MIRA INFORM REPORT

 

 

Report No. :

331628

Report Date :

15.07.2015

 

IDENTIFICATION DETAILS

 

Name :

CACAO PARAMOUNT SDN. BHD.

 

 

Formerly Known As :

CACAO SPECIALIST SDN BHD


KOTA KINABALU CREDIT SDN BHD


KOTA KINABALU FINANCE SDN BHD

 

 

Registered Office :

318, Teck Guan Regency, Jalan St Patrick, Off Jalan Belunu, 91000 Tawau, Sabah

 

 

Country :

Malaysia.

 

 

Financials (as on) :

31.01.2014

 

 

Date of Incorporation :

07.06.1979

 

 

Com. Reg. No.:

48106-U

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Subject is engaged in the processing of cocoa products.

 

 

No. of Employees :

Not Available

 

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 :

Slow but correct

 

 

Litigation :

Clear

 

 

NOTES:

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

 

 

ECGC Country Risk Classification List – March 31, 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.

:

48106-U

COMPANY NAME

:

CACAO PARAMOUNT SDN. BHD.

FORMER NAME

:

CACAO SPECIALIST SDN BHD (18/09/1990)
KOTA KINABALU CREDIT SDN BHD (23/09/1989)
KOTA KINABALU FINANCE SDN BHD

INCORPORATION DATE

:

07/06/1979

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

318, TECK GUAN REGENCY, JALAN ST PATRICK, OFF JALAN BELUNU, 91000 TAWAU, SABAH, MALAYSIA.

BUSINESS ADDRESS

:

318, TECH GUAN REGENCY, JALAN ST PATRICK, OFF JALAN BELUNU, P.O.BOX 33, 91007 TAWAU, SABAH, MALAYSIA.

TEL.NO.

:

089-772277

FAX.NO.

:

089-761052

CONTACT PERSON

:

THAM VUI VUN ( DIRECTOR )

INDUSTRY CODE

:

10731 10403

PRINCIPAL ACTIVITY

:

PROCESSING OF COCOA PRODUCTS, KERNEL CRUSHING

AUTHORISED CAPITAL

:

MYR 12,000,000.00 DIVIDED INTO 
ORDINARY SHARE 12,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 11,660,000.00 DIVIDED INTO 
ORDINARY SHARES 2,550,002 CASH AND 9,109,998 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 182,870,346 [2014]

NET WORTH

:

MYR 13,634,168 [2014]

STAFF STRENGTH

:

N/A

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

SLOW BUT CORRECT

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

N/A

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) processing of cocoa products, kernel crushing.

 

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

 

 

Share Capital History

 

Date

Authorised Shared Capital

Issue & Paid Up Capital

18/07/2014

MYR 12,000,000.00

MYR 11,660,000.00

02/07/1994

MYR 9,000,000.00

MYR 8,850,000.00

08/05/1991

MYR 5,000,000.00

MYR 5,000,000.00

16/10/1990

MYR 5,000,000.00

MYR 2,450,000.00

 

 

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

 


Name

Address

IC/PP/Loc No

Shareholding

(%)

TECK GUAN PERDANA BERHAD

318, TECK GUAN REGENCY, JALAN ST.PATRICK, OFF JALAN BELUNU, 91000 TAWAU, SABAH, MALAYSIA.

307097A

11,660,000.00

100.00

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

------

11,660,000.00

100.00

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

=====

 

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. THAM VUI VUN

Address

:

16, TAMAN PERMATA, BATU 3 1/2, JALAN KUHARA, 91000 TAWAU, SABAH, MALAYSIA.

IC / PP No

:

H0220434

New IC No

:

570928-12-5009

Date of Birth

:

28/09/1957

Nationality

:

MALAYSIAN

Date of Appointment

:

15/04/2013

 

DIRECTOR 2

 

Name Of Subject

:

MR. NG LIONG @ NG LEONG YEN

Address

:

3593, TAMAN MAJU, JALAN KUHARA, 91000 TAWAU, SABAH, MALAYSIA.

IC / PP No

:

H0150607

New IC No

:

530128-12-5055

Date of Birth

:

28/01/1953

Nationality

:

MALAYSIAN

Date of Appointment

:

16/01/1990

 

DIRECTOR 3

 

Name Of Subject

:

MR. TANG AMIY @ TANG AH MEI

Address

:

3600, TAMAN MAJU, BATU 2, JALAN KUHARA, 91000 TAWAU, SABAH, MALAYSIA.

IC / PP No

:

0247640

New IC No

:

470208-05-5243

Date of Birth

:

08/02/1947

Nationality

:

MALAYSIAN

Date of Appointment

:

11/01/1995

 

DIRECTOR 4

 

Name Of Subject

:

MR. MAPAHITA BIN TAHIR

Address

:

KAMPUNG TANJUNG BATU LAUT, PETI SURAT 61080, 91020 TAWAU, SABAH, MALAYSIA.

IC / PP No

:

H0085141

New IC No

:

450323-71-5181

Date of Birth

:

26/11/1953

Nationality

:

MALAYSIAN

Date of Appointment

:

29/04/1991

 

DIRECTOR 5

 

Name Of Subject

:

MR. HONG NGIT MING

Address

:

2456, LEE GARDEN, PETI SURAT 33, 91007 TAWAU, SABAH, MALAYSIA.

IC / PP No

:

H0420993

New IC No

:

531126-12-5101

Date of Birth

:

26/11/1953

Nationality

:

MALAYSIAN

Date of Appointment

:

25/07/1985



MANAGEMENT

 

 

1)

Name of Subject

:

THAM VUI VUN

Position

:

DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

ERNST & YOUNG

Auditor' Address

:

MPT 4604, LOT 17-28, BLOCK B, BANDARAN BARU, JALAN BARU, 3RD FLOOR, 91000 TAWAU, SABAH, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. CHAN KIN DAK @ TAN KIN DAK

IC / PP No

:

H0080446

New IC No

:

590405-12-5569

Address

:

6282, TAMAN HOT SPRING JAYA, JALAN AIR PANAS, 91000 TAWAU, SABAH, MALAYSIA.

 

 

 

BANKING

 

Banking relations are maintained principally with :

 

1)

Name

:

MALAYAN BANKING BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

25/06/1991

CHARGE

STANDARD CHARTERED BANKMALAYSIA BERHAD

MYR 5,000,000.00

Satisfied

2

25/06/1991

DEBENTURE

STANDARD CHARTERED BANKMALAYSIA BERHAD

MYR 1.00

Satisfied

3

03/08/1991

N/A

MALAYSIAN INDUSTRIAL DEVELOPMENT FINANCE BERHAD

MYR 5,000,000.00

Satisfied

4

10/01/1992

DEBENTURE

STANDARD CHARTERED BANKMALAYSIA BERHAD

MYR 1.00

Satisfied

5

10/01/1992

CHARGE

STANDARD CHARTERED BANKMALAYSIA BERHAD

MYR 4,000,000.00

Satisfied

 

 

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.

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

:

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

[

X

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

N/A

Overseas

:

N/A


The Subject refused to disclose its clientele. 

OPERATIONS

 

Products manufactured

:

COCOA PRODUCTS, PALM OIL

Member(s) / Affiliate(s)

:

SMALL & MEDIUM ENTERPRISE

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) processing of cocoa products, kernel crushing. 

The Subject is one of the pioneers in manufacturing of cocoa butter, cocoa powder, Cocoa Cake, Cocoa Mass, palm kernel expeller.

 

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

089-772277

Match

:

N/A

Address Provided by Client

:

BT 2 1/2, JLN TG BT LAUT, 91000 TAWAU, SABAH, MALAYSIA.RN318, TECK GUAN REGENCY, JALAN ST. PATRICK, OFF JALAN BELUNU, P.O BOX 33,

Current Address

:

318, TECH GUAN REGENCY, JALAN ST PATRICK, OFF JALAN BELUNU, P.O.BOX 33, 91007 TAWAU, SABAH, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


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


The Subject refused to disclose its number of employees.


The address provided is as per stated in the report.

 

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Decreased

[

2010 - 2014

]

Return on Shareholder Funds

:

Favourable

[

41.11%

]

Return on Net Assets

:

Favourable

[

32.86%

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.The management had succeeded in turning the Subject into a profit making company. The profit could be due to better control of its operating costs and efficiency in utilising its resources. Generally the Subject was profitable. The favourable return on shareholders' funds and return on net assets indicate that the Subject's management was efficient in utilising the assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

47 Days

]

Debtor Ratio

:

Favourable

[

6 Days

]

Creditors Ratio

:

Favourable

[

6 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

:

Unfavourable

[

0.74 Times

]

Current Ratio

:

Unfavourable

[

1.09 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

:

Acceptable

[

3.04 Times

]

Gearing Ratio

:

Unfavourable

[

2.42 Times

]

The Subject's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the Subject is able to generate sufficient income to service its interest and repay the loans. The Subject was highly geared, thus it had a high financial risk. The Subject was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the Subject will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the Subject has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the Subject's turnover and the interest it needs to pay.

Overall Assessment :

The Subject's turnover showed a volatile trend but its losses were lower when compared to the previous corresponding period. This could suggest that the Subject was more efficient in its operating cost control and was more competitive. 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 had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the Subject's profit, we do believe the Subject is able to generate sufficient cash flow to service its interest payment. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

Overall financial condition of the Subject : 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 


INDUSTRY ANALYSIS

 

MSIC CODE

 

10731 : Manufacture of cocoa products

10403 : Manufacture of palm kernel oil

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 1979, the Subject is a Private Limited company, focusing on processing of cocoa products, kernel crushing. 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. With a large issued and paid up capital of MYR 11,660,000 and strong backing from its shareholder, the Subject enjoys timely financial assistance should the needs arise. These favourable conditions has minimised its risk in the industry compared to other players.

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. 

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. Based on the higher profitability, the Subject has generated a favourable return based on its existing shareholders' funds which indicated that the management was efficient in utilising its funds to generate income. 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. The high gearing ratio clearly implied that the Subject was supported by more debt than equity. Thus, the Subject is exposed to high financial risk. Given a positive net worth standing at MYR 13,634,168, 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. 

Overall, the Subject's payment habit is good as the Subject has a good credit control and it could be taking advantage of the cash discounts while maintaining a good reputation with its creditors. 

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)

 

Financial Year End

2014-01-31

2013-01-31

2012-01-31

2011-01-31

2010-01-31

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

SUMMARY

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

182,870,346

143,861,708

184,341,532

138,237,710

56,560,528

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

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

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

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

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

Total Turnover

182,870,346

143,861,708

184,341,532

138,237,710

56,560,528

Costs of Goods Sold

(165,176,102)

(146,977,308)

-

-

-

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

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

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

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

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

Gross Profit

17,694,244

(3,115,600)

-

-

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

7,070,485

(11,656,534)

2,510,052

3,619,948

(1,898,842)

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

7,070,485

(11,656,534)

2,510,052

3,619,948

(1,898,842)

Taxation

(1,465,376)

1,880,968

(1,154,710)

(1,076,025)

(138,209)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

5,605,109

(9,775,566)

1,355,342

2,543,923

(2,037,051)

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

(9,415,339)

356,022

(1,007,730)

(2,766,002)

(733,156)

Prior year adjustment

-

-

4,205

-

-

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

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

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

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

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

As restated

(9,415,339)

356,022

(1,003,525)

(2,766,002)

(733,156)

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

(3,810,230)

(9,419,544)

351,817

(222,079)

(2,770,207)

TRANSFER TO RESERVES - General

30,814

4,205

4,205

(785,651)

4,205

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

(3,779,416)

(9,415,339)

356,022

(1,007,730)

(2,766,002)

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

1,348

15,063

-

-

-

Bankers' acceptance

205,645

865,224

-

-

-

Term loan / Borrowing

858,255

1,235,884

-

-

-

Others

2,407,313

1,388,548

-

-

-

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

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

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

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

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

3,472,561

3,504,719

-

-

-

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

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

-

-

-

DEPRECIATION (as per notes to P&L)

1,075,520

1,083,625

-

-

-

AMORTIZATION

80,000

21,774

-

-

-

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

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

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

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

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

1,155,520

1,105,399

-

-

-

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

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

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

24,280,372

24,414,244

23,979,069

23,992,893

16,314,768

Others

1,920,000

2,000,000

-

-

-

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

1,920,000

2,000,000

-

-

-

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

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

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

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

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

TOTAL LONG TERM ASSETS

26,200,372

26,414,244

23,979,069

23,992,893

16,314,768

Stocks

23,315,877

22,851,255

-

-

-

Trade debtors

3,212,640

2,592,943

-

-

-

Other debtors, deposits & prepayments

34,442,589

38,411,440

-

-

-

Cash & bank balances

12,116,224

20,812,398

-

-

-

Others

-

245,173

-

-

-

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

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

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

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

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

TOTAL CURRENT ASSETS

73,087,330

84,913,209

80,442,716

101,569,855

111,666,586

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

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

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

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

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

TOTAL ASSET

99,287,702

111,327,453

104,421,785

125,562,748

127,981,354

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

2,639,538

585,543

-

-

-

Other creditors & accruals

816,941

1,670,433

-

-

-

Bank overdraft

110,219

33,884

-

-

-

Short term borrowings/Term loans

10,280,187

10,255,388

-

-

-

Other borrowings

2,000,000

2,000,000

-

-

-

Bill & acceptances payable

3,478,000

17,680,000

-

-

-

Amounts owing to holding company

18,452,608

11,635,138

-

-

-

Amounts owing to related companies

29,331,887

33,574,865

-

-

-

Other liabilities

95,646

316,149

-

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

67,205,026

77,751,400

52,554,400

67,846,838

80,657,768

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

5,882,304

7,161,809

27,888,316

33,723,017

31,008,818

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

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

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

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

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

TOTAL NET ASSETS

32,082,676

33,576,053

51,867,385

57,715,910

47,323,586

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

11,660,000

11,660,000

11,660,000

11,660,000

11,660,000

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

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

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

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

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

TOTAL SHARE CAPITAL

11,660,000

11,660,000

11,660,000

11,660,000

11,660,000

Revaluation reserve

5,753,584

5,784,398

3,440,925

3,449,335

3,449,335

Retained profit/(loss) carried forward

(3,779,416)

(9,415,339)

356,022

(1,007,730)

(2,766,002)

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

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

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

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

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

TOTAL RESERVES

1,974,168

(3,630,941)

3,796,947

2,441,605

683,333

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

13,634,168

8,029,059

15,456,947

14,101,605

12,343,333

Long term loans

17,178,742

25,546,994

-

-

-

Deferred taxation

1,269,766

-

-

-

-

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

18,448,508

25,546,994

36,410,438

43,614,305

34,980,253

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

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

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

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

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

32,082,676

33,576,053

51,867,385

57,715,910

47,323,586

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

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

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

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

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

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

12,116,224

20,812,398

-

-

-

Net Liquid Funds

8,528,005

3,098,514

-

-

-

Net Liquid Assets

(17,433,573)

(15,689,446)

27,888,316

33,723,017

31,008,818

Net Current Assets/(Liabilities)

5,882,304

7,161,809

27,888,316

33,723,017

31,008,818

Net Tangible Assets

32,082,676

33,576,053

51,867,385

57,715,910

47,323,586

Net Monetary Assets

(35,882,081)

(41,236,440)

(8,522,122)

(9,891,288)

(3,971,435)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

10,543,046

(8,151,815)

-

-

-

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

11,698,566

(7,046,416)

-

-

-

BALANCE SHEET ITEMS

Total Borrowings

33,047,148

55,516,266

-

-

-

Total Liabilities

85,653,534

103,298,394

88,964,838

111,461,143

115,638,021

Total Assets

99,287,702

111,327,453

104,421,785

125,562,748

127,981,354

Net Assets

32,082,676

33,576,053

51,867,385

57,715,910

47,323,586

Net Assets Backing

13,634,168

8,029,059

15,456,947

14,101,605

12,343,333

Shareholders' Funds

13,634,168

8,029,059

15,456,947

14,101,605

12,343,333

Total Share Capital

11,660,000

11,660,000

11,660,000

11,660,000

11,660,000

Total Reserves

1,974,168

(3,630,941)

3,796,947

2,441,605

683,333

LIQUIDITY (Times)

Cash Ratio

0.18

0.27

-

-

-

Liquid Ratio

0.74

0.80

-

-

-

Current Ratio

1.09

1.09

1.53

1.50

1.38

WORKING CAPITAL CONTROL (Days)

Stock Ratio

47

58

-

-

-

Debtors Ratio

6

7

-

-

-

Creditors Ratio

6

1

-

-

-

SOLVENCY RATIOS (Times)

Gearing Ratio

2.42

6.91

-

-

-

Liabilities Ratio

6.28

12.87

5.76

7.90

9.37

Times Interest Earned Ratio

3.04

(2.33)

-

-

-

Assets Backing Ratio

2.75

2.88

4.45

4.95

4.06

PERFORMANCE RATIO (%)

Operating Profit Margin

3.87

(8.10)

1.36

2.62

(3.36)

Net Profit Margin

3.07

(6.80)

0.74

1.84

(3.60)

Return On Net Assets

32.86

(24.28)

4.84

6.27

(4.01)

Return On Capital Employed

32.75

(24.25)

4.84

6.27

(4.01)

Return On Shareholders' Funds/Equity

41.11

(121.75)

8.77

18.04

(16.50)

 

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.63.50

UK Pound

1

Rs.98.20

Euro

1

Rs.69.73

 

INFORMATION DETAILS

 

Analysis Done by :

RAS

 

 

Report Prepared by :

TRU

 

               

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.