MIRA INFORM REPORT

Report Date :

26.09.2012

IDENTIFICATION DETAILS

Name :	EMERY OLEOCHEMICALS (M) SDN BHD
Formerly Known As :	COGNIS OLEOCHEMICALS (M) SDN BHD (12/05/2009)
Registered Office :	Lot 4, Jalan Perak, Kawasan Perusahaan Batu 9, Jalan Klang-Banting, Teluk Panglima Garang, 42500 Kuala Langat, Selangor
Country :	Malaysia
Financials (as on) :	31.12.2011
Date of Incorporation :	06.10.1980
Com. Reg. No.:	63112-D
Legal Form :	Private Limited
Line of Business :	Manufacturer of Oleochemical Products
No. of Employees :	350

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 :	Slow but correct
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30^th, 2012

Country Name	Previous Rating (31.03.2011)	Current Rating (30.06.2012)
Malaysia	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

MALAYSIA - ECONOMIC OVERVIEW

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with strained government finances, has forced Kuala Lumpur to begin to reduce government subsidies. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies more than 40% of government revenue. The central bank maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia''s exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB has raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but he has encountered significant opposition, especially from Malay nationalists and other vested interests.

Source : CIA

* Adopted abbreviations :	SC - Subject Company (the company enquired by you)
	N/A - Not Applicable

EXECUTIVE SUMMARY

REGISTRATION NO.

:

63112-D

COMPANY NAME

:

EMERY OLEOCHEMICALS (M) SDN BHD

FORMER NAME

:

COGNIS OLEOCHEMICALS (M) SDN BHD (12/05/2009)
HENKEL OLEOCHEMICALS (MALAYSIA) SDN BHD (16/09/1999)

INCORPORATION DATE

:

06/10/1980

COMPANY STATUS

:

EXIST

LEGAL STATUS

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

LOT 4, JALAN PERAK, KAWASAN PERUSAHAAN BATU 9, JALAN KLANG-BANTING, TELUK PANGLIMA GARANG, 42500 KUALA LANGAT, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 4, JALAN PERAK, KAWASAN PERUSAHAAN TELUK PANGLIMA GARANG, 42500 KUALA LANGAT, SELANGOR, MALAYSIA.

TEL.NO.

:

03-33268686

FAX.NO.

:

03-33268787

WEB SITE

:

www.emeryoleo.com

CONTACT PERSON

:

MOHD NAJIB ( GENERAL MANAGER )

INDUSTRY CODE

:

24290 1514

PRINCIPAL ACTIVITY

:

MANUFACTURER OF OLEOCHEMICAL PRODUCTS

AUTHORISED CAPITAL

:

MYR 500,000,000.00 DIVIDED INTO
ORDINARY SHARE 500,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 400,000,000.00 DIVIDED INTO
ORDINARY SHARES 400,000,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 3,065,403,000 [2011]

NET WORTH

:

MYR 899,435,000 [2011]

M1000 OVERALL RANKING

:

147[2011]

M1000 INDUSTRY RANKING

:

3[2011]

STAFF STRENGTH

:

350 [2012]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

PROMPT

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

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 oleochemical products.

The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).

According to the Malaysia 1000 publication, the SC's ranking are as follows:
YEAR	2011	2009	2008	2005	2004
OVERALL RANKING	147	89	94	321	387
INDUSTRY RANKING	3	2	2	15	12

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
PTT CHEMICAL INTERNATIONAL PRIVATE LIMITED	391B, ORCHARD ROAD, 13-10A, NGEE ANN CITY TOWER B, 238874, SINGAPORE.	200813882	200,000,000.00	50.00
SIME DARBY PLANTATION SDN BHD	WISMA COSPLANT 1, 2 JALAN SS 16/4, 4TH FLOOR, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.	647766	200,000,000.00	50.00
			---------------	------
			400,000,000.00	100.00
			============	=====

+ Also Director

The SC interest in other companies (Subsidiaries/Associates) are shown as follow :

Local No	Company	(%)	As At
215324	EMERYOLEO SPECIALTIES (M) SDN BHD	100	31/12/2011
93282	EMERY OLEOCHEMICALS RIKA (M) SDN BHD	55	31/12/2011

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MS. PUNTIP OUNGPASUK
Address	:	114/99, LADDAROM VILLAGE SOI 7, SAINA, MUANG NONTHABURI 11000, THAILAND.
IC / PP No	:	K623923
Date of Birth	:	23/12/1960
Nationality	:	THAI
Date of Appointment	:	24/11/2008

DIRECTOR 2

Name Of Subject	:	MR. VANCHAI TADADOLTIP
Address	:	5/103 MOO 3, TAB-MA ROAD, NERNPRA, AMPHOE MUANG, RAYONG, THAILAND.
IC / PP No	:	L863657

DIRECTOR 3

Name Of Subject	:	MR. VEERASAK KOSITPAISAL
Address	:	1092/279, NG TOWER, F1.14TH, BAGNA-TRAD, KILOMETER 3, ROAD BANGNA, 10260, BANGKOK, THAILAND.
IC / PP No	:	L683359
Date of Birth	:	18/06/1954
Nationality	:	THAI
Date of Appointment	:	25/03/2009

DIRECTOR 4

Name Of Subject	:	MR. MUSTAMIR BIN MOHAMAD
Address	:	9, JALAN ARA SD 7/1B, BANDAR SRI DAMANSARA, 52200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	A1836639
New IC No	:	720518-10-5399
Date of Birth	:	18/05/1972
Nationality	:	MALAYSIAN MALAY

DIRECTOR 5

Name Of Subject	:	MS. RENAKA A/P RAMACHANDRAN
Address	:	19, JALAN ENDAH 6/7, 46000 PETALING JAYA, SELANGOR, MALAYSIA.
IC / PP No	:	A0821952
New IC No	:	671005-10-6080
Date of Birth	:	05/10/1967
Nationality	:	MALAYSIAN INDIAN

DIRECTOR 6

Name Of Subject	:	MR. HARIS FADZILAH BIN HASSAN
Address	:	10, JALAN U5/91B, SUBANG BESTARI, SEKSYEN U5, 40150 SHAH ALAM, SELANGOR, MALAYSIA.
IC / PP No	:	A0859932
New IC No	:	671201-02-5691
Date of Birth	:	01/12/1967
Nationality	:	MALAYSIAN MALAY
Date of Appointment	:	24/11/2008

DIRECTOR 7

Name Of Subject	:	MR. NARONGSAK JIVAKANUN
Address	:	100/9, LADAWAN SUKHUMVIT, CHALERM PARKIET RAMA 9 ROAD, PRAVET, BANGKOK, THAILAND.
IC / PP No	:	L818846
Date of Birth	:	27/01/1969
Nationality	:	THAI
Date of Appointment	:	15/10/2009
Remark	:	ALT DIR TO KONGKRAPAN INTARAJANG, PUNTIP OUNGPASUK & VEERASAK KOSITPAISAL, VANCHAI TADADOLTIP

DIRECTOR 8

Name Of Subject	:	MR. FRANKI A/L ANTHONY DASS
Address	:	3, JALAN 3/66, SECTION 3, 46000 PETALING JAYA, SELANGOR, MALAYSIA.
New IC No	:	561002-07-5533
Date of Birth	:	02/10/1956
Nationality	:	MALAYSIAN INDIAN

DIRECTOR 9

Name Of Subject	:	MR. KONGKRAPAN INTARAJANG
Address	:	38/17 SOI SOON VIJAI 6, NEW PETCHBURI ROAD, BANGKAPI, HUI KHWANG, 10320, BANGKOK, THAILAND.
IC / PP No	:	A932762
Date of Birth	:	21/04/1967
Nationality	:	THAI
Date of Appointment	:	24/11/2008
Remark	:	OLD P/P R759551

DIRECTOR 10

Name Of Subject	:	MR. ZULKIFLEE BIN ABDUL RAHMAN
Address	:	30, JALAN SUNGAI BERANANG 32/57, BUKIT RIMAU, SECTION 32, 40460 SHAH ALAM, SELANGOR, MALAYSIA.
IC / PP No	:	A0422566
New IC No	:	660720-01-6371
Date of Birth	:	20/07/1966
Nationality	:	MALAYSIAN MALAY
Remark	:	ALT DIR FRANKI A/L ANTHONY DASS, HARIS FADZILAH BIN HASSAN, RENAKA A/P RAMACHANDRAN, MUSTAMIR BIN MOHAMAD

MANAGEMENT

1)	Name of Subject	:	MOHD NAJIB
	Position	:	GENERAL MANAGER

2)	Name of Subject	:	MICHAEL SIONG
	Position	:	FINANCE MANAGER

3)	Name of Subject	:	KELVIN TAN
	Position	:	MARKETING MANAGER

4)	Name of Subject	:	FAIRUZ NIZAM
	Position	:	CORPORATE AFFAIRS MANAGER

5)	Name of Subject	:	ROZIYANA AHMAD
	Position	:	SECRETARY

AUDITOR

Auditor	:	KPMG
Auditor' Address	:	WISMA KPMG, KPMG TOWER, 8, FIRST AVENUE, BANDAR UTAMA, LEVEL 10, 47800 PETALING JAYA, SELANGOR, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MR. SHAH RIZAL BIN NOOR IKHSAN
	IC / PP No	:	A1073204
	New IC No	:	680827-01-5393
	Address	:	170, JALAN A10, TAMAN MELAWATI, HULU KLANG, 53100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

The SC enjoys normal banking routine with above mentioned banker(s). No adverse record was found during our investigation.

ENCUMBRANCE (S)

No encumbrance was found in our databank at the time of investigation.

LEGAL CHECK AGAINST 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.

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
Overseas	:	YES
Import Countries	:	INDONESIA,GERMANY,SINGAPORE

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	[	X	]	Good 31-60 Days	[	]	Average 61-90 Days	[	]
Fair 91-120 Days	[		]	Poor >120 Days	[	]

CLIENTELE

Local	:	YES
Domestic Markets	:	MALAYSIA
Overseas	:	YES
Export Market	:	EUROPE, ASIA, MIDDLE EAST
Credit Term	:	30 - 60 DAYS
Payment Mode	:	CHEQUES,TELEGRAPHIC TRANSFER (TT),LETTER OF CREDIT (LC)
Type of Customer	:	INDUSTRIAL SECTOR
CUSTOMER(S)	:	1) COLGATE-PALMOLIVE (MALAYSIA) SDN BHD

OPERATIONS

Products manufactured

:

FATTY/ ACIDS, FATTY ALCOHOLS, CHEMICALS, OZONE ACIDS & OTHER OLEOCHEMICALS DERIVATIVES

Brand Name

:

EDENOR, HYDRENOL, LOROL, STENOL

Award

:

1 ) HACCP Year :2005
2 ) MS ISO 14001 Year :2001
3 ) MS ISO 9001 : 2000 Year :1997

Competitor(s)

:

BP CHEMICALS (MALAYSIA) SDN BHD
KL-KEPONG OLEOMAS SDN BHD
NATURAL OLEOCHEMICALS SDN BHD
NYLEX (MALAYSIA) BHD
PETRONAS CHEMICALS GROUP BHD

Member(s) / Affiliate(s)

:

MALAYSIAN CROP CARE AND PUBLIC HEALTH ASSOCIATION (MCPA)

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

SMALL & MEDIUM ENTERPRISE

CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

Ownership of premises

:

OWNED

Production Line

:

4

Production Capacity

:

120,000 TO 130,000 TONNES PER MONTH

Shifts

:

3

Total Number of Employees:
YEAR	2012	2011	2010	2009	2008	2007
GROUP	N/A	N/A	N/A	N/A	N/A	N/A
COMPANY	350	550	550	500	400	348

Branch

:

NO

Other Information:

The SC is principally engaged in the (as a / as an) manufacturer of oleochemical products.

The SC is an affiliate of the worldwide Cognis Group, one of the leading firms in the specialty chemicals field. Cognis is a leading specialty chemicals company with activities around the world. Utilizing its vast experience in oleochemicals, Cognis markets innovative products and solutions for personal care, home care and modern nutrition, as well as high-performance products for numerous industrial markets.

The SC offers a complete spectrum of oleochemical raw materials, know-how for developing innovative product concepts, and chemical/technical expertise for streamlining industrial processes.

The SC's chemistry draws on the powers of nature: oils from palm, palm kernel and coconut are its most important raw materials.

The SC produces a wide range of oleochemicals including caprylic-capric acid, fatty acid methylesters, palm fatty acid, refined glycerine Ph Eur 99.8%, distilled palm kernel, fractional fatty acid methyesters, fractional fatty acids (C6 to C18 pure), saturated fatty alcohols narrow cuts and etc.

The SC's oleochemicals are, therefore the natural solution to a wide range of applications such as food industries and other industries such as detergents, alcohol, textiles, plastics and toiletries.

We were informed that the SC produces its chemicals products in both liquid and powder forms.

PROJECTS

No projects found in our databank

RECENT DEVELOPMENT

Sept 20th, 2011

Emery Oleochemicals recently received the 2011 Frost & Sullivan Asia Pacific Green Excellence Award for Product Innovation in Renewable Chemicals. Held for the first time, the Asia Pacific Green Excellence Awards program recognizes organizations, individuals, technologies and solutions that are focused on environmental priorities, long-term sustainability, and are viable in the marketplace.

The award which reaffirms the strength of our product platform, is primarily characterized by our approach to long-term sustainability. To qualifying for this win, we were benchmarked against a number of competitors using three key criteria - Product Profile, Business Commitment and Environmental Accountability. Our on-going works and expansion plans in this region was also recognized.

Aug 15th, 2011

The 2011 Frost & Sullivan Asia Pacific Green Excellence Awards, is presented to companies that have excelled in green product and technology innovation, and service achievements that promote sustainability. These awards recognize ground-breaking ideas and innovations that originated from a firm sense of environmental responsibility across a multitude of disciplines, such as Environment, Energy & Power, Government, Chemicals and Logistics, amongst others.

For Emery Oleochemicals Group, winning the coveted 'Product Innovation' category is a recognition for our industry leadership position amongst chemical players, particularly in this region. Winning this award is certainly timely as the company is implementing various growth initiatives to expand our market reach and increase our specialties portfolio.

Feb 9th, 2011

Emery Oleochemicals Group (Emery Oleochemicals) has entered into a strategic joint venture agreement with AK ChemTech Co., LTD. (AK ChemTech), a move that will significantly increase both companies' thrust and presence in the global home and personal wellness market.

The joint venture generates significant synergies for both partners, driven by AK ChemTech's technology in product development and applications know-how coupled with Emery Oleochemical's globality and market intimacy.

June 21st, 2011

Emery Oleochemicals, the largest oleochemicals company in the world, which is jointly ventured by Sime Darby Bhd, will invest approximately RM600 million to double its production capacity in Malaysia to 600,000 tonnes from 300,000 tonnes by 2015 to meet higher demand in the consumer products industry.

Its chief executive, Dr Kongkrapan Intarajang said the five year plan involving both the oleobasics and specialised chemicals segments will see an additional plant being built on the current factory site in Teluk Panglima Garang, Selangor.

May 3rd, 2010

Emery Oleochemicals LLC received the OCTC Excellence Award for environmental performance at a ceremony in Columbus OH. The award recognized the significant reduction in air and waste water emissions over the past 3 years.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	03-33268686
Match	:	N/A
Address Provided by Client	:	LOT 4, JALAN PERAK, KAWASAN PERUSAHAAN TELUK PANGLIMA GARANG,42500,KUALA LANGAT,SELANGOR.
Current Address	:	LOT 4, JALAN PERAK, KAWASAN PERUSAHAAN TELUK PANGLIMA GARANG, 42500 KUALA LANGAT, SELANGOR, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

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

FINANCIAL ANALYSIS

Profitability
Turnover	:	Erratic	[	2008 - 2011	]
Profit/(Loss) Before Tax	:	Decreased	[	2008 - 2011	]
Return on Shareholder Funds	:	Unfavourable	[	0.66%	]
Return on Net Assets	:	Unfavourable	[	3.99%	]
The fluctuating turnover reflects the fierce competition among the existing and new market players.The SC's profit fell sharply because of the high operating costs incurred. The unfavourable return on shareholders' funds could indicate that the SC was inefficient in utilising its assets to generate returns.
Working Capital Control
Stock Ratio	:	Acceptable	[	61 Days	]
Debtor Ratio	:	Favourable	[	54 Days	]
Creditors Ratio	:	Favourable	[	26 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	:	Acceptable	[	0.85 Times	]
Current Ratio	:	Unfavourable	[	1.50 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	:	Unfavourable	[	1.91 Times	]
Gearing Ratio	:	Favourable	[	0.55 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 lowly geared thus it had a low financial risk. The SC was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the SC being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.
Overall Assessment :
The SC recorded lower profits as its turnover showed a erratic trend. The SC's management was unable to control its costs efficiently as its profit showed a downward trend. The SC's liquidity was at an acceptable range. If the SC is able to obtain further short term financing, it should be able to meet all its short term obligations. 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 as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.
Overall financial condition of the SC : LIMITED

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators:	2008	2009	2010	2011*	2012**
Population ( Million)	27.73	28.13	28.35	28.70	29.10
Gross Domestic Products ( % )	4.6	<0.5>	7.2	5.5	5.3
Domestic Demand ( % )	6.9	2.9	6.3	4.8	7.6
Private Expenditure ( % )	7.1	<2.7>	8.1	7.0	8.7
Consumption ( % )	8.4	0.7	6.7	6.3	7.1
Investment ( % )	1.5	<17.2>	17.7	16.2	15.9
Public Expenditure ( % )	6.5	5.2	3.8	7.6	4.7
Consumption ( % )	11.6	3.1	0.2	8.9	3.0
Investment ( % )	0.7	8.0	2.8	0.6	7.0
Balance of Trade ( MYR Million )	129,563	89,650	118,356	116,058	-
Government Finance ( MYR Million )	<34,462>	<28,450>	<40,482>	<45,511>	<43,021>
Government Finance to GDP / Fiscal Deficit ( % )	<4.8>	<4.8>	<5.6>	<5.4>	<4.7>
Inflation ( % Change in Composite CPI)	<3.3>	<5.2>	5.1	3.1	-
Unemployment Rate	3.7	4.5	3.9	3.3	-
Net International Reserves ( MYR Billion )	388	331	329	415	-
Average Risk-Weighted Capital Adequacy Ratio ( % )	1.91	2.87	2.20	3.50	-
Average 3 Months of Non-performing Loans ( % )	13.24	11.08	15.30	14.80	-
Average Base Lending Rate ( % )	6.72	5.53	6.30	6.60	-
Business Loans Disbursed( % )	11.6	10.5	14.7	15.3	-
Foreign Investment ( MYR Million )	23,261.4	22,156.8	22,517.9	23,546.1	-
Consumer Loans ( % )	-	-	-	-	-
Registration of New Companies ( No. )	41,599	41,578	44,148	-	-
Registration of New Companies ( % )	<4.0>	<0.1>	6.2	-	-
Liquidation of Companies ( No. )	27,992	39,075	25,585	-	-
Liquidation of Companies ( % )	23.7	39.6	<34.5>	-	-
Registration of New Business ( No. )	269,866	312,581	271,414	-	-
Registration of New Business ( % )	-	-	-	-	-
Business Dissolved ( No. )	18,885	19,345	19,738	-	-
Business Dissolved ( % )	<7.6>	2.4	2.0	-	-
Sales of New Passenger Cars (' 000 Unit )	497.5	486.3	543.6	363.0	-
Cellular Phone Subscribers ( Million )	25.1	30.1	32.8	35.3	-
Tourist Arrival ( Million Persons )	21.5	23.6	24.6	25.3	-
Hotel Occupancy Rate ( % )	68.0	58.0	63.0	51.3	-
Credit Cards Spending ( % )	17.1	12.8	14.1	15.6	-
Bad Cheque Offenders (No.)	34,834	36,667	33,568	27,208	-
Individual Bankruptcy ( No.)	13,907	16,228	18,119	16,155	-
Individual Bankruptcy ( % )	5.1	16.7	11.7	<10.8>	-

INDUSTRIES ( % of Growth ):	2008	2009	2010	2011*	2012**
Agriculture	3.6	0.4	2.1	4.7	4.1
Palm Oil	7.0	<1.1>	<3.4>	7.3	-
Rubber	<1.1>	<19.8>	9.9	6.4	-
Forestry & Logging	<1.5>	<5.9>	<3.3>	<4.7>	-
Fishing	4.0	5.5	5.6	2.8	-
Other Agriculture	5.9	9.0	7.9	8.5	-
Industry Non-Performing Loans ( MYR Million )	393.0	413.7	508.4	634.1	-
% of Industry Non-Performing Loans	<2.0>	1.3	2.1	3.2	-
Mining	<0.8>	<3.8>	0.2	<2.4>	2.5
Oil & Gas	12.7	2.1	0.5	<1.7>	-
Other Mining	-	-	-	-	-
Industry Non-performing Loans ( MYR Million )	36.0	44.2	49.7	46.5	-
% of Industry Non-performing Loans	0.1	0.1	0.1	0.1	-
Manufacturing #	1.3	<9.4>	11.4	5.6	4.5
Exported-oriented Industries	2.7	<19.0>	12.1	2.8	-
Electrical & Electronics	2.4	<30.3>	28.4	<4.9>	-
Rubber Products	4.2	<10.1>	25.3	15.4	-
Wood Products	<6.0>	<24.1>	20.1	<7.3>	-
Textiles & Apparel	1.9	<19.5>	<0.4>	14.8	-
Domestic-oriented Industries	9.9	<9.8>	16.3	6.3	-
Food, Beverages & Tobacco	9.5	0.2	3.0	4.2	-
Chemical & Chemical Products	1.4	<7.7>	16.2	5.6	-
Plastic Products	6.5	<9.1>	2.4	3.8	-
Iron & Steel	16.8	<32.7>	29.3	2.4	-
Fabricated Metal Products	14.7	<2.5>	14.9	25.2	-
Non-metallic Mineral	8.3	<15.5>	20.2	16.3	-
Transport Equipment	27.1	<13.5>	36.5	<9.4>	-
Paper & Paper Products	8.6	<5.0>	18.7	15.6	-
Crude Oil Refineries	7.8	0.2	<11.4>	9.3	-
Industry Non-Performing Loans ( MYR Million )	5,729.4	6,007.3	6,217.5	6,537.2	-
% of Industry Non-Performing Loans	16.8	18.3	23.8	25.7	-
Construction	2.1	5.8	5.1	4.4	7.0
Industry Non-Performing Loans ( MYR Million )	4,149.8	3,241.8	4,038.5	3,856.9	-
% of Industry Non-Performing Loans	12.2	9.9	10.7	10.2	-
Services	7.3	2.6	6.5	6.4	6.5
Electric, Gas & Water	5.0	0.4	8.5	5.6	4.8
Transport, Storage & Communication	7.8	1.6	7.7	6.5	7.3
Wholesale, Retail, Hotel & Restaurant	10.0	2.8	4.7	5.2	6.9
Finance, Insurance & Real Estate	9.2	3.8	6.1	6.3	6.5
Government Services	8.6	2.0	6.7	7.6	5.6
Other Services	5.9	4.4	4.2	5.4	5.7
Industry Non-Performing Loans ( MYR Million )	8,281.4	6,631.3	7,384.6	6,825.2	-
% of Industry Non-Performing Loans	24.3	20.2	25.7	23.4	-
* Estimate / Preliminary
** Forecast
# Based On Manufacturing Production Index (Source : Department of Statistics / Economic Report / Bank Negara Report)

INDUSTRY ANALYSIS

MSIC CODE
24290 : Manufacture of other chemical products n.e.c
1514 : Manufacture of vegetable and animal oils and fats
INDUSTRY :	MANUFACTURING
The manufacturing sector is expected to be driven by higher value-added activities in Malaysia.The GDP growth for first quarter 2012 indicating manufacturing maintain its growth of 4.5%, similar to year 2011.Malaysia recorded a 12% jump in approved investments in the manufacturing sector in the first quarter of 2012 compared with the corresponding period 2011. According to Federation of Malaysian Manufacturers (FMM), manufacturing sector expected to improve in the third quarter 2012 despite concerns over external developments and the rising cost of production.
The rubber products sub-sector is expected to remain resilient supported by continuous improvements in medical and healthcare standards in emerging markets as well as demand from niche markets such as the oil and gas sector for rubber hoses. Malaysia rubber exports are forecast to grow at 10%, at the end of 2012 driven by global demand for medical gloves as well as rubber tyres and tubes.Rubber glove exports make up 70 % of total rubber shipments in Malaysia due to hospitals and clinics place more intrest on rising health and hygiene awareness.
The Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.
Chemical production are expected to show 6.2% in year 2012 and 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.
According to Malaysian Iron and Steel Industry Federation, first half of 2012 would remain weak for the local steel industry due to eurozone crisis, slowdown in China's economy and less robust construction activities in the developed countries. At first quarter 2012, the average local steel price is trading atRM2,300 per tonne compared with the average international price of US$740 (RM2,331) per tonne.
According to the Department of Statistics, Malaysia during the first quarter 2012, the manufacturing output increased due to activities in major sub-sectors such as petroleum, chemical, rubber and plastic products (10.5 %), and non-metallic mineral products, basic metal and fabricated metal products (3.9 %). Meanwhile, it's also announced that the manufacturing sector's sales grew by 10 % in May 2012 to record RM52.5 billion compared with RM47.7 billion in May 2011. The Industrial Production Index (IPI ) increased 7.6 % in May (2012) due to increases in manufacturing (6.5 %).
Tax and non-tax incentives provided by goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such as solar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1980, the SC is a Private Limited company, focusing on manufacturer of oleochemical products. The SC has been in business for over 3 decades. It has built up a strong clientele base and good reputation will enable the SC to further enhance its business in the near term. The SC is expected to enjoy a stable market shares. Having strong support from its shareholders has enabled the SC to remain competitive despite the challenging business environment. The SC is a large entity with strong capital position. We are confident with the SC's business and its future growth prospect.

Over the years, the SC has penetrated into both the local and overseas market. The SC has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the SC to further enhance its business in the near term. The SC is a fairly large and rapidly growing company with over 350 staff in its operations. Overall, we regard that the SC's management capability is average. This indicates that the SC has greater potential to improve its business performance and raising income for the SC.

The SC's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The SC however managed to maintain an adequate liquidity level, indicating that the SC has the ability to meet its financial obligations. Being a lowly geared company, the SC is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 899,435,000, the SC should be able to maintain its business in the near terms.

The SC's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the SC has a good control over its resources.

We regard that the SC's overall payment habit is prompt. The SC had a favourable creditors' ratio as evidenced by its favourable collection days.

The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the SC is expected to benefit from the favourable outlook of the industry.

Based on the above condition, we recommend credit be granted to the SC normally.

PROFIT AND LOSS ACCOUNT

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

EMERY OLEOCHEMICALS (M) SDN BHD

Financial Year End	31/12/2011	31/12/2010	31/12/2009	31/12/2008
Months	12	12	12	12
Consolidated Account	GROUP	GROUP	GROUP	GROUP
Audited Account	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES
Financial Type	FULL	FULL	FULL	FULL
Currency	MYR	MYR	MYR	MYR
TURNOVER	3,065,403,000	3,114,760,000	2,646,135,000	3,793,811,000
Other Income	99,327,000	91,143,000	-	-
	----------------	----------------	----------------	----------------
Total Turnover	3,164,730,000	3,205,903,000	2,646,135,000	3,793,811,000
Costs of Goods Sold	<3,198,979,000>	<2,651,644,000>	-	-
	----------------	----------------	----------------	----------------
Gross Profit	<34,249,000>	554,259,000	-	-
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	23,331,000	76,982,000	<34,638,000>	<17,536,000>
SHARE OF PROFITS/(LOSSES) OF ASSOCIATED COMPANIES	<377,000>	122,000	<439,000>	<230,000>
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	22,954,000	77,104,000	<35,077,000>	<17,766,000>
Taxation	<13,716,000>	<26,780,000>	<289,000>	744,000
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	9,238,000	50,324,000	<35,366,000>	<17,022,000>
Minority interests	<3,277,000>	<3,047,000>	<3,487,000>	<4,749,000>
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS	5,961,000	47,277,000	<38,853,000>	<21,771,000>
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS	5,961,000	47,277,000	<38,853,000>	<21,771,000>
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	382,998,000	335,721,000	374,574,000	396,345,000
	----------------	----------------	----------------	----------------
As restated	382,998,000	335,721,000	374,574,000	396,345,000
	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	388,959,000	382,998,000	335,721,000	374,574,000
	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	388,959,000	382,998,000	335,721,000	374,574,000
	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Revolving loans	8,038,000	3,708,000	4,186,000	-
Others	17,317,000	11,414,000	15,667,000	26,101,000
	----------------	----------------	----------------	----------------
	25,355,000	15,122,000	19,853,000	26,101,000
	=============	=============	=============	=============

BALANCE SHEET

EMERY OLEOCHEMICALS (M) SDN BHD

ASSETS EMPLOYED:
FIXED ASSETS	766,689,000	660,617,000	608,072,000	621,223,000
LONG TERM INVESTMENTS/OTHER ASSETS
Associated companies	16,035,000	-	-	-
Investments	210,000	210,000	-	-
Deferred assets	4,511,000	6,288,000	21,012,000	11,744,000
Others	7,176,000	6,990,000	6,778,000	5,640,000
	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	27,932,000	13,488,000	27,790,000	17,384,000
INTANGIBLE ASSETS
Deferred/Expenditure carried forward	22,691,000	23,857,000	19,592,000	34,134,000
	----------------	----------------	----------------	----------------
TOTAL INTANGIBLE ASSETS	22,691,000	23,857,000	19,592,000	34,134,000
	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	817,312,000	697,962,000	655,454,000	672,741,000
CURRENT ASSETS
Stocks	510,741,000	502,019,000	413,602,000	406,699,000
Trade debtors	454,215,000	440,957,000	401,572,000	417,021,000
Other debtors, deposits & prepayments	39,877,000	18,957,000	21,200,000	18,439,000
Short term deposits	53,579,000	35,746,000	107,625,000	155,417,000
Cash & bank balances	101,985,000	106,732,000	90,579,000	82,733,000
Others	17,506,000	20,311,000	9,667,000	22,177,000
	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	1,177,903,000	1,124,722,000	1,044,245,000	1,102,486,000
	----------------	----------------	----------------	----------------
TOTAL ASSET	1,995,215,000	1,822,684,000	1,699,699,000	1,775,227,000
	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	231,294,000	235,317,000	224,126,000	218,416,000
Other creditors & accruals	89,064,000	82,242,000	85,357,000	80,825,000
Hire purchase & lease creditors	4,245,000	248,000	303,000	356,000
Bank overdraft	6,746,000	3,823,000	3,205,000	2,140,000
Short term borrowings/Term loans	-	170,979,000	-	7,618,000
Other borrowings	297,232,000	249,149,000	155,504,000	185,291,000
Bill & acceptances payable	117,708,000	45,962,000	-	-
Provision for taxation	13,399,000	6,491,000	2,234,000	1,509,000
Dividends payable/proposed	-	-	14,229,000	-
Other liabilities	23,377,000	8,946,000	913,000	50,169,000
	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	783,065,000	803,157,000	485,871,000	546,324,000
	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	394,838,000	321,565,000	558,374,000	556,162,000
	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	1,212,150,000	1,019,527,000	1,213,828,000	1,228,903,000
	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	400,000,000	400,000,000	400,000,000	400,000,000
	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	400,000,000	400,000,000	400,000,000	400,000,000
RESERVES
Share premium	28,578,000	28,578,000	28,578,000	28,578,000
Revaluation reserve	8,135,000	8,094,000	8,052,000	7,850,000
Retained profit/(loss) carried forward	388,959,000	382,998,000	335,721,000	374,574,000
Others	20,373,000	16,884,000	47,973,000	39,213,000
	----------------	----------------	----------------	----------------
TOTAL RESERVES	446,045,000	436,554,000	420,324,000	450,215,000
MINORITY INTEREST	53,390,000	52,350,000	53,790,000	54,789,000
	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	899,435,000	888,904,000	874,114,000	905,004,000
LONG TERM LIABILITIES
Long term loans	158,648,000	-	205,954,000	200,616,000
Lease obligations	17,888,000	640,000	-	274,000
Deferred taxation	19,309,000	14,493,000	10,128,000	6,765,000
Retirement benefits provision	106,302,000	104,884,000	123,632,000	116,244,000
Others	10,568,000	10,606,000	-	-
	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	312,715,000	130,623,000	339,714,000	323,899,000
	----------------	----------------	----------------	----------------
	1,212,150,000	1,019,527,000	1,213,828,000	1,228,903,000
	=============	=============	=============	=============

FINANCIAL RATIO

EMERY OLEOCHEMICALS (M) SDN BHD

TYPES OF FUNDS
Cash	155,564,000	142,478,000	198,204,000	238,150,000
Net Liquid Funds	148,818,000	138,655,000	194,999,000	236,010,000
Net Liquid Assets	<115,903,000>	<180,454,000>	144,772,000	149,463,000
Net Current Assets/(Liabilities)	394,838,000	321,565,000	558,374,000	556,162,000
Net Tangible Assets	1,189,459,000	995,670,000	1,194,236,000	1,194,769,000
Net Monetary Assets	<428,618,000>	<311,077,000>	<194,942,000>	<174,436,000>
BALANCE SHEET ITEMS
Total Borrowings	492,797,000	428,547,000	369,152,000	396,295,000
Total Liabilities	1,095,780,000	933,780,000	825,585,000	870,223,000
Total Assets	1,995,215,000	1,822,684,000	1,699,699,000	1,775,227,000
Net Assets	1,212,150,000	1,019,527,000	1,213,828,000	1,228,903,000
Net Assets Backing	899,435,000	888,904,000	874,114,000	905,004,000
Shareholders' Funds	899,435,000	888,904,000	874,114,000	905,004,000
Total Share Capital	400,000,000	400,000,000	400,000,000	400,000,000
Total Reserves	446,045,000	436,554,000	420,324,000	450,215,000
LIQUIDITY (Times)
Cash Ratio	0.20	0.18	0.41	0.44
Liquid Ratio	0.85	0.78	1.30	1.27
Current Ratio	1.50	1.40	2.15	2.02
WORKING CAPITAL CONTROL (Days)
Stock Ratio	61	59	57	39
Debtors Ratio	54	52	55	40
Creditors Ratio	26	32	31	21
SOLVENCY RATIOS (Times)
Gearing Ratio	0.55	0.48	0.42	0.44
Liabilities Ratio	1.22	1.05	0.94	0.96
Times Interest Earned Ratio	1.91	6.10	<0.77>	0.32
Assets Backing Ratio	2.97	2.49	2.99	2.99
PERFORMANCE RATIO (%)
Operating Profit Margin	0.75	2.48	<1.33>	<0.47>
Net Profit Margin	0.19	1.52	<1.47>	<0.57>
Return On Net Assets	3.99	9.05	<1.25>	0.68
Return On Capital Employed	3.70	8.36	<1.18>	0.63
Return On Shareholders' Funds/Equity	0.66	5.32	<4.44>	<2.41>
Dividend Pay Out Ratio (Times)	0.00	0.00	0.00	0.00
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.53.53
UK Pound	1	Rs.86.82
Euro	1	Rs.69.03

INFORMATION DETAILS

Report Prepared by :

PRL

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	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
--	NB	New Business	--

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.