MIRA INFORM REPORT

 

 

Report Date :

06.05.2014

 

IDENTIFICATION DETAILS

 

Name :

FELDA MARKETING SERVICES SDN. BHD.

 

 

Registered Office :

Menara Felda, Platinum Park, 11, Persiaran KLCC, Level 42, 50088 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

03.08.1995

 

 

Com. Reg. No.:

353807-M

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Subject is engaged in the Trading of Palm Oil Products, Commodity Products

 

 

No. of Employees :

70 [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 – 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

Moderately Low Risk

 

B1

Moderate Risk

 

B2

Moderately 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 sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 32% of government revenue in 2013. Bank Negara 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 earlier raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays.

 

Source : CIA


EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

353807-M

COMPANY NAME

:

FELDA MARKETING SERVICES SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

03/08/1995

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

MENARA FELDA, PLATINUM PARK, 11, PERSIARAN KLCC, LEVEL 42, 50088 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

TINGKAT 5, BALAI FELDA, JALAN GURNEY SATU, 54000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

TEL.NO.

:

03-26005888

FAX.NO.

:

03-26946441

WEB SITE

:

WWW.FELDA.NET.MY

CONTACT PERSON

:

FAKHRUNNIAN OTHMAN ( CEO )

INDUSTRY CODE

:

46202

PRINCIPAL ACTIVITY

:

TRADING OF PALM OIL PRODUCTS, COMMODITY PRODUCTS

AUTHORISED CAPITAL

:

MYR 25,000,000.00 DIVIDED INTO
ORDINARY SHARE 25,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 17,000,000.00 DIVIDED INTO
ORDINARY SHARES 3 CASH AND 16,999,997 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 426,943,394 [2012]

NET WORTH

:

MYR 210,490,614 [2012]

STAFF STRENGTH

:

70 [2014]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STABLE

PAYMENT

:

PROMPT

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) trading of palm oil products, commodity products.

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

 

The immediate holding company of the Subject is FELDA PALM INDUSTRIES SDN BHD, a company incorporated in MALAYSIA.

The penultimate holding company of the Subject is FELDA HOLDINGS BERHAD, a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

12/06/2013

MYR 25,000,000.00

MYR 17,000,000.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

FELDA PALM INDUSTRIES SDN BHD

MENARA FELDA, PLATINUM PARK, 11, PERSIARAN KLCC, JALAN GURNEY SATU, LEVEL 42, 54000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

359584V

8,670,000.00

51.00

KOPERASI PERMODALAN FELDA MALAYSIA BERHAD

BANGUNAN BLOK J, ANJUNG FELDA, JALAN MAKTAB, 54000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

KOOP NEGARA 39

8,330,000.00

49.00

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

------

17,000,000.00

100.00

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

=====

+ Also Director



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. MOHD EMIR MAVANI BIN ABDULLAH

Address

:

32,JALAN PUNCAK, SETIAWANGSA 3, TAMAN SETIAWANGSA, 54200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

7173861

New IC No

:

631015-04-5377

Date of Birth

:

15/10/1963

Nationality

:

MALAYSIAN INDIAN

Date of Appointment

:

01/02/2013

 

DIRECTOR 2

 

Name Of Subject

:

MR. AHMAD TIFLI BIN MOHD TALHA

Address

:

NO.9, JALAN PUALAM TIGA 7/32C, 40000 SHAH ALAM, SELANGOR, MALAYSIA.

New IC No

:

650627-10-6437

Date of Birth

:

27/06/1965

Nationality

:

MALAYSIAN

Date of Appointment

:

15/09/2012

 

DIRECTOR 3

 

Name Of Subject

:

MR. FAIZOULL BIN AHMAD

Address

:

NO. 54, KUALA TERENGGANU GOLF RESORT, JALAN TOK JEMBAL, 21300 KUALA TERENGGANU, TERENGGANU, MALAYSIA.

New IC No

:

600507-05-5423

Date of Birth

:

07/05/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

15/09/2012

 

DIRECTOR 4

 

Name Of Subject

:

TUAN HJ MEGAT DZIAUDDIN BIN MEGAT MAHMUD

Address

:

NO.64, LENGKOK ZAABA, TAMAN TUN DR. ISMAIL, 60000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

1697459

New IC No

:

460203-08-5057

Date of Birth

:

03/02/1946

Nationality

:

MALAYSIAN

Date of Appointment

:

01/02/2006

Qualification

:

HE IS AN ECONOMICS GRADUATE OF THE QUEENS UNIVERSITY OF BELFAST

Profile

:

HE IS ALSO A BOARD MEMBER OF SEVERAL OF THE GROUP SUBSIDIARIES HE HAD PREVIOUSLY SERVED AS A TREASURY ACCOUNTANT IN THE ACCOUNTANT GENERAL'S DEPARTMENT, FINANCE MANAGER WITH THE BANK SIMPANAN NASIONAL & GENERAL MANAGER INVESTMENT WITH ARAB-MALAYSIAN MERCHANT BANK BHD

Other Info

:

HE FELLOW OF THE INSTITUTE OF CHARTERED ACCOUNTANTS IN IRELAND & A REGISTERED ACCOUNTANT WITH THE MALAYSIAN INSTITUTE OF ACCOUNTANTS

 

DIRECTOR 5

 

Name Of Subject

:

MR. LIM THEAN SHIANG

Address

:

A-2-6, LEVEL 4, BLOCK A, MENARA UNCANG EMAS, NO. 85, JALAN LOKE YEW, 55200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

New IC No

:

710525-07-5803

Date of Birth

:

25/05/1971

Nationality

:

MALAYSIAN

Date of Appointment

:

01/02/2013

 

DIRECTOR 6

 

Name Of Subject

:

MR. TAN SRI HAJI MOHD ISA BIN DATO' HAJI ABDUL SAMAD

Address

:

PT 41191,JALAN BBN 8/78, NILAI SPRING VILLAS, 71900 LABU, NEGERI SEMBILAN, MALAYSIA.

New IC No

:

491114-04-5151

Date of Birth

:

14/11/1949

Nationality

:

MALAYSIAN

Date of Appointment

:

29/08/2013


MANAGEMENT

 

 

1)

Name of Subject

:

FAKHRUNNIAN OTHMAN

Position

:

CEO

 

2)

Name of Subject

:

SITI AISHAH ABD RAHMAN

Position

:

FINANCE MANAGER

 

3)

Name of Subject

:

MOHD IDRIS ISMAIL

Position

:

GENERAL MANAGER

 

4)

Name of Subject

:

HIDAYAH

Position

:

EXECUTIVE HUMAN RESOURCE

 

5)

Name of Subject

:

MOHD GHAZALI ISMAIL

Position

:

HUMAN RESOURCE MANAGER

 

 

AUDITOR

 

Auditor

:

PRICEWATERHOUSECOOPERS

Auditor' Address

:

1 SENTRAL, JALAN TRAVERS, KUALA LUMPUR SENTRAL, P.O. BOX 10192, LEVEL 10, 50706 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. SHAHNIZA ANOM BINTI ELIAS

New IC No

:

680929-01-5802

Address

:

NO. 26, JALAN UNGU U9/35, SUNWAY KAYANGAN, SEKSYEN U9, 40150 SHAH ALAM, 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

11/09/1997

N/A

FEDERAL LAND DEVELOPMENT AUTHORITY

MYR 29,000,000.00

Satisfied

2

30/06/1998

N/A

FEDERAL LAND DEVELOPMENT AUTHORITY

MYR 12,000,000.00

Satisfied

3

09/04/2001

N/A

FEDERAL LAND DEVELOPMENT AUTHORITY

MYR 12,000,000.00

Satisfied

4

09/04/2001

N/A

FEDERAL LAND DEVELOPMENT AUTHORITY

MYR 29,000,000.00

Satisfied

5

09/05/2013

N/A

MAYBANK ISLAMIC BERHAD

MYR 100,000,000.00

Unsatisfied

 

 

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

:

100%

Overseas

:

NO

Percentage

:

0%


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

:

50%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

50%

Export Market

:

ASIA

Credit Term

:

AS AGREED

Payment Mode

:

CHEQUES

Type of Customer

:

AGRICULTURE INDUSTRIES

 

 

OPERATIONS

 

Goods Traded

:

PALM OIL PRODUCTS, COMMODITY PRODUCTS

Award

:

1 ) MS ISO 9001 : 2000 Year :2003

Competitor(s)

:

AMBROSIA SDN BHD
EURO FIDELITY SDN BHD
PACIFIC OILS & FATS INDUSTRIES SDN BHD
PALMBASE (M) SDN BHD
SIME DARBY FUTURES TRADING SDN BHD

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2014

2013

2012

2011

2010


GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

70

60

60

60

66

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) trading of palm oil products, commodity products.

We were informed that the subject acts as the marketing arm of the Felda Group of Companies.

The subject involved in the sales of palm products and trades in physicals and paper futures.

It offers a wide range of products includes as follows:

* Crude Palm Oil
* Crude Palm Olein
* RBD Palm Oil
* RBD Palm Olein
* RBD Palm Stearin
* Palm Fatty Acid Distillate
* Crude Palm Kernel Oil
* RBD Palm Kernel Oil
* Palm Kernels
* Palm Kernels Expeller


RECENT DEVELOPMENT


Oct 3, 2013


Felda Seeking Land Acquisitions With $814 Million Left From IPO


Felda Global Ventures Bhd. (FGV), the world’s third-largest manager of oil palm plantations, may buy land in Southeast Asia and expand into Africa with 2.6 billion ringgit ($814 million) remaining from its share sale.

The Malaysian planter, which completed the world’s third-largest initial public offering in 2012 at $3.3 billion, is seeking land in Indonesia, Cambodia and Myanmar, Chief Executive Officer Mohd Emir Mavani Abdullah told reporters in Kuala Lumpur today. The company also exploring palm oil operations in Africa, he said.

Malaysia has reached the limit of area it can use for oil palm cultivation, spurring planters to either seek local takeovers or land abroad to grow their portfolios. Felda used IPO proceeds to complete the 1.2 billion ringgit takeover of Pontian United Plantations Bhd. this week, while local competitor IOI Corp. yesterday made a bid for Unico-Desa Plantations Bhd. (UDP)


“Felda is keen to expand into the Asean region, including land acquisitions in Myanmar and Cambodia,” Mohd Emir said, referring to Southeast Asia. It is also looking for “green field lands in Indonesia as the currency is down and it’s a good time to buy.”


The rupiah has fallen 13 percent this year against the dollar, the most among 11 most-traded Asia Pacific currencies tracked by Bloomberg.


The Pontian acquisition boosted Felda’s land-bank by four percent, adding 40,000 acres, Mohd Isa Abdul Samad, Felda’s non-executive chairman, told reporters in Kuala Lumpur today.



CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-26005888

Match

:

N/A

Address Provided by Client

:

BALAI FELDA JALAN GUARNEY 54000 KUALA LUMPUR MALAYSIA 1350

Current Address

:

TINGKAT 5, BALAI FELDA, JALAN GURNEY SATU, 54000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


On 29th April 2014, we have contacted one of the staff from the subject and she provided some information.


The address provided does not belong to the Subject.



FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2008 - 2012

]

Profit/(Loss) Before Tax

:

Increased

[

2008 - 2012

]

Return on Shareholder Funds

:

Acceptable

[

11.34%

]

Return on Net Assets

:

Acceptable

[

13.45%

]

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

:

Nil

[

0 Days

]

Debtor Ratio

:

Favourable

[

42 Days

]

Creditors Ratio

:

Favourable

[

1 Days

]

As the Subject is a service oriented company, the Subject does not need to keep 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

[

1.86 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

:

Acceptable

[

9.09 Times

]

Gearing Ratio

:

Favourable

[

0.47 Times

]

The Subject's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the Subject is able to generate sufficient income to service its interest and repay the loans. 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 :

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. The Subject had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the Subject's profit, we do believe the Subject is able to generate sufficient cash flow to service its interest payment. 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 : STABLE

 

 

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

46202 : Wholesale of 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 1995, the Subject is a Private Limited company, focusing on trading of palm oil products and commodity products. With its long presence in the industry coupled with its vast experiences in the business, the Subject should have built up certain goodwill with its clients over times. 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 has a total workforce of 70 employees in its business 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 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 210,490,614, 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. We noted that the Subject's supplies are solely sourced from local market. Being highly dependent on a limited number of suppliers could lead to delays, lost of revenue and increased costs if such resources become unavailable or shortage


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 has reached its optimum level and is generally stable. It is saturated and very competitive. As the Subject is long presence in the market, it should have acquired competitive edge against other players in the same fields


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

426,943,394

681,786,184

537,532,265

395,302,384

182,972,168

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

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

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

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

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

Total Turnover

426,943,394

681,786,184

537,532,265

395,302,384

182,972,168

Costs of Goods Sold

(397,350,007)

(652,495,952)

(506,374,301)

-

-

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

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

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

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

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

Gross Profit

29,593,387

29,290,232

31,157,964

-

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

25,215,963

24,474,211

78,081,873

16,025,658

6,594,708

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

25,215,963

24,474,211

78,081,873

16,025,658

6,594,708

Taxation

(1,339,078)

(6,388,475)

(4,261,932)

(6,673,066)

(4,631,552)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

23,876,885

18,085,736

73,819,941

9,352,592

1,963,156

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

129,620,604

116,668,955

63,093,405

60,115,813

89,772,657

Prior year adjustment

(7,263)

(34,087)

(7,463,625)

-

-

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

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

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

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

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

As restated

129,613,341

116,634,868

55,629,780

60,115,813

89,772,657

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

153,490,226

134,720,604

129,449,721

69,468,405

91,735,813

DIVIDENDS - Ordinary (paid & proposed)

(6,375,000)

(5,100,000)

(12,780,766)

(6,375,000)

(31,620,000)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

147,115,226

129,620,604

116,668,955

63,093,405

60,115,813

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

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

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

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

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

Term loan / Borrowing

3,118,786

5,702,007

-

-

-

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

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

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

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

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

3,118,786

5,702,007

-

-

-

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

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

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

1,128,300

1,155,747

744,132

765,821

1,266,481

LONG TERM INVESTMENTS/OTHER ASSETS

Subsidiary companies

-

-

-

-

5,577,956

Associated companies

20,000

20,000

20,000

29,020,442

29,020,442

Investment properties

3,464,700

829,320

878,934

928,547

4

Deferred assets

516,970

-

881,340

1,132,706

1,867,703

Others

111,540,841

95,198,041

90,203,320

2,925,000

-

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

115,542,511

96,047,361

91,983,594

34,006,695

36,466,105

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

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

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

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

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

TOTAL LONG TERM ASSETS

116,670,811

97,203,108

92,727,726

34,772,516

37,732,586

Short term quoted/unquoted investments

-

-

-

-

14,300

Stocks

-

-

-

31,813,597

8,391,290

Trade debtors

48,559,332

169,060,158

111,313,782

66,965,214

135,765,152

Other debtors, deposits & prepayments

4,130,882

969,593

12,359,509

15,275,625

393,792

Short term deposits

106,932,488

57,882,464

36,463,288

71,750,110

47,352,208

Amount due from holding company

30,117,603

30,617,385

6,151,489

4,869,460

4,351,954

Amount due from related companies

4,108,852

5,253,990

4,532,801

39,928,640

5,607,610

Amount due from associated companies

-

2,410,074

3,158,000

-

-

Cash & bank balances

1,980,122

3,795,950

20,952,911

27,394,607

5,265,771

Others

7,437,091

2,253,489

-

1,718,459

14,498,755

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

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

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

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

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

TOTAL CURRENT ASSETS

203,266,370

272,243,103

194,931,780

259,715,712

221,640,832

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

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

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

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

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

TOTAL ASSET

319,937,181

369,446,211

287,659,506

294,488,228

259,373,418

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

1,150,765

29,145,569

10,091,245

31,673,050

6,611,642

Other creditors & accruals

5,157,330

5,698,240

4,055,848

13,521,619

10,126,722

Short term borrowings/Term loans

99,702,502

147,134,575

104,114,084

134,331,537

112,584,000

Other liabilities & accruals

-

-

5,719,950

-

-

Amounts owing to holding company

2,167,500

3,789,370

-

-

-

Amounts owing to related companies

1,154,139

5,443,533

4,544,878

9,233,329

14,705,653

Dividends payable/proposed

-

-

-

-

12,750,000

Other liabilities

-

1,062,679

324,786

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

109,332,236

192,273,966

128,850,791

188,759,535

156,778,017

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

93,934,134

79,969,137

66,080,989

70,956,177

64,862,815

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

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

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

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

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

TOTAL NET ASSETS

210,604,945

177,172,245

158,808,715

105,728,693

102,595,401

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

17,000,000

17,000,000

17,000,000

17,000,000

17,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

17,000,000

17,000,000

17,000,000

17,000,000

17,000,000

RESERVES

Share premium

25,479,588

25,479,588

25,479,588

25,479,588

25,479,588

Retained profit/(loss) carried forward

147,115,226

129,620,604

116,668,955

63,093,405

60,115,813

Others

20,895,800

4,553,000

(441,721)

-

-

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

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

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

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

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

TOTAL RESERVES

193,490,614

159,653,192

141,706,822

88,572,993

85,595,401

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

210,490,614

176,653,192

158,706,822

105,572,993

102,595,401

Deferred taxation

-

404,031

-

-

-

Retirement benefits provision

114,331

115,022

-

155,700

-

Others

-

-

101,893

-

-

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

114,331

519,053

101,893

155,700

-

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

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

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

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

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

210,604,945

177,172,245

158,808,715

105,728,693

102,595,401

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

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

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

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

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

Contingent Liabilities

2,000,000

2,000,000

2,000,000

5,000,000

5,000,000

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

108,912,610

61,678,414

57,416,199

99,144,717

52,617,979

Net Liquid Funds

108,912,610

61,678,414

57,416,199

99,144,717

52,617,979

Net Liquid Assets

93,934,134

79,969,137

66,080,989

39,142,580

56,471,525

Net Current Assets/(Liabilities)

93,934,134

79,969,137

66,080,989

70,956,177

64,862,815

Net Tangible Assets

210,604,945

177,172,245

158,808,715

105,728,693

102,595,401

Net Monetary Assets

93,819,803

79,450,084

65,979,096

38,986,880

56,471,525

BALANCE SHEET ITEMS

Total Borrowings

99,702,502

147,134,575

104,114,084

134,331,537

112,584,000

Total Liabilities

109,446,567

192,793,019

128,952,684

188,915,235

156,778,017

Total Assets

319,937,181

369,446,211

287,659,506

294,488,228

259,373,418

Net Assets

210,604,945

177,172,245

158,808,715

105,728,693

102,595,401

Net Assets Backing

210,490,614

176,653,192

158,706,822

105,572,993

102,595,401

Shareholders' Funds

210,490,614

176,653,192

158,706,822

105,572,993

102,595,401

Total Share Capital

17,000,000

17,000,000

17,000,000

17,000,000

17,000,000

Total Reserves

193,490,614

159,653,192

141,706,822

88,572,993

85,595,401

LIQUIDITY (Times)

Cash Ratio

1.00

0.32

0.45

0.53

0.34

Liquid Ratio

1.86

1.42

1.51

1.21

1.36

Current Ratio

1.86

1.42

1.51

1.38

1.41

WORKING CAPITAL CONTROL (Days)

Stock Ratio

0

0

0

29

17

Debtors Ratio

42

91

76

62

271

Creditors Ratio

1

16

7

29

13

SOLVENCY RATIOS (Times)

Gearing Ratio

0.47

0.83

0.66

1.27

1.10

Liabilities Ratio

0.52

1.09

0.81

1.79

1.53

Times Interest Earned Ratio

9.09

5.29

0.00

0.00

0.00

Assets Backing Ratio

12.39

10.42

9.34

6.22

6.04

PERFORMANCE RATIO (%)

Operating Profit Margin

5.91

3.59

14.53

4.05

3.60

Net Profit Margin

5.59

2.65

13.73

2.37

1.07

Return On Net Assets

13.45

17.03

49.17

15.16

6.43

Return On Capital Employed

13.45

17.03

49.17

15.16

6.43

Return On Shareholders' Funds/Equity

11.34

10.24

46.51

8.86

1.91

Dividend Pay Out Ratio (Times)

0.27

0.28

0.17

0.68

16.11

NOTES TO ACCOUNTS

Contingent Liabilities

2,000,000

2,000,000

2,000,000

5,000,000

5,000,000



FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.60.05

UK Pound

1

Rs.101.32

Euro

1

Rs.83.34

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

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 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.