MIRA INFORM REPORT

 

 

Report Date :

06.08.2013

 

IDENTIFICATION DETAILS

 

Name :

KL-KEPONG OLEOMAS SDN. BHD.

 

 

Formerly Known As :

ELVISSA CORPORATION SDN. BHD. (15/10/2002)

 

 

Registered Office :

Wisma Taiko, 1 Jalan S.P.Seenivasagam, 30000 Ipoh, Perak

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.09.2012

 

 

Date of Incorporation :

22.07.2002

 

 

Com. Reg. No.:

587027-T

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Manufacture of Oleochemicals

 

 

No. of Employees :

700

 

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 :

Good

Payment Behaviour :

Regular

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 – March, 31st, 2013

 

Country Name

Previous Rating

(31.12.2012)

Current Rating

(31.03.2013)

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. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. 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 about 35% of government revenue in 2011. Bank Negera Malaysia (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

 


EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

587027-T

COMPANY NAME

:

KL-KEPONG OLEOMAS SDN. BHD.

FORMER NAME

:

ELVISSA CORPORATION SDN. BHD. (15/10/2002)

INCORPORATION DATE

:

22/07/2002

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

WISMA TAIKO, 1 JALAN S.P.SEENIVASAGAM, 30000 IPOH, PERAK, MALAYSIA.

BUSINESS ADDRESS

:

25, JALAN SUNGAI PINANG 5/18, FASA 2D, TAMAN PERINDUSTRIAN PULAU INDAH, 42920 PELABUHAN KELANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-31012633

FAX.NO.

:

03-31013299

CONTACT PERSON

:

KHOO PING KHEAN ( MANAGING DIRECTOR )

INDUSTRY CODE

:

20

PRINCIPAL ACTIVITY

:

MANUFACTURE OF OLEOCHEMICALS

AUTHORISED CAPITAL

:

MYR 150,000,000.00 DIVIDED INTO
ORDINARY SHARE 100,000,000.00 OF MYR 1.00 EACH.
PREFERENCE SHARE 500,000,000.00 OF MYR 0.10 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 559,000,000.00 DIVIDED INTO
ORDINARY SHARES 100,000,000 CASH OF MYR 1.00 EACH.
PREFERENCE SHARES 393,000,000 CASH AND 66,000,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 1,469,149,000 [2012]

NET WORTH

:

MYR 665,373,000 [2012]

STAFF STRENGTH

:

700 [2013]

BANKER (S)

 

AMBANK (M) BHD
MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

AVERAGE

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) manufacture of oleochemicals.

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

 

The immediate and ultimate holding company of the SC is KUALA LUMPUR KEPONG BERHAD, a company incorporated in MALAYSIA.

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

KL-KEPONG INDUSTRIAL HOLDINGS SDN. BHD.

WISMA TAIKO, 1 JALAN S.P.SEENIVASAGAM, 30000 IPOH, PERAK, MALAYSIA.

300525M

223,600,000.00

40.00

KUALA LUMPUR KEPONG BERHAD

WISMA TAIKO, NO.1,JALAN S.P. SEENIVASAGAM, 30000 IPOH, PERAK, MALAYSIA.

15043V

223,600,000.00

40.00

PALM-OLEO SDN. BHD.

WISMA TAIKO, 1 JALAN S.P SEENIVASAGAM, 30000 IPOH, PERAK, MALAYSIA.

185886V

111,800,000.00

20.00

 

 

 

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

------

 

 

 

559,000,000.00

100.00

 

 

 

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

=====

+ Also Director

 

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

 

Local No

Country

Company

(%)

As At

629076P

MALAYSIA

KLK BIOENERGY SDN BHD

100.00

29/03/2013



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. KHOO PING KHEAN

Address

:

22, JALAN USJ 3/3N, SUBANG JAYA, 47600 SUBANG JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

4403571

New IC No

:

530121-08-5943

Date of Birth

:

21/01/1953

Nationality

:

MALAYSIAN

Date of Appointment

:

27/03/2006

 

DIRECTOR 2

 

Name Of Subject

:

MR. YEOW AH KOW

Address

:

3, JALAN SS19/3C, SUBANG JAYA, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

8391290

New IC No

:

540203-05-5085

Date of Birth

:

03/02/1954

Nationality

:

MALAYSIAN

Date of Appointment

:

24/10/2002

 

DIRECTOR 3

 

Name Of Subject

:

MR. MADHEV A/L BALA SUBRAMANIAM

Address

:

4, SS 24/9, TAMAN MEGAH, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

8294889

New IC No

:

600913-71-5115

Date of Birth

:

13/09/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

27/03/2006

 

DIRECTOR 4

 

Name Of Subject

:

MR. PUNG KOK HOOI

Address

:

1, JALAN SS 24/19, TAMAN MEGAH, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

New IC No

:

660414-07-5357

Date of Appointment

:

26/12/2008



MANAGEMENT

 

 

 

1)

Name of Subject

:

KHOO PING KHEAN

 

Position

:

MANAGING DIRECTOR

 

 

 

 

 

2)

Name of Subject

:

JESSI KOH

 

Position

:

FINANCE MANAGER

 

 

 

 

 

3)

Name of Subject

:

BRIAN LEE

 

Position

:

HUMAN RESOURCE MANAGER

 

 

 

 

 

AUDITOR

 

Auditor

:

KPMG

Auditor' Address

:

KPMG TOWER, 8, FIRST AVENUE, BANDAR UTAMA, LEVEL 10, 47800 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. PUNG KOK HOOI

 

Address

:

1, JALAN SS 24/19, TAMAN MEGAH, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

 

2)

Company Secretary

:

MS. YAP MIOW KIEN

 

IC / PP No

:

A1171235

 

New IC No

:

681220-05-5334

 

Address

:

12, LINGKARAN MERU VALLEY 1A, LAKEVIEW VILLA, MERU VALLEY GOLF RESORT, JALAN BUKIT MERU, 30020 IPOH, PERAK, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

AMBANK (M) BHD

 

 

 

 

 

 

 

 

 

2)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

 

 

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,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

[

 

]

 

Good 31-60 Days

[

 

]

 

Average 61-90 Days

[

X

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 



CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

 

 

 

Export Market

:

EUROPE

UNITED STATES

BRAZIL

UNITED KINGDOM

ASIA

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

 

 

OPERATIONS

 

Products manufactured

:

OLEOCHEMICALS

 

 

 

Brand Name

:

PALMEROL , PALMESTER

 

 

 

 

Competitor(s)

:

EMERY OLEOCHEMICALS (M) SDN BHD
NATURAL OLEOCHEMICALS SDN. BHD.
NYLEX (MALAYSIA) BHD

 

 

 

 

 

 

Member(s) / Affiliate(s)

:

CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

 

 

 

Ownership of premises

:

OWNED

 

 

Total Number of Employees:

 

YEAR

2013

2012

2011

2010

2009

 

 

 

 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

700

500

250

250

250

 

 

 

 

 

Branch

:

NO

 

 

Other Information:


The SC is principally engaged in the (as a / as an) manufacture of oleochemicals.


The SC is under the Kuala Lumpur Kepong Bhd, a Malaysian multinational company involved in plantation, manufacturing, retailing and property development. Whilst plantation remains KLK's core business, the Group has expanded downstream into resource-based manufacturing, in particular oleochemicals, cocoa processing and rubber processing.


The SC is one of the world's largest manufacturers of palm-based oleochemical products and their derivatives, with a product portfolio covering fatty acids & glycerine, fatty amides, soap noodles & soap bars, esters, and fatty alcohols. Recent investments and acquisition activities have allowed the Group to venture further downstream into products like methyl ester sulfonate, amines, biodiesel, fine chemicals and surfactants.


The SC's products range includes fatty acids, fatty alchohol, glycerine, fatty estere, fatty animes, derivatives and surfactants.

The SC utilises advanced automated and semi-automated machineries to ensure production of high quality products.

Besides that the SC has a warehouse located at the same premises to keep stocks and materials.

 

 

PROJECTS


No projects found in our databank



CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

331012633

Current Telephone Number

:

03-31012633

Match

:

YES

 

 

 

Address Provided by Client

:

NO 25 JALAN SUNGAI PINANG 5/8 FASA 2D TAMAN PERINADUSTRIAN PULAU INDAH 42920 PE

Current Address

:

25, JALAN SUNGAI PINANG 5/18, FASA 2D, TAMAN PERINDUSTRIAN PULAU INDAH, 42920 PELABUHAN KELANG, SELANGOR, MALAYSIA.

Match

:

NO

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


On 2nd August 2013 we contacted a staff from the SC and she provided some information of the SC.

The address provided is incorrect.

 

FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Unfavourable

[

5.52%

]

 

Return on Net Assets

:

Unfavourable

[

6.17%

]

 

 

 

 

 

 

 

 

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

[

56 Days

]

 

Debtor Ratio

:

Favourable

[

47 Days

]

 

Creditors Ratio

:

Favourable

[

20 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 where the SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Liquid Ratio

:

Acceptable

[

1.00 Times

]

 

Current Ratio

:

Unfavourable

[

1.60 Times

]

 

 

 

 

 

 

 

 

The SC's liquid ratio was slightly low. This could indicate that the SC's working capital was slightly deficient. The SC will have to improve its liquidity position either by obtaining short term financing or increase its paid up capital so that it can meet all its short term obligations as and when they fall due.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Acceptable

[

4.56 Times

]

 

Gearing Ratio

:

Favourable

[

0.13 Times

]

 

 

 

 

 

 

 

 

The SC's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the SC is able to generate sufficient income to service its interest and repay the loans. The SC was 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 had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the SC's profit, we do believe the SC is able to generate sufficient cash flow to service its interest payment. The SC 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:

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Population ( Million)

28.13

28.35

28.70

29.30

29.80

Gross Domestic Products ( % )

<0.5>

7.2

5.1

5.6

5.3

Domestic Demand ( % )

2.9

6.3

8.2

9.4

5.6

Private Expenditure ( % )

<2.7>

8.1

8.2

8.0

7.4

Consumption ( % )

0.7

6.7

7.1

1.0

5.7

Investment ( % )

<17.2>

17.7

12.2

11.7

13.3

Public Expenditure ( % )

5.2

3.8

8.4

13.3

1.2

Consumption ( % )

3.1

0.2

16.1

11.3

<1.2>

Investment ( % )

8.0

2.8

<0.3>

15.9

4.2

 

 

 

 

 

 

Balance of Trade ( MYR Million )

89,650

118,356

116,058

106,300

110,700

Government Finance ( MYR Million )

<28,450>

<40,482>

<45,511>

<42,297>

<39,993>

Government Finance to GDP / Fiscal Deficit ( % )

<4.8>

<5.6>

<5.4>

<4.5>

<4.0>

Inflation ( % Change in Composite CPI)

<5.2>

5.1

3.1

1.6

2.5

Unemployment Rate

4.5

3.9

3.3

3.2

3.0

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

331

329

415

427

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

2.87

2.20

3.50

2.20

-

Average 3 Months of Non-performing Loans ( % )

11.08

15.30

14.80

14.70

-

Average Base Lending Rate ( % )

5.53

6.30

6.60

6.53

-

Business Loans Disbursed( % )

10.5

14.7

15.3

32.2

-

Foreign Investment ( MYR Million )

22,156.8

22,517.9

23,546.1

26,230.4

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,578

44,148

45,455

45,441

-

Registration of New Companies ( % )

<0.1>

6.2

3.0

<0.0>

-

Liquidation of Companies ( No. )

39,075

25,585

132,476

-

-

Liquidation of Companies ( % )

39.6

<34.5>

417.8

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

312,581

271,414

284,598

324,761

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

19,345

19,738

20,121

-

-

Business Dissolved ( % )

2.4

2.0

1.9

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

486.3

543.6

535.1

552.2

-

Cellular Phone Subscribers ( Million )

30.1

32.8

35.3

38.5

-

Tourist Arrival ( Million Persons )

23.6

24.6

24.7

25.0

-

Hotel Occupancy Rate ( % )

58.0

63.0

60.6

62.4

-

 

 

 

 

 

 

Credit Cards Spending ( % )

12.8

14.1

15.6

12.6

-

Bad Cheque Offenders (No.)

36,667

33,568

32,627

26,982

-

Individual Bankruptcy ( No.)

16,228

18,119

19,167

19,575

-

Individual Bankruptcy ( % )

16.7

11.7

5.8

2.1

-

 

 

 

 

 

 



INDUSTRIES ( % of Growth ):

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Agriculture

0.4

2.1

5.9

0.6

2.4

Palm Oil

<1.1>

<3.4>

10.8

<2.8>

-

Rubber

<19.8>

9.9

6.1

<0.6>

-

Forestry & Logging

<5.9>

<3.3>

<7.6>

<2.2>

-

Fishing

5.5

5.6

2.1

<0.7>

-

Other Agriculture

9.0

7.9

7.1

6.4

-

Industry Non-Performing Loans ( MYR Million )

413.7

508.4

634.1

-

-

% of Industry Non-Performing Loans

1.3

2.1

3.2

-

-

 

 

 

 

 

 

Mining

<3.8>

0.2

<5.7>

1.5

2.7

Oil & Gas

2.1

0.5

<1.7>

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

44.2

49.7

46.5

-

-

% of Industry Non-performing Loans

0.1

0.1

0.1

-

-

 

 

 

 

 

 

Manufacturing #

<9.4>

11.4

4.7

4.2

4.9

Exported-oriented Industries

<19.0>

12.1

2.8

4.1

-

Electrical & Electronics

<30.3>

28.4

<4.9>

1.6

-

Rubber Products

<10.1>

25.3

15.4

3.6

-

Wood Products

<24.1>

20.1

<4.9>

4.6

-

Textiles & Apparel

<19.5>

<0.4>

14.8

<7.1>

-

Domestic-oriented Industries

<9.8>

16.3

6.5

8.6

-

Food, Beverages & Tobacco

0.2

3.0

4.2

-

-

Chemical & Chemical Products

<7.7>

16.2

5.5

9.9

-

Plastic Products

<9.1>

2.4

3.8

-

-

Iron & Steel

<32.7>

29.3

2.4

-

-

Fabricated Metal Products

<2.5>

14.9

25.2

-

-

Non-metallic Mineral

<15.5>

20.2

27.1

6.6

-

Transport Equipment

<13.5>

36.5

<10.4>

13.7

-

Paper & Paper Products

<5.0>

18.7

14.8

<7.8>

-

Crude Oil Refineries

0.2

<11.4>

9.3

-

-

Industry Non-Performing Loans ( MYR Million )

6,007.3

6,217.5

6,537.2

-

-

% of Industry Non-Performing Loans

18.3

23.8

25.7

-

-

 

 

 

 

 

 

Construction

5.8

5.1

4.4

15.5

11.2

Industry Non-Performing Loans ( MYR Million )

3,241.8

4,038.5

3,856.9

-

-

% of Industry Non-Performing Loans

9.9

10.7

10.2

-

-

 

 

 

 

 

 

Services

2.6

6.5

6.4

5.5

5.6

Electric, Gas & Water

0.4

8.5

5.6

4.8

-

Transport, Storage & Communication

1.6

7.7

6.5

7.3

-

Wholesale, Retail, Hotel & Restaurant

2.8

4.7

5.2

6.9

-

Finance, Insurance & Real Estate

3.8

6.1

6.3

6.5

-

Government Services

2.0

6.7

7.6

5.6

-

Other Services

4.4

4.2

5.4

5.7

-

Industry Non-Performing Loans ( MYR Million )

6,631.3

7,384.6

6,825.2

-

-

% of Industry Non-Performing Loans

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

20 : MANUFACTURE OF CHEMICALS AND CHEMICAL PRODUCTS

 

 

INDUSTRY :

MANUFACTURING

 

The Manufacturing sector is one of the important sectors to the growth of the Malaysian economy. According to Ministry of Finance, the manufacturing sector is expected to grow 4.9% in year 2013. Export oriented-industries are expected to benefit from the higher growth of global trade, while domesticoriented industries expand in line with the better consumer sentiment and business confidence. The resource-based industries are envisaged to grow steadily attributed to improved demand for petroleum, chemical, rubber and plastic products. With better job prospects and higher disposable income, the transportation equipment subsector, in particular, the passenger car segment is expected to expand.

 

Value-added of the manufacturing sector expanded 5% during the first half of 2012. Output of the sector rose 5.2% during the first sevenmonths of 2012 in line with the increase in sales value of manufactured products by 6.5% to RM363.1 billion. Output from domesticoriented industries continued to expand 8.6% while export-oriented industries grew 4.1%.

 

According to the Department of Statistics, the sales value of the Manufacturing sector in January 2013 posted a growth of 7.4% (RM3.6 billion) to record RM52.4 billion as compared to RM48.8 billion reported in year 2012. Meanwhile, month-on-month basis, the sales value has decreased by 0.4% (RM0.2 billion) as compared with the preceding month. The sales value in December 2012 has been revised positive 7.5% year-on-year to record RM52.6 billion.

 

Output of rubber products increased 3.6% in the first seven month of 2012 mainly supported by continuous demand for rubber gloves. Output of rubber gloves grew 5.9% on account of the expansion in the global healthcare industry and wider usage of gloves in other sectors. Similarly, output of catheters, especially for use in medical appliances, also registered a strong growth of 12.6%. Nevertheless, production of rubber tyres and tubes reduced 10.9% in tandem with slowing external demand from the automotive industry, especially China.

 

Meanwhile, production of wood and wood products rebounded 4.6% largely supported by higher demand for wooden and cane furniture (33.5%). The positive performance was attributed to vibrant higher demand from major export destinations such as China and the United States (US) for Malaysian-made furniture. Demand from China accelerated further following the country's rising income level and the implementation of zero import duty on Malaysian made-furniture. 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.

 

The output of chemicals and chemical products rose 9.9% in the first seven month of year 2012 on account of increasing demand for plastic products (11.8%) and basic chemicals (11.1%). External demand for plastic packaging materials surged during the early part of the year 2012, particularly from Japan and Thailand, as manufacturers resumed operations, which were interrupted by natural calamities and power outages. Chemical production are expected to show 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.

 

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 assolar 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 2002, the SC is a Private Limited company, focusing on manufacture of oleochemicals. With its long establishment in the market, the SC has received strong support from its stable customers base. Its business position in the market is quite stable and it is expected to enjoy better market shares over its rivals. The SC is well backed by a listed company shareholders which would stimulate further growth for the SC. Hence, the potential growth of the SC is positive. 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. Being a large entity, the SC has a steady workforce of 700 personnel to support its business operations. Its future prospects seem to be fairly good as its business operations are running relatively stable. 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 is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term 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 665,373,000, the SC should be able to maintain its business in the near terms.


Having a strong assets backing, the SC possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. 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.


The SC's payment habit is average. With its adequate working capital, the SC should be able to pay its short term debts.

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 promptly.

 



 

 

PROFIT AND LOSS ACCOUNT

 

 

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

KL-KEPONG OLEOMAS SDN. BHD.

 

Financial Year End

30/09/2012

30/09/2011

30/09/2010

30/09/2009

30/09/2008

Months

12

12

12

12

12

Consolidated Account

GROUP

GROUP

GROUP

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

1,469,149,000

1,472,238,000

703,952,000

548,342,000

513,411,000

Other Income

18,234,000

4,920,000

8,284,000

-

-

 

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

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

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

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

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

Total Turnover

1,487,383,000

1,477,158,000

712,236,000

548,342,000

513,411,000

Costs of Goods Sold

<1,412,836,000>

<1,383,005,000>

<652,537,000>

-

-

 

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

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

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

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

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

Gross Profit

74,547,000

94,153,000

59,699,000

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

39,129,000

58,446,000

38,759,000

45,913,000

26,803,000

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

39,129,000

58,446,000

38,759,000

45,913,000

26,803,000

Taxation

<2,403,000>

<628,000>

<150,000>

144,000

<80,000>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

36,726,000

57,818,000

38,609,000

46,057,000

26,723,000

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

152,147,000

95,638,000

57,029,000

11,653,000

<15,070,000>

Prior year adjustment

-

<1,309,000>

-

-

-

 

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

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

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

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

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

As restated

152,147,000

94,329,000

57,029,000

11,653,000

<15,070,000>

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

188,873,000

152,147,000

95,638,000

57,710,000

11,653,000

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

188,873,000

152,147,000

95,638,000

57,710,000

11,653,000

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bankers' acceptance

7,131,000

6,409,000

2,571,000

-

-

Loan from holding company

-

282,000

-

-

-

Term loan / Borrowing

1,130,000

1,325,000

1,054,000

-

-

Others

2,730,000

1,076,000

332,000

1,192,000

4,307,000

 

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

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

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

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

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

 

10,991,000

9,092,000

3,957,000

1,192,000

4,307,000

 

 

 

BALANCE SHEET

 

 

KL-KEPONG OLEOMAS SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

586,231,000

514,179,000

502,081,000

442,303,000

331,514,000

\

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Subsidiary companies

-

-

-

2,748,000

-

Others

3,166,000

3,217,000

3,268,000

-

21,888,000

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

3,166,000

3,217,000

3,268,000

2,748,000

21,888,000

 

 

 

 

 

 

INTANGIBLE ASSETS

 

 

 

 

 

Goodwill on consolidation

225,000

225,000

225,000

-

-

 

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

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

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

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

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

TOTAL INTANGIBLE ASSETS

225,000

225,000

225,000

-

-

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

589,622,000

517,621,000

505,574,000

445,051,000

353,402,000

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

223,456,000

348,441,000

223,384,000

109,909,000

157,342,000

Trade debtors

189,976,000

221,564,000

126,896,000

74,226,000

61,426,000

Other debtors, deposits & prepayments

5,134,000

9,048,000

6,695,000

4,074,000

2,539,000

Short term deposits

71,870,000

8,820,000

9,700,000

4,300,000

15,000,000

Amount due from subsidiary companies

-

-

-

15,347,000

-

Amount due from related companies

-

-

-

26,339,000

37,962,000

Cash & bank balances

16,986,000

1,598,000

862,000

3,129,000

507,000

Others

88,306,000

4,471,000

611,000

90,000

-

 

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

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

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

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

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

TOTAL CURRENT ASSETS

595,728,000

593,942,000

368,148,000

237,414,000

274,776,000

 

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

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

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

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

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

TOTAL ASSET

1,185,350,000

1,111,563,000

873,722,000

682,465,000

628,178,000

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

76,184,000

80,343,000

93,864,000

31,925,000

11,194,000

Other creditors & accruals

93,760,000

55,518,000

12,661,000

11,615,000

11,847,000

Short term borrowings/Term loans

11,680,000

11,680,000

2,920,000

-

-

Other borrowings

64,223,000

35,260,000

44,385,000

-

1,868,000

Bill & acceptances payable

127,123,000

266,208,000

115,674,000

61,876,000

106,510,000

Amounts owing to holding company

-

-

-

13,000

720,000

Amounts owing to subsidiary companies

-

-

-

8,765,000

-

Amounts owing to related companies

-

-

-

67,058,000

54,171,000

Provision for taxation

170,000

-

-

-

150,000

Other liabilities

-

12,998,000

-

132,003,000

118,565,000

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

373,140,000

462,007,000

269,504,000

313,255,000

305,025,000

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

222,588,000

131,935,000

98,644,000

<75,841,000>

<30,249,000>

 

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

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

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

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

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

TOTAL NET ASSETS

812,210,000

649,556,000

604,218,000

369,210,000

323,153,000

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

137,650,000

137,650,000

137,650,000

121,150,000

121,150,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

137,650,000

137,650,000

137,650,000

121,150,000

121,150,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Share premium

338,850,000

338,850,000

338,850,000

190,350,000

190,350,000

Retained profit/(loss) carried forward

188,873,000

152,147,000

95,638,000

57,710,000

11,653,000

 

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

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

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

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

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

TOTAL RESERVES

527,723,000

490,997,000

434,488,000

248,060,000

202,003,000

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

665,373,000

628,647,000

572,138,000

369,210,000

323,153,000

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Long term loans

8,720,000

20,400,000

32,080,000

-

-

Other long term borrowings

2,546,000

-

-

-

-

Deferred taxation

-

509,000

-

-

-

Others

135,571,000

-

-

-

-

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

146,837,000

20,909,000

32,080,000

-

-

 

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

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

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

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

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

 

812,210,000

649,556,000

604,218,000

369,210,000

323,153,000

 

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

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

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

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

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

 

 

FINANCIAL RATIO

 

 

KL-KEPONG OLEOMAS SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

88,856,000

10,418,000

10,562,000

7,429,000

15,507,000

Net Liquid Funds

88,856,000

10,418,000

10,562,000

7,429,000

15,507,000

Net Liquid Assets

<868,000>

<216,506,000>

<124,740,000>

<185,750,000>

<187,591,000>

Net Current Assets/(Liabilities)

222,588,000

131,935,000

98,644,000

<75,841,000>

<30,249,000>

Net Tangible Assets

811,985,000

649,331,000

603,993,000

369,210,000

323,153,000

Net Monetary Assets

<147,705,000>

<237,415,000>

<156,820,000>

<185,750,000>

<187,591,000>

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

87,169,000

67,340,000

79,385,000

0

1,868,000

Total Liabilities

519,977,000

482,916,000

301,584,000

313,255,000

305,025,000

Total Assets

1,185,350,000

1,111,563,000

873,722,000

682,465,000

628,178,000

Net Assets

812,210,000

649,556,000

604,218,000

369,210,000

323,153,000

Net Assets Backing

665,373,000

628,647,000

572,138,000

369,210,000

323,153,000

Shareholders' Funds

665,373,000

628,647,000

572,138,000

369,210,000

323,153,000

Total Share Capital

137,650,000

137,650,000

137,650,000

121,150,000

121,150,000

Total Reserves

527,723,000

490,997,000

434,488,000

248,060,000

202,003,000

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.24

0.02

0.04

0.02

0.05

Liquid Ratio

1.00

0.53

0.54

0.41

0.38

Current Ratio

1.60

1.29

1.37

0.76

0.90

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

56

86

116

73

112

Debtors Ratio

47

55

66

49

44

Creditors Ratio

20

21

53

21

8

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.13

0.11

0.14

0.00

0.01

Liabilities Ratio

0.78

0.77

0.53

0.85

0.94

Times Interest Earned Ratio

4.56

7.43

10.80

39.52

7.22

Assets Backing Ratio

5.90

4.72

4.39

3.05

2.67

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

2.66

3.97

5.51

8.37

5.22

Net Profit Margin

2.50

3.93

5.48

8.40

5.20

Return On Net Assets

6.17

10.40

7.07

12.76

9.63

Return On Capital Employed

6.17

10.39

7.07

12.76

9.63

Return On Shareholders' Funds/Equity

5.52

9.20

6.75

12.47

8.27

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

0.00

0.00

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

0

0

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.60.82

UK Pound

1

Rs.92.97

Euro

1

Rs.80.73

 

 

INFORMATION DETAILS

 

Report Prepared by :

SDA

 

 

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.