MIRA INFORM REPORT

 

 

 

Report Date :

10.11.2008

 

IDENTIFICATION DETAILS

 

Name :

LEONG HUAT TIEN GUAN TRADING SDN BHD

 

 

Registered Office :

11-K, Jalan Tun Perak, Mezzanine Floor, 75300 Melaka, Melaka

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.06.2007

 

 

Date of Incorporation :

01.09.1992

 

 

Com. Reg. No.:

247990-H

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Trading in Sundry Goods

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

No Complaints

 

 

Litigation :

Clear

 

 

* Adopted abbreviations :          SC - Subject Company (the company enquired by you)

                                              N/A - Not Applicable

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

247990-H

COMPANY NAME

:

LEONG HUAT TIEN GUAN TRADING SDN BHD

FORMER NAME

:

N/A

INCORPORATION DATE

:

01/09/1992

 

 

 

COMPANY STATUS

:

EXIST

LEGAL STATUS

:

PRIVATE LIMITED

LISTED STATUS

:

NO

 

 

 

REGISTERED ADDRESS

:

11-K, JALAN TUN PERAK, MEZZANINE FLOOR, 75300 MELAKA, MELAKA, MALAYSIA.

BUSINESS ADDRESS

:

LOT 79, JALAN IKS MJ 4, TAMAN MALIM JAYA, 75250 MELAKA, MELAKA, MALAYSIA.

TEL.NO.

:

06-3340684/3340690

FAX.NO.

:

06-3340696

CONTACT PERSON

:

NG LONG CHONG ( DIRECTOR )

 

 

 

INDUSTRY CODE

:

51239

PRINCIPAL ACTIVITY

:

TRADING IN SUNDRY GOODS

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,200,000.00 DIVIDED INTO
ORDINARY SHARES 1,200,000 CASH OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 33,393,220 [2007]

NET WORTH

:

MYR 2,684,478 [2007]

 

 

 

STAFF STRENGTH

:

25 [2008]

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

:

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) trading in sundry goods.

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

 

Name

Address

IC/PP/Loc No

Shareholding

MR. NG CHEE HENG +

2, JALAN MURNI 1, TAMAN MALIM JAYA, 75250 MELAKA, MELAKA, MALAYSIA.

810417-04-5031

300,000.00

MR. NG LONG CHONG +

24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75300 MELAKA, MELAKA, MALAYSIA.

480610-04-5333 0665926

300,000.00

MS. TEO AH CHIEW +

24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75300 MELAKA, MELAKA, MALAYSIA.

560515-04-5562 4974503

300,000.00

MR. NG CHEE KIONG +

24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75300 MELAKA, MELAKA, MALAYSIA.

741209-04-5495 A2968614

300,000.00

 

 

 

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

 

 

 

1,200,000.00

 

 

 

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

 

 

+ Also Director

DIRECTORS


DIRECTOR 1

 

Name Of Subject

:

MR. NG CHEE HENG

Address

:

2, JALAN MURNI 1, TAMAN MALIM JAYA, 75250 MELAKA, MELAKA, MALAYSIA.

New IC No

:

810417-04-5031

Date of Birth

:

17/04/1981

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

19/11/2004

 

DIRECTOR 2

 

Name Of Subject

:

MR. NG LONG CHONG

Address

:

24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75300 MELAKA, MELAKA, MALAYSIA.

IC / PP No

:

0665926

New IC No

:

480610-04-5333

Date of Birth

:

10/06/1948

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

01/09/1992

 

DIRECTOR 3

 

Name Of Subject

:

MS. TEO AH CHIEW

Address

:

24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75300 MELAKA, MELAKA, MALAYSIA.

IC / PP No

:

4974503

New IC No

:

560515-04-5562

Date of Birth

:

15/05/1956

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

01/09/1992

 

DIRECTOR 4

 

Name Of Subject

:

MR. NG CHEE KIONG

Address

:

24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75300 MELAKA, MELAKA, MALAYSIA.

IC / PP No

:

A2968614

New IC No

:

741209-04-5495

Date of Birth

:

09/12/1974

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

04/05/1993




MANAGEMENT

 

 

 

1)

Name of Subject

:

NG LONG CHONG

 

Position

:

DIRECTOR

 

 

 

 

 

 

AUDITOR

 

Auditor

:

H L LIM & CO

Auditor' Address

:

11-K, JALAN TUN PERAK, 1ST FLOOR, 75300 MELAKA, MELAKA, MALAYSIA.

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. TAN AH MOI

 

IC / PP No

:

6092774

 

New IC No

:

610126-04-5334

 

Address

:

36, JALAN POKOK MANGGA 22, TAMAN POKOK MANGGA, 75250 MELAKA, MELAKA, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING 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

:

08/05/2002

Description Of Charge

:

N/A

Amount Secured

:

RM320,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BHD

 

Form 40 Dated

Registered and Numbered 3 In The Register of Charges



ENCUMBRANCE 2

Date of Creation

:

21/05/2002

Description Of Charge

:

N/A

Amount Secured

:

RM579,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BHD

 

Form 40 Dated

Registered and Numbered 4 In The Register of Charges



ENCUMBRANCE 3

Date of Creation

:

08/05/2002

Description Of Charge

:

N/A

Amount Secured

:

RM320,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BHD

 

Form 40 Dated

Registered and Numbered 5 In The Register of Charges



ENCUMBRANCE 4

Date of Creation

:

12/06/2003

Description Of Charge

:

N/A

Amount Secured

:

RM800,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BHD

 

Form 40 Dated

Registered and Numbered 6 In The Register of Charges



ENCUMBRANCE 5

Date of Creation

:

12/06/2003

Description Of Charge

:

N/A

Amount Secured

:

RM1,600,000.00

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 6

Date of Creation

:

07/09/2004

Description Of Charge

:

N/A

Amount Secured

:

RM150,000,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BHD

 

Form 40 Dated

Registered and Numbered 8 In The Register of Charges



ENCUMBRANCE 7

Date of Creation

:

17/12/2007

Description Of Charge

:

FACILITY AGREEMENT

Amount Secured

:

RM5,000,000.00

Description Of Property Affected

:

PT 4897, JALAN IKS MJ 5, TAMAN MALIM JAYA, 75250 MELAKA HELD UNDER INDIVIDUAL TITLE PM 2038, LOT 6234

Name & Address Of Chargee

:

MALAYAN BANKING BHD

114 & 114A, GRAHA PELADANG, JALAN HANG TUAH, 75300 MELAKA, MELAKA, MALAYSIA.

Form 40 Dated 08/01/2008

Registered and Numbered 9 In The Register of Charges

 

LEGAL CHECK AGAINST SC


* A check has been conducted in our databank againt 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 databank.

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

[

X

]

 

Fair

[

 

]

 

Poor

[

 

]

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

Percentage

:

0%

 

 

 

 

 

 

Credit Term

:

AS AGREED

 

 

 

 

 

 

Payment Mode

:

CASH

Type of Customer

:

END USERS,DEALERS,WALK IN CUSTOMERS

 

 

 

 

 

 

 

OPERATIONS

 

Goods Traded

:

SUNDRY GOODS

 

 

 

Competitor(s)

:

AURIC CHUN YIP SDN BHD

HARPERS TRADING (MALAYSIA) SDN BHD

LUN HENG SDN BHD

PGEO GROUP SDN BHD

UNILEVER (MALAYSIA) HOLDINGS SDN BHD

 

 

 

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2008

2007

2006

2005

2004

 

 

 

 

 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

25

30

30

44

43

 

 

 

 

 

Branch

:

NO

Other Information:


The SC is principally engaged in the (as a / as an) trading in sundry goods.

The SC sells a wide range of provision goods and fast moving goods such as onions, garlic, sugar, rice, flour, dryfood and others.

Besides that the SC also sells canned foods including canned fruits, luncheon meat, luncheon pork, canned soup, mushroom soup and etc.

The SC has its own transport to send goods to its customers' premises.

The SC has a warehouse at the ground floor and its office is based in first floor of the same building.

We were informed that the SC normally imports goods every week but during the peak seasons, the SC imports more often.

The SC also undertakes packing of certain products according to its customers' requirements.

According to the SC, its business faces stiff competition from the local players.

PROJECTS


No projects found in our databank

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

:

06-3340684/3340690

Match

:

N/A

Address Provided by Client

:

LOT 79, JALAN IKS MJ 4, TAMAN MALIM JAYA, 75250 MELAKA, MELAKA.

Current Address

:

LOT 79, JALAN IKS MJ 4, TAMAN MALIM JAYA, 75250 MELAKA, MELAKA, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


We contacted one of the staff from the SC and she provided some information on the SC.



 

FINANCIAL COMMENTS

 

 

Profitability:

Turnover

:

Increased

[

2005 - 2007

]

Profit/(Loss) Before Tax

:

Decreased

[

2005 - 2007

]

Return on Shareholder Funds

:

Acceptable

[

16.80%

]

Return on Net Assets

:

Acceptable

[

19.19%

]


The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years. The dip in profit could be due to the stiff market competition which reduced the SC's profit margin. The SC's management had generated acceptable return for its shareholders using its assets.

Working Capital Control:

Stock Ratio

:

Favourable

[

22 Days

]

Debtors Ratio

:

Favourable

[

34 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 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

[

0.61 Times

]

Current Ratio

:

Unfavourable

[

0.90 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

[

2.80 Times

]

Gearing Ratio

:

Acceptable

[

0.96 Times

]


The SC's interest cover was low. If its profits fall or when interest rate rises, it may not be able to meet all its interest payment. The SC's gearing was slightly high. The SC is utilising the leverage concept to fund its expansion. However, the high gearing has added financial risks to the SC. It will be more vulnerable in times of economy downturn.

Overall Accessment:

Although the SC's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the SC's profit margin. 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. If there is a fall in the SC's profit or any increase in interest rate, the SC may not be able to generate sufficient cash-flow to service its interest. The SC's gearing was slightly high and its financial risk was also high. If no plans are made to reduce its gearing, the SC's performance may deteriorate in the coming year.

Overall financial condition of the SC : LIMITED

ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2005

2006

2007

2008*

2009**

 

 

 

 

 

 

Population ( Million)

26.13

26.64

27.17

27.73

28.31

Gross Domestic Products ( % )

5.3

5.8

6.3

5.0

3.5

Domestic Demand ( % )

7.3

7.0

9.0

6.1

6.0

Private Expenditure ( % )

9.5

7.0

8.6

6.6

6.4

Consumption ( % )

9.2

7.1

9.0

6.8

6.5

Investment ( % )

8.5

7.0

7.1

6.2

5.8

Public Expenditure ( % )

3.6

6.8

10.1

4.7

5.1

Consumption ( % )

5.4

5.0

10.8

5.7

4.0

Investment ( % )

1.9

8.9

9.3

3.6

6.4

 

 

 

 

 

 

Balance of Trade ( MYR Million )

99,760

108,192

100,340

115,563

126,650

Government Finance ( MYR Million )

<18,684>

<19,109>

<19,948>

<34,462>

<28,450>

Government Finance to GDP / Fiscal Deficit ( % )

<3.8>

<3.3>

<3.2>

<4.8>

<4.8>

Inflation ( % Change in Composite CPI)

3.1

3.9

2.0

4.4

5.0

Unemployment Rate

3.5

3.4

3.2

3.3

3.2

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

266

290

336

388

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

5.13

4.21

3.04

1.91

-

Average 3 Months of Non-performing Loans ( % )

13.63

12.91

13.30

13.24

-

Average Base Lending Rate ( % )

6.00

6.61

6.72

6.72

-

Business Loans Disbursed( % )

8.7

<2.5>

9.1

-

-

Foreign Investment ( MYR Million )

17,882.9

20,228.0

33,426.0

23,261.4

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

37,474

38,293

43,337

-

-

Registration of New Companies ( % )

<2.9>

2.2

13.2

-

-

Liquidation of Companies ( No. )

3,069

8,647

22,629

-

-

Liquidation of Companies ( % )

<7.9>

181.8

161.5

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

193,095

216,147

227,410

-

-

Registration of New Business ( % )

2.1

11.9

5.2

-

-

Business Dissolved ( No. )

73,355

52,879

20,431

-

-

Business Dissolved ( % )

43.0

<27.9>

<61.4>

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

400.8

446.2

442.9

-

-

Cellular Phone Subscribers ( Million )

18.5

19.5

23.3

25.1

-

Tourist Arrival ( Million Persons )

16.7

17.5

20.9

21.5

-

Hotel Occupancy Rate ( % )

63.6

64.8

70.0

68.0

-

 

 

 

 

 

 

Credit Cards Spending ( % )

13.9

15.4

20.1

-

-

Bad Cheque Offenders (No.)

57,316

36,555

30,004

-

-

Individual Bankruptcy ( No.)

15,868

13,596

13,238

-

-

Individual Bankruptcy ( % )

<2.4>

<14.3>

<2.6>

-

-

 

INDUSTRIES ( % of Growth ):

2005

2006

2007

2008*

2009**

 

 

 

 

 

 

Agriculture

2.5

5.3

3.1

3.6

3.7

Palm Oil

7.1

5.8

<0.6>

7.0

-

Rubber

<2.9>

12.6

1.0

<1.1>

-

Forestry & Logging

2.0

<0.4>

2.8

<1.5>

-

Fishing

<0.4>

9.3

5.2

4.0

-

Other Agriculture

3.2

5.3

7.0

5.9

-

Industry Non-Performing Loans ( MYR Million )

563.7

516.5

487.3

393

0

% of Industry Non-Performing Loans

1.19

1.06

1.08

0

0

 

 

 

 

 

 

Mining

0.8

<0.4>

3.3

2.8

3.4

Oil & Gas

1.6

4.6

2.2

12.7

-

Other Mining

<1.0>

5.1

-

-

-

Industry Non-performing Loans ( MYR Million )

68.8

55.4

42.2

36.0

-

% of Industry Non-performing Loans

0.1

0.1

0.1

-

-

 

 

 

 

 

 

Manufacturing #

5.1

7.3

3.1

4.7

4.3

Exported-oriented Industries

3.0

11.1

<1.9>

2.7

-

Electrical & Electronics

3.6

13.4

3.0

2.4

-

Rubber Products

2.4

0.4

8.0

4.2

-

Wood Products

0.9

0.7

3.3

<6.0>

-

Textiles & Apparel

<4.4>

12.6

<10.1>

1.9

-

Domestic-oriented Industries

6.9

5.0

5.3

9.9

-

Food, Beverages & Tobacco

7.7

4.8

5.6

9.5

-

Chemical & Chemical Products

6.9

1.7

9.2

1.4

-

Plastic Products

18.6

21.3

<3.6>

6.5

-

Iron & Steel

<6.7>

<6.9>

17.5

16.8

-

Fabricated Metal Products

<7.5>

20.0

26.2

14.7

-

Non-metallic Mineral

<6.0>

<1.9>

6.6

8.3

-

Transport Equipment

10.4

5.3

<19.0>

27.1

-

Paper & Paper Products

4.6

4.1

14.9

8.6

-

Crude Oil Refineries

8.2

12.1

8.6

7.8

-

Industry Non-Performing Loans ( MYR Million )

6,035.6

6,181.3

6,366.2

5,729.4

-

% of Industry Non-Performing Loans

 

 

 

 

 

 

 

 

 

 

 

 

Construction

<1.6>

<0.5>

4.6

4.0

3.1

Industry Non-Performing Loans ( MYR Million )

5,172.7

5,527.3

5,116.7

4,149.8

-

% of Industry Non-Performing Loans

10.9

11.4

11.3

-

-

 

 

 

 

 

 

Services

6.6

7.2

9.7

7.7

6.9

Electric, Gas & Water

5.5

5.2

4.6

5.0

4.3

Transport, Storage & Communication

6.3

5.2

7.6

7.8

7.3

Wholesale, Retail, Hotel & Restaurant

8.0

7.1

11.6

10.0

7.4

Finance, Insurance & Real Estate

7.0

7.7

10.7

9.2

8.1

Government Services

7.6

9.8

4.6

8.6

4.0

Other Services

5.0

4.7

5.0

5.9

5.4

Industry Non-Performing Loans ( MYR Million )

8,716.8

11,593.2

10,207.8

8,281.4

-

% of Industry Non-Performing Loans

18.4

23.9

22.6

-

-

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 

# Based On Manufacturing Production Index
(Source : Department of Statistics / Economic Report / Bank Negara Report)

 

INDUSTRY COMMENTS

 

MSIC CODE

51239 : Wholesale of other foodstuffs e.g mee,kueh teow, wantan skin and related products,cooking oil, tinned food, etc

 

 

INDUSTRY :

FOOD & BEVERAGES

 


Agricultural output will be further boosted by the projected increase in food production resulting from the various incentives and development programmes mounted by the government to reduce the high food import bill as well as to raise farmers' income through diversification into high value food crops and farming, including aquaculture, floriculture and cultivation of medicinal plants.


During the January to November 2007, domestic food manufacturing surged by 7.9%. The food and beverage sector remains dynamic with the opening of new international and local food chains and outlets throughout the country. The industry's potential has also attracted the interest of investors in hospitality-linked companies including the introduction of a new budget hotel chain patterned after the concept of budget airlines.


Agricultural produces for food is one of the main thrusts of the Government towards country's self-sufficiency, and also as a major contributor to the country's development. The objective is expected to be achieved through concerted efforts to reduce food imports and fully utilise the nation's resources. Imports of meat products currently stand at about RM2 billion annually.


In addition, turning Malaysia into a halal food hub is still on the agenda, which partly supports the positive outlook on the domestic food industry; this is a niche market that is not seen to be vulnerable to the effects of an economic slowdown in the US. Meanwhile, another area that has experienced growth and is poised to expand further this year is the processing and preservation of fish and fish products.


The Government has identified the processed food industry as one of the major growth sectors of the economy under the Ninth Malaysia Plan (9MP). Under the 9MP, the food commodities subsector is expected to grow at an average rate of 7.6% per annum through improvements in efficiency and productivity as well as expansion in hectarage. Exports of food commodities will be increased to achieve a positive food trade balance. The production of 'padi' will be increased to meet the target of self-sufficiency level of 90%. The production of fruits will be undertaken on a large-scale in the fruit production zones using the cluster development approach and concentrating on nine fruit species which have export potential. The production of vegetables will focus on high value varieties for local consumption and selected export markets. The Green Book Programme to promote cultivation of food crops at the community level will be reactivated.


The Government has approved an allocation of RM11.4 billion representing an increase of 70% compared with the Eighth Plan allocation for the sector. Among the objectives of the plan are large-scale commercial farming and greater application of modern technology and ICT to produce higher value-added processed food and food products.


Note : The Ninth Malaysia Plan (9MP) was tabled in Parliament on March 31, 2006, is the five-year blueprints within the new National Mission policy and implementation framework from now until 2010. Malaysia is expected to see some structural changes and improved performance in the economy

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth


COMMENTS

 


Formed in 1992, as a private limited company, the SC is principally engaged in the trading in sundry goods such as onions, garlic, rice, canned foods and others. With its long track record in the industry, the SC should have gained certain market share and acquired a satisfactory reputation in the market. Having a paid up capital of RM1.2 million, the SC has the abilities to expand its business comfortably.


Although the SC solely focuses on the local market, it does not face significant risk as its products are treated as necessity items for public. Moreover, its long presence in the market has enabled the SC to gain certain market shares and established good rapport with its clients. The SC's business risk is regarded as moderate. Today, the management of the SC is assisted by 25 employees in the operations. It is managed by its director, Ng Long Chong.


During the financial year 2007, the SC's turnover has increased to RM33,393,220 while its pre-tax profit dropped to RM586,577. Return on shareholders' funds is at an acceptable level, indicating that the SC's management was efficient in utilising its funds to generate return. However, the SC is in a weak liquidity position. It may face working capital deficiency in meeting its short term obligations. A low gearing ratio has minimised its financial risk. The overall financial performance of the SC is limited. Given a networth of RM2.68 million, we believe that the SC has the abilities to maintain its business in the near term.


Investigation revealed that the SC sources its products from both the local and overseas market. Thus the SC is subjected to the foreign currency exposure risk.


Based on its financial historical data, the SC's payment record is average and there are no legal suit against the SC.


The industry continues to grow and the growth prospect is bright. This has created ample business opportunities for the SC to expand and stabilise its business. The SC however faces moderate business risk as it has to compete with many well established players in the same field.


In view of the above, we recommend credit be granted to the SC normally.

 

PROFIT AND LOSS ACCOUNT

 

 

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.

LEONG HUAT TIEN GUAN TRADING SDN BHD

For The Year Ended 30-June-2007

 

 

2007

2006

2005

 

MYR

MYR

MYR

 

 

 

 

TURNOVER

33,393,220

27,774,743

26,846,958

 

==========

==========

==========

PROFIT/(LOSS) FROM OPERATIONS

586,577

605,726

426,208

 

 

 

 

 

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

586,577

605,726

426,208

Taxation

<135,704>

<145,255>

<117,973>


PROFIT/(LOSS) AFTER TAXATION

------------
450,873

------------
460,471

------------
308,235

 

 

 

 


PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS

------------
450,873

------------
460,471

------------
308,235

 

 

 

 


PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS
RETAINED PROFIT/(ACCUMULATED LOSS) BROUGHT FORWARD

------------
450,873

------------
460,471

------------
308,235

As previous reported

1,233,605

773,134

464,899

 

 

 

 


As restated

------------
1,233,605

------------
773,134

------------
464,899

 

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

1,684,478

1,233,605

773,134

 

 

 

 


RETAINED PROFIT/(ACCUMULATED LOSS) CARRIED FORWAD

------------
1,684,478
==========

------------
1,233,605
==========

------------
773,134
==========

RETAINED BY: The Company

1,684,478

1,233,605

773,134

 

------------
1,684,478
==========

------------
1,233,605
==========

------------
773,134
==========

INTEREST EXPENSE (as per notes to PL)

 

 

 

Term loan

77,753

36,575

40,469

 

 

 

 

 

 

 

 

Hire purchase

8,283

16,437

11,882

 

 

 

 

bank interest

22,190

11,019

135,846

bankers acceptance

217,542

154,759

27,375

overdue interest

-

144

-

 

 

 

 

 

------------
325,768
==========

------------
218,934
==========

------------
215,572
==========

 

BALANCE SHEET

 

 

LEONG HUAT TIEN GUAN TRADING SDN BHD

As At 30-June-2007

 

 

 

 

 

 

2007

2006

2005

 

MYR

MYR

MYR

ASSET EMPLOYED:

 

 

 

FIXED ASSETS

5,459,199

3,047,909

2,904,918

TOTAL LONG TERM ASSETS

------------
5,459,199

------------
3,047,909

------------
2,904,918

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

Development Properties/expenditure

-

484,353

227,399

 

 

 

 

 

 

Stocks

1,972,400

1,446,693

1,853,213

 

 

 

 

 

 

Trade debtors

3,131,450

2,170,185

2,318,191

 

Other debtors, deposits & prepayments

343,934

19,055

47,732

 

 

 

 

 

 

Cash & bank balances

746,904

102,450

224,509

TOTAL CURRENT ASSETS


------------
6,194,688


------------
4,222,736


------------
4,671,044

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Trade creditors

892,170

657,371

682,087

 

Other creditors & accruals

168,737

110,615

78,898

 

Hire purchase & lease creditors

119,382

85,587

120,820

 

Bank overdraft

-

310,134

166,966

 

Short term borrowings/Term loans

447,176

187,313

195,276

 

 

 

 

 

 

 

 

 

 

 

Bill & acceptances payable

4,266,000

2,063,000

2,870,000

 

Amounts owing to director

852,862

810,744

830,884

 

Provision for taxation

32,602

81,829

55,966

 

 

 

 

 

 

provision for directors' fee

120,000

120,000

155,000

 

 

 

 

 

TOTAL CURRENT LIABILITIES

------------
6,898,929

------------
4,426,593

------------
5,155,897

NET CURRENT ASSETS/(LIABILITIES)

------------
<704,241>

------------
<203,857>

------------
<484,853>

TOTAL NET ASSETS

------------
4,754,958
==========

------------
2,844,052
==========

------------
2,420,065
==========

 

 

 

 

 

FINANCED BY:

 

 

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

Ordinary share capital

1,000,000

1,000,000

1,000,000

 

 

 

 

 

TOTAL SHARE CAPITAL

------------
1,000,000

------------
1,000,000

------------
1,000,000

 

 

 

 

 

RESERVES

 

 

 

 

 

 

 

 

 

Retain profit/(Accumulated loss) carried forward

1,684,478

1,233,605

773,134


TOTAL RESERVES

------------
1,684,478

------------
1,233,605

------------
773,134


SHAREHOLDERS' FUNDS/EQUITY


------------
2,684,478


------------
2,233,605


------------
1,773,134


LONG TERM & DEFERRED LIABILITIES & PROVISIONS

 

 

 

 

 

 

 

 

 

Long term loans

1,960,515

453,892

604,228

 

 

 

 

 

 

 

 

 

 

 

Hire purchase creditors

45,454

114,414

5,625

 

Deferred taxation

64,511

42,141

37,078

 

 

 

 

 


TOTAL LONG TERM & DEFERRED LIABILITIES & PROVISIONS

------------
2,070,480

------------
610,447

------------
646,931

 

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

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

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

 

4,754,958

2,844,052

2,420,065

 

==========

==========

==========

 

 

 

 

 

 

FINANCIAL RATIOS

 

 

LEONG HUAT TIEN GUAN TRADING SDN BHD

As At 30-June-2007

 

 

2007

2006

2005

 

MYR

MYR

MYR

TYPES OF FUNDS

 

 

 

 

Cash

746,904

102,450

224,509

 

Net Liquid Funds

299,728

<394,997>

<137,733>

 

Net Liquid Assets

<2,676,641>

<1,650,550>

<2,338,066>

 

Net Current Assets/(Liabilities)

<704,241>

<203,857>

<484,853>

 

Net Tangible Assets

4,754,958

2,844,052

2,420,065

 

Net Monetary Assets

<4,747,121>

<2,260,997>

<2,984,997>

 

 

 

 

 

BALANCE SHEET ITEMS

 

 

 

 

Total Borrowings

2,572,527

1,151,340

1,092,915

 

Total Liabilities

8,969,409

5,037,040

5,802,828

 

Total Assets

11,653,887

7,270,645

7,575,962

 

Net Assets

4,754,958

2,844,052

2,420,065

 

Net Assets Backing

2,684,478

2,233,605

1,773,134

 

Shareholders" Funds

2,684,478

2,233,605

1,773,134

 

Total Share Capital

1,000,000

1,000,000

1,000,000

 

Total Reserves

1,684,478

1,233,605

773,134

 

 

 

 

 

WORKING CAPITAL CONTROL (Days)

 

 

 

 

Stock Ratio

22

25

28

 

Debtors Ratio

34

29

32

 

Creditors Ratio

10

9

9

 

 

 

 

 

SOLVENCY RATIOS (Times)

 

 

 

 

Gearing Ratio

0.96

0.52

0.62

 

Liabilities Ratio

3.34

2.26

3.27

 

Times Interest Earned Ratio

2.80

3.77

2.98

 

 

 

 

 

PERFORMANCE RATIO (%)

 

 

 

 

Operating Profit Margin

1.76

2.18

1.59

 

Net Profit Margin

1.35

1.66

1.15

 

Return On Net Assets

19.19

29.00

26.52

 

Return On Capital Employed

17.14

24.06

22.11

 

Return On Shareholders' Funds/Equity

16.80

20.62

17.38

 

Dividend Pay Out Ratio (Times)

0

0

0

 

 

 

 

 

NOTES TO ACCOUNTS

 

 

 

 

Contingent Liabilities

0.00

0.00

0.00

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.47.32

UK Pound

1

Rs.74.20

Euro

1

Rs.60.73

 

 

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%)

 

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions