MIRA INFORM REPORT

 

 

Report Date :

07.01.2014

 

IDENTIFICATION DETAILS

 

Name :

LAM SOON EDIBLE OILS SDN. BHD.

 

 

Formerly Known As :

PACIFIC EDIBLE OIL INDUSTRIES 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 :

03.08.1973

 

 

Com. Reg. No.:

14578-T

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Processing and Refining of palm oil and other consumer products

 

 

No. of Employees :

1300 [2013]

 

 

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.

:

14578-T

COMPANY NAME

:

LAM SOON EDIBLE OILS SDN. BHD.

FORMER NAME

:

PACIFIC EDIBLE OIL INDUSTRIES SDN BHD (10/07/2000)

INCORPORATION DATE

:

03/08/1973

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

:

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

TEL.NO.

:

03-78822399

FAX.NO.

:

03-55692297

WEB SITE

:

WWW.LAMSOON.COM.MY

CONTACT PERSON

:

KHOO HENG SUAN ( MANAGING DIRECTOR )

INDUSTRY CODE

:

10402

PRINCIPAL ACTIVITY

:

PROCESSING AND REFINING OF PALM OIL AND OTHER CONSUMER PRODUCTS

AUTHORISED CAPITAL

:

MYR 80,000,000.00 DIVIDED INTO
ORDINARY SHARE 80,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 55,987,147.00 DIVIDED INTO
ORDINARY SHARES 14,623,511 CASH AND 41,363,636 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 1,315,420,884 [2012]

NET WORTH

:

MYR 258,335,170 [2012]

M1000 OVERALL RANKING

:

350[2011]

M1000 INDUSTRY RANKING

:

27[2011]

STAFF STRENGTH

:

1300 [2013]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

MATURE

 

 

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) processing and refining of palm oil and other consumer products.

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

 

 

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

 

 

 

 

 

 

YEAR

2011

2009

2008

2005

 

OVERALL RANKING

350

371

385

377

 

INDUSTRY RANKING

27

29

27

35

 

 

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

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

15/02/2013

MYR 80,000,000.00

MYR 55,987,147.00

 

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

Name

Address

IC/PP/Loc No

Shareholding

(%)

LAM SOON (M) BERHAD

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

84273H

55,847,147.00

99.75

WONG SHEE FUN & CO.PTE LTD

74, SOUTH BRIDGE ROAD #06-01, 058704, SINGAPORE.

29/1952

135,000.00

0.24

MR. KHOO HENG SUAN +

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

470109-04-5509 0869939B

1,000.00

0.00

TAN SRI ESTATE OF NIK AHMED KAMIL

5 JALAN PENAGA, BUKIT BANDARAYA, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

000001192

4,000.00

0.01

 

 

 

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

------

 

 

 

55,987,147.00

100.00

 

 

 

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. QUICK BACK HENG @ KUEK BAK HENG

Address

:

147, JALAN SS 22/27, DAMANSARA JAYA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

1882683

New IC No

:

490607-01-5677

Date of Birth

:

07/06/1949

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

15/06/2006

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

DATO' LT. JEN.(B) RAJA ABDUL RASHID BIN RAJA BADIOZAMAN

Address

:

DL64, LORONG NILAM, TAMAN BUKIT AMPANG, JALAN BUKIT BELACHAN, 68000 AMPANG, SELANGOR, MALAYSIA.

IC / PP No

:

4933280

New IC No

:

400718-08-5289

Date of Birth

:

18/07/1940

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

21/05/2003

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

WHANG SHANG YING

Address

:

26A, TUDOR CLOSE, 297953, SINGAPORE.

IC / PP No

:

1483019G

 

 

 

 

 

 

 

 

 

Nationality

:

SINGAPOREAN

Date of Appointment

:

23/07/1999

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 4

 

Name Of Subject

:

MR. KHOO HENG SUAN

Address

:

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

IC / PP No

:

0869939B

New IC No

:

470109-04-5509

Date of Birth

:

09/01/1947

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

21/07/1999

 

 

 

 

 

 

 

 

 

 

 

 



MANAGEMENT

 

 

 

1)

Name of Subject

:

KHOO HENG SUAN

 

Position

:

MANAGING DIRECTOR

 

 

 

 

 

2)

Name of Subject

:

ANNIE FUNG

 

Position

:

ADMIN MANAGER

 

 

 

 

 

3)

Name of Subject

:

K.H CHUA

 

Position

:

GENERAL MANAGER

 

 

 

 

 

4)

Name of Subject

:

TAN G S

 

Position

:

FINANCE MANAGER

 

 

 

 

 

5)

Name of Subject

:

KUEK BAK HENG

 

Position

:

SALES DIRECTOR

 

 

 

 

 

6)

Name of Subject

:

JANE YAP

 

Position

:

HUMAN RESOURCE DIRECTOR

 

 

 

 

 

AUDITOR

 

Auditor

:

MAZARS

Auditor' Address

:

WISMA SELANGOR DREDGING, SOUTH BLOCK, 142-A, JALAN AMPANG, SEVENTH FLOOR, 50450 KUALA LUMPUR, WILAYAH PERSEKUTUAN, 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 HEIGHTS CONDOMINIUM, 92, JALAN 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

2

30/12/1975

N/A

MALAYAN BANKING BERHAD

MYR 3,500,000.00

Satisfied

4

25/04/1977

N/A

MALAYAN BANKING BERHAD

MYR 1,200,000.00

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

Percentage

:

90%

Overseas

:

YES

Percentage

:

10%

 

 

 

 

 

 



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

[

 

]

 

Good 31-60 Days

[

X

]

 

Average 61-90 Days

[

 

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 



CLIENTELE

 

Local

:

YES

Percentage

:

60%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

40%

Export Market

:

MIDDLE EAST

EUROPE

AUSTRALIA

SOUTH AFRICA

ASIA

Credit Term

:

30 - 60 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

DEALERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Products manufactured

:

HYDROGENATED FATS (PALM, PALM KERNEL, SEED OILS AND BLENDS) AND OTHERS

 

 

 

Certification of Products

:

1 ) MS 682:2004

 

 

 

Competitor(s)

:

FELDA IFFCO SDN BHD

FUTURE PRELUDE SDN BHD

GREEN OCEAN CORPORATION BHD

IOI LIPID ENZYMTEC SDN BHD

LAM SOON (M) BHD

 

 

 

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

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

Shifts

:

3 (24 HOURS)

 

 

 

 

Total Number of Employees:

 

YEAR

2013

2012

2011

2010

2009

 

 

 

 

 

GROUP

1300

1,320

1,320

1,220

1,220

 

 

 

 

 

120

N/A

N/A

N/A

 

 

 

 

 

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) processing and refining of palm oil and other consumer products.

The Subject is a subsidiary of Lam Soon (M) Berhad. The Lam Soon Group is engaged in oil palm plantation, oleochemicals, manufacturing of detergents and FMCG products.

The Subject produces a wide range of products which are include:

* Hydrogenated Fats (Palm, Palm Kernel, Seed Oils & Belends).
* RBD Fractions (Olein, Stearin, Palm Mid Fraction).
* RBD Seed Oils (Soya Bean, Corn, Canola, Sunflower, Blends).
* Ghees, Margarines and RBD Palm Oils.
* Soap (Soap Noodles)

The Subject also undertakes Research & Development activites to enable production of its products that meet the right standard for quality that customers' demand.

The Subject utilizes the advanced automated and semi-automated machineries at its production plants.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-78822399

Match

:

N/A

 

 

 

Address Provided by Client

:

LOT 10, JALAN TIMAH, P O BOX 70, 81707 PASIR GUDANG JOHOR DARUL TAKZIM

Current Address

:

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

Match

:

NO

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


On 26th December 2013 we contacted one of the staff from the Subject and she provided some information on the Subject.


The address provided belongs to the Subject's factory.



FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Unfavourable

[

1.24%

]

 

Return on Net Assets

:

Unfavourable

[

3.19%

]

 

 

 

 

 

 

 

 

The fluctuating turnover reflects the fierce competition among the existing and new market players.The Subject's profit fell sharply because of the high operating costs incurred. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

47 Days

]

 

Debtor Ratio

:

Favourable

[

50 Days

]

 

Creditors Ratio

:

Favourable

[

42 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

[

1.14 Times

]

 

Current Ratio

:

Unfavourable

[

1.86 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

:

Unfavourable

[

2.46 Times

]

 

Gearing Ratio

:

Favourable

[

0.25 Times

]

 

 

 

 

 

 

 

 

The Subject'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 Subject was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

The Subject recorded lower profits as its turnover showed a erratic trend. The Subject's management was unable to control its costs efficiently as its profit showed a downward trend. 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. If there is a fall in the Subject's profit or any increase in interest rate, the Subject may not be able to generate sufficient cash-flow to service its interest. The Subject as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

 

 

 

 

 

 

 

Overall financial condition of the Subject : LIMITED

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Population ( Million)

28.13

28.35

28.70

29.30

29.80

Gross Domestic Products ( % )

<0.5>

7.2

5.1

5.6

5.3

Domestic Demand ( % )

2.9

6.3

8.2

9.4

5.6

Private Expenditure ( % )

<2.7>

8.1

8.2

8.0

7.4

Consumption ( % )

0.7

6.7

7.1

1.0

5.7

Investment ( % )

<17.2>

17.7

12.2

11.7

13.3

Public Expenditure ( % )

5.2

3.8

8.4

13.3

1.2

Consumption ( % )

3.1

0.2

16.1

11.3

<1.2>

Investment ( % )

8.0

2.8

<0.3>

15.9

4.2

 

 

 

 

 

 

Balance of Trade ( MYR Million )

89,650

118,356

116,058

106,300

110,700

Government Finance ( MYR Million )

<28,450>

<40,482>

<45,511>

<42,297>

<39,993>

Government Finance to GDP / Fiscal Deficit ( % )

<4.8>

<5.6>

<5.4>

<4.5>

<4.0>

Inflation ( % Change in Composite CPI)

<5.2>

5.1

3.1

1.6

2.5

Unemployment Rate

4.5

3.9

3.3

3.2

3.0

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

331

329

415

427

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

2.87

2.20

3.50

2.20

-

Average 3 Months of Non-performing Loans ( % )

11.08

15.30

14.80

14.70

-

Average Base Lending Rate ( % )

5.53

6.30

6.60

6.53

-

Business Loans Disbursed( % )

10.5

14.7

15.3

32.2

-

Foreign Investment ( MYR Million )

22,156.8

22,517.9

23,546.1

26,230.4

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,578

44,148

45,455

45,441

-

Registration of New Companies ( % )

<0.1>

6.2

3.0

<0.0>

-

Liquidation of Companies ( No. )

39,075

25,585

132,476

-

-

Liquidation of Companies ( % )

39.6

<34.5>

417.8

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

312,581

271,414

284,598

324,761

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

19,345

19,738

20,121

-

-

Business Dissolved ( % )

2.4

2.0

1.9

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

486.3

543.6

535.1

552.2

-

Cellular Phone Subscribers ( Million )

30.1

32.8

35.3

38.5

-

Tourist Arrival ( Million Persons )

23.6

24.6

24.7

25.0

-

Hotel Occupancy Rate ( % )

58.0

63.0

60.6

62.4

-

 

 

 

 

 

 

Credit Cards Spending ( % )

12.8

14.1

15.6

12.6

-

Bad Cheque Offenders (No.)

36,667

33,568

32,627

26,982

-

Individual Bankruptcy ( No.)

16,228

18,119

19,167

19,575

-

Individual Bankruptcy ( % )

16.7

11.7

5.8

2.1

-

 

 

 

 

 

 



INDUSTRIES ( % of Growth ):

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Agriculture

0.4

2.1

5.9

0.6

2.4

Palm Oil

<1.1>

<3.4>

10.8

<2.8>

-

Rubber

<19.8>

9.9

6.1

<0.6>

-

Forestry & Logging

<5.9>

<3.3>

<7.6>

<2.2>

-

Fishing

5.5

5.6

2.1

<0.7>

-

Other Agriculture

9.0

7.9

7.1

6.4

-

Industry Non-Performing Loans ( MYR Million )

413.7

508.4

634.1

-

-

% of Industry Non-Performing Loans

1.3

2.1

3.2

-

-

 

 

 

 

 

 

Mining

<3.8>

0.2

<5.7>

1.5

2.7

Oil & Gas

2.1

0.5

<1.7>

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

44.2

49.7

46.5

-

-

% of Industry Non-performing Loans

0.1

0.1

0.1

-

-

 

 

 

 

 

 

Manufacturing #

<9.4>

11.4

4.7

4.2

4.9

Exported-oriented Industries

<19.0>

12.1

2.8

4.1

-

Electrical & Electronics

<30.3>

28.4

<4.9>

1.6

-

Rubber Products

<10.1>

25.3

15.4

3.6

-

Wood Products

<24.1>

20.1

<4.9>

4.6

-

Textiles & Apparel

<19.5>

<0.4>

14.8

<7.1>

-

Domestic-oriented Industries

<9.8>

16.3

6.5

8.6

-

Food, Beverages & Tobacco

0.2

3.0

4.2

-

-

Chemical & Chemical Products

<7.7>

16.2

5.5

9.9

-

Plastic Products

<9.1>

2.4

3.8

-

-

Iron & Steel

<32.7>

29.3

2.4

-

-

Fabricated Metal Products

<2.5>

14.9

25.2

-

-

Non-metallic Mineral

<15.5>

20.2

27.1

6.6

-

Transport Equipment

<13.5>

36.5

<10.4>

13.7

-

Paper & Paper Products

<5.0>

18.7

14.8

<7.8>

-

Crude Oil Refineries

0.2

<11.4>

9.3

-

-

Industry Non-Performing Loans ( MYR Million )

6,007.3

6,217.5

6,537.2

-

-

% of Industry Non-Performing Loans

18.3

23.8

25.7

-

-

 

 

 

 

 

 

Construction

5.8

5.1

4.4

15.5

11.2

Industry Non-Performing Loans ( MYR Million )

3,241.8

4,038.5

3,856.9

-

-

% of Industry Non-Performing Loans

9.9

10.7

10.2

-

-

 

 

 

 

 

 

Services

2.6

6.5

6.4

5.5

5.6

Electric, Gas & Water

0.4

8.5

5.6

4.8

-

Transport, Storage & Communication

1.6

7.7

6.5

7.3

-

Wholesale, Retail, Hotel & Restaurant

2.8

4.7

5.2

6.9

-

Finance, Insurance & Real Estate

3.8

6.1

6.3

6.5

-

Government Services

2.0

6.7

7.6

5.6

-

Other Services

4.4

4.2

5.4

5.7

-

Industry Non-Performing Loans ( MYR Million )

6,631.3

7,384.6

6,825.2

-

-

% of Industry Non-Performing Loans

20.2

25.7

23.4

-

-

 

 

 

 

 

 

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 

# Based On Manufacturing Production Index



INDUSTRY ANALYSIS

 

MSIC CODE

10402 : Manufacture of refined palm oil

 

 

INDUSTRY :

PALM OIL

 

 

 

Oil palm is one of the main drivers of Malaysia's agriculture sector where it has accounting for 71% of its agricultural land bank. Malaysia is the one of the biggest producers and exporters of palm oil prodcuts in the growing global need for oils and fats. The palm oil industry is expected to grow about 7.1% over the next 10 years where it is driven by new plantation expansion, venture of large plantation companies into high potential downstream activities such as processed food, biodiesel, second generation biofuel and oleochemicals. Malaysia currently accounts for 39 % of world palm oil production and 44% of world exports. Taken into account of other oils & fats produced in the country, Malaysia accounts for 12% and 27% of the world's total production and exports of oils and fats. Being one of the biggest producers and exporters of palm oil and palm oil products, Malaysia has an important role to play in fulfilling the growing global need for oils and fats sustainably.

 

In year 2013, the production of crude palm oil is envisaged to rebound 2.5% to 18.9 million tonnes on account of expanded matured areas to 4.44 million hectares. However Malaysian palm oil’s supply and demand for February 2013 with palm oil stocks continued to be lower for the consecutive two months at 2.444 million tonnes, a decrease of 5.23% from January 2013 and was slightly above the average estimation at 2.42 million tonnes. The exports in February 2013 fell 13.98% to 1.398 million tonnes while the palm oil production reduced 19.15% to 1.296 million tonnes. The palm oil production would be expected to be in dismal as the oil palm had entered a low yield cycle currently.

 

According to the 2013 Budget, the palm oil sector contracted 8.6% during the first half of the year 2012 due to the less favourable weather conditions and natural production down cycle that constrained the output of fresh fruit bunches. However, the yield is expected to improve in the later part of the year, with the subsector registering a smaller contraction of 2.8% in 2012. Total planted areas of oil palm increased substantially by 77,106 hectares to five million hectares as at end-June 2012. Of the total planted areas, 28.4% or 1.5 million hectares are located in Sabah. With the acceleration of planting activity, total planted areas are expected to increase to 5.1 million hectares in 2012.

 

According to the Performance Management and Delivery Unit (Pemandu), the Palm Oil National Key Economic Area (NKEA), Malaysia's most important commodity is expected to contribute from RM125 billion to RM178 billion to the Gross National Income (GNI) and create about 41,600 jobs by 2020, with the government's focus on eight Entry Point Projects (EPPs). As part of the government's efforts to accelerate the country's replanting and new planting programme and manage stock levels, the government has allocated an additional RM432 million as funds for independent smallholders' replanting and new planting initiatives in 2013. According to Pemandu, the government will also accelerate the replanting of oil palm by plantations and smallholders as well as new planting by independent smallholders to 130,000 ha. and raise the area complying with best practices by an additional 200,000 ha. in 2013.

 

However, the future performance of the industry is unpredictable as with many factors that can give impact to the industry is still unknown. Nationally, the sentiments seem positive, internation­ally there are mixed signals but with the current growth rate, an expected increase in demand, a recovering glo­bal economy, analysts and industry sources are reckoning that the bull may be able to hold the bear back.

 

Under the palm oil National Key Economic Areas (NKEAs) in 2011, the launches of the Oil Palm Replanting and New Planting Smallholders Schemes ware improved the smallholders agricultural practices in 2012.The oil extraction rate is set to improve to 21.05% in three-year from 2012 to low of 19.70% as 1.35 more.

 

In driving speedier harvesting of oil palm fruits, the government has introduced the RM1,000 discount scheme to encourage the use of motorised sickle called Cantas and diamond blade sharpeners to enhance the palm oil industry. MPOB appointed 100 enforcement officers to visit mills to ensure the only good quality crops are processed. Since 2007, the palm oil industry has grown at an average of 14.5 per cent annualy until 2012. If the momentum is maitained for next 5 to 8 years, malaysia will achive its target of two million of hecters palm oil.

 

 

OVERALL INDUSTRY OUTLOOK : Mature



CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 1973, the Subject is a Private Limited company, focusing on processing and refining of palm oil and other consumer products. The Subject has been in business for over four 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 a strong shareholders' backing , the Subject has the advantage to compete with its rivals and it is expected to enjoy timely financial assistance should the needs arise. The Subject is a large entity with strong capital position.


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. Being a large entity, the Subject has a steady workforce of 1300 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 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.

 
The Subject's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. 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 lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 258,335,170, 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.

 
Overall, the Subject's payment habit is good as the Subject has a good credit control and it could be taking advantage of the cash discounts while maintaining a good reputation with its creditors.

 
The industry has reached its optimum level and is generally stable. It is saturated and very competitive. Thus, the Subject's growth prospect is very much depends on its capacity in sustaining its performance in the market.

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

 



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

Unit

 

 

 

 

 

 

 

 

 

 

 

TURNOVER

1,315,420,884

1,365,107,952

1,151,245,135

1,044,672,291

1,049,003,240

Other Income

8,723,924

7,800,130

10,673,423

-

-

 

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

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

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

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

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

Total Turnover

1,324,144,808

1,372,908,082

1,161,918,558

1,044,672,291

1,049,003,240

Costs of Goods Sold

<1,146,570,775>

<1,185,240,239>

<962,400,133>

-

-

 

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

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

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

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

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

Gross Profit

177,574,033

187,667,843

199,518,425

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

4,953,371

46,774,009

66,039,614

55,664,968

17,736,171

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

4,953,371

46,774,009

66,039,614

55,664,968

17,736,171

Taxation

<1,740,592>

<11,659,156>

<17,053,776>

<14,063,008>

<6,498,234>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

3,212,779

35,114,853

48,985,838

41,601,960

11,237,937

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

206,696,309

180,209,551

139,856,154

107,679,518

101,387,933

Prior year adjustment

-

2,569,334

792,883

-

-

 

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

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

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

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

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

As restated

206,696,309

182,778,885

140,649,037

107,679,518

101,387,933

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

209,909,088

217,893,738

189,634,875

149,281,478

112,625,870

TRANSFER TO RESERVES - General

-

-

92,491

92,491

92,491

DIVIDENDS - Ordinary (paid & proposed)

<11,197,429>

<11,197,429>

<9,517,815>

<9,517,815>

<5,038,843>

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

198,711,659

206,696,309

180,209,551

139,856,154

107,679,518

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

261

1,518

1,676

-

-

Bankers' acceptance

3,395,714

3,895,484

2,488,690

-

-

Others

 

 

-

2,326,113

4,522,505

 

3,395,975

3,897,002

2,490,366

2,326,113

4,522,505

 

BALANCE SHEET

 

 

 

 

 

 

 

 

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

59,427,024

63,817,021

62,299,718

69,801,058

80,297,057

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Others

-

-

-

3,299,349

-

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

-

-

-

3,299,349

-

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

59,427,024

63,817,021

62,299,718

73,100,407

80,297,057

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

168,220,910

207,913,976

180,974,203

155,742,283

147,932,015

Trade debtors

179,575,944

202,648,852

184,124,684

167,634,289

150,514,692

Other debtors, deposits & prepayments

14,356,684

30,215,643

24,781,601

5,009,234

7,772,816

Short term deposits

53,230,222

53,996,232

23,007,073

14,354,745

1,775,000

Amount due from holding company

-

-

-

682,351

-

Amount due from related companies

858,211

612,866

1,419,232

959,967

2,812,300

Cash & bank balances

12,687,756

21,531,208

15,931,124

11,531,103

12,452,051

Others

8,864,668

268,928

863,275

-

3,889,834

 

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

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

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

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

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

TOTAL CURRENT ASSETS

437,794,395

517,187,705

431,101,192

355,913,972

327,148,708

 

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

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

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

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

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

TOTAL ASSET

497,221,419

581,004,726

493,400,910

429,014,379

407,445,765

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

132,755,652

140,154,968

110,514,161

103,582,272

94,521,923

Other creditors & accruals

37,506,149

46,684,617

41,852,472

32,267,360

35,565,432

Bank overdraft

153,638

1,948,067

604,230

359,028

147,452

Other borrowings

-

-

-

-

683,250

Deposits from customers

19,418

19,058

-

-

-

Bill & acceptances payable

63,839,000

119,385,000

85,154,000

80,150,000

96,998,000

Amounts owing to holding company

12,960

58,292

100,634

-

244,324

Amounts owing to related companies

1,248,179

969,108

2,784,332

2,232,163

2,670,856

Provision for taxation

-

1,171,646

4,489,961

2,200,312

-

Other liabilities

104,447

1,111,258

195,191

-

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

235,639,443

311,502,014

245,694,981

220,791,135

230,831,237

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

202,154,952

205,685,691

185,406,211

135,122,837

96,317,471

 

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

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

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

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

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

TOTAL NET ASSETS

261,581,976

269,502,712

247,705,929

208,223,244

176,614,528

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

55,987,147

55,987,147

55,987,147

55,987,147

55,987,147

 

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

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

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

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

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

TOTAL SHARE CAPITAL

55,987,147

55,987,147

55,987,147

55,987,147

55,987,147

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Share premium

3,636,364

3,636,364

3,636,364

3,636,364

3,636,364

Revaluation reserve

-

-

2,166,828

2,259,319

2,351,810

Retained profit/(loss) carried forward

198,711,659

206,696,309

180,209,551

139,856,154

107,679,518

 

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

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

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

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

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

TOTAL RESERVES

202,348,023

210,332,673

186,012,743

145,751,837

113,667,692

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

258,335,170

266,319,820

241,999,890

201,738,984

169,654,839

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Deferred taxation

3,246,806

3,182,892

5,706,039

6,484,260

6,959,689

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

3,246,806

3,182,892

5,706,039

6,484,260

6,959,689

 

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

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

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

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

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

 

261,581,976

269,502,712

247,705,929

208,223,244

176,614,528

 

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

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

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

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

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

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

 

 

 

 

 

Cash

65,917,978

75,527,440

38,938,197

25,885,848

14,227,051

Net Liquid Funds

1,925,340

<45,805,627>

<46,820,033>

<54,623,180>

<82,918,401>

Net Liquid Assets

33,934,042

<2,228,285>

4,432,008

<20,619,446>

<51,614,544>

Net Current Assets/(Liabilities)

202,154,952

205,685,691

185,406,211

135,122,837

96,317,471

Net Tangible Assets

261,581,976

269,502,712

247,705,929

208,223,244

176,614,528

Net Monetary Assets

30,687,236

<5,411,177>

<1,274,031>

<27,103,706>

<58,574,233>

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

63,992,638

121,333,067

85,758,230

80,509,028

97,828,702

Total Liabilities

238,886,249

314,684,906

251,401,020

227,275,395

237,790,926

Total Assets

497,221,419

581,004,726

493,400,910

429,014,379

407,445,765

Net Assets

261,581,976

269,502,712

247,705,929

208,223,244

176,614,528

Net Assets Backing

258,335,170

266,319,820

241,999,890

201,738,984

169,654,839

Shareholders' Funds

258,335,170

266,319,820

241,999,890

201,738,984

169,654,839

Total Share Capital

55,987,147

55,987,147

55,987,147

55,987,147

55,987,147

Total Reserves

202,348,023

210,332,673

186,012,743

145,751,837

113,667,692

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.28

0.24

0.16

0.12

0.06

Liquid Ratio

1.14

0.99

1.02

0.91

0.78

Current Ratio

1.86

1.66

1.75

1.61

1.42

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

47

56

57

54

51

Debtors Ratio

50

54

58

59

52

Creditors Ratio

42

43

42

36

33

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.25

0.46

0.35

0.40

0.58

Liabilities Ratio

0.92

1.18

1.04

1.13

1.40

Times Interest Earned Ratio

2.46

13.00

27.52

24.93

4.92

Assets Backing Ratio

4.67

4.81

4.42

3.72

3.15

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

0.38

3.43

5.74

5.33

1.69

Net Profit Margin

0.24

2.57

4.26

3.98

1.07

Return On Net Assets

3.19

18.80

27.67

27.85

12.60

Return On Capital Employed

3.19

18.67

27.60

27.80

12.59

Return On Shareholders' Funds/Equity

1.24

13.19

20.24

20.62

6.62

Dividend Pay Out Ratio (Times)

3.49

0.32

0.19

0.23

0.45

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

0

0

0



FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.62.33

UK Pound

1

Rs.101.99

Euro

1

Rs.84.62

 

 

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.