MIRA INFORM REPORT

 

 

Report Date :

14.10.2014

 

IDENTIFICATION DETAILS

 

Name :

PALM-OLEO (KLANG) SDN. BHD.

 

 

Registered Office :

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

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.09.2013

 

 

Date of Incorporation :

20.06.1997

 

 

Com. Reg. No.:

435832-T

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing and Sale of Oleo Chemical Product.

 

 

No of Employees :

150 [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 :

Good

Payment Behaviour :

Regular

Litigation :

Clear

 

NOTES :

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

 

 

ECGC Country Risk Classification List – 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.

:

435832-T

COMPANY NAME

:

PALM-OLEO (KLANG) SDN. BHD.

FORMER NAME

:

UNIQEMA (MALAYSIA) SDN BHD (23/11/2007)
UNICHEMA (MALAYSIA) SDN BHD (05/03/1999)

INCORPORATION DATE

:

20/06/1997

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

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

BUSINESS ADDRESS

:

LOT 1 & 2, SOLOK WAJA 3, BUKIT RAJA INDUSTRIAL ESTATE, 41710 KLANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-33412115

FAX.NO.

:

03-33427877

CONTACT PERSON

:

YEOW AH KOW ( DIRECTOR )

INDUSTRY CODE

:

20291

PRINCIPAL ACTIVITY

:

MANUFACTURING AND SALE OF OLEOCHEMICAL PRODUCT

AUTHORISED CAPITAL

:

MYR 98,200,000.00 DIVIDED INTO
ORDINARY SHARE 2,000,000.00 OF MYR 49.00 EACH.
PREFERENCE SHARE 200,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 89,800,046.00 DIVIDED INTO
ORDINARY SHARES 200,000 CASH AND 1,632,654 OTHERWISE OF MYR 49.00 EACH.

SALES

:

MYR 567,232,000 [2013]

NET WORTH

:

MYR 227,027,000 [2013]

M1000 OVERALL RANKING

:

928[2004]

M1000 INDUSTRY RANKING

:

47[2004]

STAFF STRENGTH

:

150 [2014]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

PROMPT

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

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 and sale of oleochemical product.

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


 

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

YEAR

2004

OVERALL RANKING

928

INDUSTRY RANKING

47


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

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

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


Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

28/09/2010

MYR 98,200,000.00

MYR 89,800,046.00

21/12/1997

MYR 10,000,000.00

MYR 9,929,286.00

21/12/1997

MYR 100,000.00

MYR 49.00

30/06/1997

MYR 100,000.00

MYR 2.00


 

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

 


Name

Address

IC/PP/Loc No

Shareholding

(%)

PALM-OLEO SDN. BHD.

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

185886V

1,832,654.00

100.00

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

------

1,832,654.00

100.00

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

=====

+ Also Director





DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

MR. PUNG KOK HOOI

Address

:

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

New IC No

:

660414-07-5357

Date of Birth

:

14/04/1966

Nationality

:

MALAYSIAN

Date of Appointment

:

26/12/2008

 

DIRECTOR 2

 

Name Of Subject

:

MR. GOH ENG CHOOR

Address

:

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

IC / PP No

:

5485745

New IC No

:

571002-10-5199

Date of Birth

:

02/10/1957

Nationality

:

MALAYSIAN

Date of Appointment

:

11/06/2008

 

DIRECTOR 3

 

Name Of Subject

:

MR. YEOW AH KOW

Address

:

3, JALAN SS19/3C, PETALING JAYA, 47610 SUBANG JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

8391290

New IC No

:

540203-05-5085

Date of Birth

:

03/02/1954

Nationality

:

MALAYSIAN

Date of Appointment

:

28/09/2007

 

DIRECTOR 4

 

Name Of Subject

:

MR. MADHEV A/L BALA SUBRAMANIAM

Address

:

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

IC / PP No

:

8294889

New IC No

:

600913-71-5115

Date of Birth

:

13/09/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

11/06/2008




MANAGEMENT

 

 

1)

Name of Subject

:

YEOW AH KOW

Position

:

DIRECTOR

 

2)

Name of Subject

:

MAY LIM

Position

:

FINANCE MANAGER

 

3)

Name of Subject

:

ROHAIDAH ANUM

Position

:

HUMAN RESOURCE MANAGER

 

AUDITOR

 

Auditor

:

KPMG

Auditor' Address

:

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

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. YAP MIOW KIEN

IC / PP No

:

A1171235

New IC No

:

681220-05-5334

Address

:

12, LINGKARAN MERU VALLEY 1A, LAKEVIEW VILLA, MERU VALLEY GOLF RESORT, JALAN BUKIT MERU, 30250 IPOH, PERAK, MALAYSIA.

 

2)

Company Secretary

:

MR. PUNG KOK HOOI

New IC No

:

660414-07-5357

Address

:

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

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

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

:

YES

Import Countries

:

ASIA



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

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

SOUTHEAST ASIA

MIDDLE EAST

EUROPE

AUSTRALIA

NEW ZEALAND

SINGAPORE

SOUTH AFRICA

Credit Term

:

30 - 60 DAYS

Payment Mode

:

TELEGRAPHIC TRANSFER (TT)
CHEQUES

Type of Customer

:

MANUFACTURING INDUSTRIES

 

OPERATIONS

 

Products manufactured

:

FATTY ACIDS, OLEOCHEMICALS

Product Brand Name

:

PRICERINE, ESTASAN, ESTOL, PRICERINE, PRISAVON, PRISTERENE, PRIFAC

Member(s) / Affiliate(s)

:

SMI ASSOCIATION OF MALAYSIA

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

MALAYSIA FOOD & BEVERAGE INDUSTRY

Ownership of premises

:

OWNED

Shifts

:

3 SHIFTS

 

Total Number of Employees:

 

YEAR

2014

2013

2012

2011

2010


GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

150

150

150

150

150

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing and sale of oleochemical product.

The Subject is a related companies of namely Kuala Lumpur Kepong Berhad.

Kuala Lumpur Kepong Berhad, is a reputable plantation Group. However the Group has also ventured into The Group is also involved in global retailing of premium personal care products, toiletries, home fragrances and fine foods.

The Subject produces fatty acids, glycerine, fatty acid esters and soap noodles.

Fatty Acids is being used extensively by many well known international brands in industries such as pharmaceuticals, soaps & detergents, cosmetics, food emulsifiers, varnishes & paints, etc. PalmeraTM Glycerine also finds wide appeal in many industries due to its renowned stability and quality consistency, a crucial criteria for many of today's products.

The Subject has an installed oleochemical production capacity of 100,000 tonnes per annum for fatty acids and soap noodles and 15,000 tonnes per annum of fatty acid esters.

Besides that the Subject has a warehouse located at the same premises to keep stocks and materials.

The Subject utilises advanced automated and semi-automated machineries at its production site.

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

603-78098833/603-33412115

Current Telephone Number

:

03-33412115

Match

:

YES

Address Provided by Client

:

LOT 1 & 2, SOLOK WAJA 3, BUKIT RAJA INDUSTRIAL ESTATE,41710,KLANG,SELANGOR.

Current Address

:

LOT 1 & 2, SOLOK WAJA 3, BUKIT RAJA INDUSTRIAL ESTATE, 41710 KLANG, SELANGOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 9th October 2014 we contacted one of the staff from the Subject and she provided some information.



FINANCIAL ANALYSIS

 

Profitability

Turnover

:

Decreased

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Increased

[

2009 - 2013

]

Return on Shareholder Funds

:

Acceptable

[

15.01%

]

Return on Net Assets

:

Acceptable

[

17.68%

]

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 Subject's management had generated acceptable return for its shareholders using its assets.

Working Capital Control

Stock Ratio

:

Favourable

[

39 Days

]

Debtor Ratio

:

Favourable

[

14 Days

]

Creditors Ratio

:

Favourable

[

11 Days

]

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Favourable

[

2.64 Times

]

Current Ratio

:

Favourable

[

4.65 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

:

Favourable

[

110.03 Times

]

Gearing Ratio

:

Favourable

[

0.00 Times

]

The interest cover showed that the Subject was able to service the interest. The favourable interest cover could indicate that the Subject was making enough profit to pay for the interest accrued. 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 :

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. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. 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 : STRONG

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2009

2010

2011

2012

2013

Population ( Million)

28.13

28.35

28.70

29.30

29.80

Gross Domestic Products ( % )

(0.5)

7.2

5.1

5.6

5.3

Domestic Demand ( % )

2.9

6.3

8.2

9.4

5.6

Private Expenditure ( % )

(2.7)

8.1

8.2

8.0

7.4

Consumption ( % )

0.7

6.7

7.1

1.0

5.7

Investment ( % )

(17.2)

17.7

12.2

11.7

13.3

Public Expenditure ( % )

5.2

3.8

8.4

13.3

1.2

Consumption ( % )

3.1

0.2

16.1

11.3

(1.2)

Investment ( % )

8.0

2.8

(0.3)

15.9

4.2

Balance of Trade ( MYR Million )

89,650

118,356

116,058

106,300

110,700

Government Finance ( MYR Million )

(28,450)

(40,482)

(45,511)

(42,297)

(39,993)

Government Finance to GDP / Fiscal Deficit ( % )

(4.8)

(5.6)

(5.4)

(4.5)

(4.0)

Inflation ( % Change in Composite CPI)

(5.2)

5.1

3.1

1.6

2.5

Unemployment Rate

4.5

3.9

3.3

3.2

3.0

Net International Reserves ( MYR Billion )

331

329

415

427

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

2.87

2.20

3.50

2.20

-

Average 3 Months of Non-performing Loans ( % )

11.08

15.30

14.80

14.70

-

Average Base Lending Rate ( % )

5.53

6.30

6.60

6.53

-

Business Loans Disbursed( % )

10.5

14.7

15.3

32.2

-

Foreign Investment ( MYR Million )

22,156.8

22,517.9

23,546.1

26,230.4

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

41,578

44,148

45,455

45,441

-

Registration of New Companies ( % )

(0.1)

6.2

3.0

(0.0)

-

Liquidation of Companies ( No. )

39,075

25,585

132,476

-

-

Liquidation of Companies ( % )

39.6

(34.5)

417.8

-

-

Registration of New Business ( No. )

312,581

271,414

284,598

324,761

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

19,345

19,738

20,121

-

-

Business Dissolved ( % )

2.4

2.0

1.9

-

-

Sales of New Passenger Cars (' 000 Unit )

486.3

543.6

535.1

552.2

-

Cellular Phone Subscribers ( Million )

30.1

32.8

35.3

38.5

-

Tourist Arrival ( Million Persons )

23.6

24.6

24.7

25.0

-

Hotel Occupancy Rate ( % )

58.0

63.0

60.6

62.4

-

Credit Cards Spending ( % )

12.8

14.1

15.6

12.6

-

Bad Cheque Offenders (No.)

36,667

33,568

32,627

26,982

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

20291 : Manufacture of photographic plates, films, sensitized paper and other sensitized unexposed materials

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 1997 as a private limited company, the Subject is principally engaged in the manufacturing and sale of oleochemical product. Having been in the industry for 16 years, the Subject should have received strong support from its regular customers. With an issued and paid up capital of MYR 89,800,046 and strong backing from its holding company, the Subject has the ability to further expand its business in the future. The Subject is a large entity with strong capital position. We are confident with the Subject's business and its future growth prospect.

Our investigation revealed that the Subject serves both local and overseas clients. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. The Subject is a fairly large and rapidly growing company with over 150 staff in its 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 zero geared company, the Subject virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. Given a positive net worth standing at MYR 227,027,000, the Subject should be able to maintain its business in the near terms.

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.

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 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.

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)

PALM-OLEO (KLANG) SDN. BHD.

 

Financial Year End

2013-09-30

2012-09-30

2011-09-30

2010-09-30

2009-09-30

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

567,232,000

686,951,000

743,250,000

511,890,000

260,349,000

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

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

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

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

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

Total Turnover

567,232,000

686,951,000

743,250,000

511,890,000

260,349,000

Costs of Goods Sold

(511,253,000)

(646,461,000)

(716,725,000)

(498,417,000)

-

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

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

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

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

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

Gross Profit

55,979,000

40,490,000

26,525,000

13,473,000

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

43,722,000

31,657,000

13,221,000

10,824,000

15,673,000

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

43,722,000

31,657,000

13,221,000

10,824,000

15,673,000

Taxation

(9,640,000)

(7,153,000)

(3,428,000)

(2,819,000)

(4,197,000)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

34,082,000

24,504,000

9,793,000

8,005,000

11,476,000

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

55,763,000

23,211,000

10,225,000

3,174,000

(5,077,000)

Prior year adjustment

-

8,048,000

3,811,000

-

-

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

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

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

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

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

As restated

55,763,000

31,259,000

14,036,000

3,174,000

(5,077,000)

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

89,845,000

55,763,000

23,829,000

11,179,000

6,399,000

TRANSFER TO RESERVES - General

-

-

-

(129,000)

-

DIVIDENDS - Ordinary (paid & proposed)

(687,000)

-

(618,000)

(825,000)

(3,225,000)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

89,158,000

55,763,000

23,211,000

10,225,000

3,174,000

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Term loan / Borrowing

166,000

854,000

2,389,000

1,104,000

-

Others

235,000

967,000

1,071,000

644,000

1,435,000

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

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

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

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

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

401,000

1,821,000

3,460,000

1,748,000

1,435,000

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

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

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

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

 

 

 

 

 

 

 

 

BALANCE SHEET

 

PALM-OLEO (KLANG) SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

118,877,000

117,785,000

111,895,000

115,892,000

119,637,000

Others

20,739,000

21,018,000

21,297,000

21,576,000

-

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

20,739,000

21,018,000

21,297,000

21,576,000

-

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

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

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

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

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

TOTAL LONG TERM ASSETS

139,616,000

138,803,000

133,192,000

137,468,000

119,637,000

Stocks

60,533,000

74,399,000

83,797,000

70,130,000

50,519,000

Trade debtors

21,911,000

21,079,000

30,115,000

38,992,000

23,769,000

Other debtors, deposits & prepayments

576,000

3,114,000

2,071,000

746,000

6,586,000

Amount due from holding company

2,990,000

5,227,000

6,589,000

3,784,000

-

Amount due from related companies

16,979,000

15,084,000

27,228,000

14,156,000

5,830,000

Cash & bank balances

35,096,000

4,303,000

4,888,000

4,611,000

3,920,000

Others

1,947,000

1,922,000

154,000

970,000

-

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

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

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

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

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

TOTAL CURRENT ASSETS

140,032,000

125,128,000

154,842,000

133,389,000

90,624,000

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

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

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

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

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

TOTAL ASSET

279,648,000

263,931,000

288,034,000

270,857,000

210,261,000

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

15,924,000

14,820,000

4,081,000

5,749,000

3,578,000

Other creditors & accruals

9,014,000

7,108,000

15,259,000

11,648,000

8,751,000

Short term borrowings/Term loans

-

5,943,000

38,333,000

15,833,000

7,067,000

Bill & acceptances payable

-

-

10,000,000

-

-

Amounts owing to holding company

2,820,000

26,464,000

34,095,000

63,596,000

4,945,000

Amounts owing to related companies

903,000

2,550,000

22,000

23,000

181,000

Provision for taxation

-

-

-

-

489,000

Other liabilities

1,485,000

-

3,370,000

-

14,242,000

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

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

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

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

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

TOTAL CURRENT LIABILITIES

30,146,000

56,885,000

105,160,000

96,849,000

39,253,000

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

109,886,000

68,243,000

49,682,000

36,540,000

51,371,000

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

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

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

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

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

TOTAL NET ASSETS

249,502,000

207,046,000

182,874,000

174,008,000

171,008,000

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

89,800,000

89,800,000

89,800,000

89,800,000

9,800,000

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

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

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

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

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

TOTAL SHARE CAPITAL

89,800,000

89,800,000

89,800,000

89,800,000

9,800,000

RESERVES

Share premium

47,940,000

47,940,000

47,940,000

47,940,000

-

Capital reserve

129,000

129,000

129,000

129,000

-

Retained profit/(loss) carried forward

89,158,000

55,763,000

23,211,000

10,225,000

3,174,000

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

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

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

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

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

TOTAL RESERVES

137,227,000

103,832,000

71,280,000

58,294,000

3,174,000

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

227,027,000

193,632,000

161,080,000

148,094,000

12,974,000

Long term loans

-

-

5,883,000

12,834,000

19,667,000

Deferred taxation

18,267,000

12,930,000

15,911,000

13,080,000

10,298,000

Others

4,208,000

484,000

-

-

128,069,000

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

22,475,000

13,414,000

21,794,000

25,914,000

158,034,000

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

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

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

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

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

249,502,000

207,046,000

182,874,000

174,008,000

171,008,000

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

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

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

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

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

 

 

 

 

 

 

 

FINANCIAL RATIO

 

PALM-OLEO (KLANG) SDN. BHD.

 

TYPES OF FUNDS

Cash

35,096,000

4,303,000

4,888,000

4,611,000

3,920,000

Net Liquid Funds

35,096,000

4,303,000

(5,112,000)

4,611,000

3,920,000

Net Liquid Assets

49,353,000

(6,156,000)

(34,115,000)

(33,590,000)

852,000

Net Current Assets/(Liabilities)

109,886,000

68,243,000

49,682,000

36,540,000

51,371,000

Net Tangible Assets

249,502,000

207,046,000

182,874,000

174,008,000

171,008,000

Net Monetary Assets

26,878,000

(19,570,000)

(55,909,000)

(59,504,000)

(157,182,000)

BALANCE SHEET ITEMS

Total Borrowings

0

5,943,000

54,216,000

28,667,000

26,734,000

Total Liabilities

52,621,000

70,299,000

126,954,000

122,763,000

197,287,000

Total Assets

279,648,000

263,931,000

288,034,000

270,857,000

210,261,000

Net Assets

249,502,000

207,046,000

182,874,000

174,008,000

171,008,000

Net Assets Backing

227,027,000

193,632,000

161,080,000

148,094,000

12,974,000

Shareholders' Funds

227,027,000

193,632,000

161,080,000

148,094,000

12,974,000

Total Share Capital

89,800,000

89,800,000

89,800,000

89,800,000

9,800,000

Total Reserves

137,227,000

103,832,000

71,280,000

58,294,000

3,174,000

LIQUIDITY (Times)

Cash Ratio

1.16

0.08

0.05

0.05

0.10

Liquid Ratio

2.64

0.89

0.68

0.65

1.02

Current Ratio

4.65

2.20

1.47

1.38

2.31

WORKING CAPITAL CONTROL (Days)

Stock Ratio

39

40

41

50

71

Debtors Ratio

14

11

15

28

33

Creditors Ratio

11

8

2

4

5

SOLVENCY RATIOS (Times)

Gearing Ratio

0.00

0.03

0.34

0.19

2.06

Liabilities Ratio

0.23

0.36

0.79

0.83

15.21

Times Interest Earned Ratio

110.03

18.38

4.82

7.19

11.92

Assets Backing Ratio

2.78

2.31

2.04

1.94

17.45

PERFORMANCE RATIO (%)

Operating Profit Margin

7.71

4.61

1.78

2.11

6.02

Net Profit Margin

6.01

3.57

1.32

1.56

4.41

Return On Net Assets

17.68

16.17

9.12

7.22

10.00

Return On Capital Employed

17.68

16.17

9.12

7.22

10.00

Return On Shareholders' Funds/Equity

15.01

12.65

6.08

5.41

88.45

Dividend Pay Out Ratio (Times)

0.02

0.00

0.06

0.10

0.28

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 

 

 

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.25

UK Pound

1

Rs.98.68

Euro

1

Rs.77.60

 

 

INFORMATION DETAILS

 

Analysis Done by :

RAS

 

 

Report Prepared by :

TPT

 


 

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.