MIRA INFORM REPORT

 

 

Report Date :

02.10.2014

 

IDENTIFICATION DETAILS

 

Name :

PUNJAB OIL PRODUCTS (M) SDN. BHD.

 

 

Registered Office :

Menara City One, Letter Box CP5-01, 3, Jalan Munshi Abdullah, Level 5, 50100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

21.06.2011

 

 

Com. Reg. No.:

949580-P

 

 

Legal Form :

Private Limited (Limited By Shares)

 

 

Line of Business :

Trading of Palm Oil

 

 

No. of Employees :

5 [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

 

 

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 – June 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 


 

MALAYSIA - ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with 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.

:

949580-P

COMPANY NAME

:

PUNJAB OIL PRODUCTS (M) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

21/06/2011

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

MENARA CITY ONE, LETTER BOX CP5-01, 3, JALAN MUNSHI ABDULLAH, LEVEL 5, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

260-A, JALAN 4D, KAMPUNG BARU SUBANG, SUBANG, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

TEL.NO.

:

03-80275082

FAX.NO.

:

03-77341414

CONTACT PERSON

:

NOSHEEN NAEEM ( DIRECTOR )

 

 

 

INDUSTRY CODE

:

46202

PRINCIPAL ACTIVITY

:

TRADING OF PALM OIL

AUTHORISED CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARE 1,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARES 1,000,000 CASH OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 1,566,572 [2012]

NET WORTH

:

MYR 868,778 [2012]

 

 

 

STAFF STRENGTH

:

5 [2014]

BANKER (S)

:

ALLIANCE BANK MALAYSIA BHD
MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

WEAK

 

 

 

COMMERCIAL RISK

:

HIGH

CURRENCY EXPOSURE

:

N/A

GENERAL REPUTATION

:

SATISFACTORY

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.

 

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 1,000,000.00

MYR 1,000,000.00

04/11/2011

MYR 1,000,000.00

MYR 500,000.00

21/06/2011

MYR 1,000,000.00

MYR 4.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

MR. MOHAMMAD NAEEM +

12, 5/17 JALAN SEPAH PUTRI, SEKSYEN 5, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

AR9951473

250,000.00

25.00

MR. NOSHEEN NAEEM +

12, 5/17 JALAN SEPAH PUTRI, SEKSYEN 5, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

KH287924

250,000.00

25.00

AYUB MUHAMMAD +

HOUSE P 204, ABUBAKAR ROAD, BEHIND MOSQUE ABULKHALID, SAEED COLONY 1, FAISALABAD 38000, PAKISTAN.

AH1132682

250,000.00

25.00

MUHAMMAD TAHIR

HOUSE 32, BLOCK Z, STREET 13, MADINA TOWN, FAISALABAD 38000, PAKISTAN.

AD7123892

250,000.00

25.00

 

 

 

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

------

 

 

 

1,000,000.00

100.00

 

 

 

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

=====

+ Also Director


DIRECTORS

 

DIRECTOR 1

Name Of Subject

:

AYUB MUHAMMAD

Address

:

HOUSE P 204, ABUBAKAR ROAD, BEHIND MOSQUE ABULKHALID, SAEED COLONY 1, FAISALABAD 38000, PAKISTAN.

IC / PP No

:

AH1132682

 

 

 

 

 

 

 

 

 

Nationality

:

PAKISTANI

Date of Appointment

:

21/06/2011

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. NOSHEEN NAEEM

Address

:

12, 5/17 JALAN SEPAH PUTRI, SEKSYEN 5, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

KH287924

 

 

 

 

 

 

 

 

 

 

 

 

Date of Appointment

:

21/06/2011

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

MR. MOHAMMAD NAEEM

Address

:

12, 5/17 JALAN SEPAH PUTRI, SEKSYEN 5, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

AR9951473

 

 

 

 

 

 

 

 

 

 

 

 

Date of Appointment

:

21/06/2011

 

 

MANAGEMENT

 

1)

Name of Subject

:

NOSHEEN NAEEM

 

Position

:

DIRECTOR

 

 

AUDITOR

 

Auditor

:

WSJ & CO

Auditor' Address

:

MENARA CITY ONE, LETTER BOX CP5-01, 3, JALAN MUNSHI ABDULLAH, LEVEL 6, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. M RAMANATHAN A/L S M MEYYAPPAN

 

IC / PP No

:

6057502

 

New IC No

:

600923-10-6815

 

Address

:

15, JALAN DATO ABDUL AZIZ 14/29, 46100 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

BANKING

 

Banking relations are maintained principally with :

 

1)

Name

:

ALLIANCE BANK MALAYSIA BHD

 

 

 

 

 

 

 

 

 

2)

Name

:

MALAYAN BANKING BHD

 

 

ENCUMBRANCE (S)

 

No encumbrance was found in our databank at the time of investigation.

 

 

LEGAL CHECK AGAINST SUBJECT

 

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


No legal action was found in our databank.


No winding up petition was found in our databank.

 

 

DEFAULTER CHECK AGAINST SUBJECT

 

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

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

 

 

PAYMENT RECORD

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

N/A

 

 

 



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

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

 

 

 

 

 

 

 

 

 

Credit Term

:

N/A

 

 

 

 

 

 

Payment Mode

:

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Goods Traded

:

PALM OIL

 

 

 

 

 

Total Number of Employees:

YEAR

2014

2012

 

 

GROUP

N/A

N/A

 

 

 

 

 

 

 

COMPANY

5

0

 

 

 

 

 

 

 

 

Branch

:

NO

 

 

Other Information:


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


The Subject refused to disclose its operation.

 

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

 

Telephone Number Provided By Client

:

0380275082

Current Telephone Number

:

03-80275082

Match

:

N/A

 

 

 

Address Provided by Client

:

NW3A-30,COVA SQUARE JALAN TEKNOLOGI,PJU5,KOTA DAMANSARA

47810, PJ SELAN-GOR,MALAYSIA

Current Address

:

260-A, JALAN 4D, KAMPUNG BARU SUBANG, SUBANG, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

Match

:

NO

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


We contacted one of the staff from the Subject and he provided some information.


The Subject is not aware of the address provided.

 

 

FINANCIAL ANALYSIS

 

Profitability

 

 

 

 

 

 

Turnover

:

Increased

[

(0.00%)

]

 

Profit/(Loss) Before Tax

:

Increased

[

(1,324.24%)

]

 

Return on Shareholder Funds

:

Unfavourable

[

(14.11%)

]

 

Return on Net Assets

:

Unfavourable

[

(13.74%)

]

 

 

 

 

 

 

 

 

The higher turnover could be attributed to the favourable market condition.Higher losses before tax during the year could be due to the higher operating costs incurred. The Subject's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

46 Days

]

 

Debtor Ratio

:

Unfavourable

[

82 Days

]

 

Creditors Ratio

:

Favourable

[

60 Days

]

 

 

 

 

 

 

 

 

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The high debtors' ratio could indicate that the Subject was weak in its credit control. However, the Subject could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. 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

[

2.20 Times

]

 

Current Ratio

:

Favourable

[

2.66 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

[

(37.19 Times)

]

 

Gearing Ratio

:

Favourable

[

0.00 Times

]

 

 

 

 

 

 

 

 

The Subject incurred losses in the year. It did not generate sufficient income to service its interest.  If the situation does not improve, the Subject may be vulnerable to default in servicing the interest. The Subject had no gearing and hence it had virtually no financial risk. The Subject was financed by its shareholders' funds and internally generated fund. During the economic downturn, the Subject, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

Although the Subject's turnover increased its profits however showed a reverse trend. The losses could be due to the management's failure to maintain its competitiveness in the market. 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's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. The Subject was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The Subject has good chance of getting loans, if the needs arises.

 

 

 

 

 

 

 

Overall financial condition of the Subject : 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

28,876

Individual Bankruptcy ( No.)

16,228

18,119

19,167

19,575

21,984

Individual Bankruptcy ( % )

16.7

11.7

5.8

2.1

12.3

 

INDUSTRIES ( % of Growth ):

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Agriculture

0.1

2.4

5.8

1.3

2.1

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

(6.5)

(0.3)

(5.4)

1.0

0.7

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 #

(9.0)

11.9

4.7

4.8

3.5

Exported-oriented Industries

(19.0)

12.1

2.8

4.1

-

Electrical & Electronics

(30.3)

28.4

(4.0)

12.7

18.6

Rubber Products

(10.1)

25.3

20.7

3.0

8.2

Wood Products

(24.1)

20.1

(5.1)

8.7

(3.1)

Textiles & Apparel

(19.5)

(0.4)

13.2

(7.1)

(2.6)

Domestic-oriented Industries

(9.8)

16.3

6.5

8.6

-

Food, Beverages & Tobacco

0.2

3.0

4.8

2.7

3.6

Chemical & Chemical Products

(7.7)

16.2

10.0

10.8

(0.7)

Plastic Products

(9.1)

2.4

3.8

-

-

Iron & Steel

(32.7)

29.3

2.2

(6.6)

3.4

Fabricated Metal Products

(2.5)

14.9

21.8

13.8

12.2

Non-metallic Mineral

(15.5)

20.2

12.1

2.9

(0.4)

Transport Equipment

(13.5)

36.5

12.0

3.4

13.8

Paper & Paper Products

(5.0)

18.7

9.5

3.1

2.3

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

6.2

11.4

4.7

18.6

10.9

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

2.9

7.4

7.1

6.4

5.9

Electric, Gas & Water

1.4

7.8

3.5

4.4

4.2

Transport, Storage & Communication

1.6

7.7

6.5

7.1

7.3

Wholesale, Retail, Hotel & Restaurant

2.8

4.7

5.2

4.7

5.9

Finance, Insurance & Real Estate

3.8

6.1

6.9

9.7

3.7

Government Services

3.4

5.9

12.4

9.4

8.3

Other Services

3.8

4.4

5.1

3.9

5.1

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


Established in 2011, the Subject is a Private Limited company, focusing on trading of palm oil. The Subject has been in business for less than 5 years and it has slowly been building up contact with its clients while competing in the industry. However, it has yet to enjoy a stable market shares as it need to compete many well established players in the same field. With a paid up capital of MYR 1,000,000, the Subject has greater opportunities to expand its business when the needs arise. Under the control of its directors, we considered that the Subject's business position in the market is much dependent on their abilities.

Investigation revealed that the Subject concentrates only on the local market. In this regard, the Subject's commercial risk is high. Any adverse changes to the local economy might have a negative impact on the Subject's business performance. Being a small company, the Subject's business operation is supported by only 5 employees. Overall, we regard that the Subject's management capability is weak. Without capable management, the Subject is unlikely to be successful and often contribute to unacceptable levels of accountability. Weak management can affect productivity, profitability, sales growth and ultimately can result in the failure of a business.

Despite the higher turnover, the Subject suffered pre-tax losses which reflected a highly competitive business environment. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a zero geared company, the Subject virtually has no financial risk as it is mainly dependent on its internal funds to finance its business.

Without a strong assets backing, the Subject may face difficulties in getting loans for its future expansion and continued growth .

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

In view of the above, we recommend credit be granted to the Subject with close monitoring.

 

PROFIT AND LOSS ACCOUNT

 

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

PUNJAB OIL PRODUCTS (M) SDN. BHD.

 

Financial Year End

2012-12-31

2011-12-31

Months

12

12

Consolidated Account

Company

Company

Audited Account

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

Financial Type

FULL

FULL

Currency

MYR

MYR

 

 

 

TURNOVER

1,566,572

-

 

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

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

Total Turnover

1,566,572

-

 

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

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

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

(122,613)

(8,609)

 

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

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

PROFIT/(LOSS) BEFORE TAXATION

(122,613)

(8,609)

Taxation

0

-

 

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

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

PROFIT/(LOSS) AFTER TAXATION

(122,613)

(8,609)

 

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

As previously reported

(8,609)

-

 

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

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

As restated

(8,609)

-

 

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

(131,222)

(8,609)

 

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

(131,222)

(8,609)

 

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

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

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

Others

3,211

-

 

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

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

 

3,211

-

 

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

 

 

 

BALANCE SHEET

 

PUNJAB OIL PRODUCTS (M) SDN. BHD.

 

ASSETS EMPLOYED:

 

 

FIXED ASSETS

166,358

-

 

 

 

 

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

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

TOTAL LONG TERM ASSETS

166,358

-

 

 

 

Stocks

195,623

-

Trade debtors

350,200

-

Other debtors, deposits & prepayments

19,000

-

Amount due from director

493,407

492,427

Cash & bank balances

67,202

-

 

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

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

TOTAL CURRENT ASSETS

1,125,432

492,427

 

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

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

TOTAL ASSET

1,291,790

492,427

 

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

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

 

 

 

CURRENT LIABILITIES

 

 

Trade creditors

256,302

-

Other creditors & accruals

44,838

1,036

Amounts owing to director

121,872

-

 

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

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

TOTAL CURRENT LIABILITIES

423,012

1,036

 

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

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

NET CURRENT ASSETS/(LIABILITIES)

702,420

491,391

 

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

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

TOTAL NET ASSETS

868,778

491,391

 

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

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

 

 

 

SHARE CAPITAL

 

 

Ordinary share capital

1,000,000

500,000

 

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

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

TOTAL SHARE CAPITAL

1,000,000

500,000

 

 

 

Retained profit/(loss) carried forward

(131,222)

(8,609)

 

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

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

TOTAL RESERVES

(131,222)

(8,609)

 

 

 

 

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

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

SHAREHOLDERS' FUNDS/EQUITY

868,778

491,391

 

 

 

 

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

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

 

868,778

491,391

 

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

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

 

 

FINANCIAL RATIO

 

PUNJAB OIL PRODUCTS (M) SDN. BHD.

 

TYPES OF FUNDS

 

 

Cash

67,202

0

Net Liquid Funds

67,202

0

Net Liquid Assets

506,797

491,391

Net Current Assets/(Liabilities)

702,420

491,391

Net Tangible Assets

868,778

491,391

Net Monetary Assets

506,797

491,391

BALANCE SHEET ITEMS

 

 

Total Borrowings

0

0

Total Liabilities

423,012

1,036

Total Assets

1,291,790

492,427

Net Assets

868,778

491,391

Net Assets Backing

868,778

491,391

Shareholders' Funds

868,778

491,391

Total Share Capital

1,000,000

500,000

Total Reserves

(131,222)

(8,609)

LIQUIDITY (Times)

 

 

Cash Ratio

0.16

0.00

Liquid Ratio

2.20

475.32

Current Ratio

2.66

475.32

WORKING CAPITAL CONTROL (Days)

 

 

Stock Ratio

46

0

Debtors Ratio

82

0

Creditors Ratio

60

0

SOLVENCY RATIOS (Times)

 

 

Gearing Ratio

0.00

0.00

Liabilities Ratio

0.49

0.00

Times Interest Earned Ratio

(37.19)

0.00

Assets Backing Ratio

0.87

0.98

PERFORMANCE RATIO (%)

 

 

Operating Profit Margin

(7.83)

0.00

Net Profit Margin

(7.83)

0.00

Return On Net Assets

(13.74)

(1.75)

Return On Capital Employed

(13.74)

(1.75)

Return On Shareholders' Funds/Equity

(14.11)

(1.75)

Dividend Pay Out Ratio (Times)

0.00

0.00

NOTES TO ACCOUNTS

 

 

Contingent Liabilities

0

0

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.75

UK Pound

1

Rs.100.07

Euro

1

Rs.77.95

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

NIT

 

               

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.