MIRA INFORM REPORT

 

 

Report Date :

03.05.2014

 

IDENTIFICATION DETAILS

 

Name :

PALM-OLEO SDN. BHD.

 

 

Registered Office :

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

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.09.2012

 

 

Date of Incorporation :

23.08.1989

 

 

Com. Reg. No.:

185886-V

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing of fatty acid products

 

 

No. of Employees :

350

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Status :

Good

Payment Behaviour :

Regular

Litigation :

Clear

 

 

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – March 31, 2014

 

Country Name

Previous Rating

(31.12.2013)

Current Rating

(31.03.2014)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderate Low Risk

 

B1

Moderate Risk

 

B2

Moderate High Risk

 

C1

High Risk

 

C2

Very High Risk

 

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

 

* Adopted abbreviations :

SC - Subject Company (the company enquired by you)

N/A - Not Applicable

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

185886-V

COMPANY NAME

:

PALM-OLEO SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

23/08/1989

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

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

BUSINESS ADDRESS

:

LOT 1245, KUNDANG INDUSTRIAL ESTATE, 48020 RAWANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-60344800

FAX.NO.

:

03-60341279

EMAIL

:

ENQUIRY.POL@PALMOLEO.COM.MY

WEB SITE

:

WWW.PALMOLEO.COM.MY

CONTACT PERSON

:

YEOW AH KOW ( MANAGING DIRECTOR )

INDUSTRY CODE

:

10401

PRINCIPAL ACTIVITY

:

MANUFACTURING OF FATTY ACID PRODUCTS

AUTHORISED CAPITAL

:

MYR 500,000,000.00 DIVIDED INTO
ORDINARY SHARE 500,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 403,000,000.00 DIVIDED INTO
ORDINARY SHARES 157,904,417 CASH AND 245,095,583 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 1,826,578,000 [2012]

NET WORTH

:

MYR 826,153,000 [2012]

M1000 OVERALL RANKING

:

425[2011]

M1000 INDUSTRY RANKING

:

19[2011]

STAFF STRENGTH

:

350 [2013]

BANKER (S)

:

THE HONGKONG & SHANGHAI BANKING CORPORATION LIMITED

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

MATURE

 

 

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) manufacturing of fatty acid products.

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

 

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

YEAR

2011

2009

2008

OVERALL RANKING

425

403

413

INDUSTRY RANKING

19

9

6

 

The immediate holding company of the SC is KL-KEPONG INDUSTRIAL HOLDINGS SDN. BHD., a company incorporated in MALAYSIA.

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

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

KL-KEPONG INDUSTRIAL HOLDINGS SDN. BHD.

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

AF300525

321,545,583.00

79.79

MITSUI & CO., LTD

2-1, OHTEMACHI 1-CHOME, CHIYODA-KU, TOKYO, JAPAN.

JP011048

63,276,696.00

15.70

ADEKA CORPORATION

2-35 HIGASIOKU, 7-CHOME ARAKAWA-KU, TOKYO, JAPAN.

JP011049

10,075,000.00

2.50

MITSUI & CO. ( ASIA PACIFIC ) PTE. LTD

MILLENNIUM OFFICE BLOCK, 160, JALAN BUKIT BINTANG, 5TH FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

995131U

4,072,721.00

1.01

MIYOSHI OIL & FAT CO., LTD

66-1, HORIKIRI, 4-CHOME, KATSUSHIKA-KU, TOKYO, JAPAN.

JP011050

4,030,000.00

1.00

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

------

403,000,000.00

100.00

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

=====

+ Also Director

 

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

 

Local No

Country

Company

(%)

As At

248395T

MALAYSIA

PALMAMIDE SDN. BHD.

100.00

01/04/2013

435832T

MALAYSIA

PALM-OLEO (KLANG) SDN. BHD.

100.00

01/04/2013

120900P

MALAYSIA

KSP MANUFACTURING SDN. BHD.

100.00

29/03/2013



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. MADHEV A/L BALA SUBRAMANIAM

Address

:

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

IC / PP No

:

8294889

New IC No

:

600913-71-5115

Date of Birth

:

13/09/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

26/12/2008

 

DIRECTOR 2

 

Name Of Subject

:

MR. GOH ENG CHOOR

Address

:

9, LORONG BATU NILAM 20G, BANDAR BUKIT TINGGI 2, 41200 KLANG, SELANGOR, MALAYSIA.

IC / PP No

:

5485745

New IC No

:

571002-10-5199

Date of Birth

:

02/10/1957

Nationality

:

MALAYSIAN

Date of Appointment

:

01/10/2005

 

DIRECTOR 3

 

Name Of Subject

:

MR. PUNG KOK HOOI

Address

:

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

New IC No

:

660414-07-5357

Date of Birth

:

14/04/1966

Nationality

:

MALAYSIAN

Date of Appointment

:

26/12/2008

 

DIRECTOR 4

 

Name Of Subject

:

MR. YEOW AH KOW

Address

:

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

IC / PP No

:

8391290

New IC No

:

540203-05-5085

Date of Birth

:

03/02/1954

Nationality

:

MALAYSIAN

Date of Appointment

:

16/03/1998

 

DIRECTOR 5

 

Name Of Subject

:

TAN SRI DATO' SERI LEE OI HIAN

Address

:

55, GOLF KELAB ROAD, 30350 IPOH, PERAK, MALAYSIA.

IC / PP No

:

8023079

New IC No

:

510207-08-5743

Date of Birth

:

07/02/1951

Nationality

:

MALAYSIAN

Date of Appointment

:

24/12/1990

 

DIRECTOR 6

 

Name Of Subject

:

DAIJI KOJIMA

Address

:

SHONAN 3-9-17, SUGINAMI-KU, TOKYO, JAPAN.

IC / PP No

:

TH4018883

Nationality

:

JAPANESE

Date of Appointment

:

02/12/2011

 

DIRECTOR 7

 

Name Of Subject

:

HISASHI ONOZUKA

Address

:

HAMPSHIRE RESIDENCE UNIT A-9-3, PERSIARAN HAMPSHIRE, OFF JALAN AMPANG, 50250 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

MZ0643164

Nationality

:

JAPANESE

Date of Appointment

:

02/12/2011

Remark

:

ALTERNATE TO DAIJI KOJIMA

 

DIRECTOR 8

 

Name Of Subject

:

TARO MORISHITA

Address

:

3-17-22-202, SOSHIGAYA, SETAGAYA, TOKYO, JAPAN.

IC / PP No

:

TG7468476

Nationality

:

JAPANESE

Date of Appointment

:

08/03/2012



MANAGEMENT

 

 

 

1)

Name of Subject

:

DEVA RATHNAM

Position

:

PRODUCTION MANAGER

 

2)

Name of Subject

:

OSCAR LEE

Position

:

FINANCIAL CONTROLLER

 

3)

Name of Subject

:

RASHIDAH ABD JABAR

Position

:

HUMAN RESOURCE MANAGER

 

4)

Name of Subject

:

YEOW AH KOW

Position

:

MANAGING DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

KPMG

Auditor' Address

:

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

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. YAP MIOW KIEN

IC / PP No

:

A1171235

New IC No

:

681220-05-5334

Address

:

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

 

2)

Company Secretary

:

MR. PUNG KOK HOOI

New IC No

:

660414-07-5357

Address

:

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

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

THE HONGKONG & SHANGHAI BANKING CORPORATION LIMITED

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

2

08/11/1991

DEBENTURE

HONGKONG BANK MALAYSIA BERHAD

MYR 31,000,000.00

Satisfied

1

02/12/1991

N/A

HONGKONG BANK MALAYSIA BERHAD

N/A

Satisfied

 

 

LEGAL CHECK AGAINST SC


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

No legal action was found in our databank.

No winding up petition was found in our databank.

 

DEFAULTER CHECK AGAINST SC


* We have checked through the SC in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed.

No blacklisted record & debt collection case was found in our defaulters' databank.

 

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

 

Local

:

YES

Percentage

:

60%

Overseas

:

YES

Percentage

:

40%

Import Countries

:

ASIA


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

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

X

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]



CLIENTELE

 

Local

:

YES

Percentage

:

45%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

55%

Export Market

:

EUROPE

SOUTH AFRICA

CANADA

ASIA

Credit Term

:

30 - 60 DAYS

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)
LETTER OF CREDIT (LC)

 

 

OPERATIONS

 

Products manufactured

:

FATTY ACIDS, GLYCERINE AND PALM OIL DERIVATIVES

Award

:

1 ) MS ISO 9001 : 2000 Year :0

Competitor(s)

:

INTERCONTINENTAL SPECIALTY FATS SDN BHD
MEWAHOLEO INDUSTRIES SDN BHD
MOI FOODS MALAYSIA SDN BHD
SMALLHOLDERS EDIBLE OIL SDN BHD
SOON SOON OILMILLS SDN. BHD.

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

MALAYSIA FOOD & BEVERAGE INDUSTRY

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2013

2012

2011

2010

2009

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

350

350

350

350

350

 

Branch

:

NO

Other Information:


The SC is principally engaged in the (as a / as an) manufacturing of fatty acid products.

The SC's products are mainly used for soap, detergent, food emulsifier, varnishes, paints and others.

We were informed that the SC is using latest processing technology and online computer process system on its production site.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-60344800

Match

:

N/A

Address Provided by Client

:

LOT-1245 KUNDANG INDUSTRIAL ESTATE, 48020 RAWANG, SELANGORE DARUL EHSAN MALAYSIA

Current Address

:

LOT 1245, KUNDANG INDUSTRIAL ESTATE, 48020 RAWANG, SELANGOR, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


we contacted one of the staff from the SC and she provided some information on the SC.

The address provided belongs to the SC's Corporate cum registered office.

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2008 - 2012

]

Profit/(Loss) Before Tax

:

Increased

[

2008 - 2012

]

Return on Shareholder Funds

:

Acceptable

[

11.58%

]

Return on Net Assets

:

Acceptable

[

13.74%

]

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

Working Capital Control

Stock Ratio

:

Favourable

[

43 Days

]

Debtor Ratio

:

Favourable

[

29 Days

]

Creditors Ratio

:

Favourable

[

9 Days

]

The SC'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 SC. The SC had a favourable creditors' ratio where the SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Favourable

[

3.10 Times

]

Current Ratio

:

Favourable

[

5.55 Times

]

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

Solvency

Interest Cover

:

Favourable

[

56.29 Times

]

Gearing Ratio

:

Favourable

[

0.01 Times

]

The interest cover showed that the SC was able to service the interest. The favourable interest cover could indicate that the SC was making enough profit to pay for the interest accrued. The SC had no gearing and hence it had virtually no financial risk. The SC was financed by its shareholders' funds and internally generated fund. During the economic downturn, the SC, 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 SC had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability. The SC was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations. With the favourable interest cover, the SC could be able to service all the accrued interest without facing any difficulties. The SC as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

Overall financial condition of the SC : STRONG

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2009

2010

2011

2012*

2013**

Population ( Million)

28.13

28.35

28.70

29.30

29.80

Gross Domestic Products ( % )

<0.5>

7.2

5.1

5.6

5.3

Domestic Demand ( % )

2.9

6.3

8.2

9.4

5.6

Private Expenditure ( % )

<2.7>

8.1

8.2

8.0

7.4

Consumption ( % )

0.7

6.7

7.1

1.0

5.7

Investment ( % )

<17.2>

17.7

12.2

11.7

13.3

Public Expenditure ( % )

5.2

3.8

8.4

13.3

1.2

Consumption ( % )

3.1

0.2

16.1

11.3

<1.2>

Investment ( % )

8.0

2.8

<0.3>

15.9

4.2

Balance of Trade ( MYR Million )

89,650

118,356

116,058

106,300

110,700

Government Finance ( MYR Million )

<28,450>

<40,482>

<45,511>

<42,297>

<39,993>

Government Finance to GDP / Fiscal Deficit ( % )

<4.8>

<5.6>

<5.4>

<4.5>

<4.0>

Inflation ( % Change in Composite CPI)

<5.2>

5.1

3.1

1.6

2.5

Unemployment Rate

4.5

3.9

3.3

3.2

3.0

Net International Reserves ( MYR Billion )

331

329

415

427

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

2.87

2.20

3.50

2.20

-

Average 3 Months of Non-performing Loans ( % )

11.08

15.30

14.80

14.70

-

Average Base Lending Rate ( % )

5.53

6.30

6.60

6.53

-

Business Loans Disbursed( % )

10.5

14.7

15.3

32.2

-

Foreign Investment ( MYR Million )

22,156.8

22,517.9

23,546.1

26,230.4

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

41,578

44,148

45,455

45,441

-

Registration of New Companies ( % )

<0.1>

6.2

3.0

<0.0>

-

Liquidation of Companies ( No. )

39,075

25,585

132,476

-

-

Liquidation of Companies ( % )

39.6

<34.5>

417.8

-

-

Registration of New Business ( No. )

312,581

271,414

284,598

324,761

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

19,345

19,738

20,121

-

-

Business Dissolved ( % )

2.4

2.0

1.9

-

-

Sales of New Passenger Cars (' 000 Unit )

486.3

543.6

535.1

552.2

-

Cellular Phone Subscribers ( Million )

30.1

32.8

35.3

38.5

-

Tourist Arrival ( Million Persons )

23.6

24.6

24.7

25.0

-

Hotel Occupancy Rate ( % )

58.0

63.0

60.6

62.4

-

Credit Cards Spending ( % )

12.8

14.1

15.6

12.6

-

Bad Cheque Offenders (No.)

36,667

33,568

32,627

26,982

-

Individual Bankruptcy ( No.)

16,228

18,119

19,167

19,575

-

Individual Bankruptcy ( % )

16.7

11.7

5.8

2.1

-

 

INDUSTRIES ( % of Growth ):

2009

2010

2011

2012*

2013**

Agriculture

0.4

2.1

5.9

0.6

2.4

Palm Oil

<1.1>

<3.4>

10.8

<2.8>

-

Rubber

<19.8>

9.9

6.1

<0.6>

-

Forestry & Logging

<5.9>

<3.3>

<7.6>

<2.2>

-

Fishing

5.5

5.6

2.1

<0.7>

-

Other Agriculture

9.0

7.9

7.1

6.4

-

Industry Non-Performing Loans ( MYR Million )

413.7

508.4

634.1

-

-

% of Industry Non-Performing Loans

1.3

2.1

3.2

-

-

Mining

<3.8>

0.2

<5.7>

1.5

2.7

Oil & Gas

2.1

0.5

<1.7>

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

44.2

49.7

46.5

-

-

% of Industry Non-performing Loans

0.1

0.1

0.1

-

-

Manufacturing #

<9.4>

11.4

4.7

4.2

4.9

Exported-oriented Industries

<19.0>

12.1

2.8

4.1

-

Electrical & Electronics

<30.3>

28.4

<4.9>

1.6

-

Rubber Products

<10.1>

25.3

15.4

3.6

-

Wood Products

<24.1>

20.1

<4.9>

4.6

-

Textiles & Apparel

<19.5>

<0.4>

14.8

<7.1>

-

Domestic-oriented Industries

<9.8>

16.3

6.5

8.6

-

Food, Beverages & Tobacco

0.2

3.0

4.2

-

-

Chemical & Chemical Products

<7.7>

16.2

5.5

9.9

-

Plastic Products

<9.1>

2.4

3.8

-

-

Iron & Steel

<32.7>

29.3

2.4

-

-

Fabricated Metal Products

<2.5>

14.9

25.2

-

-

Non-metallic Mineral

<15.5>

20.2

27.1

6.6

-

Transport Equipment

<13.5>

36.5

<10.4>

13.7

-

Paper & Paper Products

<5.0>

18.7

14.8

<7.8>

-

Crude Oil Refineries

0.2

<11.4>

9.3

-

-

Industry Non-Performing Loans ( MYR Million )

6,007.3

6,217.5

6,537.2

-

-

% of Industry Non-Performing Loans

18.3

23.8

25.7

-

-

Construction

5.8

5.1

4.4

15.5

11.2

Industry Non-Performing Loans ( MYR Million )

3,241.8

4,038.5

3,856.9

-

-

% of Industry Non-Performing Loans

9.9

10.7

10.2

-

-

Services

2.6

6.5

6.4

5.5

5.6

Electric, Gas & Water

0.4

8.5

5.6

4.8

-

Transport, Storage & Communication

1.6

7.7

6.5

7.3

-

Wholesale, Retail, Hotel & Restaurant

2.8

4.7

5.2

6.9

-

Finance, Insurance & Real Estate

3.8

6.1

6.3

6.5

-

Government Services

2.0

6.7

7.6

5.6

-

Other Services

4.4

4.2

5.4

5.7

-

Industry Non-Performing Loans ( MYR Million )

6,631.3

7,384.6

6,825.2

-

-

% of Industry Non-Performing Loans

20.2

25.7

23.4

-

-

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index
(Source : Department of Statistics / Economic Report / Bank Negara Report)

 

INDUSTRY ANALYSIS

 

MSIC CODE

10401 : Manufacture of crude 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.



CREDIT RISK EVALUATION & RECOMMENDATION

 

 


Incorporated in 1989, the SC is a Private Limited company, focusing on manufacturing of fatty acid products. The SC has been in business for over two decades. It has built up a strong clientele base and good reputation will enable the SC to further enhance its business in the near term. The SC is expected to enjoy a stable market shares. Having strong support from its holding company has enabled the SC to remain competitive despite the challenging business environment. The SC has strong capital position. We are confident with the SC's business and its future growth prospect.

Over the years, the SC has established an extensive clientele base in the market. Besides catering to the local market, the SC has penetrated into other countries. With the contribution of both local and overseas customers, the SC is likely to be exposed to lower commercial risk. Hence, we believe that the SC has better business expansion opportunities in the future. The SC is a fairly large and rapidly growing company with over 350 staff in its operations Overall, we regard that the SC's management capability is average. This indicates that the SC has greater potential to improve its business performance and raising income for the SC. To improve its quality products and services, we noted that the SC has received a number of certifications & awards. This will improve the customer's confidence level to the SC.

Despite the lower turnover, the SC'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 SC was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The SC is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the SC is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 826,153,000, the SC should be able to maintain its business in the near terms.

The SC's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the SC has a good control over its resources.

Overall, the SC's payment habit is good as the SC 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 SC'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 SC promptly.

 

 

PROFIT AND LOSS ACCOUNT

 

 

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

PALM-OLEO SDN. BHD.

 

Financial Year End

2012-09-30

2011-09-30

2010-09-30

2009-09-30

2008-09-30

Months

12

12

12

12

12

Consolidated Account

GROUP

GROUP

GROUP

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

1,826,578,000

2,082,842,000

1,323,725,000

850,136,000

1,245,607,000

Other Income

7,609

4,644

-

927,000

1,093,000

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

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

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

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

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

Total Turnover

1,826,585,609

2,082,846,644

1,323,725,000

851,063,000

1,246,700,000

Costs of Goods Sold

<1,687,083,000>

<1,946,645,000>

<1,240,176,000>

<779,655,000>

<1,166,449,000>

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

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

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

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

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

Gross Profit

139,502,609

136,201,644

83,549,000

71,408,000

80,251,000

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

118,716,000

113,252,000

80,832,000

50,377,000

66,479,000

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

118,716,000

113,252,000

80,832,000

50,377,000

66,479,000

Taxation

<23,030,000>

<24,030,000>

<17,577,000>

<12,834,000>

<15,093,000>

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

95,686,000

89,222,000

63,255,000

37,543,000

51,386,000

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

350,007,000

280,512,000

358,886,000

249,166,000

197,780,000

Prior year adjustment

-

2,942,000

-

-

-

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

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

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

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

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

As restated

350,007,000

283,454,000

358,886,000

249,166,000

197,780,000

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

445,693,000

372,676,000

422,141,000

286,709,000

249,166,000

TRANSFER TO RESERVES - General

-

-

<129,000>

-

-

CAPITALISATION FOR BONUS ISSUES

-

-

<141,500,000>

-

-

DIVIDENDS - Ordinary (paid & proposed)

<22,669,000>

<22,669,000>

-

-

-

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

423,024,000

350,007,000

280,512,000

286,709,000

249,166,000

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Others

2,147,000

7,408,000

2,814,000

4,500,000

5,800,000

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

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

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

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

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

2,147,000

7,408,000

2,814,000

4,500,000

5,800,000

 

BALANCE SHEET

 

PALM-OLEO SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

317,058,000

331,568,000

259,905,000

132,748,000

143,262,000

LONG TERM INVESTMENTS/OTHER ASSETS

Subsidiary companies

-

-

-

87,942,000

87,942,000

Associated companies

132,649,000

124,933,000

122,103,000

63,800,000

63,800,000

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

132,649,000

124,933,000

122,103,000

151,742,000

151,742,000

INTANGIBLE ASSETS

Goodwill on consolidation

35,082,000

35,082,000

-

-

-

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

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

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

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

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

TOTAL INTANGIBLE ASSETS

35,082,000

35,082,000

-

-

-

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

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

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

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

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

TOTAL LONG TERM ASSETS

484,789,000

491,583,000

382,008,000

284,490,000

295,004,000

CURRENT ASSETS

Stocks

213,034,000

303,771,000

212,404,000

95,929,000

145,619,000

Trade debtors

146,012,000

199,911,000

79,808,000

39,934,000

66,303,000

Other debtors, deposits & prepayments

4,184,000

17,490,000

11,584,000

1,312,000

4,864,000

Short term deposits

104,455,000

13,248,000

11,475,000

24,051,000

9,220,000

Short term loans & advances

-

-

-

15,017,000

-

Amount due from holding company

134,000

75,000

95,750,000

-

33,000

Amount due from subsidiary companies

-

-

-

5,577,000

5,086,000

Amount due from related companies

548,000

16,000

14,861,000

20,370,000

21,288,000

Amount due from associated companies

8,000

146,000

65,866,000

67,432,000

57,786,000

Cash & bank balances

7,083,000

7,009,000

6,189,000

1,368,000

1,185,000

Others

6,485,000

4,032,000

970,000

22,000

11,000

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

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

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

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

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

TOTAL CURRENT ASSETS

481,943,000

545,698,000

498,907,000

271,012,000

311,395,000

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

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

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

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

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

TOTAL ASSET

966,732,000

1,037,281,000

880,915,000

555,502,000

606,399,000

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

43,800,000

47,326,000

37,367,000

17,104,000

13,124,000

Other creditors & accruals

32,091,000

30,918,000

24,315,000

18,596,000

16,846,000

Short term borrowings/Term loans

8,235,000

16,000,000

16,000,000

21,250,000

-

Other borrowings

-

60,423,000

-

-

28,620,000

Bill & acceptances payable

-

21,820,000

-

-

28,500,000

Amounts owing to holding company

78,000

30,501,000

29,786,000

17,000

1,276,000

Amounts owing to subsidiary companies

-

-

-

84,000

4,367,000

Amounts owing to related companies

1,625,000

1,022,000

13,864,000

15,125,000

4,323,000

Amounts owing to associated companies

31,000

42,000

774,000

13,000

39,000

Provision for taxation

1,018,000

2,105,000

1,908,000

2,415,000

1,500,000

Other liabilities

-

9,565,000

9,000,000

39,000

1,138,000

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

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

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

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

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

TOTAL CURRENT LIABILITIES

86,878,000

219,722,000

133,014,000

74,643,000

99,733,000

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

395,065,000

325,976,000

365,893,000

196,369,000

211,662,000

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

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

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

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

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

TOTAL NET ASSETS

879,854,000

817,559,000

747,901,000

480,859,000

506,666,000

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

403,000,000

403,000,000

403,000,000

141,500,000

141,500,000

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

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

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

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

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

TOTAL SHARE CAPITAL

403,000,000

403,000,000

403,000,000

141,500,000

141,500,000

RESERVES

Capital reserve

129,000

129,000

129,000

-

-

Retained profit/(loss) carried forward

423,024,000

350,007,000

280,512,000

286,709,000

249,166,000

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

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

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

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

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

TOTAL RESERVES

423,153,000

350,136,000

280,641,000

286,709,000

249,166,000

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

826,153,000

753,136,000

683,641,000

428,209,000

390,666,000

LONG TERM LIABILITIES

Long term loans

-

8,174,000

24,292,000

23,750,000

85,000,000

Deferred taxation

53,218,000

56,249,000

39,968,000

28,900,000

31,000,000

Others

483,000

-

-

-

-

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

53,701,000

64,423,000

64,260,000

52,650,000

116,000,000

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

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

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

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

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

879,854,000

817,559,000

747,901,000

480,859,000

506,666,000

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

PALM-OLEO SDN. BHD.

 

TYPES OF FUNDS

Cash

111,538,000

20,257,000

17,664,000

25,419,000

10,405,000

Net Liquid Funds

111,538,000

<1,563,000>

17,664,000

25,419,000

<18,095,000>

Net Liquid Assets

182,031,000

22,205,000

153,489,000

100,440,000

66,043,000

Net Current Assets/(Liabilities)

395,065,000

325,976,000

365,893,000

196,369,000

211,662,000

Net Tangible Assets

844,772,000

782,477,000

747,901,000

480,859,000

506,666,000

Net Monetary Assets

128,330,000

<42,218,000>

89,229,000

47,790,000

<49,957,000>

BALANCE SHEET ITEMS

Total Borrowings

8,235,000

106,417,000

40,292,000

45,000,000

142,120,000

Total Liabilities

140,579,000

284,145,000

197,274,000

127,293,000

215,733,000

Total Assets

966,732,000

1,037,281,000

880,915,000

555,502,000

606,399,000

Net Assets

879,854,000

817,559,000

747,901,000

480,859,000

506,666,000

Net Assets Backing

826,153,000

753,136,000

683,641,000

428,209,000

390,666,000

Shareholders' Funds

826,153,000

753,136,000

683,641,000

428,209,000

390,666,000

Total Share Capital

403,000,000

403,000,000

403,000,000

141,500,000

141,500,000

Total Reserves

423,153,000

350,136,000

280,641,000

286,709,000

249,166,000

LIQUIDITY (Times)

Cash Ratio

1.28

0.09

0.13

0.34

0.10

Liquid Ratio

3.10

1.10

2.15

2.35

1.66

Current Ratio

5.55

2.48

3.75

3.63

3.12

WORKING CAPITAL CONTROL (Days)

Stock Ratio

43

53

59

41

43

Debtors Ratio

29

35

22

17

19

Creditors Ratio

9

9

11

8

4

SOLVENCY RATIOS (Times)

Gearing Ratio

0.01

0.14

0.06

0.11

0.36

Liabilities Ratio

0.17

0.38

0.29

0.30

0.55

Times Interest Earned Ratio

56.29

16.29

29.72

12.19

12.46

Assets Backing Ratio

2.10

1.94

1.86

3.40

3.58

PERFORMANCE RATIO (%)

Operating Profit Margin

6.50

5.44

6.11

5.93

5.34

Net Profit Margin

5.24

4.28

4.78

4.42

4.13

Return On Net Assets

13.74

14.76

11.18

11.41

14.27

Return On Capital Employed

13.21

14.15

11.18

11.41

14.27

Return On Shareholders' Funds/Equity

11.58

11.85

9.25

8.77

13.15

Dividend Pay Out Ratio (Times)

0.24

0.25

0.00

0.00

0.00

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0




 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.60.23

UK Pound

1

Rs.101.68

Euro

1

Rs.83.46

 

INFORMATION DETAILS

 

Report Prepared by :

NIS

 

 

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.