MIRA INFORM REPORT

 

 

Report Date :

15.02.2014

 

IDENTIFICATION DETAILS

 

Name :

PACIFIC OLEOCHEMICALS SDN. BHD.

 

 

Formerly Known As :

AKZO NOBEL OLEOCHEMICALS SDN BHD

 

 

Registered Office :

Wisma Dls, 6, Jalan Jurunilai U1/20, Hicom-Glenmarie Industrial Park, 40150 Shah Alam, Selangor

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

11.11.1980

 

 

Com. Reg. No.:

64175-U

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacture of Distilled Fatty Acid, Stearic Acid, Fractionated Fatty Acid and Refined Glycerine

 

 

No. of Employees :

200 [2014]

 

 

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 – September 30, 2013

 

Country Name

Previous Rating

(30.06.2013)

Current Rating

(30.09.2013)

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.

:

64175-U

COMPANY NAME

:

PACIFIC OLEOCHEMICALS SDN. BHD.

FORMER NAME

:

AKZO NOBEL OLEOCHEMICALS SDN BHD (10/05/2006)
AKZO & PACIFIC OLEOCHEMICALS SDN BHD (08/12/1994)
MALAYSIAN OLEO CHEMICALS SDN BHD (23/11/1988)

INCORPORATION DATE

:

11/11/1980

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

WISMA DLS, 6, JALAN JURUNILAI U1/20, HICOM-GLENMARIE INDUSTRIAL PARK, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LEVEL 3, WISMA DLS, NO 6, JALAN JURUNILAI U1/20, HICOM-GLENMARIE INDUSTRIAL PARK, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

TEL.NO.

:

03-55692739

FAX.NO.

:

03-55691658

EMAIL

:

POC@PACIFICOLEO.COM

WEB SITE

:

WWW.PACIFICOLEO.COM

CONTACT PERSON

:

KHOO HENG SUAN ( CHAIRMAN )

INDUSTRY CODE

:

202

PRINCIPAL ACTIVITY

:

MANUFACTURE OF DISTILLED FATTY ACID, STEARIC ACID, FRACTIONATED FATTY ACID AND REFINED GLYCERINE

AUTHORISED CAPITAL

:

MYR 100,000,000.00 DIVIDED INTO
ORDINARY SHARE 100,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 100,000,000.00 DIVIDED INTO
ORDINARY SHARES 40,000,000 CASH AND 60,000,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 530,954,412 [2012]

NET WORTH

:

MYR 202,598,379 [2012]

STAFF STRENGTH

:

200 [2014]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

PROMPT

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

 

HISTORY / BACKGROUND

 

The Subject 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 Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject 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 Subject is insolvent. The Subject 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 Subject is principally engaged in the (as a / as an) manufacture of distilled fatty acid, stearic acid, fractionated fatty acid and refined glycerine.

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

 

The immediate holding company of the Subject is LAM SOON PLANTATIONS SDN. BHD., a company incorporated in MALAYSIA.

The ultimate holding company of the Subject is LAM SOON (M) BHD, a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

18/12/2013

MYR 100,000,000.00

MYR 100,000,000.00

23/04/2013

MYR 100,000,000.00

MYR 50,000,000.00

 

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


Name

Address

IC/PP/Loc No

Shareholding

(%)

LAM SOON PLANTATIONS SDN. BHD.

WISMA DLS, NO. 6, JALAN JURUNILAI U1/20, HICOM-GLENMARIE INDUSTRIAL PARK, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

40857X

100,000,000.00

100.00

 

 

 

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

------

 

 

 

100,000,000.00

100.00

 

 

 

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

=====

+ Also Director

 

 

DIRECTORS


DIRECTOR 1

 

Name Of Subject

:

MR. TAN GEOK CHAI

Address

:

44, JALAN SURIA 2, TAMAN SURIA, 81100 JOHOR BAHRU, JOHOR, MALAYSIA.

IC / PP No

:

4424813

New IC No

:

530404-01-5419

Date of Birth

:

04/04/1953

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

02/11/1999

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. KHOO HENG SUAN

Address

:

21,JALAN SS 2/57, 47300 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

0869939

New IC No

:

470109-04-5509

Date of Birth

:

09/01/1947

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

15/12/1987

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

WHANG SHANG YING

Address

:

26A, TUDOR CLOSE, 2797953, SINGAPORE.

IC / PP No

:

1483019G

 

 

 

 

 

 

 

 

 

Nationality

:

SINGAPOREAN

Date of Appointment

:

24/04/1997

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 4

 

Name Of Subject

:

MR. RAJA ABDUL RASHID BIN RAJA BADIOZAMAN

Address

:

DL 64,TAMAN BUKIT AMPANG, JALAN BUKIT BELACAN, 68000 AMPANG, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

400718-08-5289

Date of Birth

:

18/07/1940

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

17/03/2006

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 5

 

Name Of Subject

:

MR. RICHARD SAKIAN BIN GUNTING

Address

:

HSE 73, LORONG POKOK SERAYA 1, TAMAN KHIDMAT, 88400 KOTA KINABALU, SABAH, MALAYSIA.

IC / PP No

:

H0391094

New IC No

:

510704-12-5451

Date of Birth

:

04/07/1951

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

01/02/2009

 

 

 

 

 

 

 

 

 

 

 

 



MANAGEMENT

 

 

 

1)

Name of Subject

:

KHOO HENG SUAN

 

Position

:

CHAIRMAN

 

 

 

 

 

 

 

AUDITOR

 

Auditor

:

ERNST & YOUNG

Auditor' Address

:

SUITE 11.2A, LEVEL 11, MENARA PELANGI, 2, JALAN KUNING, TAMAN PELANGI, LEVEL 11, 80400 JOHOR BAHRU, JOHOR, MALAYSIA.

 

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. THIAN YEW FONG

 

IC / PP No

:

5493695

 

New IC No

:

581201-10-6150

 

Address

:

206B, FRASER EAST TOWER, GASING HGHTS.CONDO, 92,JLN.5/60, 46000 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

 

 

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

07/12/1982

N/A

MALAYSIA INDUSTRIAL DEVELOPMENT FINANCE BHD

MYR 3,000,000.00

Satisfied

2

29/09/1983

N/A

MSIAN INDUSTRIAL DEVELOPMENT FINANCE BHD

MYR 3,000,000.00

Satisfied

 

 

LEGAL CHECK AGAINST SUBJECT


* A check has been conducted in our databank againt the Subject 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 SUBJECT


* We have checked through the Subject 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

 

 

 


The Subject refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

X

]

 

Good 31-60 Days

[

 

]

 

Average 61-90 Days

[

 

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 



CLIENTELE

 

Local

:

YES

Percentage

:

40%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

60%

Export Market

:

WORLDWIDE

Credit Term

:

AS AGREED

 

 

 

 

 

 

Payment Mode

:

TELEGRAPHIC TRANSFER (TT)
LETTER OF CREDIT (LC)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Products manufactured

:

GLYCERINE & FATTY ACIDS

 

 

 

Award

:

1 ) MS ISO 14001 Year :2000

 

 

 

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

SMALL & MEDIUM ENTERPRISE

MALAYSIAN INTERNATIONAL CHAMBER OF COMMERCE AND INDUSTRY (MICCI)

CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

MALAYSIA FOOD & BEVERAGE INDUSTRY

 

 

 

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2014

2013

2011

2010

2009

 

 

 

 


 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

200

200

200

190

189

 

 

 

 

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) manufacture of distilled fatty acid, stearic acid, fractionated fatty acid and refined glycerine.


The Subject is one of the leading producers of Oleochemicals offering a wide range of fatty acids, glycerine and specialty products.


We were informed that the all of Subject's products are derived from renewable vegetable raw materials, mainly from palm oil and palm kernel oil.

The Subject is producing the semi finished products which are widely used in cosmetic products, food, rubbers and other related products.



CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-55692739

Match

:

N/A

 

 

 

Address Provided by Client

:

PLO 285, JALAN PEKELILING TIMUR P O BOX 143, 81707 PASIR GUDANG JOHAR DARUL TAKZIM,

Current Address

:

LEVEL 3, WISMA DLS, NO 6, JALAN JURUNILAI U1/20, HICOM-GLENMARIE INDUSTRIAL PARK, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


On 11th February 2014 we contacted one of the staff from the Subject and she provided some information.


The address provided belongs to the Subject's factory.



FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Increased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Acceptable

[

10.47%

]

 

Return on Net Assets

:

Acceptable

[

16.38%

]

 

 

 

 

 

 

 

 

The fluctuating turnover reflects the fierce competition among the existing and new market players.The Subject's management have been efficient in controlling its operating costs. The Subject's management had generated acceptable return for its shareholders using its assets.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

31 Days

]

 

Debtor Ratio

:

Favourable

[

37 Days

]

 

Creditors Ratio

:

Favourable

[

22 Days

]

 

 

 

 

 

 

 

 

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Liquid Ratio

:

Favourable

[

1.26 Times

]

 

Current Ratio

:

Unfavourable

[

1.79 Times

]

 

 

 

 

 

 

 

 

A minimum liquid ratio of 1 should be maintained by the Subject in order to assure its creditors of its ability to meet short term obligations and the Subject was in a good liquidity position. Thus, we believe the Subject is able to meet all its short term obligations as and when they fall due.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Favourable

[

369.38 Times

]

 

Gearing Ratio

:

Favourable

[

0.00 Times

]

 

 

 

 

 

 

 

 

The interest cover showed that the Subject was able to service the interest. The favourable interest cover could indicate that the Subject was making enough profit to pay for the interest accrued. The Subject had no gearing and hence it had virtually no financial risk. The Subject was financed by its shareholders' funds and internally generated fund. During the economic downturn, the Subject, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

Although the turnover was erratic, the Subject had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. The Subject was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The Subject has good chance of getting loans, if the needs arises.

 

 

 

 

 

 

 

Overall financial condition of the Subject : FAIR

 

 

 

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



INDUSTRY ANALYSIS

 

MSIC CODE

202 : Manufacture of other 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 1980, the Subject is a Private Limited company, focusing on manufacture of distilled fatty acid, stearic acid, fractionated fatty acid and refined glycerine. The Subject has been in business for over two decades. It has built up a strong clientele base and good reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. Having strong support from its holding company has enabled the Subject to remain competitive despite the challenging business environment. The Subject is a large entity with strong capital position. We are confident with the Subject's business and its future growth prospect.

 
Over the years, the Subject has established an extensive clientele base in the market. Besides catering to the local market, the Subject has penetrated into other countries. With the contribution of both local and overseas customers, the Subject is likely to be exposed to lower commercial risk. Hence, we believe that the Subject has better business expansion opportunities in the future. The Subject is a fairly large and rapidly growing company with over 200 staff in its operations. Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject.

Despite the lower turnover, the Subject's pre-tax profit have increased compared to the previous year. The higher profit could be due to better control of its operating costs and efficiency in utilising its resources. Return on shareholders' funds of the Subject was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The Subject 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 zero geared company, the Subject virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. Given a positive net worth standing at MYR 202,598,379, the Subject should be able to maintain its business in the near terms.


Having a strong assets backing, the Subject possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The Subject'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 Subject has a good control over its resources.


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


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


Based on the above condition, we recommend credit be granted to the Subject promptly.

 



PROFIT AND LOSS ACCOUNT

 

 

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

 

Financial Year End

2012-12-31

2011-12-31

2010-12-31

2009-12-31

2008-12-31

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

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

530,954,412

674,933,293

459,913,656

388,644,466

589,773,496

Other Income

8,577,373

4,533,304

-

-

-

 

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

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

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

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

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

Total Turnover

539,531,785

679,466,597

459,913,656

388,644,466

589,773,496

Costs of Goods Sold

(472,585,640)

(603,290,177)

-

-

-

 

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

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

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

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

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

Gross Profit

66,946,145

76,176,420

-

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

33,841,671

31,165,377

27,603,141

31,471,748

27,900,791

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

33,841,671

31,165,377

27,603,141

31,471,748

27,900,791

Taxation

(12,636,194)

5,381,486

(5,953,775)

3,115,645

(10,123,563)

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

21,205,477

36,546,863

21,649,366

34,587,393

17,777,228

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

131,392,902

94,846,039

72,776,644

38,189,251

20,412,023

Prior year adjustment

-

-

420,029

-

-

 

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

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

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

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

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

As restated

131,392,902

94,846,039

73,196,673

38,189,251

20,412,023

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

152,598,379

131,392,902

94,846,039

72,776,644

38,189,251

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

152,598,379

131,392,902

94,846,039

72,776,644

38,189,251

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Term loan / Borrowing

91,866

667,566

-

-

-

Others

-

-

460,707

469,062

286,728

 

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

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

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

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

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

 

91,866

667,566

460,707

469,062

286,728

 

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

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

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

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

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

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

139,696,794

157,305,589

176,110,788

152,116,493

177,972,193

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Deferred assets

-

4,645,302

-

-

-

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

-

4,645,302

-

-

-

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

139,696,794

161,950,891

176,110,788

152,116,493

177,972,193

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

45,048,628

55,922,365

50,186,376

33,657,169

34,753,407

Trade debtors

53,479,379

68,374,677

73,530,135

32,988,494

36,424,930

Other debtors, deposits & prepayments

4,511,041

817,992

6,172,302

16,972,819

1,284,959

Short term deposits

42,145,910

45,922,494

11,432,040

31,636,988

38,879,204

Amount due from holding company

200

-

-

-

-

Amount due from related companies

1,625,913

-

-

-

-

Cash & bank balances

1,544,205

1,732,683

1,445,322

14,132,939

427,608

Others

4,252,395

1,822,800

2,173,296

10,430,578

152,939

 

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

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

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

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

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

TOTAL CURRENT ASSETS

152,607,671

174,593,011

144,939,471

139,818,987

111,923,047

 

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

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

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

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

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

TOTAL ASSET

292,304,465

336,543,902

321,050,259

291,935,480

289,895,240

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

28,561,405

29,443,920

31,425,220

12,042,493

7,054,108

Other creditors & accruals

14,094,630

22,279,032

158,674,170

7,908,130

9,115,414

Bank overdraft

-

-

-

-

244,534

Bill & acceptances payable

-

17,506,000

10,377,000

-

-

Amounts owing to holding company

-

-

-

810

-

Amounts owing to related companies

42,475,478

84,331,671

-

176,483,462

212,701,895

Provision for taxation

-

-

938,132

-

-

Other liabilities

61,875

1,590,377

-

-

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

85,193,388

155,151,000

201,414,522

196,434,895

229,115,951

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

67,414,283

19,442,011

(56,475,051)

(56,615,908)

(117,192,904)

 

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

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

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

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

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

TOTAL NET ASSETS

207,111,077

181,392,902

119,635,737

95,500,585

60,779,289

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

50,000,000

50,000,000

20,000,000

20,000,000

20,000,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

50,000,000

50,000,000

20,000,000

20,000,000

20,000,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

152,598,379

131,392,902

94,846,039

72,776,644

38,189,251

 

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

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

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

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

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

TOTAL RESERVES

152,598,379

131,392,902

94,846,039

72,776,644

38,189,251

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

202,598,379

181,392,902

114,846,039

92,776,644

58,189,251

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Deferred taxation

4,512,698

-

4,789,698

2,723,941

2,590,038

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

4,512,698

-

4,789,698

2,723,941

2,590,038

 

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

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

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

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

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

 

207,111,077

181,392,902

119,635,737

95,500,585

60,779,289

 

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

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

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

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

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

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

 

 

 

 

 

Cash

43,690,115

47,655,177

12,877,362

45,769,927

39,306,812

Net Liquid Funds

43,690,115

30,149,177

2,500,362

45,769,927

39,062,278

Net Liquid Assets

22,365,655

(36,480,354)

(106,661,427)

(90,273,077)

(151,946,311)

Net Current Assets/(Liabilities)

67,414,283

19,442,011

(56,475,051)

(56,615,908)

(117,192,904)

Net Tangible Assets

207,111,077

181,392,902

119,635,737

95,500,585

60,779,289

Net Monetary Assets

17,852,957

(36,480,354)

(111,451,125)

(92,997,018)

(154,536,349)

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

0

17,506,000

10,377,000

0

244,534

Total Liabilities

89,706,086

155,151,000

206,204,220

199,158,836

231,705,989

Total Assets

292,304,465

336,543,902

321,050,259

291,935,480

289,895,240

Net Assets

207,111,077

181,392,902

119,635,737

95,500,585

60,779,289

Net Assets Backing

202,598,379

181,392,902

114,846,039

92,776,644

58,189,251

Shareholders' Funds

202,598,379

181,392,902

114,846,039

92,776,644

58,189,251

Total Share Capital

50,000,000

50,000,000

20,000,000

20,000,000

20,000,000

Total Reserves

152,598,379

131,392,902

94,846,039

72,776,644

38,189,251

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.51

0.31

0.06

0.23

0.17

Liquid Ratio

1.26

0.76

0.47

0.54

0.34

Current Ratio

1.79

1.13

0.72

0.71

0.49

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

31

30

40

32

22

Debtors Ratio

37

37

58

31

23

Creditors Ratio

22

18

25

11

4

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.00

0.10

0.09

0.00

0.00

Liabilities Ratio

0.44

0.86

1.80

2.15

3.98

Times Interest Earned Ratio

369.38

47.69

60.91

68.10

98.31

Assets Backing Ratio

4.14

3.63

5.98

4.78

3.04

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

6.37

4.62

6.00

8.10

4.73

Net Profit Margin

3.99

5.41

4.71

8.90

3.01

Return On Net Assets

16.38

17.55

23.46

33.45

46.38

Return On Capital Employed

16.38

17.55

23.46

33.45

46.19

Return On Shareholders' Funds/Equity

10.47

20.15

18.85

37.28

30.55

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.62.28

UK Pound

1

Rs.103.67

Euro

1

Rs.85.18

 

 

INFORMATION DETAILS

 

Report Prepared by :

NNA

 

 

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.