|
* Adopted abbreviations : SC -
Subject Company (the company enquired by you)
N/A
- Not Applicable
EXECUTIVE SUMMARY
|
REGISTRATION NO.
|
:
|
781769-K
|
|
COMPANY NAME
|
:
|
RECRON (MALAYSIA) SDN BHD
|
|
FORMER NAME
|
:
|
REAL AIM DEVELOPMENT SDN BHD (20/08/2007)
|
|
INCORPORATION DATE
|
:
|
20/07/2007
|
|
COMPANY STATUS
|
:
|
EXIST
|
|
LEGAL STATUS
|
:
|
PRIVATE LIMITED
|
|
LISTED STATUS
|
:
|
NO
|
|
REGISTERED ADDRESS
|
:
|
SUITE 7.01-7.03, WISMA GOLDHILL, 67 JALAN RAJA CHULAN, 7TH FLOOR,
50200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
|
|
BUSINESS ADDRESS
|
:
|
WISMA GOLDHILL, LEVEL 8 & 9, , 67, JALAN RAJA CHULAN, 50200
KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
|
|
TEL.NO.
|
:
|
03-20316000
|
|
FAX.NO.
|
:
|
03-20315000
|
|
WEB SITE
|
:
|
www.recronmalaysia.com
|
|
CONTACT PERSON
|
:
|
JUTTI CHANDRA SURESH ( CEO )
|
|
INDUSTRY CODE
|
:
|
17299
|
|
PRINCIPAL ACTIVITY
|
:
|
MANUFACTURING OF TEXTILES AND FIBRE PRODUCTS
|
|
AUTHORISED CAPITAL
|
:
|
MYR
50,000,000.00 DIVIDED INTO
ORDINARY SHARE 50,000,000.00 OF MYR 1.00 EACH.
|
|
ISSUED AND
PAID UP CAPITAL
|
:
|
MYR
2,500,000.00 DIVIDED INTO
ORDINARY SHARES 2,500,000 CASH OF MYR 1.00 EACH.
|
|
SALES
|
:
|
MYR 2,888,960,000 [2009]
|
|
NET WORTH
|
:
|
MYR 883,650,000 [2009]
|
|
STAFF STRENGTH
|
:
|
7,500 [2011]
|
|
BANKER (S)
|
|
HONG LEONG
ASSURANCE BHD
MALAYAN BANKING BHD
|
|
LITIGATION
|
:
|
CLEAR
|
|
DEFAULTER CHECK
|
:
|
CLEAR
|
|
FINANCIAL CONDITION
|
:
|
POOR
|
|
PAYMENT
|
:
|
AVERAGE
|
|
MANAGEMENT CAPABILITY
|
:
|
AVERAGE
|
|
|
|
|
|
COMMERCIAL RISK
|
:
|
LOW
|
|
CURRENCY EXPOSURE
|
:
|
HIGH
|
|
GENERAL REPUTATION
|
:
|
SATISFACTORY
|
|
INDUSTRY OUTLOOK
|
:
|
MATURE
|
|
PROPOSED
CREDIT LIMIT
|
:
|
USD508,461.00
|
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) manufacturing of textiles
and fibre products.
The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).
The major shareholder(s) of the SC are
shown as follows :
Name
|
Address
|
IC/PP/Loc No
|
Shareholding
|
|
RELIANCE GLOBAL BUSINESS B V
|
SOPHIALAAN 1A, 2514 JP, THE HAGUE, NETHERLANDS.
|
|
2,500,000.00
|
|
|
|
|
---------------
|
|
|
|
|
2,500,000.00
|
|
|
|
|
============
|
+ Also Director
DIRECTORS
DIRECTOR 1
|
Name Of Subject
|
:
|
MR. MAN MOHAN
|
|
Address
|
:
|
41, BAKHTAWAR ANNEXE, 22, NARAYAN DABHOLKAR ROAD, MALABAR HILL,
BOMBAY, 400 006, BOMBAY, INDIA.
|
|
IC / PP No
|
:
|
Z1777776
|
|
|
|
|
|
Date of Birth
|
:
|
10/07/1951
|
|
|
|
|
|
Nationality
|
:
|
INDIAN
|
|
Date of Appointment
|
:
|
22/08/2007
|
|
Remark
|
:
|
OLD PP: F3673620
|
|
|
|
|
|
|
|
|
|
|
|
|
DIRECTOR 2
|
Name Of Subject
|
:
|
MR. JAIN PRAVEEN KUMAR
|
|
Address
|
:
|
UNIT A-17-3, MONT KIARA MERIDIN, 19, JALAN DUTA KIARA, 50480 KUALA
LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
|
|
IC / PP No
|
:
|
Z1808929
|
|
|
|
|
|
Date of Birth
|
:
|
04/01/1964
|
|
|
|
|
|
Nationality
|
:
|
INDIAN
|
|
Date of Appointment
|
:
|
22/08/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIRECTOR 3
|
Name Of Subject
|
:
|
MR. UDESHI RAJEN DWARKADAS
|
|
Address
|
:
|
502, SHANTI APARTMENT, 98, WALKESHWAR ROAD, 400 006, BOMBAY, INDIA.
|
|
IC / PP No
|
:
|
Z2175096
|
|
|
|
|
|
Date of Birth
|
:
|
31/01/1951
|
|
|
|
|
|
Nationality
|
:
|
INDIAN
|
|
Date of Appointment
|
:
|
22/08/2007
|
|
Remark
|
:
|
OLD PP: G0600014
|
|
|
|
|
|
|
|
|
|
|
|
|
DIRECTOR 4
|
Name Of Subject
|
:
|
MR. JUTTI CHANDRA SURESH
|
|
Address
|
:
|
10, JALAN 8/155A, BUKIT JALIL GOLF RESORT, 57100 KUALA LUMPUR,
WILAYAH PERSEKUTUAN, MALAYSIA.
|
|
IC / PP No
|
:
|
Z1801030
|
|
|
|
|
|
Date of Birth
|
:
|
26/02/1948
|
|
|
|
|
|
Nationality
|
:
|
INDIAN
|
|
Date of Appointment
|
:
|
24/03/2008
|
|
Remark
|
:
|
OLD PP: Z1584700
|
|
|
|
|
|
|
|
|
|
|
|
|
DIRECTOR 5
|
Name Of Subject
|
:
|
RAJBANSHI ANIL KUMAR
|
|
Address
|
:
|
A-402, CHAITANYA TOWER, APPASAHAB MARATHE, MARG, PRABHADEVI, 40002, MUMBAI,
INDIA.
|
|
IC / PP No
|
:
|
Z1877333
|
|
|
|
|
|
Date of Birth
|
:
|
09/08/1956
|
|
|
|
|
|
Nationality
|
:
|
INDIAN
|
|
Date of Appointment
|
:
|
05/02/2008
|
MANAGEMENT
|
1)
|
Name of Subject
|
:
|
JUTTI CHANDRA SURESH
|
|
|
Position
|
:
|
CEO
|
|
|
|
|
|
|
2)
|
Name of Subject
|
:
|
YOONG YIEN PING
|
|
|
Position
|
:
|
ASSISTANT FINANCE MANAGER
|
|
|
|
|
|
|
3)
|
Name of Subject
|
:
|
SENGUPTA
|
|
|
Position
|
:
|
FINANCE MANAGER
|
|
|
|
|
|
|
4)
|
Name of Subject
|
:
|
WONG YEN CHI
|
|
|
Position
|
:
|
HUMAN RESOURCE MANAGER
|
|
|
|
|
|
|
5)
|
Name of Subject
|
:
|
KU CHOY HA
|
|
|
Position
|
:
|
PRODUCTION MANAGER
|
|
|
|
|
|
|
6)
|
Name of Subject
|
:
|
AMIT DAMANI
|
|
|
Position
|
:
|
MARKETING MANAGER
|
|
|
|
|
|
|
7)
|
Name of Subject
|
:
|
LAM SOON HOCK
|
|
|
Position
|
:
|
ADMIN MANAGER
|
AUDITOR
|
Auditor
|
:
|
PRICEWATERHOUSECOOPERS
|
|
Auditor' Address
|
:
|
1 SENTRAL, JALAN TRAVERS, KUALA LUMPUR SENTRAL, P O BOX 10192, LEVEL
10, 50706 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
|
|
|
|
|
COMPANY SECRETARIES
|
1)
|
Company Secretary
|
:
|
MS. CHEONG CHOON YIN
|
|
|
IC / PP No
|
:
|
A1998972
|
|
|
New IC No
|
:
|
711103-03-5216
|
|
|
Address
|
:
|
11, JALAN USJ 3/4J, 47600 SUBANG JAYA, SELANGOR, MALAYSIA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2)
|
Company Secretary
|
:
|
MS. CATHERINE MAH SUIK CHING
|
|
|
IC / PP No
|
:
|
5588928
|
|
|
New IC No
|
:
|
600421-10-6364
|
|
|
Address
|
:
|
19 JALAN BK3/8D, BANDAR KINRARA, 47180 PUCHONG, SELANGOR, MALAYSIA.
|
|
|
|
|
|
|
|
|
|
|
BANKING
Banking relations are maintained principally with :
|
1)
|
Name
|
:
|
HONG LEONG ASSURANCE BHD
|
|
|
|
|
|
|
2)
|
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)
ENCUMBRANCE 1
|
Date of Creation
|
:
|
25/10/2010
|
|
Description Of Charge
|
:
|
DEBENTURE
|
|
Amount Secured
|
:
|
USD25,000,000.00
|
|
Description Of Property Affected
|
:
|
ALL CHARGE ASSETS
|
|
Name & Address Of Chargee
|
:
|
ICICI BANK LTD
9, RAFFLES PLACE, 05-01, REPUBLIC PLAZA, 048619, SINGAPORE.
|
|
|
|
|
|
|
|
|
|
Form 40 Dated 03/11/2010
|
|
Registered and Numbered 1 In The Register of Charges
|
ENCUMBRANCE 2
|
Date of Creation
|
:
|
25/10/2010
|
|
Description Of Charge
|
:
|
MEMORANDUM OF CHARGE
|
|
Amount Secured
|
:
|
N/A
|
|
Description Of Property Affected
|
:
|
ALL MORTGAGED PORTFOLIO
|
|
Name & Address Of Chargee
|
:
|
ICICI BANK LTD
9, RAFFLES PLACE, 50-01, REPUBLIC PLAZA, 048619, SINGAPORE.
|
|
|
|
|
|
|
|
|
|
Form 40 Dated 03/11/2010
|
|
Registered and Numbered 2 In The Register of Charges
|
LEGAL CHECK AGAINST 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 databank.
DEFAULTER CHECK AGAINST SC
* We have checked through the SC in our defaulters' database which comprised
of debtors that have been blacklisted by our customers and debtors that have
been placed or assigned to us for collection since 1990. Information was
provided by third party where the debt amount can be disputed. Please check
with creditors for confirmation as alleged debts may have been paid since
recorded or are being disputed.
No blacklisted record & debt collection case was found in our defaulters'
databank.
PAYMENT RECORD
SOURCES OF RAW
MATERIALS:
Local : YES Percentage : 40%
Overseas : YES Percentage : 60%
Import Countries : INDIA
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 0-30 Days
|
[
|
|
]
|
|
Good 31-60 Days
|
[
|
|
]
|
|
Average 61-90 Days
|
[
|
X
|
]
|
|
|
Fair 91-120 Days
|
[
|
|
]
|
|
Poor >120 Days
|
[
|
|
]
|
|
|
|
|
|
|
CLIENTELE
|
Local
|
:
|
YES
|
Percentage
|
:
|
10%
|
|
Domestic Markets
|
:
|
MALAYSIA
|
|
Overseas
|
:
|
YES
|
Percentage
|
:
|
90%
|
|
Export Market
|
:
|
SOUTHEAST ASIA, AFRICA, MIDDLE EAST,
UNITED STATES, EUROPE, TURKEY
|
|
Credit Term
|
:
|
30 - 60 DAYS
|
|
|
|
|
|
|
|
|
Payment Mode
|
:
|
CHEQUES,TELEGRAPHIC TRANSFER (TT),LETTER OF CREDIT (LC)
|
|
Type of Customer
|
:
|
TEXTILES AND GARMENT INDUSTRIES,RETAIL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATIONS
|
Products manufactured
|
:
|
|
TEXTILES AND FIBRE PRODUCTS
|
|
|
|
|
|
|
Competitor(s)
|
:
|
EMAS KIARA
INDUSTRIES BHD
FIBERTEX PERSONAL CARE SDN BHD
HUALON CORPORATION (M) SDN BHD
PCCS GROUP BHD
YEN GLOBAL BHD
|
|
|
|
|
|
Ownership of premises
|
:
|
OWNED
|
|
Total Number of Employees:
|
|
|
YEAR
|
2011
|
2010
|
2009
|
2008
|
|
|
|
|
|
|
|
|
GROUP
|
N/A
|
N/A
|
N/A
|
N/A
|
|
|
|
|
|
|
COMPANY
|
7,500
|
7,350
|
7,300
|
7,343
|
|
|
|
|
|
Other Information:
The SC is principally engaged in the (as a / as an) manufacturing of textiles
and fibre products.
The SC is one of largest integrated polyester and Textile Company with world
class manufacturing facilities at Nilai and Melaka in Malaysia.
The SC's products ranges are as follows:
1) Polyester Polymer Production
2) Nylon Polymer Production
3) Polyester Staple Fibre
4) Spun Yarns
5) Polyester Filament Yarns
6) PET bottle grade Resins
7) Fabrics
The SC produces annually over 500,000 tons of Polyester Products, 36,000 tons
of Nylon Products and 500 million meters of Fabrics.
The products are used for making ready made garments, home furnishings,
curtain materials and others.
The SC's vertically integrated production units have state of art machines and
equipment. Its biggest asset is its highly skilled and dedicated work
force.
PROJECTS
No projects found in our databank
RECENT DEVELOPMENT
01 JUNE 2010
Recron Malaysia is reported to be developing bed linen for the health sector
and also hospital uniforms and head scarves worn by Muslim women in Indonesia
and Malaysia. The company is currently incorporating the polymer-based
antimicrobial Polygiene+FR in polyester filament yarn, and also plans to
produce polyamide 6 filament yarn incorporating Polygiene for sportswear and
other end-uses. According to Polygiene of Malmo. Sweden, Polygiene+FR is a
polymer-based combination of flame retardant and antimicrobial, similar to
Trevira CS Bioactive. Polygiene masterbatch Is a proprietary technology and
produced in Europe.
CURRENT INVESTIGATION
Latest fresh investigations carried out on the SC indicated that :
|
Telephone Number Provided By Client
|
:
|
N/A
|
|
Current Telephone Number
|
:
|
03-20316000
|
|
Match
|
:
|
N/A
|
|
|
|
|
|
Address Provided by Client
|
:
|
KUALA LUMPUR
|
|
Current Address
|
:
|
WISMA GOLDHILL, LEVEL 8 & 9, , 67, JALAN RAJA CHULAN, 50200
KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
|
|
Match
|
:
|
NO
|
|
|
|
|
|
Latest Financial Accounts
|
:
|
YES
|
Other Investigations
We contacted one of the staff from the SC and she provided some information
on the SC.
The address provided is incomplete.
FINANCIAL COMMENTS
Profitability:
|
Turnover
|
:
|
Decreased
|
[
|
1.47%
|
]
|
|
Profit/(Loss) Before Tax
|
:
|
Decreased
|
[
|
74.38%
|
]
|
|
Return on Shareholder Funds
|
:
|
Unfavourable
|
[
|
1.86%
|
]
|
|
Return on Net Assets
|
:
|
Unfavourable
|
[
|
4.53%
|
]
|
The lower turnover could be due to the unfavourable market conditions. 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:
|
Stock Ratio
|
:
|
Acceptable
|
[
|
57 Days
|
]
|
|
Debtors Ratio
|
:
|
Favourable
|
[
|
18 Days
|
]
|
|
Creditors Ratio
|
:
|
Favourable
|
[
|
14 Days
|
]
|
The SC kept adequate stocks to meet its normal business transactions without
incurring excessive storage costs. 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
|
[
|
0.12 Times
|
]
|
|
Current Ratio
|
:
|
Unfavourable
|
[
|
0.49 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
|
[
|
1.37 Times
|
]
|
|
Gearing Ratio
|
:
|
Unfavourable
|
[
|
1.19 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 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
performance deteriorated over the years with lower turnover and profit. 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 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
ECONOMIC / INDUSTRY OUTLOOK
|
Major Economic Indicators:
|
2007
|
2008
|
2009
|
2010*
|
2011**
|
|
|
|
|
|
|
|
|
Population ( Million)
|
27.17
|
27.73
|
28.31
|
28.88
|
29.13
|
|
Gross Domestic Products ( % )
|
6.3
|
4.6
|
<0.5>
|
6.9
|
5.8
|
|
Domestic Demand ( % )
|
9.0
|
6.9
|
2.9
|
4.6
|
4.8
|
|
Private Expenditure ( % )
|
8.6
|
7.1
|
<2.7>
|
8.1
|
7.0
|
|
Consumption ( % )
|
9.0
|
8.4
|
0.7
|
6.7
|
6.3
|
|
Investment ( % )
|
7.1
|
1.5
|
<17.2>
|
15.2
|
10.2
|
|
Public Expenditure ( % )
|
10.1
|
6.5
|
5.2
|
3.8
|
2.8
|
|
Consumption ( % )
|
10.8
|
11.6
|
3.1
|
0.2
|
4.6
|
|
Investment ( % )
|
9.3
|
0.7
|
8.0
|
8.3
|
0.6
|
|
|
|
|
|
|
|
|
Balance of Trade ( MYR Million )
|
100,340
|
129,563
|
89,650
|
118,356
|
116,058
|
|
Government Finance ( MYR Million )
|
<19,948>
|
<34,462>
|
<28,450>
|
<40,482>
|
-
|
|
Government Finance to GDP / Fiscal Deficit ( % )
|
<3.2>
|
<4.8>
|
<4.8>
|
<5.6>
|
<5.4>
|
|
Inflation ( % Change in Composite CPI)
|
2.0
|
<3.3>
|
<5.2>
|
5.1
|
-
|
|
Unemployment Rate
|
3.2
|
3.7
|
4.5
|
3.9
|
-
|
|
|
|
|
|
|
|
|
Net International Reserves ( MYR Billion )
|
336
|
388
|
331
|
394
|
-
|
|
Average Risk-Weighted Capital Adequacy Ratio ( % )
|
3.04
|
1.91
|
2.87
|
2.20
|
-
|
|
Average 3 Months of Non-performing Loans ( % )
|
13.30
|
13.24
|
11.08
|
15.30
|
-
|
|
Average Base Lending Rate ( % )
|
6.72
|
6.72
|
5.53
|
5.70
|
-
|
|
Business Loans Disbursed( % )
|
9.1
|
11.6
|
10.5
|
14.7
|
-
|
|
Foreign Investment ( MYR Million )
|
33,426.0
|
23,261.4
|
22,156.8
|
22,517.9
|
-
|
|
Consumer Loans ( % )
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Registration of New Companies ( No. )
|
43,337
|
41,599
|
41,578
|
-
|
-
|
|
Registration of New Companies ( % )
|
13.2
|
<4.0>
|
<0.1>
|
-
|
-
|
|
Liquidation of Companies ( No. )
|
22,629
|
27,992
|
39,075
|
-
|
-
|
|
Liquidation of Companies ( % )
|
161.5
|
23.7
|
39.6
|
-
|
-
|
|
|
|
|
|
|
|
|
Registration of New Business ( No. )
|
227,410
|
269,866
|
312,581
|
-
|
-
|
|
Registration of New Business ( % )
|
-
|
-
|
-
|
-
|
-
|
|
Business Dissolved ( No. )
|
20,431
|
18,885
|
19,345
|
-
|
-
|
|
Business Dissolved ( % )
|
<61.4>
|
<7.6>
|
2.4
|
-
|
-
|
|
|
|
|
|
|
|
|
Sales of New Passenger Cars (' 000 Unit )
|
442.9
|
497.5
|
319.4
|
369.7
|
-
|
|
Cellular Phone Subscribers ( Million )
|
23.3
|
25.1
|
30.1
|
32.8
|
-
|
|
Tourist Arrival ( Million Persons )
|
20.9
|
21.5
|
23.6
|
24.0
|
25.0
|
|
Hotel Occupancy Rate ( % )
|
70
|
68
|
58
|
63
|
-
|
|
|
|
|
|
|
|
|
Credit Cards Spending ( % )
|
20.1
|
17.1
|
12.8
|
15.1
|
-
|
|
Bad Cheque Offenders (No.)
|
30,004
|
34,834
|
-
|
-
|
-
|
|
Individual Bankruptcy ( No.)
|
13,238
|
13,907
|
-
|
-
|
-
|
|
Individual Bankruptcy ( % )
|
<2.6>
|
5.1
|
-
|
-
|
-
|
|
INDUSTRIES ( % of Growth ):
|
2007
|
2008
|
2009
|
2010*
|
2011**
|
|
|
|
|
|
|
|
|
Agriculture
|
3.1
|
3.6
|
0.4
|
3.4
|
4.5
|
|
Palm Oil
|
<0.6>
|
7.0
|
<1.1>
|
1.3
|
-
|
|
Rubber
|
1.0
|
<1.1>
|
<19.8>
|
9.9
|
-
|
|
Forestry & Logging
|
2.8
|
<1.5>
|
<5.9>
|
<1.3>
|
-
|
|
Fishing
|
5.2
|
4.0
|
5.5
|
4.1
|
-
|
|
Other Agriculture
|
7.0
|
5.9
|
9.0
|
6.6
|
-
|
|
Industry Non-Performing Loans ( MYR Million )
|
487.3
|
393.0
|
413.7
|
508.4
|
-
|
|
% of Industry Non-Performing Loans
|
1.1
|
<2.0>
|
1.3
|
2.1
|
-
|
|
|
|
|
|
|
|
|
Mining
|
3.3
|
<0.8>
|
<3.8>
|
1.0
|
2.9
|
|
Oil & Gas
|
2.2
|
12.7
|
2.1
|
4.9
|
-
|
|
Other Mining
|
-
|
-
|
-
|
-
|
-
|
|
Industry Non-performing Loans ( MYR Million )
|
42.2
|
36.0
|
44.2
|
49.7
|
-
|
|
% of Industry Non-performing Loans
|
0.1
|
0.1
|
0.1
|
0.1
|
-
|
|
|
|
|
|
|
|
|
Manufacturing #
|
3.1
|
1.3
|
<9.4>
|
10.8
|
6.7
|
|
Exported-oriented Industries
|
<1.9>
|
2.7
|
<19.0>
|
12.1
|
-
|
|
Electrical & Electronics
|
3.0
|
2.4
|
<30.3>
|
27.4
|
-
|
|
Rubber Products
|
8.0
|
4.2
|
<10.1>
|
25.3
|
-
|
|
Wood Products
|
3.3
|
<6.0>
|
<24.1>
|
19.7
|
-
|
|
Textiles & Apparel
|
<10.1>
|
1.9
|
<19.5>
|
<1.3>
|
-
|
|
Domestic-oriented Industries
|
5.3
|
9.9
|
<9.8>
|
16.3
|
-
|
|
Food, Beverages & Tobacco
|
5.6
|
9.5
|
0.2
|
3.0
|
-
|
|
Chemical & Chemical Products
|
9.2
|
1.4
|
<7.7>
|
20.4
|
-
|
|
Plastic Products
|
<3.6>
|
6.5
|
<9.1>
|
2.4
|
-
|
|
Iron & Steel
|
17.5
|
16.8
|
<32.7>
|
30.0
|
-
|
|
Fabricated Metal Products
|
26.2
|
14.7
|
<2.5>
|
14.9
|
-
|
|
Non-metallic Mineral
|
6.6
|
8.3
|
<15.5>
|
20.2
|
-
|
|
Transport Equipment
|
<19.0>
|
27.1
|
<13.5>
|
36.5
|
-
|
|
Paper & Paper Products
|
14.9
|
8.6
|
<5.0>
|
20.5
|
-
|
|
Crude Oil Refineries
|
8.6
|
7.8
|
0.2
|
<11.4>
|
-
|
|
Industry Non-Performing Loans ( MYR Million )
|
6,366.2
|
5,729.4
|
6,007.3
|
6,217.5
|
-
|
|
% of Industry Non-Performing Loans
|
14.1
|
16.8
|
18.3
|
23.8
|
-
|
|
|
|
|
|
|
|
|
Construction
|
4.6
|
2.1
|
5.8
|
4.9
|
4.4
|
|
Industry Non-Performing Loans ( MYR Million )
|
5,116.7
|
4,149.8
|
3,241.8
|
4,038.5
|
-
|
|
% of Industry Non-Performing Loans
|
11.3
|
12.2
|
9.9
|
10.7
|
-
|
|
|
|
|
|
|
|
|
Services
|
9.7
|
7.3
|
2.6
|
6.5
|
5.3
|
|
Electric, Gas & Water
|
4.6
|
5.0
|
0.4
|
8.5
|
5.6
|
|
Transport, Storage & Communication
|
7.60
|
7.80
|
1.60
|
7.15
|
7.55
|
|
Wholesale, Retail, Hotel & Restaurant
|
11.6
|
10.0
|
2.8
|
4.7
|
5.2
|
|
Finance, Insurance & Real Estate
|
10.7
|
9.2
|
3.8
|
6.0
|
5.2
|
|
Government Services
|
4.6
|
8.6
|
2.0
|
6.7
|
1.9
|
|
Other Services
|
5.0
|
5.9
|
4.4
|
4.2
|
5.4
|
|
Industry Non-Performing Loans ( MYR Million )
|
10,207.8
|
8,281.4
|
6,631.3
|
7,384.6
|
-
|
|
% of Industry Non-Performing Loans
|
22.6
|
24.3
|
20.2
|
25.7
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Estimate /
Preliminary
|
|
|
|
|
|
|
** Forecast
|
|
|
|
|
|
|
# Based On
Manufacturing Production Index
(Source : Department of Statistics / Economic Report / Bank Negara Report)
|
INDUSTRY COMMENTS
|
MSIC CODE
|
|
17299 : Manufacture of other textiles n.e.c.
|
|
|
|
|
INDUSTRY :
|
TEXTILE
|
|
|
|
|
|
|
The Malaysian textile industry is in a quandary and slowly losing out to
other textile-producing countries in the region like Cambodia, China,
Indonesia, Thailand and Vietnam. Malaysian Knitting Manufacturers
Association (MKMA) viewed that in order to remain competitive and relevant,
it needs support from the Government and the financial sector. Without this
support, the industry might not be able to survive and will soon become a
sunset industry.
|
|
Textile industry remained labour-intensive and the Government must admit
that companies were largely dependent on foreign workers as they were
having problems hiring locals. If the Government did not provide long-term
solutions, local textile companies would have no choice but to relocate to
other countries. Although production cost was rising in China, the country
was huge, offered a ready workforce and companies could operate in the
second- and third-tier cities. Government always told industries to
automate, it must remember that certain production procedures still
required the human touch. Moreover, it was not easy for textile companies
to secure loans to invest in automation and technology, as local banks already
had the notion that the industry was a sunset industry.
|
|
However, this perception is disputed as the country's export of textiles
and apparel was on the uptrend in the last 10 years; although the figure declined
to RM8.93bil last year from RM10.49bil in 2008 due to the global economic
recession. The outlook for the textile industry is still positive as orders
have started coming back since the last quarter of 2009 and are expected to
pick up in the second half of the year.
|
|
Local textile makers were not really perturbed by the difficulty in
securing loans for their business expansion and some of them had even
diversified their range of products. These include producing fire-retardant
and ultraviolet-protective textile and fabrics for the non-apparel segment
such as the upholstery for furniture, automotives and aeroplanes.
|
|
In the view of above, Government should be more proactive and emulate the steps
taken by the governments of the countries mentioned in supporting their
textile industry. For example, there is a bill in the United States
requiring the health, military and postal departments there to use only
locally-made fabrics for their staff uniforms. Therefore, Malaysia should
do the same and the move could include the police, immigration and customs
departments, and uniforms for school children and participants of the
National Service programme. If such a bill were passed by parliament, not only
the textile industry would benefit but so would the small and medium-scale
enterprises, especially those in the support and service sectors. Although
local textile makers were known for their reliability and quality products
internationally, that would not guarantee their survival as other countries
were fast catching up.
|
|
|
|
|
OVERALL INDUSTRY OUTLOOK : Mature
|
COMMENTS & RECOMMENDATION
|
Started in 2007, as a private limited company, the SC is principally
engaged in the manufacturing of textile and fibre products. Backed by its
well established shareholder coupled with a paid up capital of RM2.5
million, the SC has the potential of capturing a higher market shares as it
is competing aggressively in the market.
|
|
Although the SC has been in the business for only 4 years, it has
established an extensive marketing network to support its business
operation. Being an export-oriented player where 90% products are exported
to worldwide, the business risk of the SC is well-mitigated and better
growth prospect can be expected. However, being an international player,
the SC is subjected to certain inherent risks of stiff competition from the
international market. Operating in a large scale, the SC has total workforce
of 7,500 in its operation. The SC's overall management capability is
considered average.
|
|
For the financial year ended 2009, the SC has recorded a pre-tax profit of
RM11.71 million on the backed of RM2.88 billion in its turnover. The SC has
generated a relatively low return on shareholders' funds indicating that
the management was inefficient in utilising its funds to generate return.
Besides, we noted that the SC's current liabilities well exceed its current
assets. Due to its weak liquidity position, the SC may face working capital
deficiency in meeting its short term financial obligations if no fresh
capital is injected into the SC. Moreoover, the high gearing ratio has
placed the SC at high financial risk. Generally, the financial performance
of SC was unfavourable.
|
|
Our investigation revealed that the SC sources 40% of its products locally
while the rest are obtained from overseas suppliers. As an export-oriented
company and being involved in import activities, the SC is exposed to
foreign exchange risk.
|
|
Based on the historical financial data, we concluded that the SC's payment
habit is average. The SC is capable to meet small and medium commitments.
Based on our databank, there are no legal suits against the SC.
|
|
The industry demonstrates downward trend and the immediate outlook for the
industry is uncertain. There are many competitors involved in the textile
and apparel industry and the competitiveness are highly dependent on the
SC's ability to deliver good quality products in order to further enhance
its competitiveness and thus increased its profitability.
|
|
In view of its poor financial performance and based on our assessment, we
recommend credit be granted to the SC with close monitoring.
|
PROFIT AND LOSS ACCOUNT
|
THE FINANCIAL
STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.
|
|
RECRON
(MALAYSIA) SDN BHD
|
|
For The Year
Ended 31-December-2009
|
|
|
|
17 month
|
|
|
2009
|
2008
|
|
|
MYR
|
MYR
|
|
|
|
|
|
|
|
|
|
TURNOVER
|
2,888,960,000
|
2,932,020,000
|
|
|
==========
|
==========
|
|
PROFIT/(LOSS) FROM OPERATIONS
|
11,710,000
|
45,700,000
|
|
|
|
|
|
|
------------
|
------------
|
|
PROFIT/(LOSS) BEFORE TAXATION
|
11,710,000
|
45,700,000
|
|
Taxation
|
4,700,000
|
-
|
|
PROFIT/(LOSS) AFTER TAXATION
|
------------
16,410,000
|
------------
45,700,000
|
|
|
|
|
|
|
|
|
|
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS
|
------------
16,410,000
|
------------
45,700,000
|
|
|
|
|
|
PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS
RETAINED PROFIT/(ACCUMULATED LOSS) BROUGHT FORWARD
|
------------
16,410,000
|
------------
45,700,000
|
|
As previous reported
|
45,700,000
|
-
|
|
|
|
|
|
As restated
|
------------
45,700,000
|
------------
-
|
|
|
------------
|
------------
|
|
PROFIT AVAILABLE FOR APPROPRIATIONS
|
62,110,000
|
45,700,000
|
|
RETAINED PROFIT/(ACCUMULATED LOSS) CARRIED FORWAD
|
------------
62,110,000
==========
|
------------
45,700,000
==========
|
|
RETAINED BY: The Company
|
62,110,000
|
45,700,000
|
|
|
|
|
|
|
|
|
|
|
------------
62,110,000
==========
|
------------
45,700,000
==========
|
|
INTEREST EXPENSE (as per notes to PL)
|
|
|
|
Term loan
|
19,910,000
|
30,130,000
|
|
Bank overdraft
|
11,410,000
|
-
|
|
|
------------
31,320,000
==========
|
------------
30,130,000
==========
|
BALANCE SHEET
|
RECRON
(MALAYSIA) SDN BHD
|
|
As At
31-December-2009
|
|
|
|
17 month
|
|
|
2009
|
2008
|
|
|
MYR
|
MYR
|
|
|
|
|
|
|
ASSET EMPLOYED:
|
|
|
|
FIXED ASSETS
|
1,579,120,000
|
1,617,770,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LONG TERM ASSETS
|
------------
1,579,120,000
|
------------
1,617,770,000
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stocks
|
449,240,000
|
494,930,000
|
|
|
|
|
|
|
|
Trade debtors
|
142,430,000
|
111,360,000
|
|
|
Other debtors, deposits & prepayments
|
7,480,000
|
15,390,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & bank balances
|
70,000
|
370,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
------------
599,220,000
|
------------
622,050,000
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
Trade creditors
|
111,700,000
|
75,260,000
|
|
|
Other creditors & accruals
|
48,370,000
|
41,210,000
|
|
|
|
|
|
|
|
Bank overdraft
|
235,080,000
|
254,820,000
|
|
|
Short term borrowings/Term loans
|
654,000,000
|
658,930,000
|
|
|
Other borrowings
|
165,000,000
|
191,130,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount due to ultimate holding company
|
15,300,000
|
35,360,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
------------
1,229,450,000
|
------------
1,256,710,000
|
|
NET CURRENT ASSETS/(LIABILITIES)
|
------------
<630,230,000>
|
------------
<634,660,000>
|
|
TOTAL NET ASSETS
|
------------
948,890,000
==========
|
------------
983,110,000
==========
|
|
|
|
|
|
|
FINANCED BY:
|
|
|
|
|
|
|
|
|
SHARE CAPITAL
|
|
|
|
|
Ordinary share capital
|
2,500,000
|
2,500,000
|
|
|
|
|
|
|
TOTAL SHARE CAPITAL
|
------------
2,500,000
|
------------
2,500,000
|
|
|
|
|
|
|
RESERVES
|
|
|
|
|
|
|
|
|
|
Capital reserve
|
819,040,000
|
864,970,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retain profit/(Accumulated loss) carried forward
|
62,110,000
|
45,700,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL RESERVES
|
------------
881,150,000
|
------------
910,670,000
|
|
SHAREHOLDERS' FUNDS/EQUITY
|
------------
883,650,000
|
------------
913,170,000
|
|
|
|
|
|
|
|
|
|
|
|
LONG TERM & DEFERRED LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred taxation
|
65,240,000
|
69,940,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LONG TERM & DEFERRED LIABILITIES & PROVISIONS
|
------------
65,240,000
|
------------
69,940,000
|
|
|
------------
|
------------
|
|
|
948,890,000
|
983,110,000
|
|
|
==========
|
==========
|
|
|
|
|
|
FINANCIAL RATIOS
|
RECRON
(MALAYSIA) SDN BHD
|
|
As At
31-December-2009
|
|
|
|
17 month
|
|
|
2009
|
2008
|
|
|
MYR
|
MYR
|
|
|
|
|
|
|
|
|
|
|
|
TYPES OF FUNDS
|
|
|
|
|
Cash
|
70,000
|
370,000
|
|
|
Net Liquid Funds
|
<889,010,000>
|
<913,380,000>
|
|
|
Net Liquid Assets
|
<1,079,470,000>
|
<1,129,590,000>
|
|
|
Net Current Assets/(Liabilities)
|
<630,230,000>
|
<634,660,000>
|
|
|
Net Tangible Assets
|
948,890,000
|
983,110,000
|
|
|
Net Monetary Assets
|
<1,144,710,000>
|
<1,199,530,000>
|
|
|
|
|
|
|
BALANCE SHEET ITEMS
|
|
|
|
|
Total Borrowings
|
1,054,080,000
|
1,104,880,000
|
|
|
Total Liabilities
|
1,294,690,000
|
1,326,650,000
|
|
|
Total Assets
|
2,178,340,000
|
2,239,820,000
|
|
|
Net Assets
|
948,890,000
|
983,110,000
|
|
|
Net Assets Backing
|
883,650,000
|
913,170,000
|
|
|
Shareholders" Funds
|
883,650,000
|
913,170,000
|
|
|
Total Share Capital
|
2,500,000
|
2,500,000
|
|
|
Total Reserves
|
881,150,000
|
910,670,000
|
|
|
|
|
|
|
LIQUIDITY(Times)
|
|
|
|
|
Cash Ratio
|
0
|
0
|
|
|
Liquid Ratio
|
0.12
|
0.10
|
|
|
Current Ratio
|
0.49
|
0.49
|
|
|
|
|
|
|
WORKING CAPITAL CONTROL (Days)
|
|
|
|
|
Stock Ratio
|
57
|
62
|
|
|
Debtors Ratio
|
18
|
14
|
|
|
Creditors Ratio
|
14
|
9
|
|
|
|
|
|
|
SOLVENCY RATIOS (Times)
|
|
|
|
|
Gearing Ratio
|
1.19
|
1.21
|
|
|
Liabilities Ratio
|
1.47
|
1.45
|
|
|
Times Interest Earned Ratio
|
1.37
|
2.52
|
|
|
|
|
|
|
PERFORMANCE RATIO (%)
|
|
|
|
|
Operating Profit Margin
|
0.41
|
1.56
|
|
|
Net Profit Margin
|
0.57
|
1.56
|
|
|
Return On Net Assets
|
4.53
|
7.71
|
|
|
Return On Capital Employed
|
2.34
|
4.00
|
|
|
Return On Shareholders' Funds/Equity
|
1.86
|
5.00
|
|
|
Dividend Pay Out Ratio (Times)
|
0
|
0
|
|
|
|
|
|
|
NOTES TO ACCOUNTS
|
|
|
|
|
Contingent Liabilities
|
0.00
|
0.00
|
|
|
|
|
|
|
|
|
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