MIRA INFORM REPORT

Report Date :

12.05.2014

IDENTIFICATION DETAILS

Name :	JEENHUAT FOODSTUFFS INDUSTRIES SDN.BHD.
Registered Office :	61, Jalan Deva Pada, 10400 Georgetown, Pulau Pinang
Country :	Malaysia
Financials (as on) :	31.12.2012
Date of Incorporation :	26.01.1973
Com. Reg. No.:	13717-P
Legal Form :	Private Limited Company
Line of Business :	· Engaged in manufacturing of Canned Food Subject has a wide spectrum of Product Range such as Tropical Fruit Juices, Canned Coconut Milk, Mushroom, Vegetable and fruit in syrup, Frozen Tropical Fruits, Premium Chinese Food, dried and Salted Marine Products.
No of Employees :	100 [2014]

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	Slow But Correct
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.

:

13717-P

COMPANY NAME

:

JEENHUAT FOODSTUFFS INDUSTRIES SDN.BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

26/01/1973

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

61, JALAN DEVA PADA, 10400 GEORGETOWN, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

1760, PERMATANG TINGGI, MUKIM 14, SIMPANG AMPAT, 14100 SIMPANG AMPAT, PULAU PINANG, MALAYSIA.

TEL.NO.

:

04-5887377

FAX.NO.

:

04-5887737

EMAIL

:

INFO@JESI.COM.MY

WEB SITE

:

WWW.JEFI.COM.MY

CONTACT PERSON

:

TAN HUN HUAT ( CHAIRMAN )

INDUSTRY CODE

:

10

PRINCIPAL ACTIVITY

:

MANUFACTURING OF CANNED FOOD

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO 
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO 
ORDINARY SHARES 400,000 CASH AND 4,600,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 56,897,623 [2012]

NET WORTH

:

MYR 15,203,810 [2012]

STAFF STRENGTH

:

100 [2014]

BANKER (S)

:

CIMB BANK BHD PUBLIC BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

HISTORY / BACKGROUND

The Subject is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the Subject is insolvent. The Subject is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

The Subject is principally engaged in the (as a / as an) manufacturing of canned food.

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

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
15/02/2013	MYR 5,000,000.00	MYR 5,000,000.00
10/07/2008	MYR 5,000,000.00	MYR 2,000,000.00
30/03/2002	MYR 5,000,000.00	MYR 1,600,000.00
31/10/1995	MYR 1,000,000.00	MYR 800,000.00
30/10/1993	MYR 800,000.00	MYR 800,000.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
MR. TAN BENG JEEN +	692-A, JALAN LINTANG, 11500 AYER ITAM, PULAU PINANG, MALAYSIA.	690330-07-5541 A1216423	1,500,000.00	30.00
MR. TAN BENG CHYE +	692-A, JALAN LINTANG, 11500 AYER ITAM, PULAU PINANG, MALAYSIA.	670124-07-5323 A0610960	1,500,000.00	30.00
MS. LEE WAI YENG	692-A, JALAN LINTANG, 11500 AYER ITAM, PULAU PINANG, MALAYSIA.	390216-07-5148 2200055	750,000.00	15.00
MR. TAN HUN HUAT	692-A, JALAN LINTANG, AYER ITAM, 11500 AYER ITAM, PULAU PINANG, MALAYSIA.	411126-07-5275 3895159	750,000.00	15.00
MR. TAN BENG SHANG	692-A, JALAN LINTANG, 11500 AYER ITAM, PULAU PINANG, MALAYSIA.	790114-07-5481	250,000.00	5.00
MR. TAN BENG GHEE	25866, GREEN HILL, LAKE FOREST, CA, 92630, UNITED STATES.	700521-07-5057	250,000.00	5.00
			---------------	------
			5,000,000.00	100.00
			============	=====

+ Also Director

The Subject's interest in other companies (Subsidiaries/Associates) are shown as follow :

Local No	Country	Company	(%)	As At
135716V	MALAYSIA	JEFI MARKETING SDN. BHD.	51.00	29/03/2013

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. TAN BENG JEEN
Address	:	692-A, JALAN LINTANG, 11500 AYER ITAM, PULAU PINANG, MALAYSIA.
IC / PP No	:	A1216423
New IC No	:	690330-07-5541
Date of Birth	:	30/03/1969
Nationality	:	MALAYSIAN CHINESE
Date of Appointment	:	11/04/1996

DIRECTOR 2

Name Of Subject	:	MR. TAN BENG CHYE
Address	:	692-A, JALAN LINTANG, 11500 AYER ITAM, PULAU PINANG, MALAYSIA.
IC / PP No	:	A0610960
New IC No	:	670124-07-5323
Date of Birth	:	24/01/1967
Nationality	:	MALAYSIAN CHINESE
Date of Appointment	:	11/04/1996

MANAGEMENT

1)	Name of Subject	:	TAN BENG CHYE
	Position	:	EXECUTIVE DIRECTOR

2)	Name of Subject	:	TAN BENG JEEN
	Position	:	MANAGING DIRECTOR

3)	Name of Subject	:	TAN HUN HUAT
	Position	:	CHAIRMAN

4)	Name of Subject	:	LEE CHIN LEE
	Position	:	ACCOUNT MANAGER

5)	Name of Subject	:	LIM PENG HONG
	Position	:	HUMAN RESOURCE MANAGER

AUDITOR

Auditor	:	YCS & CO
Auditor' Address	:	163-C-3, WISMA SERI PERAK, JALAN PERAK, 10150 PULAU PINANG, PULAU PINANG, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MR. ONG LIN HOE
	IC / PP No	:	A2056349
	New IC No	:	711222-07-5405
	Address	:	34, JALAN LIM EOW THOON, 10400 GEORGETOWN, PULAU PINANG, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

CIMB BANK BHD

2)

Name

:

PUBLIC BANK BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	11/10/1978	N/A	ALGEMENE BANK NEDERLAND NV	MYR 250,000.00	Satisfied
2	19/05/1979	N/A	ALGEMENE NEDERLAND BANK NV	MYR 50,000.00	Satisfied
3	27/05/1982	N/A	ALGEMENE BANK NEDERLAND NV	MYR 533,000.00	Satisfied
4	08/05/1985	N/A	ALGEMENE BANK NEDERLAND NV	MYR 817,000.00	Satisfied
5	20/07/1989	N/A	UNITED ASIAN BANK BERHAD	MYR 1,890,000.00	Satisfied
6	20/07/1989	N/A	UNITED ASIAN BANK BERHAD	MYR 1,890,000.00	Satisfied
7	05/02/1991	N/A	UNITED ASIAN BANK BHD	MYR 342,000.00	Satisfied
8	05/02/1991	N/A	UNITED ASIAN BANK BHD	MYR 342,000.00	Satisfied
9	19/07/1997	N/A	BANK OF COMMERCE M BHD	MYR 1.00	Satisfied
10	19/07/1997	N/A	BANK OF COMMERCE M BHD	MYR 1.00	Satisfied
11	06/11/2001	N/A	BUMIPUTRACOMMERCE BANK BERHAD	MYR 1.00	Satisfied
12	06/11/2001	N/A	BUMIPUTRACOMMERCE BANK BERHAD	MYR 1.00	Satisfied
13	07/11/2003	N/A	CIMB BANK BERHAD	MYR 9,500,000.00	Unsatisfied
14	27/02/2006	N/A	CIMB BANK BERHAD	MYR 1,300,000.00	Unsatisfied
15	04/04/2011	THE DEED OF ASSIGNMENT DATED 04 APR2011 (SECONDARY INSTRUMENT)	MALAYAN BANKING BERHAD	MYR 5,600,000.00	Unsatisfied
16	22/11/2011	THE SUPPLEMENTAL AGREEMENT DATED 22 NOV 2011 (SECONDARY INSTRUMENT)	MALAYAN BANKING BERHAD	MYR 22,000,000.00	Unsatisfied
17	29/03/2012	FACILITIES AGREEMENT DATED 29 MAR 2012 & DEED OF ASSIGNMENT DATED 29 MAR 2012 & POWER OF ATTORNEY DATED 29 MAR 2012	PUBLIC BANK BERHAD	-	Unsatisfied
18	19/06/2013	THE SUPPLEMENTAL AGREEMENT DATED THE 19 JUN 2013 (SECONDARY INSTRUMENT)	MALAYAN BANKING BERHAD	MYR 5,000,000.00	Unsatisfied
19	26/08/2013	THE 1ST LEGAL CHARGE DATED 26 AUG 2013 (SECONDARY INSTRUMENT)	MALAYAN BANKING BERHAD	MYR 5,600,000.00	Unsatisfied
20	26/08/2013	THE 2ND LEGAL CHARGE DATED 26 AUG 2013 (SECONDARY INSTRUMENT)	MALAYAN BANKING BERHAD	MYR 22,000,000.00	Unsatisfied
21	26/08/2013	THE 3RD LEGAL CHARGE DATED 26 AUG 2013 (SECONDARY INSTRUMENT)	MALAYAN BANKING BERHAD	MYR 5,000,000.00	Unsatisfied

LEGAL CHECK AGAINST SUBJECT

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

No legal action was found in our databank. 

No winding up petition was found in our databank. 

DEFAULTER CHECK AGAINST SUBJECT

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

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

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	YES
Overseas	:	YES
Import Countries	:	UNITED STATES,THAILAND,CHINA

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	[	]	Average 61-90 Days	[	X	]
Fair 91-120 Days	[	]	Poor >120 Days	[	]

CLIENTELE

Local	:	NO
Overseas	:	YES	Percentage	:	100%
Export Market	:	ASIA EUROPE AFRICA
Credit Term	:	30 - 60 DAYS
Payment Mode	:	TELEGRAPHIC TRANSFER (TT) LETTER OF CREDIT (LC)

OPERATIONS

Products manufactured

:

SEAFOOD (FROZEN AND SALTED), SEAFOOD ORIENTAL (CANNED), COCONUT MILK (CANNED), FRUITS (CANNED), MUSHROOMS (CANNED), VEGETABLES (CANNED), FRUIT JUICES (CANNED )

Product Brand Name

:

JEENY'S, JEFI

Award

:

1 ) GOLDEN BULL AWARD Year :2007
2 ) CERTIFICATE OF EXCELLENCE Year :2007

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

SMALL & MEDIUM ENTERPRISE

MALAYSIA FOOD & BEVERAGE INDUSTRY

Ownership of premises

:

OWNED

Factory Size

:

3 ACRES

Total Number of Employees:
YEAR	2014	2010	2009
GROUP	N/A	N/A	N/A
COMPANY	100	100	100

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) manufacturing of canned food. 

The Subject has a wide spectrum of product range such as tropical fruit juices, canned coconut milk, mushroom, vegetable and fruit in syrup, frozen tropical fruits, premium Chinese food, dried and salted marine products. 

The Subject's main core business is producing fruit juice.

"JEFI" is one of the international known brand. Jefi fruit juice have attained the strongest foot hold in the international market.

Besides that, the Subject has another brand name for its products called "VIGOR" and it is one of the canned drink product to boost the energy.

All products are manufactured and canned under stringent quality control to preserve the nutritional value. 

In this respect, HACCP (Hazard Analysis & Critical Control Points) has been integrated in the product system.

The Subject is a one-stop foodstuff supplier in the region and has branches in China, Thailand, Vietnam and USA.

The Subject produces 3 containers for one item (pineapple juice). One container comprises of 66,000 cans.

The Subject is equipped with semi-automated machineries at the production site.

Besides that the Subject's warehouse is located at its same premises to keep its products and materials.

We were informed that the Subject providing transportation services and keep its products safely for timely deliver to its customers. 

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	045887377
Current Telephone Number	:	04-5887377
Match	:	YES
Address Provided by Client	:	1760, PERMATANG TINGGI, MUKIM 14, SIMPANG AMPAT,14100,SIMPANG AMPAT,PULAU PINANG.
Current Address	:	1760, PERMATANG TINGGI, MUKIM 14, SIMPANG AMPAT, 14100 SIMPANG AMPAT, PULAU PINANG, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

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

FINANCIAL ANALYSIS

Profitability
Turnover	:	Decreased	[	2009 - 2012	]
Profit/(Loss) Before Tax	:	Increased	[	2009 - 2012	]
Return on Shareholder Funds	:	Unfavourable	[	6.67%	]
Return on Net Assets	:	Unfavourable	[	8.09%	]
The continuous fall in turnover could be due to the lower demand for the Subject's products / services.The Subject's management have been efficient in controlling its operating costs. 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	[	44 Days	]
Debtor Ratio	:	Unfavourable	[	129 Days	]
Creditors Ratio	:	Favourable	[	52 Days	]
The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The Subject's debtors ratio was high. The Subject should tighten its credit control and improve its collection period. 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	[	1.37 Times	]
Current Ratio	:	Unfavourable	[	1.52 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	[	1.31 Times	]
Gearing Ratio	:	Unfavourable	[	4.34 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 highly geared, thus it had a high financial risk. The Subject was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the Subject will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the Subject has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the Subject's turnover and the interest it needs to pay.
Overall Assessment :
Due to the efficient control of its operating costs, the Subject was able to remain profitable despite lower turnover achieved during the year. 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's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.
Overall financial condition of the 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  (Source : Department of Statistics / Economic Report / Bank Negara Report)

INDUSTRY ANALYSIS

MSIC CODE
10 : MANUFACTURE OF FOOD PRODUCTS
INDUSTRY :	MANUFACTURING
The Manufacturing sector is one of the important sectors to the growth of the Malaysian economy. According to Ministry of Finance, the manufacturing sector is expected to grow 4.9% in year 2013. Export oriented-industries are expected to benefit from the higher growth of global trade, while domesticoriented industries expand in line with the better consumer sentiment and business confidence. The resource-based industries are envisaged to grow steadily attributed to improved demand for petroleum, chemical, rubber and plastic products. With better job prospects and higher disposable income, the transportation equipment subsector, in particular, the passenger car segment is expected to expand.
Value-added of the manufacturing sector expanded 5% during the first half of 2012. Output of the sector rose 5.2% during the first sevenmonths of 2012 in line with the increase in sales value of manufactured products by 6.5% to RM363.1 billion. Output from domesticoriented industries continued to expand 8.6% while export-oriented industries grew 4.1%.
According to the Department of Statistics, the sales value of the Manufacturing sector in January 2013 posted a growth of 7.4% (RM3.6 billion) to record RM52.4 billion as compared to RM48.8 billion reported in year 2012. Meanwhile, month-on-month basis, the sales value has decreased by 0.4% (RM0.2 billion) as compared with the preceding month. The sales value in December 2012 has been revised positive 7.5% year-on-year to record RM52.6 billion.
Output of rubber products increased 3.6% in the first seven month of 2012 mainly supported by continuous demand for rubber gloves. Output of rubber gloves grew 5.9% on account of the expansion in the global healthcare industry and wider usage of gloves in other sectors. Similarly, output of catheters, especially for use in medical appliances, also registered a strong growth of 12.6%. Nevertheless, production of rubber tyres and tubes reduced 10.9% in tandem with slowing external demand from the automotive industry, especially China.
Meanwhile, production of wood and wood products rebounded 4.6% largely supported by higher demand for wooden and cane furniture (33.5%). The positive performance was attributed to vibrant higher demand from major export destinations such as China and the United States (US) for Malaysian-made furniture. Demand from China accelerated further following the country’s rising income level and the implementation of zero import duty on Malaysian made-furniture. Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.
The output of chemicals and chemical products rose 9.9% in the first seven month of year 2012 on account of increasing demand for plastic products (11.8%) and basic chemicals (11.1%). External demand for plastic packaging materials surged during the early part of the year 2012, particularly from Japan and Thailand, as manufacturers resumed operations, which were interrupted by natural calamities and power outages. Chemical production are expected to show 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.
Tax and non-tax incentives provided by goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such assolar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1973, the Subject is a Private Limited company, focusing on manufacturing of canned food. The Subject has been in business for over 4 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. The capital standing of the Subject is fair. With an adequate share capital, the Subject has the potential of expanding its business in future. 

The Subject focuses only on overseas market. This global approach has enabled the Subject to generate a better growth sales.  Being an export-oriented company, the Subject however is subjected to certain inherent risk of global economy slowdown, foreign currencies fluctuations and stiff competition in the international market. Being a moderate size company, the Subject has a total workforce of 100 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. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The high gearing ratio clearly implied that the Subject was supported by more debt than equity. However, 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. Given a positive net worth standing at MYR 15,203,810, 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. 

The Subject's payment habit is average. With its adequate working capital, the Subject should be able to pay its short term debts. 

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

PROFIT AND LOSS ACCOUNT

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

JEENHUAT FOODSTUFFS INDUSTRIES SDN.BHD.

Financial Year End	2012-12-31	2011-12-31	2010-12-31	2009-12-31
Months	12	12	12	12
Consolidated Account	GROUP	GROUP	GROUP	Company
Audited Account	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES
Financial Type	FULL	FULL	SUMMARY	SUMMARY
Currency	MYR	MYR	MYR	MYR
TURNOVER	56,897,623	60,042,068	62,966,586	55,770,059
	----------------	----------------	----------------	----------------
Total Turnover	56,897,623	60,042,068	62,966,586	55,770,059
Costs of Goods Sold	(49,544,057)	(53,055,310)	-	-
	----------------	----------------	----------------	----------------
Gross Profit	7,353,566	6,986,758	-	-
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	926,775	469,822	702,862	1,107,897
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	926,775	469,822	702,862	1,107,897
Taxation	59,305	(248,112)	(312,526)	(237,448)
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	986,080	221,710	390,336	870,449
Minority interests	27,503	94,954	(47,978)	-
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS	1,013,583	316,664	342,358	870,449
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS	1,013,583	316,664	342,358	870,449
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	4,125,791	7,034,127	6,916,769	8,104,889
	----------------	----------------	----------------	----------------
As restated	4,125,791	7,034,127	6,916,769	8,104,889
	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	5,139,374	7,350,791	7,259,127	8,975,338
TRANSFER TO RESERVES - General	-	(3,000,000)	-	-
DIVIDENDS - Ordinary (paid & proposed)	-	(225,000)	(225,000)	-
	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	5,139,374	4,125,791	7,034,127	8,975,338
	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Bank overdraft	116,304	119,472	-	-
Bankers' acceptance	1,335,750	1,183,706	-	-
Hire purchase	141,147	8,855	-	-
Letter of credit	5,395	-	-	-
Term loan / Borrowing	1,233,794	335,124	-	-
Trust receipts	133,310	174,330	-	-
Others	59,552	80,704	-	-
	----------------	----------------	----------------	----------------
	3,025,252	1,902,191	-	-
	=============	=============

BALANCE SHEET

JEENHUAT FOODSTUFFS INDUSTRIES SDN.BHD.

ASSETS EMPLOYED:
FIXED ASSETS	24,995,935	22,887,264	17,318,957	5,373,217
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	-	-	-	265,200
Goodwill on consolidation	197,560	197,560	-	-
	----------------	----------------	----------------	----------------
TOTAL INTANGIBLE ASSETS	197,560	197,560	-	-
	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	25,193,495	23,084,824	17,318,957	5,638,417
Stocks	6,935,525	7,568,503	-	-
Trade debtors	20,152,359	15,802,061	-	-
Other debtors, deposits & prepayments	34,468,962	12,075,691	-	-
Short term deposits	3,325,958	2,749,836	-	-
Amount due from director	772,319	918,180	-	-
Cash & bank balances	2,697,219	2,758,075	-	-
Others	363,910	134,977	-	-
	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	68,716,252	42,007,323	36,573,729	34,253,287
	----------------	----------------	----------------	----------------
TOTAL ASSET	93,909,747	65,092,147	53,892,686	39,891,704
	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	7,060,265	3,881,568	-	-
Other creditors & accruals	5,096,771	7,624,456	-	-
Hire purchase & lease creditors	766,692	80,768	-	-
Bank overdraft	1,222,835	1,491,179	-	-
Short term borrowings/Term loans	1,630,407	872,544	-	-
Other borrowings	1,649,184	933,233	-	-
Bill & acceptances payable	27,654,000	27,181,000	-	-
	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	45,080,154	42,064,748	37,644,039	28,531,892
	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	23,636,098	(57,425)	(1,070,310)	5,721,395
	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	48,829,593	23,027,399	16,248,647	11,359,812
	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	5,000,000	5,000,000	2,000,000	2,000,000
	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	5,000,000	5,000,000	2,000,000	2,000,000
Capital reserve	5,077,575	5,077,575	5,077,575	-
Retained profit/(loss) carried forward	5,139,374	4,125,791	7,034,127	8,975,338
Others	-	-	-	(2,000,000)
	----------------	----------------	----------------	----------------
TOTAL RESERVES	10,216,949	9,203,366	12,111,702	6,975,338
MINORITY INTEREST	(13,139)	14,364	109,318	-
	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	15,203,810	14,217,730	14,221,020	8,975,338
Long term loans	30,693,267	7,973,377	-	-
Hire purchase creditors	2,402,070	285,128	-	-
Deferred taxation	530,446	551,164	-	-
	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	33,625,783	8,809,669	2,027,627	2,384,474
	----------------	----------------	----------------	----------------
	48,829,593	23,027,399	16,248,647	11,359,812
	=============	=============	=============	=============

FINANCIAL RATIO

JEENHUAT FOODSTUFFS INDUSTRIES SDN.BHD.

TYPES OF FUNDS
Cash	6,023,177	5,507,911	-	-
Net Liquid Funds	(22,853,658)	(23,164,268)	-	-
Net Liquid Assets	16,700,573	(7,625,928)	(1,070,310)	5,721,395
Net Current Assets/(Liabilities)	23,636,098	(57,425)	(1,070,310)	5,721,395
Net Tangible Assets	48,632,033	22,829,839	16,248,647	11,359,812
Net Monetary Assets	(16,925,210)	(16,435,597)	(3,097,937)	3,336,921
BALANCE SHEET ITEMS
Total Borrowings	66,018,455	38,817,229	-	-
Total Liabilities	78,705,937	50,874,417	39,671,666	30,916,366
Total Assets	93,909,747	65,092,147	53,892,686	39,891,704
Net Assets	48,829,593	23,027,399	16,248,647	11,359,812
Net Assets Backing	15,203,810	14,217,730	14,221,020	8,975,338
Shareholders' Funds	15,203,810	14,217,730	14,221,020	8,975,338
Total Share Capital	5,000,000	5,000,000	2,000,000	2,000,000
Total Reserves	10,216,949	9,203,366	12,111,702	6,975,338
LIQUIDITY (Times)
Cash Ratio	0.13	0.13	-	-
Liquid Ratio	1.37	0.82	-	-
Current Ratio	1.52	1.00	0.97	1.20
WORKING CAPITAL CONTROL (Days)
Stock Ratio	44	46	-	-
Debtors Ratio	129	96	-	-
Creditors Ratio	52	27	-	-
SOLVENCY RATIOS (Times)
Gearing Ratio	4.34	2.73	-	-
Liabilities Ratio	5.18	3.58	2.79	3.44
Times Interest Earned Ratio	1.31	1.25	-	-
Assets Backing Ratio	9.73	4.57	8.12	5.68
PERFORMANCE RATIO (%)
Operating Profit Margin	1.63	0.78	1.12	1.99
Net Profit Margin	1.78	0.53	0.54	1.56
Return On Net Assets	8.09	10.30	4.33	9.75
Return On Capital Employed	7.75	9.56	4.30	9.75
Return On Shareholders' Funds/Equity	6.67	2.23	2.41	9.70
Dividend Pay Out Ratio (Times)	0.00	0.71	0.66	-
NOTES TO ACCOUNTS
Contingent Liabilities	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.05
UK Pound	1	Rs.101.65
Euro	1	Rs.83.08

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	MNL

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%)

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