|
EXECUTIVE SUMMARY
|
REGISTRATION NO.
|
:
|
290524-U
|
|
COMPANY NAME
|
:
|
ARROW SYSTEMS SDN BHD
|
|
FORMER NAME
|
:
|
N/A
|
|
INCORPORATION DATE
|
:
|
24/02/1994
|
|
|
|
|
|
COMPANY STATUS
|
:
|
EXIST
|
|
LEGAL STATUS
|
:
|
PRIVATE LIMITED
|
|
LISTED STATUS
|
:
|
NO
|
|
|
|
|
|
REGISTERED ADDRESS
|
:
|
36, JALAN PERINDUSTRIAL PENGKALAN 2A, KAWASAN PERINDUSTRIAN
PENGKALAN, 31500 LAHAT, PERAK,
MALAYSIA.
|
|
BUSINESS ADDRESS
|
:
|
36, JALAN PERINDUSTRIAN PENGKALAN 2A, KAWASAN PERINDUSTRIAN
PENGKALAN, 31500 LAHAT, PERAK,
MALAYSIA.
|
|
TEL.NO.
|
:
|
05-3217968
|
|
FAX.NO.
|
:
|
05-3228329
|
|
EMAIL
|
:
|
arrowsystems@pd.jaring.my
|
|
WEB SITE
|
:
|
www.arrowsystemsonline.com
|
|
CONTACT PERSON
|
:
|
CHAN KOK HENG ( MANAGING DIRECTOR )
|
|
|
|
|
|
INDUSTRY CODE
|
:
|
5159
|
|
PRINCIPAL
ACTIVITY
|
:
|
TRADING IN
FOOD PROCESSING EQUIPMENT AND PACKAGING MACHINE
|
|
AUTHORISED
CAPITAL
|
:
|
MYR 500,000.00
DIVIDED INTO
ORDINARY SHARE 500,000.00 OF MYR 1.00 EACH.
|
|
ISSUED AND
PAID UP CAPITAL
|
:
|
MYR 200,000.00
DIVIDED INTO
ORDINARY SHARES 200,000 CASH OF MYR 1.00 EACH.
|
|
|
|
|
|
SALES
|
:
|
MYR 8,247,452 [2006]
|
|
NET WORTH
|
:
|
MYR 111,840 [2006]
|
|
STAFF STRENGTH
|
:
|
20 [2008]
|
|
|
|
LITIGATION
|
:
|
CLEAR
|
|
FINANCIAL CONDITION
|
:
|
LIMITED
|
|
PAYMENT
|
:
|
POOR
|
|
MANAGEMENT CAPABILITY
|
:
|
AVERAGE
|
|
COMMERCIAL RISK
|
:
|
MODERATE
|
|
CURRENCY EXPOSURE
|
:
|
HIGH
|
|
GENERAL REPUTATION
|
:
|
SATISFACTORY
|
|
INDUSTRY OUTLOOK
|
:
|
DECLINING
|
HISTORY / BACKGROUND
The SC is a private limited company and is
allowed to have a minimum of one and a maximum of forty-nine shareholders. As
a private limited company, the SC must have at least two directors. A private
limited company is a separate legal entity from its shareholders. As a
separate legal entity, the SC is capable of owning assets, entering into
contracts, sue or be sued by other companies. The liabilities of the
shareholders are to the extent of the equity they have taken up and the
creditors cannot claim on shareholders' personal assets even if the SC is
insolvent. The SC is governed by the Companies Act, 1965 and the company must
file its annual returns, together with its financial statements with the
Registrar of Companies.
The SC is principally engaged in the (as a / as an) trading in food
processing equipment and packaging machine.
The SC is not listed on Bursa Malaysia (Malaysia
Stock Exchange).
The SC is not qualified to be one of the Top Corporate Performers in the Malaysia 1000
(M1000) publication, a directory jointly published by Companies Commission of
Malaysia (The Registrar Office), Minister of Domestic Trade and Consumer
Affairs and our publication arm, BASIS Publications House Sdn Bhd.
The major shareholder(s) of the SC are
shown as follows :
Name
|
Address
|
IC/PP/Loc No
|
Shareholding
|
|
MR. CHAN KOK HENG +
|
21, SELASAR ROKAM 24, TAMAN IPOH JAYA,
31350 IPOH, PERAK, MALAYSIA.
|
660724-08-5657
A0472951
|
150,000.00
|
|
MR. LEONG WENG KHIN +
|
33, FOO NYIT TSE STREET,
FALIM, 30200 IPOH, PERAK, MALAYSIA.
|
690316-08-6201
A1239041
|
50,000.00
|
|
|
|
|
---------------
|
|
|
|
|
200,000.00
|
|
|
|
|
============
|
+ Also Director
DIRECTORS
DIRECTOR 1
|
Name Of Subject
|
:
|
MR. LEONG WENG KHIN
|
|
Address
|
:
|
33, FOO NYIT TSE STREET,
FALIM, 30200 IPOH, PERAK, MALAYSIA.
|
|
IC / PP No
|
:
|
A1239041
|
|
New IC No
|
:
|
690316-08-6201
|
|
Date of Birth
|
:
|
16/03/1969
|
|
Nationality
|
:
|
MALAYSIAN CHINESE
|
DIRECTOR 2
|
Name Of Subject
|
:
|
MR. CHAN KOK HENG
|
|
Address
|
:
|
21, SELASAR ROKAM 24, TAMAN IPOH
JAYA, 31350 IPOH, PERAK, MALAYSIA.
|
|
IC / PP No
|
:
|
A0472951
|
|
New IC No
|
:
|
660724-08-5657
|
|
Date of Birth
|
:
|
24/07/1966
|
|
Nationality
|
:
|
MALAYSIAN CHINESE
|
MANAGEMENT
|
1)
|
Name of Subject
|
:
|
CHAN KOK HENG
|
|
|
Position
|
:
|
MANAGING DIRECTOR
|
|
|
|
|
|
AUDITOR
|
Auditor
|
:
|
M F CHAI & CO
|
|
Auditor' Address
|
:
|
81, JALAN PASAR, 30000 IPOH, PERAK, MALAYSIA.
|
|
|
|
|
COMPANY SECRETARIES
|
1)
|
Company Secretary
|
:
|
MR. ONG KIM SHAN
|
|
|
IC / PP No
|
:
|
4011584
|
|
|
New IC No
|
:
|
441015-08-5849
|
|
|
Address
|
:
|
19, LINTASAN PERAJURIT 1, TAMAN PERAK, 31400 IPOH,
PERAK, MALAYSIA.
|
|
|
|
|
|
|
|
|
|
|
|
|
2)
|
Company Secretary
|
:
|
MS. LAM CHUI YOKE
|
|
|
IC / PP No
|
:
|
7249846
|
|
|
New IC No
|
:
|
640219-01-5246
|
|
|
Address
|
:
|
12, LORONG KLEDANG UTARA 12, TAMAN KLEDANG SURIA, 31450 MENGLEMBU, PERAK, MALAYSIA.
|
|
|
|
|
|
BANKING
Banking relations are maintained principally with :
|
1)
|
Name
|
:
|
PUBLIC BANK BHD
|
|
|
|
|
|
|
The SC enjoys normal banking routine with above mentioned banker(s).
No adverse record was found during our investigation.
|
ENCUMBRANCE (S)
ENCUMBRANCE 1
|
Date of Creation
|
:
|
23/03/1996
|
|
Description Of Charge
|
:
|
|
|
Amount Secured
|
:
|
RM420,000.00
|
|
Description Of Property Affected
|
:
|
|
|
Name & Address Of Chargee
|
:
|
|
|
Form 40 Dated
|
|
Registered and Numbered 1 In The Register of Charges
|
ENCUMBRANCE 2
|
Date of Creation
|
:
|
27/08/1997
|
|
Description Of Charge
|
:
|
|
AGREEMENT & 1ST PARTY CHARGE
|
|
|
Amount Secured
|
:
|
RM90,000.00
|
|
Description Of Property Affected
|
:
|
|
HS(D)KA 26550 PT 114387, MK HULU KINTA
|
|
|
Name & Address Of Chargee
|
:
|
|
BAN HIN LEE BANK BHD
|
|
PLAZA TEH TENG SENG, 227 JALAN KAMPAR, GROUND FLOOR, 30250 IPOH, PERAK,
MALAYSIA.
|
|
|
Form 40 Dated 09/09/1997
|
|
Registered and Numbered 2 In The Register of Charges
|
ENCUMBRANCE 3
|
Date of Creation
|
:
|
21/09/2000
|
|
Description Of Charge
|
:
|
|
|
Amount Secured
|
:
|
RM144,000.00
|
|
Description Of Property Affected
|
:
|
|
|
Name & Address Of Chargee
|
:
|
|
|
Form 40 Dated
|
|
Registered and Numbered 3 In The Register of Charges
|
LEGAL CHECK AGAINST SC
* A check has been conducted in our databank againt the SC whether the
subject has been involved in any litigation. Our databank consists of 99% of
the wound up companies in Malaysia
back dated since 1900.
No legal action was found in our databank.
No winding up petition was found in our databank.
PAYMENT RECORD
|
|
|
|
SOURCES OF RAW MATERIALS:
|
|
|
Local
|
:
|
YES
|
|
|
Overseas
|
:
|
YES
|
|
|
Import Countries
|
:
|
CHINA,JAPAN,GERMANY
|
The SC refused to provide any name of trade/service supplier and we are
unable to conduct any trade enquiry. However, from financial historical data
we conclude that :
|
OVERALL PAYMENT HABIT
|
|
Prompt
|
[
|
|
]
|
|
Good
|
[
|
|
]
|
|
Average
|
[
|
|
]
|
|
|
Fair
|
[
|
|
]
|
|
Poor
|
[
|
X
|
]
|
|
|
|
|
|
|
CLIENTELE
|
Local
|
:
|
YES
|
Percentage
|
:
|
20%
|
|
Domestic Markets
|
:
|
MALAYSIA
|
|
Overseas
|
:
|
YES
|
Percentage
|
:
|
80%
|
|
Export Market
|
:
|
PAKISTAN,
PHILIPPINES, INDONESIA, MAURITANIA, SOUTH AFRICA, VIETNAM, THAILAND, SRI
LANKA, SINGAPORE,
CHINA
|
|
Credit Term
|
:
|
30 - 90 DAYS
|
|
|
|
|
|
|
|
|
Payment Mode
|
:
|
CHEQUES,LETTER OF CREDIT (LC),TELEGRAPHIC TRANSFER (TT)
|
|
Type of Customer
|
:
|
FOOD MANUFACTURERS
|
|
|
|
|
|
|
|
OPERATIONS
|
Goods Traded
|
:
|
|
FOOD PROCESSING EQUIPMENT AND PACKAGING MACHINE
|
|
|
|
|
|
|
Competitor(s)
|
:
|
|
ABILITY OILFIELD & ENGINEERING SDN BHD
|
|
ALSTOM POWER ASIA PACIFIC SDN BHD
|
|
BAYU PURNAMA SDN BHD
|
|
EWINS CORPORATION (M) SDN BHD
|
|
TANJUNG OFFSHORE SERVICES SDN BHD
|
|
|
|
|
|
|
Ownership of premises
|
:
|
|
|
Total Number of Employees:
|
|
|
YEAR
|
2008
|
2007
|
2006
|
2005
|
|
|
|
|
|
|
|
|
GROUP
|
N/A
|
N/A
|
N/A
|
N/A
|
|
|
|
|
|
|
COMPANY
|
20
|
18
|
16
|
16
|
|
|
|
|
|
Other Information:
The SC is principally engaged in the (as a / as an) trading in food
processing equipment and packaging machine.
The SC sells a wide range of products which include:
* Wafer Stick Baking Machine
* Ballmill Machine
* Potato Snack Manufacturing Line
* Toasted Puff Extruder
* Others
Besides that the SC also offers food manufacturing, coding and marking
machinery.
The SC's packaging machines are especially suited to solid, granular and
powdered goods.
The SC's complete range of products includes horizontal and vertical
automatic packaging machines, using either pillow type of three-side seal
flexible packaging. Speciality machines for packaging rice and detergent are
also available.
The SC sells both automatic and semi-automatic machines.
According to the SC, it identifies and studies the customer's needs before
recommending suitable packaging methods, materials and machinery. The SC
recommendations are based on the main objective of minimizing cost and
maximizing profit for its customers
The SC also offer scheduled preventive services and fast deployment of
servicemen for repair services.
The Customers have the option of signing a maintenance contract with the SC
for schedule preventive services. Preventive services can prevent extensive
damages to the machine, which could have started with some minor
malfunctions.
PROJECTS
No projects found in our databank
RECENT DEVELOPMENT
We have checked with the Malaysian National News Agency's (BERNAMA)database,
but no latest development was noted in our investigation.
CURRENT INVESTIGATION
Latest fresh
investigations carried out on the SC indicated that :
|
Telephone Number Provided By Client
|
:
|
N/A
|
|
Current Telephone Number
|
:
|
05-3217968
|
|
Match
|
:
|
N/A
|
|
|
|
|
|
Address Provided by Client
|
:
|
36 JLN PERINDUSTRIAN PENGKALAN 2A, KAW PERINDUSTRIAN PENGKALAN,
31500 LAHAT, PERAK
|
|
Current Address
|
:
|
36, JALAN PERINDUSTRIAN PENGKALAN 2A, KAWASAN PERINDUSTRIAN PENGKALAN,
31500 LAHAT, PERAK, MALAYSIA.
|
|
Match
|
:
|
YES
|
|
|
|
|
|
Latest Financial Accounts
|
:
|
YES
|
Other Investigations
We conducted an interview with one of the SC's staff from Accounts Department.
She revealed some relevant information on the SC.
FINANCIAL COMMENTS
Profitability:
|
Turnover
|
:
|
Increased
|
[
|
14.28%
|
]
|
|
Profit/(Loss) Before Tax
|
:
|
Increased
|
[
|
219.72%
|
]
|
|
Return on Shareholder Funds
|
:
|
Favourable
|
[
|
49.04%
|
]
|
|
Return on Net Assets
|
:
|
Favourable
|
[
|
44.54%
|
]
|
The higher turnover could be attributed to the favourable market condition
and the SC could be gaining the market share progressively. The higher profit
could be attributed to the increase in turnover. Generally the SC was
profitable. The favourable return on shareholders' funds and return on net
assets indicate that the SC's management was efficient in utilising the
assets to generate returns.
Working Capital Control:
|
Stock Ratio
|
:
|
Favourable
|
[
|
1 Days
|
]
|
|
Debtors Ratio
|
:
|
Unfavourable
|
[
|
138 Days
|
]
|
|
Creditors Ratio
|
:
|
Unfavourable
|
[
|
198 Days
|
]
|
The SC's stocks were moving fast thus reducing its holding cost. This had reduced
funds being tied up in stocks. The SC's debtors ratio was high. The SC should
tighten its credit control and improve its collection period. The
unfavourable creditors' ratio could be due to the SC taking advantage of the
credit granted by its suppliers. However this may affect the goodwill between
the SC and its suppliers and the SC may inadvertently have to pay more for
its future supplies.
Liquidity:
|
Liquid Ratio
|
:
|
Acceptable
|
[
|
0.90 Times
|
]
|
|
Current Ratio
|
:
|
Unfavourable
|
[
|
0.90 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
|
[
|
1.94 Times
|
]
|
|
Gearing Ratio
|
:
|
Unfavourable
|
[
|
9.40 Times
|
]
|
The SC's interest cover was low. If its profits fall or when interest rate
rises, it may not be able to meet all its interest payment. The SC was highly
geared, thus it had a high financial risk. The SC was dependent on loans to
finance its business needs. In times of economic downturn and / or high
interest rate, the SC will become less profitable and competitive than other
firms in the same industry, which are lowly geared. This is because the SC
has to service the interest and to repay the loan, which will erode part of
its profits. The profits will fluctuate depending on the SC's turnover and
the interest it needs to pay.
Overall
Accessment:
Generally, the
SC's performance has improved with higher turnover and profit. 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's gearing level was high and its going concern
will be in doubt if there is no injection of additional shareholders' funds
in times of economic downturn and / or high interest rates.
Overall financial condition of the SC : LIMITED
ECONOMIC / INDUSTRY OUTLOOK
|
Major Economic Indicators:
|
2004
|
2005
|
2006
|
2007*
|
2008**
|
|
|
|
|
|
|
|
|
Population ( Million)
|
25.58
|
26.13
|
26.64
|
27.17
|
27.73
|
|
Gross Domestic Products ( % )
|
7.1
|
5.3
|
5.8
|
6.0
|
6.5
|
|
Domestic Demand ( % )
|
7.5
|
7.3
|
7.0
|
9.0
|
6.8
|
|
Private Expenditure ( % )
|
13.1
|
9.5
|
7.0
|
8.6
|
8.2
|
|
Consumption ( % )
|
10.5
|
9.2
|
7.1
|
9.0
|
7.9
|
|
Investment ( % )
|
25.8
|
8.5
|
7.0
|
7.1
|
9.5
|
|
Public Expenditure ( % )
|
<2.1>
|
3.6
|
6.8
|
10.1
|
3.2
|
|
Consumption ( % )
|
6.0
|
5.4
|
5.0
|
10.8
|
5.5
|
|
Investment ( % )
|
<8.7>
|
1.9
|
8.9
|
9.3
|
0.5
|
|
|
|
|
|
|
|
|
Balance of Trade ( MYR Million )
|
80,663
|
99,760
|
108,192
|
99,965
|
99,599
|
|
Government Finance ( MYR Million )
|
<19,419>
|
<18,684>
|
<19,109>
|
<19,948>
|
<20,933>
|
|
Government Finance to GDP / Fiscal Deficit ( % )
|
<4.3>
|
<3.8>
|
<3.3>
|
<3.2>
|
<3.1>
|
|
Inflation ( % Change in Composite CPI)
|
1.4
|
3.1
|
3.9
|
4.0
|
4.0
|
|
Unemployment Rate
|
3.5
|
3.5
|
3.4
|
3.5
|
3.3
|
|
|
|
|
|
|
|
|
Net International Reserves ( MYR Billion )
|
254
|
266
|
290
|
-
|
-
|
|
Average Risk-Weighted Capital Adequacy Ratio ( % )
|
13.84
|
13.63
|
12.91
|
-
|
-
|
|
Average 3 Months of Non-performing Loans ( % )
|
8.46
|
6.74
|
5.41
|
-
|
-
|
|
Average Base Lending Rate ( % )
|
5.99
|
6.00
|
6.61
|
-
|
-
|
|
Business Loans Disbursed( % )
|
10.5
|
8.7
|
<2.5>
|
-
|
-
|
|
Foreign Investment ( MYR Million )
|
13,143.9
|
17,882.9
|
20,228.0
|
-
|
-
|
|
Consumer Loans ( % )
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Registration of New Companies ( No. )
|
38,580
|
37,474
|
38,293
|
-
|
-
|
|
Registration of New Companies ( % )
|
6.8
|
<2.9>
|
2.2
|
-
|
-
|
|
Liquidation of Companies ( No. )
|
3,334
|
3,069
|
8,647
|
-
|
-
|
|
Liquidation of Companies ( % )
|
<15.8>
|
<7.9>
|
181.8
|
-
|
-
|
|
|
|
|
|
|
|
|
Registration of New Business ( No. )
|
189,206
|
193,095
|
216,147
|
-
|
-
|
|
Registration of New Business ( % )
|
4.6
|
2.1
|
11.9
|
-
|
-
|
|
Business Dissolved ( No. )
|
51,301
|
73,355
|
52,879
|
-
|
-
|
|
Business Dissolved ( % )
|
7.0
|
43.0
|
<27.9>
|
-
|
-
|
|
|
|
|
|
|
|
|
Sales of New Passenger Cars (' 000 Unit )
|
380.6
|
400.8
|
374.1
|
-
|
-
|
|
Cellular Phone Subscribers ( Million )
|
14.6
|
18.5
|
19.5
|
21.3
|
-
|
|
Tourist Arrival ( Million Persons )
|
15.7
|
16.7
|
17.5
|
20.1
|
-
|
|
Hotel Occupancy Rate ( % )
|
60.8
|
63.6
|
64.8
|
-
|
-
|
|
|
|
|
|
|
|
|
Credit Cards Spending ( % )
|
19.3
|
13.9
|
15.4
|
-
|
-
|
|
Bad Cheque Offenders (No.)
|
70,465
|
57,316
|
36,555
|
-
|
-
|
|
Individual Bankruptcy ( No.)
|
16,251
|
15,868
|
13,596
|
-
|
-
|
|
Individual Bankruptcy ( % )
|
31.6
|
<2.4>
|
<14.3>
|
-
|
-
|
|
|
|
|
|
|
|
|
INDUSTRIES ( % of Growth ):
|
2004
|
2005
|
2006
|
2007*
|
2008**
|
|
|
|
|
|
|
|
|
Agriculture
|
5.0
|
2.5
|
5.3
|
3.1
|
3.5
|
|
Palm Oil
|
3.9
|
7.1
|
5.8
|
<0.6>
|
-
|
|
Rubber
|
16.5
|
<2.9>
|
12.6
|
1.0
|
-
|
|
Forestry & Logging
|
4.3
|
2.0
|
<0.4>
|
2.8
|
-
|
|
Fishing
|
5.5
|
<0.4>
|
9.3
|
5.2
|
-
|
|
Other Agriculture
|
2.4
|
3.2
|
5.3
|
7.0
|
-
|
|
Industry Non-Performing Loans ( MYR Million )
|
620.3
|
563.7
|
516.5
|
487.3
|
0
|
|
% of Industry Non-Performing Loans
|
1.38
|
1.19
|
1.06
|
1.08
|
0
|
|
|
|
|
|
|
|
|
Mining
|
3.9
|
0.8
|
<0.4>
|
3.3
|
4.0
|
|
Oil & Gas
|
4.5
|
1.6
|
4.6
|
-
|
-
|
|
Other Mining
|
<8.0>
|
<1.0>
|
5.1
|
-
|
-
|
|
Industry Non-performing Loans ( MYR Million )
|
62.6
|
68.8
|
55.4
|
42.2
|
-
|
|
% of Industry Non-performing Loans
|
0.1
|
0.1
|
0.1
|
0.1
|
-
|
|
|
|
|
|
|
|
|
Manufacturing #
|
9.8
|
5.1
|
7.3
|
3.1
|
3.8
|
|
Exported-oriented Industries
|
15.5
|
3.0
|
11.1
|
<1.9>
|
-
|
|
Electrical & Electronics
|
17.8
|
3.6
|
13.4
|
3.0
|
-
|
|
Rubber Products
|
14.8
|
2.4
|
0.4
|
8.0
|
-
|
|
Wood Products
|
12.7
|
0.9
|
0.7
|
3.3
|
-
|
|
Textiles & Apparel
|
<11.7>
|
<4.4>
|
12.6
|
<10.1>
|
-
|
|
Domestic-oriented Industries
|
9.7
|
6.9
|
5.0
|
5.3
|
-
|
|
Food, Beverages & Tobacco
|
3.8
|
7.7
|
4.8
|
5.6
|
-
|
|
Chemical & Chemical Products
|
14.6
|
6.9
|
1.7
|
9.2
|
-
|
|
Plastic Products
|
13.5
|
18.6
|
21.3
|
<3.6>
|
-
|
|
Iron & Steel
|
2.7
|
<6.7>
|
<6.9>
|
17.5
|
-
|
|
Fabricated Metal Products
|
29.2
|
<7.5>
|
20.0
|
26.2
|
-
|
|
Non-metallic Mineral
|
<4.8>
|
<6.0>
|
<1.9>
|
6.6
|
-
|
|
Transport Equipment
|
8.6
|
10.4
|
5.3
|
<19.0>
|
-
|
|
Paper & Paper Products
|
2.3
|
4.6
|
4.1
|
14.9
|
-
|
|
Crude Oil Refineries
|
<2.4>
|
8.2
|
12.1
|
8.6
|
-
|
|
Industry Non-Performing Loans ( MYR Million )
|
7,765.4
|
6,035.6
|
6,181.3
|
6,366.2
|
-
|
|
% of Industry Non-Performing Loans
|
17.3
|
12.7
|
12.7
|
14.1
|
-
|
|
|
|
|
|
|
|
|
Construction
|
<1.5>
|
<1.6>
|
<0.5>
|
5.2
|
6.3
|
|
Industry Non-Performing Loans ( MYR Million )
|
5,547.7
|
5,172.7
|
5,527.3
|
5,116.7
|
-
|
|
% of Industry Non-Performing Loans
|
12.4
|
10.9
|
11.4
|
11.3
|
-
|
|
|
|
|
|
|
|
|
Services
|
6.8
|
6.6
|
7.2
|
9.0
|
8.6
|
|
Electric, Gas & Water
|
8.1
|
5.5
|
5.2
|
4.6
|
5.0
|
|
Transport, Storage & Communication
|
8.5
|
6.3
|
5.2
|
7.6
|
7.8
|
|
Wholesale, Retail, Hotel & Restaurant
|
7.1
|
8.0
|
7.1
|
11.6
|
10.0
|
|
Finance, Insurance & Real Estate
|
6.3
|
7.0
|
7.7
|
10.7
|
9.2
|
|
Government Services
|
6.5
|
7.6
|
9.8
|
4.6
|
8.6
|
|
Other Services
|
4.9
|
5.0
|
4.7
|
5.0
|
5.9
|
|
Industry Non-Performing Loans ( MYR Million )
|
8,913.7
|
8,716.8
|
11,593.2
|
10,207.8
|
-
|
|
% of Industry Non-Performing Loans
|
19.9
|
18.4
|
23.9
|
22.6
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Estimate / Preliminary
|
|
|
|
|
|
|
** Forecast
|
|
|
|
|
|
|
# Based On
Manufacturing Production Index
(Source : Department of Statistics / Economic Report / Bank Negara Report)
|
|
|
|
|
|
|
|
INDUSTRY COMMENTS
|
MSIC CODE
|
|
5159 : Wholesale of other machinery, equipment and supplies
|
|
|
|
|
INDUSTRY :
|
MACHINERY
|
|
|
|
|
|
|
The early development of the machinery and equipment (M&E) industry emerged
to serve the agro-based and tin mining sectors. Over the years, local
manufacturers have also ventured into producing other M&E to meet the
need of other industries. There are four sectors in the M&E industry
and they are power generating M&E; metal working machinery; machinery
specialised for particular industries; and general industrial machinery,
equipment and parts.
|
|
Production of machinery and equipment industry including air conditioning,
refrigerating and ventilating machinery, contracted 13.7% during the first
six months of 2007 (January-June 2006: -1.7%) on account of lower sales of
5.9% (January-June 2006: 2.8%). Weakening sales during the period,
resulting from lower domestic and external demand, led to lower capacity
utilisation of 60.0%.
|
|
During the Industrial Master Plan 3 period the industry is expected to
expand further in tandem with the growth of major economic sectors, in
particular the manufacturing, agriculture and services sectors. With
increasing competition from lower cost producing countries, the industry is
expected to move up the value chain and strengthen its design, development
and innovation capabilities in the production of innovation capabilities in
the production of high technology M&E and specialized M&E for specific
industries.
|
|
To assist local small and medium enterprises enhance their technological
competitiveness in machinery and equipment manufacturing, the Government
has set up the Rasa Machinery and Equipment Technology Centre (Ramet)
managed by Sirim Bhd.
|
|
Malaysia
being a net importer of M&E should be able to gained some advantages
from the de-pegged of US Dollar (USD). Even so, the over-dependency of Malaysia on
imported M&E indicates that the local M&E industry needs to increase
the number of projects approved for both the domestic and the foreign
investors.
|
|
|
|
|
OVERALL INDUSTRY OUTLOOK : Decline
|
COMMENTS
|
Formed in 1994, the SC is a private limited company, focusing on trading in
food processing equipments and packaging machines. With a small paid up
capital of RM200,000, the SC may face difficulties in expanding its
business when the needs arise. Having been in the industry for more than a
decade, the SC should have established rapport with its customers to retain
its business position in the market. We considered that the SC's business
position in the market is much dependent on the abilities of its
shareholders.
|
|
Besides the local market, the SC has penetrated into the overseas markets
such as Pakistan, Indonesia, Thailand,
China
and others. The export business is the main revenue driver of the SC and
thus it eliminates the SC's business risk. Nonetheless, as an
export-oriented company, the SC's operations will be subjected to certain
inherent risk of foreign currencies fluctuations and stiff competition in
the international market. Today, the SC has a staff strength of 20
employees in the operations. Its management capability is average.
|
|
During the financial year 2006, the SC's turnover increased by 14.28% to
RM8,247,452. Its pre-tax profit had increased from RM28,395 to RM90,785.
Return on shareholders' funds is high, indicating that the SC has generated
a favourable return based on its shareholders' funds. Nonetheless, the SC
is in a weak liquidity position. It may face working capital deficiency in
meeting its short term obligations. A high gearing ratio has placed the SC
at high financial risk. Overall, the SC's financial position is regarded as
limited.
|
|
We noted that the SC's products are sourced locally and also from overseas
market. As an export-oriented company and being involved in import
activities, the SC is deemed to be exposed to high foreign currency
exposure risk.
|
|
Based on its financial historical data, the SC's payment record is poor.
|
|
The immediate outlook for the industry is unfavourable as it is
demonstrating a downward trend. With this unfavourable industry
environment, it might pressure down the SC's future performance. Thus, the SC
has to implement aggressive marketing strategies in order to capture its
own market shares in the market and to compete with other well established
players in the same industry.
|
|
In view of the above, we recommend credit be granted to the SC with close
monitoring.
|
PROFIT AND LOSS ACCOUNT
|
THE FINANCIAL
STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.
|
|
ARROW SYSTEMS
SDN BHD
|
|
For The Year
Ended 31-March-2006
|
|
|
|
|
|
|
2006
|
2005
|
|
|
MYR
|
MYR
|
|
|
|
|
|
|
|
|
|
TURNOVER
|
8,247,452
|
7,216,990
|
|
|
==========
|
==========
|
|
PROFIT/(LOSS) FROM OPERATIONS
|
90,785
|
28,395
|
|
|
|
|
|
|
------------
|
------------
|
|
PROFIT/(LOSS) BEFORE TAXATION
|
90,785
|
28,395
|
|
Taxation
|
<35,939>
|
<60,594>
|
|
PROFIT/(LOSS) AFTER TAXATION
|
------------
54,846
|
------------
<32,199>
|
|
|
|
|
|
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS
|
------------
54,846
|
------------
<32,199>
|
|
|
|
|
|
PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS
RETAINED PROFIT/(ACCUMULATED LOSS) BROUGHT FORWARD
|
------------
54,846
|
------------
<32,199>
|
|
As previous reported
|
<3,006>
|
29,193
|
|
|
|
|
|
As restated
|
------------
<3,006>
|
------------
29,193
|
|
|
------------
|
------------
|
|
PROFIT AVAILABLE FOR APPROPRIATIONS
|
51,840
|
<3,006>
|
|
|
|
|
|
RETAINED PROFIT/(ACCUMULATED LOSS) CARRIED FORWAD
|
------------
51,840
==========
|
------------
<3,006>
==========
|
|
RETAINED BY: The Company
|
51,840
|
<3,006>
|
|
|
|
|
|
|
------------
51,840
==========
|
------------
<3,006>
==========
|
|
INTEREST EXPENSE (as per notes to PL)
|
|
|
|
Term loan
|
14,763
|
17,923
|
|
Bank overdraft
|
1,644
|
19,512
|
|
|
|
|
|
Hire purchase
|
18,041
|
2,711
|
|
|
|
|
|
|
|
|
|
Interest on trust receipts
|
61,016
|
59,074
|
|
|
|
|
|
overdue accounts
|
663
|
-
|
|
|
------------
96,127
==========
|
------------
99,220
==========
|
|
|
|
|
BALANCE SHEET
|
ARROW SYSTEMS
SDN BHD
|
|
As At
31-March-2006
|
|
|
|
|
|
|
2006
|
2005
|
|
|
MYR
|
MYR
|
|
|
|
|
|
ASSET EMPLOYED:
|
|
|
|
FIXED ASSETS
|
1,055,921
|
620,995
|
|
|
|
|
|
|
|
|
|
TOTAL LONG TERM ASSETS
|
------------
1,055,921
|
------------
620,995
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Stocks
|
21,795
|
20,580
|
|
|
|
|
|
Trade debtors
|
3,125,324
|
2,891,238
|
|
Other debtors, deposits &
prepayments
|
636,271
|
711,210
|
|
Short term deposits
|
900,000
|
800,000
|
|
|
|
|
|
|
|
|
|
Amount due from director
|
423,389
|
512,914
|
|
Cash & bank balances
|
635,103
|
414,359
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
------------
5,741,882
|
------------
5,350,301
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
Trade creditors
|
4,475,304
|
4,354,448
|
|
Other creditors & accruals
|
1,069,122
|
238,481
|
|
Hire purchase & lease
creditors
|
42,370
|
48,053
|
|
Bank overdraft
|
167,668
|
34,224
|
|
Short term borrowings/Term
loans
|
62,495
|
59,202
|
|
Other borrowings
|
477,140
|
735,897
|
|
|
|
|
|
Bill & acceptances payable
|
74,000
|
-
|
|
|
|
|
|
|
|
|
|
Provision for taxation
|
10,095
|
40,497
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
------------
6,378,194
|
------------
5,510,802
|
|
NET CURRENT ASSETS/(LIABILITIES)
|
------------
<636,312>
|
------------
<160,501>
|
|
TOTAL NET ASSETS
|
------------
419,609
==========
|
------------
460,494
==========
|
|
|
|
|
|
FINANCED BY:
|
|
|
|
|
|
|
|
SHARE CAPITAL
|
|
|
|
Ordinary share capital
|
60,000
|
60,000
|
|
|
|
|
|
TOTAL SHARE CAPITAL
|
------------
60,000
|
------------
60,000
|
|
|
|
|
|
RESERVES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retain profit/(Accumulated loss)
carried forward
|
51,840
|
<3,006>
|
|
|
|
|
|
|
|
|
|
TOTAL RESERVES
|
------------
51,840
|
------------
<3,006>
|
|
SHAREHOLDERS' FUNDS/EQUITY
|
------------
111,840
|
------------
56,994
|
|
|
|
|
|
|
|
|
|
LONG TERM & DEFERRED LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
|
Long term loans
|
131,893
|
193,359
|
|
|
|
|
|
|
|
|
|
Hire purchase creditors
|
169,876
|
210,141
|
|
Deferred taxation
|
6,000
|
-
|
|
|
|
|
|
|
|
|
|
TOTAL LONG TERM & DEFERRED LIABILITIES & PROVISIONS
|
------------
307,769
|
------------
403,500
|
|
|
------------
|
------------
|
|
|
419,609
|
460,494
|
|
|
==========
|
==========
|
|
|
|
|
FINANCIAL RATIOS
|
ARROW SYSTEMS
SDN BHD
|
|
As At
31-March-2006
|
|
|
|
|
|
|
2006
|
2005
|
|
|
MYR
|
MYR
|
|
|
|
|
|
|
|
|
|
TYPES OF FUNDS
|
|
|
|
Cash
|
1,535,103
|
1,214,359
|
|
Net Liquid Funds
|
1,304,940
|
1,120,933
|
|
Net Liquid Assets
|
<658,107>
|
<181,081>
|
|
Net Current Assets/(Liabilities)
|
<636,312>
|
<160,501>
|
|
Net Tangible Assets
|
419,609
|
460,494
|
|
Net Monetary Assets
|
<965,876>
|
<584,581>
|
|
|
|
|
|
BALANCE SHEET ITEMS
|
|
|
|
Total Borrowings
|
1,051,442
|
1,280,876
|
|
Total Liabilities
|
6,685,963
|
5,914,302
|
|
Total Assets
|
6,797,803
|
5,971,296
|
|
Net Assets
|
419,609
|
460,494
|
|
Net Assets Backing
|
111,840
|
56,994
|
|
Shareholders" Funds
|
111,840
|
56,994
|
|
Total Share Capital
|
60,000
|
60,000
|
|
Total Reserves
|
51,840
|
<3,006>
|
|
|
|
|
|
LIQUIDITY(Times)
|
|
|
|
Cash Ratio
|
0.24
|
0.22
|
|
Liquid Ratio
|
0.90
|
0.97
|
|
Current Ratio
|
0.90
|
0.97
|
|
|
|
|
|
WORKING CAPITAL CONTROL (Days)
|
|
|
|
Stock Ratio
|
1
|
1
|
|
Debtors Ratio
|
138
|
146
|
|
Creditors Ratio
|
198
|
220
|
|
|
|
|
|
SOLVENCY RATIOS (Times)
|
|
|
|
Gearing Ratio
|
9.40
|
22.47
|
|
Liabilities Ratio
|
59.78
|
103.77
|
|
Times Interest Earned Ratio
|
1.94
|
1.29
|
|
|
|
|
|
PERFORMANCE RATIO (%)
|
|
|
|
Operating Profit Margin
|
1.10
|
0.39
|
|
Net Profit Margin
|
0.67
|
<0.45>
|
|
Return On Net Assets
|
44.54
|
27.71
|
|
Return On Capital Employed
|
27.00
|
21.20
|
|
Return On Shareholders'
Funds/Equity
|
49.04
|
<56.50>
|
|
Dividend Pay Out Ratio (Times)
|
0
|
0
|
|
|
|
|
|
NOTES TO ACCOUNTS
|
|
|
|
Contingent Liabilities
|
0.00
|
0.00
|
|
|
|
|
|