MIRA INFORM REPORT

 

 

Report Date :

08.02.2013

 

IDENTIFICATION DETAILS

 

Name :

HEVEABOARD BERHAD

 

 

Formerly Known As :

HEVEABOARD SDN BHD (16/02/2004)

 

 

Registered Office :

Menara Hap Seng, 1 & 3 Jalan P Ramlee, 10th Floor, 50250 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

03.09.1993

 

 

Com. Reg. No.:

275512-A

 

 

Legal Form :

Public (Unlimited)

 

 

Line of Business :

Manufacturing Particleboards and Investment Holding

 

 

No. of Employees :

2,000

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Status :

Satisfactory

Payment Behaviour :

No Complaints

Litigation :

Clear

 

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 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Malaysia

A1

A1

 

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

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

275512-A

COMPANY NAME

:

HEVEABOARD BERHAD

FORMER NAME

:

HEVEABOARD SDN BHD (16/02/2004)

INCORPORATION DATE

:

03/09/1993

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PUBLIC (UNLIMITED)

LISTED STATUS

:

YES

LISTED DATE

:

12/01/2005

REGISTERED ADDRESS

:

MENARA HAP SENG, 1 & 3 JALAN P RAMLEE, 10TH FLOOR, 50250 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

LOT 1942,BATU 3,JALAN TAMPIN GEMAS, 73400 GEMAS, NEGERI SEMBILAN, MALAYSIA.

TEL.NO.

:

07-9484745

FAX.NO.

:

07-21663390

EMAIL

:

INFO@HEVEABOARD.COM.MY

WEB SITE

:

WWW.HEVEABOARD.COM.MY

CONTACT PERSON

:

YOONG HAU CHUN ( GROUP MANAGING DIRECTOR )

INDUSTRY CODE

:

16212 64200

PRINCIPAL ACTIVITY

:

MANUFACTURING PARTICLEBOARDS AND INVESTMENT HOLDING

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 90,400,000.00 DIVIDED INTO
ORDINARY SHARES 90,400,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 373,049,000 [2011]

NET WORTH

:

MYR 194,022,000 [2011]

M1000 OVERALL RANKING

:

919[2011]

M1000 INDUSTRY RANKING

:

3[2011]

STAFF STRENGTH

:

2,000 [2013]

BANKER (S)

 

MALAYAN BANKING BHD
OCBC BANK (MALAYSIA) 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

:

AVERAGE GROWTH

 

 

HISTORY / BACKGROUND

 

As a public limited company, the SC must have at least one shareholder but there is no limit on the maximum number of shareholders. The SC must have at least two directors. A public 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, suing or be sued by other companies. The liabilities of the shareholders are only up 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 must file in its annual return, together with its financial statements with the Registrar of Companies. In Malaysia, all the companies seeking listing on the Bursa Malaysia (Malaysia Stock Exchange) must be public limited companies.

The SC is principally engaged in the (as a / as an) manufacturing particleboards and investment holding.

The SC was listed on the Main Board of Bursa Malaysia Securities Bhd on 12/01/2005

 

According to the Malaysia 1000 publication, the SC's ranking are as follows:

 

 

 

 

YEAR

2011

2009

 

OVERALL RANKING

919

958

 

INDUSTRY RANKING

3

4

 

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

OSK NOMINEES (TEMPATAN) SDN. BERHAD
[HEVEAWOOD INDUSTRIES SDN BHD]

10TH FLOOR, OLAZA OSK, JALAN AMPANG, 50450 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

6023

18,000,000.00

19.91

CIMSEC NOMINEES (TEMPATAN) SDN BHD
[HEVEAWOOD INDUSTRIES SDN BHD (RETAIL BANKING)]

LEVEL 2, WISMA AMANAH RAYA, JALAN SEMANTAN, DAMANSARA HEIGHTS, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

265449

9,000,000.00

9.96

TA NOMINEES (TEMPATAN) SDN. BHD.
[FIRAMA HOLDINGS SDN BHD]

14TH FLOOR, MENARA TA ONE, 22,JALAN P.RAMLEE, 50250 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

268290

4,969,000.00

5.50

SOLID EARNINGS SDN BHD

BUSINESS SUITE 19A-20-5, LEVEL 20, UOA CENTRE, NO.19 JALAN PINANG, 50450 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

814975

4,381,000.00

4.85

LIANG CHONG WAI

 

PK124482(5)

2,588,600.00

2.86

HDM NOMINEES (TEMPATAN) SDN BHD
[YAP KIEW @ YAP CHIN FOOK]

 

41117

2,396,000.00

2.65

FIRAMA ENGINEERING BHD

LOT 683, 5TH MILE, KUALA PILAH ROAD, 70400 SEREMBAN, NEGERI SEMBILAN, MALAYSIA.

103362

1,890,000.00

2.09

MR. SYED MOHD YUSOF BIN TUN SYED NASIR

LOT 8, JALAN CEKAK 11/3B, 40000 SHAH ALAM, SELANGOR, MALAYSIA.

471109-01-5611

1,600,000.00

1.77

MR. YEN WOON @ LOW SAU CHEE

LOT 113, LORONG 11, NO. 1803, TAMAN TSHUN NYEN, MILE 5, W.D.T. SS4, 90009 SANDAKAN, SABAH, MALAYSIA.

471022-05-5389

1,476,000.00

1.63

MR. LOO SWEE CHEW +

LOT 444, ASTANA GOLF RESORT, JLN SUNGAI LEMBING, 25300 KUANTAN, PAHANG, MALAYSIA.

480821-71-5069

148,000.00

0.16

MR. LIM KAH POON +

365, JALAN SRI PETALING 2, SRI PETALING, 57000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

490204-08-5347

50,000.00

0.06

REMAINING SHAREHOLDERS

 

 

43,901,400.00

48.56

 

 

 

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

------

 

 

 

90,400,000.00

100.00

 

 

 

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

=====

 

+ Also Director

 

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

 

Local No

Company

(%)

As At

521101

BOCOWOOD SDN BHD

100

31/12/2011

 

 

 

 

 

166282

HEVEAPAC SDN BHD

100

31/12/2011

 

 

 

 

 

 

103355

HEVEAMART SDN BHD

100

31/12/2011

 

 

 

 

 

 



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. CHAN CHOONG TAK @ CHAN CHOONG TACK

Address

:

1054, BUKIT RASAH, 70300 SEREMBAN, NEGERI SEMBILAN, MALAYSIA.

New IC No

:

330502-05-5047

Date of Birth

:

02/05/1933

Nationality

:

MALAYSIAN

Date of Appointment

:

01/10/2004

 

DIRECTOR 2

 

Name Of Subject

:

MS. YOONG LI YEN

IC / PP No

:

0293999A

Date of Appointment

:

06/04/2012

Remark

:

ALT DIR TO YOONG TEIN SENG @ YONG KIAN SENG

 

DIRECTOR 3

 

Name Of Subject

:

MR. LIM KAH POON

Address

:

365, JALAN SRI PETALING 2, SRI PETALING, 57000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

New IC No

:

490204-08-5347

Date of Birth

:

04/02/1949

Nationality

:

MALAYSIAN

Date of Appointment

:

01/10/2004

 

DIRECTOR 4

 

Name Of Subject

:

MR. LOO SWEE CHEW

Address

:

LOT 444, ASTANA GOLF RESORT, JLN SUNGAI LEMBING, 25300 KUANTAN, PAHANG, MALAYSIA.

New IC No

:

480821-71-5069

Date of Birth

:

21/08/1948

Nationality

:

MALAYSIAN

Date of Appointment

:

21/10/1997



MANAGEMENT

 

 

 

1)

Name of Subject

:

YOONG HAU CHUN

 

Position

:

GROUP MANAGING DIRECTOR

 

 

 

 

 

2)

Name of Subject

:

EALINE HEW

 

Position

:

CHIEF FINANCE OFFICER

 

 

 

 

 

3)

Name of Subject

:

LIYEN YOONG

 

Position

:

MARKETING MANAGER

 

 

 

 

 

4)

Name of Subject

:

JENNIS

 

Position

:

ASSISTANT HUMAN RESOURCE MANAGER

 

 

 

 

 

5)

Name of Subject

:

S GANESAN

 

Position

:

GENERAL MANAGER

 

 

AUDITOR

 

Auditor

:

BAKER TILLY MONTEIRO HENG

Auditor' Address

:

22, JALAN TUN SAMBANTHAN 3, 50470 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. PANG CHIA TYNG

 

New IC No

:

760917-01-6904

 

Address

:

16, JALAN 11, TAMAN CAHAYA, 68000 AMPANG, SELANGOR, MALAYSIA.

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

2)

Name

:

OCBC BANK (MALAYSIA) BHD

 

 

 

 

 

The SC enjoys normal banking routine with above mentioned banker(s). The SC has bank charges with above mentioned banker(s).

 

 

ENCUMBRANCE (S)


ENCUMBRANCE 1

Date of Creation

:

29/05/1996

Description Of Charge

:

N/A

 

Amount Secured

:

RM160,000.00

Description Of Property Affected

:

N/A

 

Name & Address Of Chargee

:

MALAYAN BANKING BHD

 

 

Form 40 Dated

Registered and Numbered 2 In The Register of Charges



ENCUMBRANCE 2

Date of Creation

:

30/09/1996

Description Of Charge

:

N/A

 

Amount Secured

:

RM6,000,000.00

Description Of Property Affected

:

N/A

 

Name & Address Of Chargee

:

OCBC BANK (MALAYSIA) BHD

 

 

Form 40 Dated

Registered and Numbered 4 In The Register of Charges

ENCUMBRANCE 3

Date of Creation

:

07/05/1997

Description Of Charge

:

AGREEMENT

 

Amount Secured

:

RM3,000,000.00

Description Of Property Affected

:

CT 14353 & 14354, LOT 1943 & 1944, HS(D) 10469-10472, PT 4185-4188, MK GEMAS, DIST TAMPIN

 

Name & Address Of Chargee

:

OCBC BANK (MALAYSIA) BHD
35, JALAN TENGKU AHMAD, 85000 SEGAMAT, JOHOR, MALAYSIA.

 

 

Form 40 Dated 28/05/1997

Registered and Numbered 6 In The Register of Charges


ENCUMBRANCE 4

Date of Creation

:

26/11/1997

Description Of Charge

:

AGREEMENT

 

Amount Secured

:

RM1,000,000.00

Description Of Property Affected

:

CORPORATE GUARANTEE

 

Name & Address Of Chargee

:

OCBC BANK (MALAYSIA) BHD
35, JALAN TENGKU AHMAD, 85000 SEGAMAT, JOHOR, MALAYSIA.

 

 

Form 40 Dated 09/12/1997

Registered and Numbered 7 In The Register of Charges


ENCUMBRANCE 5

Date of Creation

:

10/12/1997

Description Of Charge

:

N/A

 

Amount Secured

:

RM2,000,000.00

Description Of Property Affected

:

N/A

 

Name & Address Of Chargee

:

OCBC BANK (MALAYSIA) BHD

 

 

Form 40 Dated

Registered and Numbered 8 In The Register of Charges


ENCUMBRANCE 6

Date of Creation

:

20/07/2004

Description Of Charge

:

N/A

 

Amount Secured

:

RM4,500,000.00

Description Of Property Affected

:

N/A

 

Name & Address Of Chargee

:

MALAYAN BANKING BHD

 

 

Form 40 Dated

Registered and Numbered 11 In The Register of Charges

 

 

LEGAL CHECK AGAINST SC


* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

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

:

EUROPE,JAPAN,CHINA,FINLAND


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

:

60%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

40%

Export Market

:

KOREA

VIETNAM

INDIA

SRI LANKA

CHINA

PHILIPPINES

HONG KONG

EUROPE

Credit Term

:

30 - 60 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES
CHEQUESCASH
CHEQUESCASHTELEGRAPHIC TRANSFER (TT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Products manufactured

:

PARTICLEBOARDS

Services

:

INVESTMENT HOLDING

 

Award

:

1 ) QUALITY MANAGEMENT EXCELLENCE AWARD BY MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (MITI) Year :2008
2 ) MS ISO 9001 : 2000 Year :2000

 

 

Ownership of premises

:

OWNED

 

Production Capacity

:

APPROXIMATELY 120,000M3 OF PARTICLEBOARDPER YEAR

 

Shifts

:

2 (24 HOURS OPERATING)

 

 

Total Number of Employees:

 

YEAR

2013

2012

2011

2010

2009

 

 

 

 

GROUP

2,000

1,800

1,800

1,800

1,800

 

 

 

 

COMPANY

340

340

340

340

340

 

 

 

 

 

Branch

:

NO

 

 

Other Information:


The SC is principally engaged in the (as a / as an) manufacturing particleboards and investment holding.

The SC manufactures rubberwood based particleboard in several standard size either in plain or MFC laminated form.

Besides that it also produces Super E0, E0, E1, and MUF particleboard for the more developed markets.

According to the SC, its products are suitable for wide range of applications such as furniture, wall paneling, building and manufacturing industry.

The SC's production consists of various processes and they are as stated below:

1) The raw materials go through chipping and flaking - The rubberwood are chipped before being reduced to fine flakes of the desired thickness and length. This contributes to the optimum strength and smooth finish on the surface of the boards.

2) Drying & greening - The wet flakes are dried in a hot gas dryer to the required moisture level. Then it screened to separate and fine and core particle and stored in the surface and core silo.

3) Glue mixing & blending - The surface and core particles are separately mixed with glue, wax emulsion and other additives metered accurately to achieve high quality standard.

4) Material forming - hot process - cooling - sizing - sanding and finally laminating.


PROJECTS


No projects found in our databank

 

RECENT DEVELOPMENT


04/04/2011

The SC wishes to announce that in addition to the consent in-principal from Malayan Banking Berhad (MBB) vide its letter dated 31 March 2011, Kreditanstalt für Wiederaufbau (KfW), being the other principal banker of the Company, had vide its letter dated 1 April 2011, granted its consent in-principle to the revised repayment plan Proposal) submitted by the Company to its scheme creditors pursuant to Section 176 of the Companies Act, 1965 in accordance with the Court Order dated 14 December 2009 (Scheme), with a view to terminate the Scheme, subject to, amongst others, the following terms and conditions:


(a) Full Settlement of amounts owing by the Company to all Scheme Creditors save for KfW, MBB and Dieffenbacher GMBH + Co or its assignee (Dieffenbacher), in advance of the respective tenure under the Scheme;

(b) MBB will continue to provide banking facilities to the Company upon such terms and conditions as may be agreed upon; and


(c) Upon full settlement referred to in item (a) above, the amount owing by the Company to each of KfW, MBB and Dieffenbacher shall be restructured on terms to be agreed between the Company with each of MBB, KfW and Dieffenbacher respectively.

The details of the Proposal will be prepared in an explanatory statement to be circulated to the Scheme Creditors with a view of convening a creditors’ meeting in respect of each class of the Scheme Creditors for their approval. In the event the requisite approval of the Scheme Creditors is obtained for the Proposal, the Company will implement the Proposal and file or cause to be filed the necessary cause papers to the High Court of Malaya for the termination of the Scheme and thereafter, an office copy of the Court Order obtained in relation thereto will be lodged with the Registrar of Companies accordingly.


09 March 2011


Heveaboard Bhd received an offer from Dongwha Malaysia Holdings Sdn Bhd to acquire its assets related to the manufacturing of particleboard. If the deal is approved, it will be transacted at no less than RM245 million, based on the book value of Heaveaboard's assets as at Dec 31, 2010.

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

07-9484745

Match

:

N/A

 

 

 

Address Provided by Client

:

LOT 1942,BATU 3,JALAN TAMPIN GEMAS,73400,GEMAS,NEGERI SEMBILAN.

Current Address

:

LOT 1942,BATU 3,JALAN TAMPIN GEMAS, 73400 GEMAS, NEGERI SEMBILAN, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


On 6th February 2013 we contacted one of the staff from the Admin Department. She provided some information on the SC.


FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Increased

[

2007 - 2011

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2007 - 2011

]

 

Return on Shareholder Funds

:

Unfavourable

[

1.72%

]

 

Return on Net Assets

:

Unfavourable

[

4.14%

]

 

 

 

 

 

 

 

 

The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.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

:

Unfavourable

[

66 Days

]

 

Debtor Ratio

:

Favourable

[

41 Days

]

 

Creditors Ratio

:

Favourable

[

36 Days

]

 

 

 

 

 

 

 

 

The SC could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. 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

[

0.60 Times

]

 

Current Ratio

:

Unfavourable

[

1.26 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

[

1.41 Times

]

 

Gearing Ratio

:

Acceptable

[

0.85 Times

]

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

Although the SC's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the SC's profit margin. Due to its weak liquidity position, the SC will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the SC. If there is a fall in the SC's profit or any increase in interest rate, the SC may not be able to generate sufficient cash-flow to service its interest. The SC's gearing was slightly high and its financial risk was also high. If no plans are made to reduce its gearing, the SC's performance may deteriorate in the coming year.

 

 

 

 

 

 

 

Overall financial condition of the SC : POOR

 

 

 

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

16212 : Manufacture of particle board and fibreboard

64200 : Activities of holding companies

 

 

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 1993, the SC is a Public Listed company, focusing on manufacturing particleboards and investment holding. 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. Having strong support from its shareholder 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 established an extensive clientele base in the market. Besides catering to the local market, the SC has penetrated into other countries. With the contribution of both local and overseas customers, the SC is likely to be exposed to lower commercial risk. Hence, we believe that the SC has better business expansion opportunities in the future. Being a large entity, the SC has a steady workforce of 2,000 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. To improve its quality products and services, we noted that the SC has received a number of certifications & awards. This will improve the customer's confidence level to the SC.


Financially, the SC registered a higher turnover compared to previous year. However, its profits showed a reverse trend. The lower profit achieved was a result of higher operating cost and increased competition. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Due to its weak liquidity position, the SC may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the SC. The gearing level of the SC is slightly high, therefore it faces moderate financial risk. Given a positive net worth standing at MYR 194,022,000, 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 normally.



PROFIT AND LOSS ACCOUNT

 

 

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

HEVEABOARD BERHAD

 

Financial Year End

31/12/2011

31/12/2010

31/12/2009

31/12/2008

31/12/2007

Months

12

12

12

12

12

Consolidated Account

GROUP

GROUP

GROUP

GROUP

GROUP

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

373,049,000

363,137,000

327,417,000

340,912,000

262,238,000

 

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

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

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

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

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

Total Turnover

373,049,000

363,137,000

327,417,000

340,912,000

262,238,000

Costs of Goods Sold

<338,976,000>

<315,240,000>

-

-

-

 

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

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

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

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

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

Gross Profit

34,073,000

47,897,000

-

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

3,894,000

28,410,000

18,933,000

<182,000>

135,000

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

3,894,000

28,410,000

18,933,000

<182,000>

135,000

Taxation

<553,000>

<2,699,000>

1,525,000

1,056,000

6,682,000

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

3,341,000

25,711,000

20,458,000

874,000

6,817,000

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

84,355,000

55,622,000

35,164,000

37,002,000

33,105,000

Prior year adjustment

-

<20,458,000>

-

-

-

 

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

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

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

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

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

As restated

84,355,000

35,164,000

35,164,000

37,002,000

33,105,000

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

87,696,000

60,875,000

55,622,000

37,876,000

39,922,000

- General

-

23,480,000

-

-

-

DIVIDENDS - Ordinary (paid & proposed)

-

-

-

<2,712,000>

<2,920,000>

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

87,696,000

84,355,000

55,622,000

35,164,000

37,002,000

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

141,000

179,000

624,000

746,000

664,000

Bankers' acceptance

27,000

-

-

-

-

Hire purchase

281,000

674,000

935,000

1,114,000

1,112,000

Term loan / Borrowing

8,778,000

10,694,000

10,053,000

9,247,000

9,782,000

Others

167,000

123,000

178,000

2,374,000

2,171,000

 

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

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

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

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

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

 

9,394,000

11,670,000

11,790,000

13,481,000

13,729,000

 

 

 

BALANCE SHEET

 

 

HEVEABOARD BERHAD

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

284,797,000

293,983,000

309,656,000

332,390,000

347,892,000

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Investments

15,000

15,000

15,000

15,000

15,000

Others

6,377,000

6,540,000

10,500,000

10,707,000

10,914,000

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

6,392,000

6,555,000

10,515,000

10,722,000

10,929,000

 

 

 

 

 

 

INTANGIBLE ASSETS

 

 

 

 

 

Goodwill on consolidation

2,946,000

2,946,000

2,946,000

2,946,000

2,946,000

 

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

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

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

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

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

TOTAL INTANGIBLE ASSETS

2,946,000

2,946,000

2,946,000

2,946,000

2,946,000

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

294,135,000

303,484,000

323,117,000

346,058,000

361,767,000

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

67,664,000

61,013,000

50,482,000

56,285,000

38,410,000

Trade debtors

42,032,000

47,210,000

31,877,000

25,337,000

33,176,000

Other debtors, deposits & prepayments

2,079,000

7,560,000

7,264,000

7,052,000

6,944,000

Short term deposits

2,054,000

2,516,000

-

-

-

Cash & bank balances

15,197,000

20,306,000

12,878,000

3,102,000

1,937,000

Others

606,000

738,000

682,000

29,000

944,000

 

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

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

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

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

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

TOTAL CURRENT ASSETS

129,632,000

139,343,000

103,183,000

91,805,000

81,411,000

 

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

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

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

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

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

TOTAL ASSET

423,767,000

442,827,000

426,300,000

437,863,000

443,178,000

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

33,013,000

26,061,000

23,902,000

34,894,000

24,313,000

Other creditors & accruals

21,002,000

25,531,000

22,082,000

33,485,000

42,378,000

Hire purchase & lease creditors

2,557,000

3,386,000

5,864,000

6,787,000

5,934,000

Bank overdraft

4,437,000

942,000

2,553,000

12,986,000

12,129,000

Short term borrowings/Term loans

26,373,000

27,138,000

6,941,000

7,676,000

15,509,000

Other borrowings

14,131,000

13,524,000

3,970,000

8,946,000

5,127,000

Bill & acceptances payable

-

1,244,000

1,784,000

30,851,000

35,307,000

Amounts owing to related companies

1,039,000

679,000

709,000

1,791,000

10,574,000

Provision for taxation

153,000

-

439,000

995,000

17,000

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

102,705,000

98,505,000

68,244,000

138,411,000

151,288,000

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

26,927,000

40,838,000

34,939,000

<46,606,000>

<69,877,000>

 

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

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

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

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

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

TOTAL NET ASSETS

321,062,000

344,322,000

358,056,000

299,452,000

291,890,000

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

90,400,000

90,400,000

90,400,000

90,400,000

80,000,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

90,400,000

90,400,000

90,400,000

90,400,000

80,000,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Share premium

15,526,000

15,526,000

15,526,000

15,526,000

12,886,000

Retained profit/(loss) carried forward

87,696,000

84,355,000

55,622,000

35,164,000

37,002,000

Others

400,000

400,000

-

-

-

 

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

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

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

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

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

TOTAL RESERVES

103,622,000

100,281,000

71,148,000

50,690,000

49,888,000

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

194,022,000

190,681,000

161,548,000

141,090,000

129,888,000

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Long term loans

112,491,000

140,690,000

177,634,000

142,114,000

140,134,000

Other long term borrowings

-

5,352,000

10,744,000

-

-

Hire purchase creditors

4,493,000

1,010,000

3,711,000

9,591,000

13,139,000

Deferred taxation

4,946,000

5,050,000

3,079,000

5,499,000

7,759,000

Retirement benefits provision

1,749,000

1,539,000

1,340,000

1,158,000

970,000

Others

3,361,000

-

-

-

-

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

127,040,000

153,641,000

196,508,000

158,362,000

162,002,000

 

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

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

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

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

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

 

321,062,000

344,322,000

358,056,000

299,452,000

291,890,000

 

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

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

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

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

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

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

EVEABOARD BERHAD

 

TYPES OF FUNDS

 

 

 

 

 

Cash

17,251,000

22,822,000

12,878,000

3,102,000

1,937,000

Net Liquid Funds

12,814,000

21,880,000

10,325,000

<9,884,000>

<10,192,000>

Net Liquid Assets

<40,737,000>

<20,175,000>

<15,543,000>

<102,891,000>

<108,287,000>

Net Current Assets/(Liabilities)

26,927,000

40,838,000

34,939,000

<46,606,000>

<69,877,000>

Net Tangible Assets

318,116,000

341,376,000

355,110,000

296,506,000

288,944,000

Net Monetary Assets

<167,777,000>

<173,816,000>

<212,051,000>

<261,253,000>

<270,289,000>

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

164,482,000

192,042,000

211,417,000

188,100,000

191,972,000

Total Liabilities

229,745,000

252,146,000

264,752,000

296,773,000

313,290,000

Total Assets

423,767,000

442,827,000

426,300,000

437,863,000

443,178,000

Net Assets

321,062,000

344,322,000

358,056,000

299,452,000

291,890,000

Net Assets Backing

194,022,000

190,681,000

161,548,000

141,090,000

129,888,000

Shareholders' Funds

194,022,000

190,681,000

161,548,000

141,090,000

129,888,000

Total Share Capital

90,400,000

90,400,000

90,400,000

90,400,000

80,000,000

Total Reserves

103,622,000

100,281,000

71,148,000

50,690,000

49,888,000

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.17

0.23

0.19

0.02

0.01

Liquid Ratio

0.60

0.80

0.77

0.26

0.28

Current Ratio

1.26

1.41

1.51

0.66

0.54

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

66

61

56

60

53

Debtors Ratio

41

47

36

27

46

Creditors Ratio

36

30

27

37

34

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.85

1.01

1.31

1.33

1.48

Liabilities Ratio

1.18

1.32

1.64

2.10

2.41

Times Interest Earned Ratio

1.41

3.43

2.61

0.99

1.01

Assets Backing Ratio

3.52

3.78

3.93

3.28

3.20

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

1.04

7.82

5.78

<0.05>

0.05

Net Profit Margin

0.90

7.08

6.25

0.26

2.60

Return On Net Assets

4.14

11.64

8.58

4.44

4.75

Return On Capital Employed

4.01

11.40

8.32

4.13

4.43

Return On Shareholders' Funds/Equity

1.72

13.48

12.66

0.62

5.25

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

3.10

0.43

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

0

0

0

 

 

 

 

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.53.14

UK Pound

1

Rs.83.26

Euro

1

Rs.71.93

 

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.