MIRA INFORM REPORT

 

 

Report No. :

329658                                                                 

Report Date :

01.07.2015

 

IDENTIFICATION DETAILS

 

Name :

SABAH FOREST INDUSTRIES SDN. BHD.

 

 

Registered Office :

10, Jalan Jeti, Kompleks Sfi, 89857 Sipitang, Sabah

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.06.2014

 

 

Date of Incorporation :

30.04.1982

 

 

Com. Reg. No.:

84330-K

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Subject is principally engaged in the manufacturing of writing and printing paper and wood products.

 

 

No. of Employees :

2500 [2015]

 

 

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 :

--

 

NOTES:

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

 

 

ECGC Country Risk Classification List – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

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 previously 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. Falling global oil prices in the second half of 2014 have strained government finances, shrunk Malaysia’s current account surplus and put downward pressure on the ringgit. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplied about 29% of government revenue in 2014. 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. Malaysia is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.

 

Source : CIA

 


 

EXECUTIVE SUMMARY

 

REGISTRATION NO.

:

84330-K

COMPANY NAME

:

SABAH FOREST INDUSTRIES SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

30/04/1982

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

10, JALAN JETI, KOMPLEKS SFI, 89857 SIPITANG, SABAH, MALAYSIA.

BUSINESS ADDRESS

:

10, JALAN JETI, KOMPLEKS SFI, WDT 31, 89859 SIPITANG, SABAH, MALAYSIA.

TEL.NO.

:

087-801018

FAX.NO.

:

087-801381

CONTACT PERSON

:

SUKARTI BIN WAKIMAN ( CHAIRMAN )

INDUSTRY CODE

:

17010

PRINCIPAL ACTIVITY

:

MANUFACTURING OF WRITING AND PRINTING PAPER AND WOOD PRODUCTS

AUTHORISED CAPITAL

:

MYR 2,200,000,000.00 DIVIDED INTO 
ORDINARY SHARE 1,054,000,000.00 OF MYR 1.00 EACH.
PREFERENCE SHARE 10,000,000,000.00 OF MYR 0.10 EACH.
OTHER SHARE 146,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,969,997,926.00 DIVIDED INTO 
ORDINARY SHARES 933,167,514 CASH AND 7,498,000 OTHERWISE OF MYR 1.00 EACH.
PREFERENCE SHARES 8,833,324,120 CASH OF MYR 0.10 EACH.
OTHER SHARES 146,000,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 501,468,000 [2014]

NET WORTH

:

MYR 1,040,821,000 [2014]

M1000 OVERALL RANKING

:

820[2011]

M1000 INDUSTRY RANKING

:

10[2011]

STAFF STRENGTH

:

2500 [2015]

BANKER (S)

:

MALAYAN BANKING BHD
UNITED OVERSEAS BANK (MALAYSIA) BHD

LITIGATION

:

TRACED

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

FAIR

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

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 writing and printing paper and wood products.

 

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

2011

2009

2008

2005

2004

OVERALL RANKING

820

768

789

493

417

INDUSTRY RANKING

10

10

13

4

4

 

The immediate holding company of the Subject is BALLARPUR PAPER HOLDINGS BV, a company incorporated in NETHERLANDS.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

24/02/2015

MYR 2,200,000,000.00

MYR 1,969,997,926.00

30/12/2014

MYR 2,200,000,000.00

MYR 1,839,197,926.00

 

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


Name

Address

IC/PP/Loc No

Shareholding

(%)

BALLARPUR PAPER HOLDINGS BV

LAAN VAN KRONENBURG 8, 1183 AS AMSTELVEEN, P.O.BOX 7827, 1008 AA, AMSTERDAM, THE, NETHERLANDS.

XLZ00211524

9,731,856,532.00

98.10

SUKARTI BIN WAKIMAN +

KAMPUNG BERUNGIS, OFF JALAN TUARAN, 89200 TUARAN, SABAH, MALAYSIA.

540109-12-5083

1.00

0.00

MR. DATUK PENGIRAN HASSANEL BIN PG. MOHD TAHIR +

LOT 80, TAMAN SERI GAYA, FASA 3, 88300 KOTA KINABALU, SABAH, MALAYSIA.

580101-12-6539 H0588885

1.00

0.00

SYARIKAT WIRA BAKTI

PEJABAT SETIAUSAHA KERAJAAN, 05503 ALOR SETAR, KEDAH, MALAYSIA.

000000006K

188,133,100.00

1.90

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

------

9,919,989,634.00

100.00

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

=====

+ Also Director

 





DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

YOGESH AGARWAL

Address

:

S1, JALAN SETIA, SFI HOUSING COLONY, 89859 SIPITANG, SABAH, MALAYSIA.

IC / PP No

:

G8600230

Nationality

:

INDIAN

Date of Appointment

:

06/04/2009

 

DIRECTOR 2

 

Name Of Subject

:

RAJEEV RANJAN VEDERAH

Address

:

47, PASCHIMI MARG, VASANT VIHAR, NEW DELHI, 110057, INDIA.

IC / PP No

:

F9346213

Nationality

:

INDIAN

Date of Appointment

:

16/03/2007

 

DIRECTOR 3

 

Name Of Subject

:

HARIHARAN BHUTHALINGAM

Address

:

D-2/3, PASCHIMI MARG, VASANT VIHAR, NEW DELHI, 110057, INDIA.

IC / PP No

:

Z-1347246

Nationality

:

INDIAN

Date of Appointment

:

16/03/2007

 

DIRECTOR 4

 

Name Of Subject

:

SUKARTI BIN WAKIMAN

Address

:

KAMPUNG BERUNGIS, OFF JALAN TUARAN, 89200 TUARAN, SABAH, MALAYSIA.

New IC No

:

540109-12-5083

Date of Birth

:

09/01/1954

Nationality

:

MALAYSIAN

Date of Appointment

:

03/09/2007

 

DIRECTOR 5

 

Name Of Subject

:

MR. DATUK PENGIRAN HASSANEL BIN PG. MOHD TAHIR

Address

:

LOT 80, TAMAN SERI GAYA, FASA 3, 88300 KOTA KINABALU, SABAH, MALAYSIA.

IC / PP No

:

H0588885

New IC No

:

580101-12-6539

Date of Birth

:

01/01/1958

Nationality

:

MALAYSIAN

Date of Appointment

:

07/09/2010

 

MANAGEMENT

 

 

1)

Name of Subject

:

SUKARTI BIN WAKIMAN

Position

:

CHAIRMAN

 

AUDITOR

 

Auditor

:

DELOITTE KASSIMCHAN

Auditor' Address

:

MENARA LGB, 1 JALAN WAN KADIR, TAMAN TUN DR. ISMAIL, LEVEL 16, 60000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. ROSALIND LIEW FUI LEE

IC / PP No

:

H0776526

New IC No

:

710115-12-5046

Address

:

LOT 53, LORONG BEMBAN, TAMAN FOOK TIN, JALAN KOLAM, 88333 KOTA KINABALU, SABAH, MALAYSIA.

 

2)

Company Secretary

:

MS. EMILY CHUNG MUI CHU

IC / PP No

:

H0613268

New IC No

:

641006-12-5390

Address

:

LOT T5-133, HSE 28, LORONG PERDANA 3, TAMAN LUYANG PERDANA PHASE 1, JALAN PENAMPANG, 88300 KOTA KINABALU, SABAH, MALAYSIA.

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

2)

Name

:

UNITED OVERSEAS BANK (MALAYSIA) BHD

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

19/11/1987

N/A

MALAYAN BANKING BHD

-

Satisfied

2

30/06/1995

N/A

BBMB INTERNATIONAL BANK L LTD

MYR 500,000,000.00

Satisfied

3

30/06/1995

N/A

BBMB INTERNATIONAL BANK L LTD

MYR 500,000,000.00

Satisfied

4

22/12/2000

N/A

ARABMALYSIAN MERCHANT BANK BERHAD AS SECURITY AGEN

MYR 13,000,000.00

Satisfied

5

07/02/2005

N/A

MALAYAN BANKING BERHAD

MYR 19,600,000.00

Satisfied

6

07/02/2005

N/A

MALAYAN BANKING BERHAD

MYR 19,600,000.00

Satisfied

7

09/08/2007

N/A

MALAYAN BANKING BHD

MYR 15,000,000.00

Satisfied

8

13/09/2007

N/A

ABN AMRO BANK BHD

-

Satisfied

9

13/09/2007

N/A

ABN AMRO BANK BHD

-

Satisfied

10

17/07/2008

N/A

UNITED OVERSEAS BANK (MALAYSIA) BHD

USD 10,000,000.00

Satisfied

11

17/07/2008

N/A

UNITED OVERSEAS BANK (MALAYSIA) BHD

USD 10,000,000.00

Satisfied

12

31/07/2008

N/A

UNITED OVERSEAS BANK (MALAYSIA) BHD

USD 10,000,000.00

Satisfied

13

20/07/2010

OPEN CHARGE

MAYBAN TRUSTEES BERHAD

-

Unsatisfied

14

18/10/2010

N/A

MAYBAN TRUSTEES BERHAD

-

Unsatisfied

15

18/10/2010

N/A

MAYBAN TRUSTEES BERHAD

-

Unsatisfied

17

18/10/2010

N/A

MAYBAN TRUSTEES BERHAD

-

Unsatisfied

16

27/10/2010

N/A

MAYBAN TRUSTEES BERHAD

-

Unsatisfied

18

17/10/2013

SECOND BORROWER FIXED ASSET CHAGRE

MAYBANK TRUSTEE BERHAD

-

Unsatisfied

19

17/10/2013

SECOND BORROWER CURRENT ASSET CHARGE

MAYBANK TRUSTEE BERHAD

-

Unsatisfied

20

17/10/2013

MEMORANDUM OF CHARGE

MAYBANK TRUSTEE BERHAD

-

Unsatisfied

21

17/10/2013

SECOND BORROWER RECEIVABLES ACCOUNT

MAYBANK TRUSTEE BERHAD

-

Unsatisfied

22

17/10/2013

THE SUPPLEMENTAL ASSIGNMENT

MAYBANK TRUSTEE BERHAD

-

Unsatisfied

 

LITIGATION 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.

There is/are litigation case(s) on the Subject in our database as below:

- 1 case(s) filed in year 2007
- 1 case(s) filed in year 2014

According to the Credit Reporting Agencies Act 2010, consent from the Subject is required for the disclosure of this credit information. In order to have the consent from the Subject, we need to serve a notice to the Subject by disclose the following according to the Act Section 23(1) :

1) Enquirer or Company who request for this credit information.
2) Contact person of Enquirer
3) Purpose of this credit information being used.
4) Contact person of the Subject.

We shall appreciate if you can furnish us the above in order for us to serve a notice or inform the Subject accordingly. Otherwise, we are prohibited to disclose this credit information if there is no consent from the Subject according to the Act Section 24(1)(a).

No winding up petition was found in our affiliate's company 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

:

YES

Overseas

:

YES



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

[

]

Fair 91-120 Days

[

X

]

Poor >120 Days

[

]

 

CLIENTELE

 

Local

:

YES

Percentage

:

75%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

25%

Export Market

:

INDIA

ASIA

EUROPE

MIDDLE EAST

SINGAPORE

Credit Term

:

30 - 60 DAYS

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)
LETTER OF CREDIT (LC)

Type of Customer

:

DEALERS,DISTRIBUTORS

No of Customer

:

N/A

 

OPERATIONS

 

Products manufactured

:

PAPER AND WOOD PRODUCTS

Competitor(s)

:

GS PAPERBOARD SDN BHD

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

SMALL & MEDIUM ENTERPRISE

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

MALAYSIAN INTERNATIONAL CHAMBER OF COMMERCE AND INDUSTRY (MICCI)

Ownership of premises

:

OWNED

Production Line

:

N/A

Production Capacity

:

N/A

Shifts

:

3

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

2500

2600

2,000

2,000

2,000

 

Branch

:

YES

No of Branches

:

8

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing of writing and printing paper and wood products. 

The Subject's mainly involved in the following business:

* Pulp & paper, plantation division
* Integrated wood based activities, pulp and paper mill operations

The Subject's products includes offset printing paper, exercise book paper, white printing paper, drawing paper, and computer form paper. 

Besides that it is also engaged in the production of timber products such as sawn timber, veneer, plywood and commercial logs. 


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

087 801016/801062

Current Telephone Number

:

087-801018

Match

:

YES

Address Provided by Client

:

KOMPLEKS SFI, NO 10, JALAN JETI, W.D.T 31, SIPITANG, SABAH, MALAYSIA

Current Address

:

10, JALAN JETI, KOMPLEKS SFI, WDT 31, 89859 SIPITANG, SABAH, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


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

The address as per stated in the report.

FINANCIAL ANALYSIS

 

Profitability

Turnover

:

Increased

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Increased

[

2010 - 2014

]

Return on Shareholder Funds

:

Unfavourable

[

(5.66%)

]

Return on Net Assets

:

Unfavourable

[

(2.72%)

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.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

:

Unfavourable

[

108 Days

]

Debtor Ratio

:

Favourable

[

24 Days

]

Creditors Ratio

:

Unfavourable

[

65 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 unfavourable creditors' ratio could be due to the Subject taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies.

Liquidity

Liquid Ratio

:

Unfavourable

[

0.13 Times

]

Current Ratio

:

Unfavourable

[

0.52 Times

]

A low liquid ratio means that the Subject may be facing working capital deficiency. If the Subject cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

Solvency

Interest Cover

:

Unfavourable

[

(1.26 Times)

]

Gearing Ratio

:

Favourable

[

0.55 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 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 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. Due to its weak liquidity position, the Subject will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the Subject. 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 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 : POOR

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

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 ):

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 



INDUSTRY ANALYSIS

 

MSIC CODE

17010 : Manufacture of pulp, paper and paperboard

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 1982, the Subject is a Private Limited company, focusing on manufacturing of writing and printing paper and wood products. The Subject has been in business for over two decades. It has built up a strong clientele base and satisfactory reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. We noted that the issued and paid up capital of the Subject stands at MYR 1,969,997,926 and having strong backing from its holding company. 

Over the years, the Subject has established an extensive clientele base in the market. Besides catering to the local market, the Subject has penetrated into other countries. With the contribution of both local and overseas customers, the Subject is likely to be exposed to lower commercial risk. Hence, we believe that the Subject has better business expansion opportunities in the future. Being a large entity, the Subject has a steady workforce of 2500 personnel to support its business operations. Its future prospects seem to be fairly good as its business operations are running relatively stable. 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 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. Due to its weak liquidity position, the Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. 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 1,040,821,000, the Subject should be able to maintain its business in the near terms. 

Without a strong assets backing, the Subject may face difficulties in getting loans for its future expansion and continued growth . The Subject's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the Subject has a good control over its resources. 

The Subject's overall payment habit is fair and this clearly implied a weak credit control of the Subject. 

The industry shows an upward trend and this trend is very likely to sustain in the near terms. 

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)

SABAH FOREST INDUSTRIES SDN. BHD.

 

Financial Year End

2014-06-30

2013-06-30

2012-06-30

2011-06-30

2010-06-30

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

501,468,000

489,677,000

339,233,000

402,126,000

458,425,000

Other Income

-

145,000

-

-

-

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

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

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

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

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

Total Turnover

501,468,000

489,822,000

339,233,000

402,126,000

458,425,000

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

(70,132,000)

(65,097,000)

(543,000)

29,282,000

80,692,000

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

(70,132,000)

(65,097,000)

(543,000)

29,282,000

80,692,000

Taxation

11,238,000

22,810,000

15,071,000

24,619,000

35,072,000

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

(58,894,000)

(42,287,000)

14,528,000

53,901,000

115,764,000

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

(739,483,000)

(698,057,000)

(712,585,000)

(766,294,000)

(882,058,000)

Prior year adjustment

-

861,000

-

(192,000)

-

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

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

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

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

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

As restated

(739,483,000)

(697,196,000)

(712,585,000)

(766,486,000)

(882,058,000)

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

(798,377,000)

(739,483,000)

(698,057,000)

(712,585,000)

(766,294,000)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

(798,377,000)

(739,483,000)

(698,057,000)

(712,585,000)

(766,294,000)

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

254,000

181,000

-

15,000

-

Bankers' acceptance

-

-

-

38,000

60,000

Hire purchase

-

-

15,000

22,000

25,000

Lease interest

3,000

8,000

-

-

-

Loan from holding company

-

56,000

330,000

300,000

-

Term loan / Borrowing

22,985,000

19,935,000

-

-

-

Others

7,855,000

2,243,000

498,000

193,000

255,000

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

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

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

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

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

31,097,000

22,423,000

843,000

568,000

340,000

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

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

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

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

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

DEPRECIATION (as per notes to P&L)

102,555,000

104,569,000

60,946,000

55,808,000

48,737,000

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

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

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

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

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

102,555,000

104,569,000

60,946,000

55,808,000

48,737,000

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

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

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

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

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

 

 

 

 

 

 

 

BALANCE SHEET

 

SABAH FOREST INDUSTRIES SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

1,212,657,000

1,281,417,000

1,304,644,000

1,112,078,000

720,186,000

Deferred assets

109,220,000

97,980,000

75,170,000

59,970,000

35,240,000

Others

291,808,000

267,354,000

233,364,000

225,337,000

235,897,000

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

401,028,000

365,334,000

308,534,000

285,307,000

271,137,000

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

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

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

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

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

TOTAL LONG TERM ASSETS

1,613,685,000

1,646,751,000

1,613,178,000

1,397,385,000

991,323,000

Stocks

148,112,000

126,531,000

170,487,000

94,277,000

102,726,000

Trade debtors

32,641,000

27,867,000

30,401,000

24,668,000

45,729,000

Other debtors, deposits & prepayments

14,970,000

22,528,000

15,787,000

35,736,000

29,137,000

Cash & bank balances

380,000

8,744,000

1,703,000

5,397,000

53,800,000

Others

87,000

196,000

37,000

38,000

-

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

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

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

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

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

TOTAL CURRENT ASSETS

196,190,000

185,866,000

218,415,000

160,116,000

231,392,000

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

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

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

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

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

TOTAL ASSET

1,809,875,000

1,832,617,000

1,831,593,000

1,557,501,000

1,222,715,000

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

88,752,000

82,276,000

82,205,000

43,405,000

48,139,000

Other creditors & accruals

81,720,000

76,008,000

130,061,000

47,700,000

87,900,000

Hire purchase & lease creditors

606,000

877,000

934,000

747,000

320,000

Bank overdraft

2,229,000

-

-

-

-

Short term borrowings/Term loans

125,750,000

95,072,000

34,636,000

15,585,000

805,000

Other borrowings

55,210,000

48,447,000

48,346,000

-

-

Amounts owing to holding company

19,252,000

3,549,000

27,391,000

2,903,000

-

Amounts owing to related companies

2,536,000

628,000

-

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

376,055,000

306,857,000

323,573,000

110,340,000

137,164,000

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

(179,865,000)

(120,991,000)

(105,158,000)

49,776,000

94,228,000

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

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

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

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

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

TOTAL NET ASSETS

1,433,820,000

1,525,760,000

1,508,020,000

1,447,161,000

1,085,551,000

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

1,839,198,000

1,839,198,000

1,839,198,000

1,839,198,000

1,839,198,000

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

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

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

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

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

TOTAL SHARE CAPITAL

1,839,198,000

1,839,198,000

1,839,198,000

1,839,198,000

1,839,198,000

Capital reserve

-

-

3,931,000

3,931,000

-

Retained profit/(loss) carried forward

(798,377,000)

(739,483,000)

(698,057,000)

(712,585,000)

(766,294,000)

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

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

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

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

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

TOTAL RESERVES

(798,377,000)

(739,483,000)

(694,126,000)

(708,654,000)

(766,294,000)

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

1,040,821,000

1,099,715,000

1,145,072,000

1,130,544,000

1,072,904,000

Long term loans

392,728,000

425,168,000

354,312,000

308,211,000

-

Lease obligations

271,000

877,000

-

-

-

Hire purchase creditors

-

-

1,755,000

1,855,000

905,000

Others

-

-

6,881,000

6,551,000

11,742,000

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

392,999,000

426,045,000

362,948,000

316,617,000

12,647,000

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

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

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

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

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

1,433,820,000

1,525,760,000

1,508,020,000

1,447,161,000

1,085,551,000

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

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

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

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

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

 

 

 

 

 

 

 

FINANCIAL RATIO

 

SABAH FOREST INDUSTRIES SDN. BHD.

 

TYPES OF FUNDS

Cash

380,000

8,744,000

1,703,000

5,397,000

53,800,000

Net Liquid Funds

(1,849,000)

8,744,000

1,703,000

5,397,000

53,800,000

Net Liquid Assets

(327,977,000)

(247,522,000)

(275,645,000)

(44,501,000)

(8,498,000)

Net Current Assets/(Liabilities)

(179,865,000)

(120,991,000)

(105,158,000)

49,776,000

94,228,000

Net Tangible Assets

1,433,820,000

1,525,760,000

1,508,020,000

1,447,161,000

1,085,551,000

Net Monetary Assets

(720,976,000)

(673,567,000)

(638,593,000)

(361,118,000)

(21,145,000)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

(39,035,000)

(42,674,000)

300,000

29,850,000

81,032,000

Earnings Before Interest, Taxes, Depreciation And Amortization (EBITDA)

63,520,000

61,895,000

61,246,000

85,658,000

129,769,000

BALANCE SHEET ITEMS

Total Borrowings

576,794,000

570,441,000

439,983,000

326,398,000

2,030,000

Total Liabilities

769,054,000

732,902,000

686,521,000

426,957,000

149,811,000

Total Assets

1,809,875,000

1,832,617,000

1,831,593,000

1,557,501,000

1,222,715,000

Net Assets

1,433,820,000

1,525,760,000

1,508,020,000

1,447,161,000

1,085,551,000

Net Assets Backing

1,040,821,000

1,099,715,000

1,145,072,000

1,130,544,000

1,072,904,000

Shareholders' Funds

1,040,821,000

1,099,715,000

1,145,072,000

1,130,544,000

1,072,904,000

Total Share Capital

1,839,198,000

1,839,198,000

1,839,198,000

1,839,198,000

1,839,198,000

Total Reserves

(798,377,000)

(739,483,000)

(694,126,000)

(708,654,000)

(766,294,000)

LIQUIDITY (Times)

Cash Ratio

0.00

0.03

0.01

0.05

0.39

Liquid Ratio

0.13

0.19

0.15

0.60

0.94

Current Ratio

0.52

0.61

0.68

1.45

1.69

WORKING CAPITAL CONTROL (Days)

Stock Ratio

108

94

183

86

82

Debtors Ratio

24

21

33

22

36

Creditors Ratio

65

61

88

39

38

SOLVENCY RATIOS (Times)

Gearing Ratio

0.55

0.52

0.38

0.29

0.00

Liabilities Ratio

0.74

0.67

0.60

0.38

0.14

Times Interest Earned Ratio

(1.26)

(1.90)

0.36

52.55

238.33

Assets Backing Ratio

0.78

0.83

0.82

0.79

0.59

PERFORMANCE RATIO (%)

Operating Profit Margin

(13.99)

(13.29)

(0.16)

7.28

17.60

Net Profit Margin

(11.74)

(8.64)

4.28

13.40

25.25

Return On Net Assets

(2.72)

(2.80)

0.02

2.06

7.46

Return On Capital Employed

(2.72)

(2.80)

0.02

2.06

7.46

Return On Shareholders' Funds/Equity

(5.66)

(3.85)

1.27

4.77

10.79

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

0.00

0.00

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.63.75

UK Pound

1

Rs.100.12

Euro

1

Rs.71.20

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

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.