MIRA INFORM REPORT

 

 

Report No. :

344731

Report Date :

16.10.2015

 

IDENTIFICATION DETAILS

 

Name :

ROYCE PHARMA MANUFACTURING SDN. BHD.

 

 

Registered Office :

7a, Pearl Court, 61, Jalan Thamby Abdullah, 7th Floor, 50470 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

26.04.2004

 

 

Com. Reg. No.:

650435-X

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturer and distributor of all kinds of pharmaceutical products.

 

 

No. of Employee :

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 :

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 – 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. Malaysia is vulnerable to a fall in world commodity prices or a general slowdown in global economic activity.

The NAJIB administration 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. Gross exports of goods and services constitute more than 80% of GDP. The oil and gas sector supplied about 29% of government revenue in 2014. 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 trying to lessen its dependence on state oil producer Petronas.

Bank Negara Malaysia (the central bank) maintains healthy foreign exchange reserves; a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. In order to attract increased investment, NAJIB 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.

:

650435-X

COMPANY NAME

:

ROYCE PHARMA MANUFACTURING SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

26/04/2004

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

7A, PEARL COURT, 61, JALAN THAMBY ABDULLAH, 7TH FLOOR, 50470 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

LOT 1663, NILAI INDUSTRIAL ESTATE, 71800 NILAI, NEGERI SEMBILAN, MALAYSIA.

TEL.NO.

:

06-7995999

FAX.NO.

:

06-7994999

WEB SITE

:

WWW.ROYCEPHARMA.COM

CONTACT PERSON

:

MOHAMED AZMAN BIN MOHAMED ARIFF ( CEO )

INDUSTRY CODE

:

21001

PRINCIPAL ACTIVITY

:

MANUFACTURER AND DISTRIBUTOR OF ALL KINDS OF PHARMACEUTICAL PRODUCTS

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARES 3,000,000 CASH AND 2,000,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 44,923,399 [2014]

NET WORTH

:

MYR 10,361,522 [2014]

STAFF STRENGTH

:

N/A

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

N/A

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) manufacturer and distributor of all kinds of pharmaceutical products.

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

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

31/12/2013

MYR 5,000,000.00

MYR 5,000,000.00

08/06/2005

MYR 5,000,000.00

MYR 3,000,000.00

15/09/2004

MYR 100,000.00

MYR 10,000.00

27/05/2004

MYR 100,000.00

MYR 3,000.00

27/04/2004

MYR 100,000.00

MYR 2.00

 

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


Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

ROYCE PHARMA BERHAD

PT 1663, NILAI INDUSTRIAL ESTATE, 71800 NILAI, NEGERI SEMBILAN, MALAYSIA.

650395P

5,000,000.00

100.00

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

------

5,000,000.00

100.00

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

=====

+ Also Director

Former Shareholder(s) :

Name

Country

IC/PP/Loc No

Shareholding

Last Updated

MOHAMED AZMAN BIN MOHAMED ARIFF.

MALAYSIA

600417-06-5387

N/A

29/12/2005

NURFILZAH BINTI AHMAD SUKARDI

MALAYSIA

791110-07-5702

N/A

N/A

RADZMI BIN RAHMAT

MALAYSIA

511125-01-5623

N/A

N/A

RAMSEY RIZAL BIN RADZMI

MALAYSIA

820918-14-5099

N/A

N/A

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. ZAINAL ARIFF BIN TAN SRI MAHMOOD

Address

:

8, JALAN SEMANTAN DUA, DAMANSARA HEIGHTS, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

New IC No

:

550503-08-5517

Date of Birth

:

03/05/1955

Nationality

:

MALAYSIAN

Date of Appointment

:

01/10/2012

 

DIRECTOR 2

 

Name Of Subject

:

MS. SITI ANURA BINTI ANUAR

Address

:

1492, JALAN E3/2, TAMAN EHSAN KEPONG, 52100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

New IC No

:

790209-14-5614

Date of Birth

:

09/02/1979

Nationality

:

MALAYSIAN

Date of Appointment

:

05/05/2011

 

DIRECTOR 3

 

Name Of Subject

:

DATUK CHANDRASEKAR A/L SUPPIAH

Address

:

10, LORONG DESA MURNI 2, TAMAN DESA, OFF JALAN KELANG LAMA, 58100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

6881119

New IC No

:

620630-10-6385

Date of Birth

:

30/06/1962

Nationality

:

MALAYSIAN

Date of Appointment

:

05/03/2015

 

DIRECTOR 4

 

Name Of Subject

:

MR. ABDUL RAHMAN BIN ABDUL RAZAK

Address

:

22, JALAN CANGGUNG, SEKSYEN 11/2F, 40100 SHAH ALAM, SELANGOR, MALAYSIA.

IC / PP No

:

6407939

New IC No

:

611025-08-5913

Date of Birth

:

25/10/1961

Nationality

:

MALAYSIAN

Date of Appointment

:

05/03/2015




MANAGEMENT

 

 

 

1)

Name of Subject

:

ABDUL RAHMAN BIN ABDUL RAZAK

Position

:

DIRECTOR

 

2)

Name of Subject

:

MOHAMED AZMAN BIN MOHAMED ARIFF

Position

:

CEO

 

 

 

AUDITOR

 

Auditor

:

BAKER TILLY MONTEIRO HENG

Auditor' Address

:

22, JALAN TUN SAMBANTHAN 3, 50470 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. RAJA MANICKAM A/L K.V. GANAPATHY

IC / PP No

:

A0405257

New IC No

:

620622-04-5017

Address

:

7-10-12, TAMAN ABADI INDAH, TAMAN DESA, 58100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, 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

29/08/2005

FIRST DEBENTURE

MALAYAN BANKING BERHAD

MYR 5,000,000.00

Unsatisfied

2

29/08/2005

SECOND DEBENTURE

MALAYAN BANKING BERHAD

MYR 15,351,301.00

Unsatisfied

3

03/07/2008

DEED OF ASSIGNMENT OF CONTRACT PROCEEDS & MEMORANDUM OF DEPOSIT OF FIXED DEPOSIT

MALAYAN BANKING BERHAD

MYR 6,000,000.00

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.

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

[

]

Average 61-90 Days

[

X

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

N/A

Overseas

:

N/A


The Subject refused to disclose its clientele.

 

 

OPERATIONS

 

Products manufactured

:

HERBAL & TRADITIONAL PRODUCTS, MEDICINE

Product Brand Name

:

ROYCE, ROYCE HEALTH

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

 

Total Number of Employees:

YEAR

2013

 

GROUP

N/A

COMPANY

10

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturer and distributor of all kinds of pharmaceutical products.

The Subject is a bumiputra company, is fully equipped with the state-of-the-art facilities and experience in pharmaceutical manufacturing, marketing and distribution.

The manufacturing plant, which is located at the Nilai Industrial Estate in Nilai, Negeri Sembilan, has a built-up area of about 85,000 sq.ft. The factory is equipped for large-scale manufacturing of creams and ointments, tablets, capsules, liquid preparations, and powders and granules as well. The latest of these include high-speed liquid fillers and a fluidized processor. The laboratory is also equipped with state-of-the-art instruments for biochemical and microbiological tests and experiments.

The Subject's commitment to the highest standards of quality is evident in its management team which meets all requirements of the Malaysian Ministry of Health and the World Health Organization (WHO) for Good Manufacturing Practice (GMP).

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

06 7995999/ 6018 3509795

Current Telephone Number

:

06-7995999

Match

:

YES

Address Provided by Client

:

LOT 1663, NILAI INDUSTRIAL ESTATE,71800,NILAI,NEGERI SEMBILAN.

Current Address

:

LOT 1663, NILAI INDUSTRIAL ESTATE, 71800 NILAI, NEGERI SEMBILAN, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 9th October 2015 we contacted one of the staff from the Subject and he provided some information.

The Subject refused to disclose its number of employees.

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Increased

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Increased

[

2010 - 2014

]

Return on Shareholder Funds

:

Favourable

[

67.55%

]

Return on Net Assets

:

Favourable

[

100.08%

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The higher profit could be attributed to the increase in turnover. 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.

Liquidity

Current Ratio

:

Acceptable

[

1.25 Times

]

The Subject has an adequate liquidity position with its current liabilities well covered by its current assets. With its net current assets, the Subject should be able to repay its short term obligations.

Solvency

Liability Ratio

:

Unfavourable

[

2.05 Times

]

The Subject has high liabilities ratio and it may face financial difficulties if no additional capital is injected.

Overall Assessment :

Generally, the Subject's performance has improved with higher turnover and profit. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. The Subject's liabilities 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

3.2

4.0

Unemployment Rate

3.3

3.2

3.0

2.9

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

4.00

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

6.85

-

Business Loans Disbursed( % )

15.3

32.2

-

56.0

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

43,486.6

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

49,144

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

6.1

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

21,753

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

(17.7)

-

Registration of New Business ( No. )

284,598

324,761

329,895

332,723

-

Registration of New Business ( % )

5.0

14.0

2.0

1.0

-

Business Dissolved ( No. )

20,121

20,380

18,161

21,436

-

Business Dissolved ( % )

1.9

1.3

(10.9)

18.0

-

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

63.2

-

Credit Cards Spending ( % )

15.6

12.6

-

13.5

-

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)

-

-

3.0

-

Other Mining

-

-

-

46.6

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.4

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

1.4

-

Plastic Products

3.8

-

-

2.7

-

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

-

-

13.0

-

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

21001 : Manufacture of medicinal active substances to be used for their pharmacological properties in the manufacture of medicaments

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 2004, the Subject is a Private Limited company, focusing on manufacturer and distributor of all kinds of pharmaceutical products. Having been in the industry for over a decade, the Subject has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. A paid up capital of MYR 5,000,000 allows the Subject to expand its business more comfortably. With a strong backing from its shareholder, the Subject enjoys timely financial assistance should the needs arise.

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. The Subject managed to maintain an adequate liquidity level, indicating that the Subject has the ability to meet its financial obligations. The Subject has high liabilities ratio and it may face financial difficulties if no additional capital is injected. Given a positive net worth standing at MYR 10,361,522, 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.

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 normally.

 

 

PROFIT AND LOSS ACCOUNT

 

 

ROYCE PHARMA MANUFACTURING SDN. BHD.

 

Financial Year End

2014-12-31

2013-06-30

2012-06-30

2011-06-30

2010-06-30

Months

18

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

SUMMARY

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

44,923,399

22,070,518

17,820,125

2,081,619

37,984,463

Other Income

-

76,691

1,740,679

2,148,713

618,991

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

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

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

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

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

Total Turnover

44,923,399

22,147,209

19,560,804

4,230,332

38,603,454

Costs of Goods Sold

-

(12,150,695)

(11,850,781)

(17,928,504)

(22,763,383)

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

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

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

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

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

Gross Profit

-

9,996,514

7,710,023

(13,698,172)

15,840,071

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

11,427,860

6,756,675

3,696,871

(237,065)

4,104,090

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

11,427,860

6,756,675

3,696,871

(237,065)

4,104,090

Taxation

(4,428,208)

(1,988,489)

(1,226,233)

(445,529)

(1,205,990)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

6,999,652

4,768,186

2,470,638

(682,594)

2,898,100

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

7,361,870

2,593,684

123,046

805,640

(2,092,460)

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

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

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

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

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

As restated

7,361,870

2,593,684

123,046

805,640

(2,092,460)

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

14,361,522

7,361,870

2,593,684

123,046

805,640

DIVIDENDS - Ordinary (paid & proposed)

(9,000,000)

-

-

-

-

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

5,361,522

7,361,870

2,593,684

123,046

805,640

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

-

7,515

25,035

14,637

70,895

Bankers' acceptance

-

221,381

214,657

188,930

219,236

Hire purchase

-

29,520

9,173

1,829

-

Term loan / Borrowing

-

148,270

245,933

369,371

463,597

Others

-

-

-

77,690

68,885

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

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

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

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

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

-

406,686

494,798

652,457

822,613

-

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

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

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

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

DEPRECIATION (as per notes to P&L)

-

1,373,501

309,181

1,204,252

1,186,793

AMORTIZATION

-

262,500

262,500

23,250

262,500

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

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

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

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

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

-

1,636,001

571,681

1,227,502

1,449,293

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

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

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

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

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

 

 

 

BALANCE SHEET

 

 

ROYCE PHARMA MANUFACTURING SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

6,440,204

5,792,430

6,104,860

6,777,765

7,438,839

Intellectual property and license rights

-

-

-

1,575,000

1,837,500

Others

-

1,050,000

1,312,500

-

-

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

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

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

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

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

TOTAL INTANGIBLE ASSETS

-

1,050,000

1,312,500

1,575,000

1,837,500

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

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

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

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

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

TOTAL LONG TERM ASSETS

6,440,204

6,842,430

7,417,360

8,352,765

9,276,339

Stocks

-

8,353,234

7,154,141

5,864,524

6,728,106

Contract work-in-progress

-

1,245,665

42,800

52,662

327,553

Trade debtors

-

10,410,978

7,333,824

9,545,450

9,696,511

Other debtors, deposits & prepayments

-

2,006,946

699,920

729,960

10,450

Short term deposits

-

623,229

770,452

1,167,912

701,125

Amount due from holding company

-

3,525,403

1,958,666

2,961,779

1,023,799

Amount due from related companies

-

1,884,575

-

-

-

Cash & bank balances

-

4,668

16,601

20,478

46,988

Others

-

-

252,546

279,247

-

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

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

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

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

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

TOTAL CURRENT ASSETS

25,138,279

28,054,698

18,228,950

20,622,012

18,534,532

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

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

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

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

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

TOTAL ASSET

31,578,483

34,897,128

25,646,310

28,974,777

27,810,871

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

-

3,027,774

2,732,915

4,849,805

3,716,597

Other creditors & accruals

-

2,445,741

2,840,005

1,826,589

3,404,676

Hire purchase & lease creditors

-

40,387

37,348

11,754

-

Bank overdraft

-

992,932

417,404

1,579,371

754,405

Short term borrowings/Term loans

-

630,623

841,802

1,813,408

1,695,283

Bill & acceptances payable

-

4,595,738

3,152,440

5,149,675

2,076,661

Amounts owing to holding company

-

1,987,375

-

-

-

Amounts owing to subsidiary companies

-

4,378,944

3,628,842

4,328,799

3,857,603

Amounts owing to director

-

2,189,935

2,189,935

1,199,535

1,199,535

Provision for taxation

-

766,878

-

-

490,207

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

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

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

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

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

TOTAL CURRENT LIABILITIES

20,159,804

21,056,327

15,840,691

20,758,936

17,194,967

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

4,978,475

6,998,371

2,388,259

(136,924)

1,339,565

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

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

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

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

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

TOTAL NET ASSETS

11,418,679

13,840,801

9,805,619

8,215,841

10,615,904

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

Retained profit/(loss) carried forward

5,361,522

7,361,870

2,593,684

123,046

805,640

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

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

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

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

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

TOTAL RESERVES

5,361,522

7,361,870

2,593,684

123,046

805,640

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

10,361,522

12,361,870

7,593,684

5,123,046

5,805,640

Long term loans

-

853,137

1,372,986

2,171,207

3,935,721

Hire purchase creditors

-

113,254

135,194

77,162

-

Deferred taxation

-

512,540

703,755

844,426

874,543

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

1,057,157

1,478,931

2,211,935

3,092,795

4,810,264

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

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

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

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

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

11,418,679

13,840,801

9,805,619

8,215,841

10,615,904

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

-

627,897

787,053

1,188,390

748,113

Net Liquid Funds

-

(4,960,773)

(2,782,791)

(5,540,656)

(2,082,953)

Net Liquid Assets

4,978,475

(1,354,863)

(4,765,882)

(6,001,448)

(5,388,541)

Net Current Assets/(Liabilities)

4,978,475

6,998,371

2,388,259

(136,924)

1,339,565

Net Tangible Assets

11,418,679

12,790,801

8,493,119

6,640,841

8,778,404

Net Monetary Assets

3,921,318

(2,833,794)

(6,977,817)

(9,094,243)

(10,198,805)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

-

7,163,361

4,191,669

415,392

4,926,703

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

-

8,799,362

4,763,350

1,642,894

6,375,996

BALANCE SHEET ITEMS

Total Borrowings

-

7,226,071

5,957,174

10,802,577

8,462,070

Total Liabilities

21,216,961

22,535,258

18,052,626

23,851,731

22,005,231

Total Assets

31,578,483

34,897,128

25,646,310

28,974,777

27,810,871

Net Assets

11,418,679

13,840,801

9,805,619

8,215,841

10,615,904

Net Assets Backing

10,361,522

12,361,870

7,593,684

5,123,046

5,805,640

Shareholders' Funds

10,361,522

12,361,870

7,593,684

5,123,046

5,805,640

Total Share Capital

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

Total Reserves

5,361,522

7,361,870

2,593,684

123,046

805,640

LIQUIDITY (Times)

Cash Ratio

-

0.03

0.05

0.06

0.04

Liquid Ratio

-

0.94

0.70

0.71

0.69

Current Ratio

1.25

1.33

1.15

0.99

1.08

WORKING CAPITAL CONTROL (Days)

Stock Ratio

-

159

147

1,038

68

Debtors Ratio

-

172

150

1,674

93

Creditors Ratio

-

91

84

99

60

SOLVENCY RATIOS (Times)

Gearing Ratio

-

0.58

0.78

2.11

1.46

Liabilities Ratio

2.05

1.82

2.38

4.66

3.79

Times Interest Earned Ratio

-

17.61

8.47

0.64

5.99

Assets Backing Ratio

2.28

2.56

1.70

1.33

1.76

PERFORMANCE RATIO (%)

Operating Profit Margin

25.44

30.61

20.75

(11.39)

10.80

Net Profit Margin

15.58

21.60

13.86

(32.79)

7.63

Return On Net Assets

100.08

51.76

42.75

5.06

46.41

Return On Capital Employed

100.08

44.98

36.22

3.65

37.30

Return On Shareholders' Funds/Equity

67.55

38.57

32.54

(13.32)

49.92

Dividend Pay Out Ratio (Times)

1.29

0

0

0

0

NOTES TO ACCOUNTS

Contingent Liabilities

-

0

0

0

0




 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.64.52

UK Pound

1

Rs.100.41

Euro

1

Rs.74.50

 

 

INFORMATION DETAILS

 

Analysis Done by :

KIN

 

 

Report Prepared by :

ANK

 


 

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.