MIRA INFORM REPORT

 

 

Report No. :

307521

Report Date :

11.02.2015

 

IDENTIFICATION DETAILS

 

Name :

BP PLASTICS SDN. BHD.

 

 

Registered Office :

Menara Milenium, Jalan Damanlela, Pusat Damansara, Damansara Heights, Level 7, 50490 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

18.07.1991

 

 

Com. Reg. No.:

221104-W

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Engaged as manufacturer of Plastic Packaging Bags and Stretch Film

 

 

No of Employees :

350 (2015)

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Status :

Satisfactory 

Payment Behaviour :

No Complaints

Litigation :

Clear 

 

NOTES :

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

 

ECGC Country Risk Classification List – December 31, 2014

 

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

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.

:

221104-W

COMPANY NAME

:

BP PLASTICS SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

18/07/1991

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

MENARA MILENIUM, JALAN DAMANLELA, PUSAT DAMANSARA, DAMANSARA HEIGHTS, LEVEL 7, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

5A, JALAN WAWASAN 2, KAWASAN PERINDUSTRIAN SRI GADING, 83300 BATU PAHAT, JOHOR, MALAYSIA.

TEL.NO.

:

07-4557633

FAX.NO.

:

07-4556799

CONTACT PERSON

:

LIM CHUN YOW ( MANAGING DIRECTOR )

INDUSTRY CODE

:

222

PRINCIPAL ACTIVITY

:

Engaged as manufacturer of Plastic Packaging Bags and Stretch Film

AUTHORISED CAPITAL

:

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

ISSUED AND PAID UP CAPITAL

:

MYR 21,000,000.00 DIVIDED INTO 
ORDINARY SHARES 500,000 CASH AND 20,500,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 240,990,829 [2013]

NET WORTH

:

MYR 110,850,734 [2013]

STAFF STRENGTH

:

350 [2015]

BANKER (S)

:

OCBC BANK (MALAYSIA) BHD
ALLIANCE BANK MALAYSIA BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

No Complaints 

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 of plastic products.

 

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

 

The immediate holding company of the Subject is BP PLASTICS HOLDING BHD., a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

01/07/2013

MYR 25,000,000.00

MYR 21,000,000.00

28/05/2012

MYR 5,000,000.00

MYR 2,000,000.00

 

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

Name

Address

IC/PP/Loc No

Shareholding

(%)

BP PLASTICS HOLDING BHD.

5A, JALAN WAWASAN 2, KAWASAN PERINDUSTRIAN SRI GADING, 83300 BATU PAHAT, JOHOR, MALAYSIA.

644902V

21,000,000.00

100.00

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

------

21,000,000.00

100.00

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

Name Of Subject

:

MR. HEY SHIOW HOE

Address

:

18, JALAN AMAN, TAMAN SRI KENANGAN, 83000 BATU PAHAT, JOHOR, MALAYSIA.

IC / PP No

:

6997293

New IC No

:

630117-01-5211

Date of Birth

:

17/01/1963

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

23/07/1991

 

DIRECTOR 2

Name Of Subject

:

MR. TAN SEE KHIM

Address

:

6, LORONG SATU, JALAN KENANGAN, 83000 BATU PAHAT, JOHOR, MALAYSIA.

IC / PP No

:

7361244

New IC No

:

640613-01-5615

Date of Birth

:

13/06/1964

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

18/07/1991

 

DIRECTOR 3

Name Of Subject

:

MR. LIM CHUN YOW

Address

:

18, JALAN MELAWATI, TAMAN BANDAR, 83000 BATU PAHAT, JOHOR, MALAYSIA.

IC / PP No

:

7044276

New IC No

:

630721-01-5269

Date of Birth

:

21/07/1963

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

18/07/1991



MANAGEMENT

 

 

 

1)

Name of Subject

:

LIM CHUN YOW

Position

:

MANAGING DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

CROWE HORWATH

Auditor' Address

:

16, TOWER C, MEGAN AVENUE II, 12, JALAN YAP KWAN SENG, KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. CHUA SIEW CHUAN

IC / PP No

:

5461293

New IC No

:

580826-05-5408

Address

:

6, JALAN SS14/8E, SUBANG JAYA, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

OCBC BANK (MALAYSIA) BHD

 

2)

Name

:

ALLIANCE BANK MALAYSIA BHD

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

19/10/1991

N/A

OCBC BANK MALAYSIA BERHAD

MYR 70,000.00

Satisfied

2

19/10/1991

N/A

OCBC BANK MALAYSIA BERHAD

MYR 60,000.00

Satisfied

3

22/01/1992

N/A

OCBC BANK MALAYSIA BERHAD

MYR 50,000.00

Satisfied

4

21/12/1993

N/A

SOUTHERN BANK BERHAD

MYR 900,000.00

Satisfied

5

08/03/1995

N/A

SOUTHERN BANK BERHAD

MYR 900,000.00

Satisfied

6

13/03/1996

N/A

SOUTHERN BANK BERHAD

MYR 1,300,000.00

Satisfied

7

13/03/1996

N/A

SOUTHERN BANK BERHAD

MYR 1,300,000.00

Satisfied

8

28/08/1997

N/A

BAN HIN LEE BANK BERHAD

MYR 500,000.00

Satisfied

9

28/08/1997

N/A

BAN HIN LEE BANK BERHAD

MYR 500,000.00

Satisfied

10

15/12/1997

N/A

RHB BANK BHD

MYR 900,000.00

Satisfied

11

09/08/2000

N/A

MALAYAN BANKING BERHAD

MYR 2,500,000.00

Satisfied

14

24/08/2000

N/A

MAYBANK INTERNATIONAL L LTD

-

Satisfied

12

25/08/2000

N/A

MALAYAN BANKING BERHAD

MYR 3,600,000.00

Satisfied

13

25/08/2000

N/A

MALAYAN BANKING BERHAD

MYR 8,100,000.00

Satisfied

15

16/04/2002

N/A

MALAYAN BANKING BERHAD

MYR 3,600,000.00

Satisfied

16

22/08/2003

N/A

OVERSEA-CHINESE BANKING CORPORATION LIMITED

MYR 2,390,400.00

Satisfied

 

 

LITIGATION 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.

 

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



PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

N/A

Overseas

:

N/A


The Subject refused to disclose its suppliers. 

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

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

JAPAN

NEW ZEALAND

AUSTRALIA

EUROPE

Credit Term

:

N/A

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

TEXTILES AND GARMENT INDUSTRIES,INDUSTRIAL SECTOR,COMMERCIAL

CUSTOMER(S)

:

1) SJI INDUSTRIES SDN BHD



OPERATIONS

 

Products manufactured

:

PLASTIC BAGS AND STRETCH FILMS

Award

:

1 ) MS ISO 9001 : 2000 Year :1999

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

MALAYSIAN PLASTICS MANUFACTURERS ASSOCIATION (MPMA)

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

SMALL & MEDIUM ENTERPRISE

MALAYSIA LOGISTICS INDUSTRY

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

350

350

350

350

350

 

Branch

:

NO

 

Other Information:

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

Subject is one of the leading plastic manufacturer of plastic packaging bags and stretch film in Malaysia.

Subject provides a cost-competitive, innovative and superior quality PE film to its customers using a combination of advanced grade resins and sophisticated multiple layer extrusion technology.

Subject has evolved from a manufacturer with a simple PE extruder to one with advanced multilayer co-extrusion technology that is capable to produce cast stretch film, blown lamination film, shrink film and various general purpose mPE, mLLDPE, LDPE, LLDPE, MDPE, HDPE, PP bags. 


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

074557633

Current Telephone Number

:

07-4557633

Match

:

YES

Address Provided by Client

:

5A, JALAN WAWASAN 2, KAWASAN PERINDUSTRIAN SRI GADING,83300,BATU PAHAT,JOHOR.

Current Address

:

5A, JALAN WAWASAN 2, KAWASAN PERINDUSTRIAN SRI GADING, 83300 BATU PAHAT, JOHOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations

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



FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Increased

[

2009 - 2013

]

Return on Shareholder Funds

:

Unfavourable

[

8.74%

]

Return on Net Assets

:

Acceptable

[

10.86%

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.The Subject's management have been efficient in controlling its operating costs. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Unfavourable

[

70 Days

]

Debtor Ratio

:

Favourable

[

49 Days

]

Creditors Ratio

:

Favourable

[

41 Days

]

The Subject could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Favourable

[

1.28 Times

]

Current Ratio

:

Favourable

[

2.41 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

[

1,629.92 Times

]

Gearing Ratio

:

Favourable

[

0.03 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 was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

Overall Assessment :

Although the turnover was erratic, the Subject had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. The Subject as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

Overall financial condition of the Subject : FAIR

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2011

2012

2013

2014*

2015**

Population ( Million)

28.7

29.3

29.8

30.3

30.5

Gross Domestic Products ( % )

5.1

5.6

5.3

6.0

6.0

Domestic Demand ( % )

8.2

9.4

5.6

6.4

6.2

Private Expenditure ( % )

8.2

8.0

8.6

7.9

6.9

Consumption ( % )

7.1

1.0

5.7

6.5

5.6

Investment ( % )

12.2

11.7

13.3

12.0

10.7

Public Expenditure ( % )

8.4

13.3

4.4

2.3

4.2

Consumption ( % )

16.1

11.3

(1.2)

2.1

3.8

Investment ( % )

(0.3)

15.9

4.2

2.6

4.7

Balance of Trade ( MYR Million )

116,058

106,300

71,298

52,314

-

Government Finance ( MYR Million )

(45,511)

(42,297)

(39,993)

(37,291)

-

Government Finance to GDP / Fiscal Deficit ( % )

(5.4)

(4.5)

(4.0)

(3.5)

(3.0)

Inflation ( % Change in Composite CPI)

3.1

1.6

2.5

3.3

4.0

Unemployment Rate

3.3

3.2

3.0

3.0

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

-

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

-

-

Business Loans Disbursed( % )

15.3

32.2

-

-

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

-

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

-

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

-

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

-

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

-

-

Registration of New Business ( No. )

284,598

324,761

329,895

-

-

Registration of New Business ( % )

5.0

14.0

2.0

-

-

Business Dissolved ( No. )

20,121

20,380

18,161

-

-

Business Dissolved ( % )

1.9

1.3

(10.9)

-

-

Sales of New Passenger Cars (' 000 Unit )

535.1

552.2

576.7

598.4

610.3

Cellular Phone Subscribers ( Million )

35.3

38.5

43.0

43.8

-

Tourist Arrival ( Million Persons )

24.7

25.0

25.7

28.0

-

Hotel Occupancy Rate ( % )

60.6

62.4

62.6

-

-

Credit Cards Spending ( % )

15.6

12.6

-

-

-

Bad Cheque Offenders (No.)

32,627

26,982

28,876

-

-

Individual Bankruptcy ( No.)

19,167

19,575

21,984

-

-

Individual Bankruptcy ( % )

5.8

2.1

12.3

-

-

INDUSTRIES ( % of Growth ):

2011

2012

2013

2014*

2015**

Agriculture

5.8

1.0

2.1

3.8

3.1

Palm Oil

10.8

(0.3)

2.6

6.7

-

Rubber

6.1

(7.9)

(10.1)

(10.4)

-

Forestry & Logging

(7.6)

(4.5)

(7.8)

(4.2)

-

Fishing

2.1

4.3

1.6

2.7

-

Other Agriculture

7.1

6.4

8.2

6.2

-

Industry Non-Performing Loans ( MYR Million )

634.1

-

-

-

-

% of Industry Non-Performing Loans

3.2

-

-

-

-

Mining

(5.4)

1.4

0.9

(0.8)

2.8

Oil & Gas

(1.7)

-

-

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.6

5.5

Exported-oriented Industries

4.1

6.5

3.3

5.6

-

Electrical & Electronics

(4.0)

12.7

6.9

13.3

-

Rubber Products

20.7

3.0

11.7

(0.3)

-

Wood Products

(5.1)

8.7

(2.7)

5.1

-

Textiles & Apparel

13.2

(7.1)

(2.6)

11.5

-

Domestic-oriented Industries

10.7

1.7

6.8

9.4

-

Food, Beverages & Tobacco

4.80

2.70

3.60

6.13

6.13

Chemical & Chemical Products

10.0

10.8

5.6

-

-

Plastic Products

3.8

-

-

-

-

Iron & Steel

2.2

(6.6)

5.0

0.1

-

Fabricated Metal Products

21.8

13.8

9.9

2.9

-

Non-metallic Mineral

12.1

2.9

(2.0)

5.4

-

Transport Equipment

12.0

3.4

13.8

22.9

-

Paper & Paper Products

9.5

3.1

1.8

4.7

-

Crude Oil Refineries

9.3

-

-

-

-

Industry Non-Performing Loans ( MYR Million )

6,537.2

-

-

-

-

% of Industry Non-Performing Loans

25.7

-

-

-

-

Construction

4.7

18.6

10.9

12.7

10.7

Industry Non-Performing Loans ( MYR Million )

3,856.9

-

-

-

-

% of Industry Non-Performing Loans

10.2

-

-

-

-

Services

7.1

6.4

5.9

5.9

5.6

Electric, Gas & Water

3.5

4.4

4.2

3.6

3.9

Transport, Storage & Communication

6.50

7.10

7.30

7.50

7.15

Wholesale, Retail, Hotel & Restaurant

5.2

4.7

5.9

6.9

6.5

Finance, Insurance & Real Estate

6.90

9.70

3.70

4.65

4.25

Government Services

12.4

9.4

8.3

6.1

5.6

Other Services

5.1

3.9

5.1

4.8

4.5

Industry Non-Performing Loans ( MYR Million )

6,825.2

-

-

-

-

% of Industry Non-Performing Loans

23.4

-

-

-

-

* Estimate / Preliminary

** Forecast

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

 

 

INDUSTRY ANALYSIS

 

MSIC CODE

222 : Manufacture of plastic products

INDUSTRY :

MANUFACTURING

The manufacturing sector is expected to grow by 5.5% in 2015. It will be bolstered by strong domestic and export-oriented industries in line with growing investment activities and favorable external demand. Moreover, in 2014, the manufacturing sectors have spearheading growth. The manufacturing sector is estimated to grow at a faster pace in 2014 on higher exports of electronics and electrical (E&E) products as external demand improves.

The manufacturing sector expanded strongly during the first half of 2014, the highest growth in three years, spurred by higher global semiconductor sales. Value-added of the manufacturing sector expanded 7.1% during the first half of 2014. Production of the sector rose 6.6% in the first seven months of 2014 supported by resilient domestic demand and recovery in the external sector during the first seven months of the years. The sales value of manufactured products rebounded by 7.7% in the first seven months of 2014. The strong performance of the sector was on account of higher output at 9.4% from the domestic-oriented industries, particularly transport equipment, food and beverage.

The manufacturing sector continued to attract domestic and foreign investment with investment approved by Malaysian Investment Development Authority (MIDA) totaling RM47.4 billion during the first six months of 2014, mainly from Japan, China and Germany. Meanwhile, the capacity utilization rate remained steady at 80.4% during the second quarter of 2014 while average wage per employee and productivity improved to RM2,772 per month and 5.9%, respectively during the first seven months of 2014. Boosted by favorable domestic economic activity and recovery in the external sector, the manufacturing sector is expected to record a better performance with growth of 6.4% in 2014.

In the meantime, production of wood products rebounded by 5.1% largely supported by higher output in the saw-milling and planning of wood segment at 25.9% during the first seven months of 2014. The positive performance was attributed to vibrant residential and commercial construction activities which contributed to increased use of timber frame and glued laminated timber for cost savings compared to the use of concrete and steel. Increased demand from major export destination such as the US, Japan and Australia for Malaysian made furniture contributed to the higher output, particularly wooden and cane furniture which rebounded by 2.2%.

Production of rubber products contracted 0.3% in the first seven months of 2014 on account of slower demand for rubber gloves and rubber tyres. The decline in rubber tyres for vehicles was due to the weaker external demand from the automotive industry, particularly from China. Output of other rubber products contracted 3.8% following the product shift from rubber-based to plastics, silicones and metal alloys in the manufacture of medical devices.

Besides, exports of manufactured products are expected to grow 6.1% in 2014 boosted by the growing demand from advanced economies. However, during the first seven months of 2014, manufactured exports surged 11.4%. The robust growth was buoyed by strengthening demand in the US and EU, reflecting significant exposure of Malaysian exports to the economic performance in the advance economies. The strength in export was broad-based with robust growth in both E&E and non- E&E subsectors.

Under budget 2015, the Government will provide incentive in the form of capital allowance on automation expenditure to encourage automation in the manufacturing sector, which may help in the manufacturing sector.

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 1991, the Subject is a Private Limited company, focusing on manufacturing of plastic products. The Subject has been in business for over two 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 Subject is a large entity with strong capital position of MYR 21,000,000. We are confident with the Subject's business and its future growth prospect. The Subject is well backed by a listed holding company which would stimulate further growth for the Subject. Hence, the potential growth of the Subject is positive. 

Over the years, the Subject has penetrated into both the local and overseas market. 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 350 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. To improve its quality products and services, we noted that the Subject has received a number of certifications & awards. This will improve the customer's confidence level to the Subject. 

We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. 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 lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 110,850,734, 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 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. 

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)

BP PLASTICS SDN. BHD.

 

Financial Year End

2013-12-31

2012-12-31

2011-12-31

2010-12-31

2009-12-31

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

240,990,829

220,276,428

222,145,518

220,740,779

175,169,123

Other Income

761,989

1,435,041

695,463

1,204,129

726,146

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

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

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

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

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

Total Turnover

241,752,818

221,711,469

222,840,981

221,944,908

175,895,269

Costs of Goods Sold

(213,291,876)

(195,076,040)

(192,209,198)

(186,369,136)

(142,274,380)

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

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

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

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

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

Gross Profit

28,460,942

26,635,429

30,631,783

35,575,772

33,620,889

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

13,129,127

12,394,820

16,808,987

21,658,093

20,012,910

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

13,129,127

12,394,820

16,808,987

21,658,093

20,012,910

Taxation

(3,445,377)

(3,353,750)

(1,975,405)

(4,981,493)

(3,922,104)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

9,683,750

9,041,070

14,833,582

16,676,600

16,090,806

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

92,038,414

78,416,554

69,209,972

60,220,872

50,317,566

Prior year adjustment

-

5,180,790

-

-

-

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

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

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

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

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

As restated

92,038,414

83,597,344

69,209,972

60,220,872

50,317,566

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

101,722,164

92,638,414

84,043,554

76,897,472

66,408,372

DIVIDENDS - Ordinary (paid & proposed)

(12,000,000)

(600,000)

(5,627,000)

(7,687,500)

(6,187,500)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

89,722,164

92,038,414

78,416,554

69,209,972

60,220,872

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Others

8,060

36,676

43,597

12,572

-

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

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

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

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

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

8,060

36,676

43,597

12,572

-

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

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

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

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

 

 

 

BALANCE SHEET

 

 

BP PLASTICS SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

67,978,034

71,681,067

76,103,979

67,143,663

70,392,343

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

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

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

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

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

TOTAL LONG TERM ASSETS

67,978,034

71,681,067

76,103,979

67,143,663

70,392,343

Short term quoted/unquoted investments

100,800

100,800

100,800

100,800

-

Stocks

42,572,431

44,436,509

21,935,030

22,245,431

22,751,996

Contract work-in-progress

3,632,510

3,404,401

-

-

-

Trade debtors

32,376,737

31,875,341

30,727,139

31,362,067

25,296,898

Other debtors, deposits & prepayments

748,353

1,007,996

749,893

398,844

570,583

Short term deposits

-

723,585

13,395,528

2,500,000

4,400,000

Amount due from subsidiary companies

-

256,305

-

-

-

Cash & bank balances

11,214,237

1,317,158

2,730,583

5,774,483

2,658,488

Money at call & short notice

-

-

-

-

3,640,257

Others

-

433,012

1,090,715

154,394

-

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

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

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

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

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

TOTAL CURRENT ASSETS

90,645,068

83,555,107

70,729,688

62,536,019

59,318,222

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

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

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

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

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

TOTAL ASSET

158,623,102

155,236,174

146,833,667

129,679,682

129,710,565

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

24,154,327

26,500,387

16,594,077

20,233,497

15,653,955

Other creditors & accruals

4,243,834

4,001,312

23,725,346

20,660,435

34,082,741

Short term borrowings/Term loans

3,723,600

-

9,555,900

-

883,049

Amounts owing to holding company

4,046,055

-

-

-

-

Amounts owing to subsidiary companies

7,552

7,552

-

-

-

Provision for taxation

1,475,000

803,759

-

1,450,364

500,280

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

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

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

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

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

TOTAL CURRENT LIABILITIES

37,650,368

31,313,010

49,875,323

42,344,296

51,120,025

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

52,994,700

52,242,097

20,854,365

20,191,723

8,198,197

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

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

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

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

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

TOTAL NET ASSETS

120,972,734

123,923,164

96,958,344

87,335,386

78,590,540

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

21,000,000

21,000,000

2,000,000

2,000,000

2,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

21,000,000

21,000,000

2,000,000

2,000,000

2,000,000

Capital reserve

-

-

5,180,790

5,180,790

5,180,790

Retained profit/(loss) carried forward

89,722,164

92,038,414

78,416,554

69,209,972

60,220,872

Others

128,570

-

-

-

-

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

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

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

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

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

TOTAL RESERVES

89,850,734

92,038,414

83,597,344

74,390,762

65,401,662

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

110,850,734

113,038,414

85,597,344

76,390,762

67,401,662

Deferred taxation

10,122,000

10,884,750

11,361,000

10,944,624

11,188,878

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

10,122,000

10,884,750

11,361,000

10,944,624

11,188,878

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

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

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

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

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

120,972,734

123,923,164

96,958,344

87,335,386

78,590,540

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

BP PLASTICS SDN. BHD.

 

TYPES OF FUNDS

Cash

11,214,237

2,040,743

16,126,111

8,274,483

7,058,488

Net Liquid Funds

11,214,237

2,040,743

16,126,111

8,274,483

7,058,488

Net Liquid Assets

10,422,269

7,805,588

(1,080,665)

(2,053,708)

(14,553,799)

Net Current Assets/(Liabilities)

52,994,700

52,242,097

20,854,365

20,191,723

8,198,197

Net Tangible Assets

120,972,734

123,923,164

96,958,344

87,335,386

78,590,540

Net Monetary Assets

300,269

(3,079,162)

(12,441,665)

(12,998,332)

(25,742,677)

BALANCE SHEET ITEMS

Total Borrowings

3,723,600

0

9,555,900

0

883,049

Total Liabilities

47,772,368

42,197,760

61,236,323

53,288,920

62,308,903

Total Assets

158,623,102

155,236,174

146,833,667

129,679,682

129,710,565

Net Assets

120,972,734

123,923,164

96,958,344

87,335,386

78,590,540

Net Assets Backing

110,850,734

113,038,414

85,597,344

76,390,762

67,401,662

Shareholders' Funds

110,850,734

113,038,414

85,597,344

76,390,762

67,401,662

Total Share Capital

21,000,000

21,000,000

2,000,000

2,000,000

2,000,000

Total Reserves

89,850,734

92,038,414

83,597,344

74,390,762

65,401,662

LIQUIDITY (Times)

Cash Ratio

0.30

0.07

0.32

0.20

0.14

Liquid Ratio

1.28

1.25

0.98

0.95

0.72

Current Ratio

2.41

2.67

1.42

1.48

1.16

WORKING CAPITAL CONTROL (Days)

Stock Ratio

70

79

36

37

47

Debtors Ratio

49

53

50

52

53

Creditors Ratio

41

50

32

40

40

SOLVENCY RATIOS (Times)

Gearing Ratio

0.03

0.00

0.11

0.00

0.01

Liabilities Ratio

0.43

0.37

0.72

0.70

0.92

Times Interest Earned Ratio

1,629.92

338.95

386.55

1,723.72

0.00

Assets Backing Ratio

5.76

5.90

48.48

43.67

39.30

PERFORMANCE RATIO (%)

Operating Profit Margin

5.45

5.63

7.57

9.81

11.42

Net Profit Margin

4.02

4.10

6.68

7.55

9.19

Return On Net Assets

10.86

10.03

17.38

24.81

25.46

Return On Capital Employed

10.86

10.03

17.38

24.81

25.46

Return On Shareholders' Funds/Equity

8.74

8.00

17.33

21.83

23.87

Dividend Pay Out Ratio (Times)

1.24

0.07

0.38

0.46

0.38




 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.96

UK Pound

1

Rs.94.41

Euro

1

Rs.70.20

 

INFORMATION DETAILS

 

Analysis Done by :

RAS

 

 

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%)

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.