MIRA INFORM REPORT

 

 

Report No. :

345648

Report Date :

20.10.2015

 

IDENTIFICATION DETAILS

 

Name :

TOYOCHEM SPECIALTY CHEMICAL SDN. BHD.

 

 

Formerly Known As :

T.I.P.P. (MALAYSIA) SDN BHD

 

 

Registered Office :

Symphony House, Blok D13, Pusat Dagangan Dana 1, Jalan Pju 1a/46, Level 8, 47301 Petaling Jaya, Selangor

 

 

Country :

Malaysia

 

 

Date of Incorporation :

12.01.1996

 

 

Com. Reg. No.:

373634-A

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Subject is engaged in manufacturing and distribution of polymer, industrial adhesives and its related products

 

 

No. of Employee :

100 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

NOTES :

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

 

 

ECGC Country Risk Classification List – 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.

:

373634-A

COMPANY NAME

:

TOYOCHEM SPECIALTY CHEMICAL SDN. BHD.

FORMER NAME

:

T.I.P.P. (MALAYSIA) SDN BHD (24/06/2009)

INCORPORATION DATE

:

12/01/1996

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SYMPHONY HOUSE, BLOK D13, PUSAT DAGANGAN DANA 1, JALAN PJU 1A/46, LEVEL 8, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 17942-44 & 17950-52, TUANKU JAAFAR INDUSTRIAL PARK, SUNGAI GADUT, 71450 SEREMBAN, NEGERI SEMBILAN, MALAYSIA.

TEL.NO.

:

06-6791800

FAX.NO.

:

06-6791802

WEB SITE

:

WWW.TOYOCHEM.COM.MY

CONTACT PERSON

:

TAN CHUAN FOOK ( DIRECTOR )

INDUSTRY CODE

:

202

PRINCIPAL ACTIVITY

:

MANUFACTURING AND DISTRIBUTION OF POLYMER, INDUSTRIAL ADHESIVES AND ITS RELATED PRODUCTS

AUTHORISED CAPITAL

:

MYR 200,000,000.00 DIVIDED INTO
ORDINARY SHARE 200,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 153,923,230.00 DIVIDED INTO
ORDINARY SHARES 142,182,775 CASH AND 11,740,455 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 229,090,299 [2014]

NET WORTH

:

MYR 170,893,536 [2014]

STAFF STRENGTH

:

100 [2015]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

 

HISTORY / BACKGROUND

 

The Subject is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the Subject is insolvent. The Subject is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

The Subject is principally engaged in the (as a / as an) manufacturing and distribution of polymer, industrial adhesives and its related products.

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

 

The immediate holding company of the Subject is TIPPS PTE LTD, a company incorporated in SINGAPORE.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/03/2015

MYR 200,000,000.00

MYR 153,923,230.00

20/04/2007

MYR 100,000,000.00

MYR 87,923,230.00

05/01/2006

MYR 100,000,000.00

MYR 80,320,030.00

14/09/2005

MYR 100,000,000.00

MYR 77,050,030.00

27/01/2000

MYR 100,000,000.00

MYR 62,860,000.00

23/07/1998

MYR 50,000,000.00

MYR 27,520,000.00

14/06/1996

MYR 50,000,000.00

MYR 1,902,000.00

12/01/1996

MYR 50,000,000.00

MYR 2.00

 

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


Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

TIPPS PTE LTD
[FORMERLY KNOWN AS TOYO INK PAN PACIFIC PTE LTD]

31, TUAS AVENUE 2, 639462, SINGAPORE.

199401617K

153,923,230.00

100.00

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

------

153,923,230.00

100.00

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

=====

+ Also Director

 

The Subject's interest in other companies (Subsidiaries/Associates) are shown as follow :

 

Local No

Country

Company

Status

(%)

As At

372329W

MALAYSIA

TOYOCHEM CORPORATION SDN. BHD.

Disolved

49.00

26/11/2014



DIRECTORS


DIRECTOR 1

 

Name Of Subject

:

MR. TAN CHUAN FOOK

Address

:

65-C,LAM SUN GDN., TLK.WANJAH, ALOR STAR,KEDAH, MALAYSIA.

IC / PP No

:

5080013

New IC No

:

560409-02-5103

Date of Birth

:

09/04/1956

Nationality

:

MALAYSIAN

Date of Appointment

:

03/07/2008

 

DIRECTOR 2

 

Name Of Subject

:

TAICHIRO MATSUOKA

Address

:

3-13-25, HAYAMINE, NERIMA, TOKYO JAPAN, JAPAN.

IC / PP No

:

TZ0278173

Nationality

:

JAPANESE

Date of Appointment

:

01/07/2013

 

DIRECTOR 3

 

Name Of Subject

:

TADASHI NAKANO

Address

:

10-10, OZENJINISHI 4-CHOME, KAWASAKI ASAO-KU, KANAGAWA 215-0017 JAPAN, JAPAN.

IC / PP No

:

TG8578034

Date of Appointment

:

04/09/2014

 

DIRECTOR 4

 

Name Of Subject

:

MAMI AOTANI

Address

:

LIONS-MANSION, #303 31-2, AOTO 5-CHOME, KATSUSHIKA-KU, TOKYO 152-0062 JAPAN, JAPAN.

IC / PP No

:

TZ0278100

Nationality

:

JAPANESE

Date of Appointment

:

24/05/2012

 

DIRECTOR 5

 

Name Of Subject

:

HIROYUKI MATSUMOTO

Address

:

B1-11-2, SOLARIS DUTAMAS, DESIGNER SUITE, JALAN DUTAMAS 1, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

TH8436425

Date of Appointment

:

20/04/2015

 

 

MANAGEMENT

 

 

 

1)

Name of Subject

:

TAN CHUAN FOOK

Position

:

DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

PRICEWATERHOUSECOOPERS

Auditor' Address

:

1 SENTRAL, JALAN TRAVERS, KUALA LUMPUR SENTRAL, P.O. BOX 10192, LEVEL 10, 50706 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. CHAN SAU LENG

IC / PP No

:

A1278792

New IC No

:

690409-08-5646

Address

:

14, JALAN HELANG 3, BANDAR PUCHONG JAYA, 47170 PUCHONG JAYA, SELANGOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

ENCUMBRANCE (S)


No encumbrance was found in our databank at the time of investigation.

 

 

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

Percentage

:

70%

Overseas

:

YES

Percentage

:

30%

Import Countries

:

SINGAPORE,JAPAN,TAIWAN,INDONESIA



The Subject refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

X

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

30%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

70%

Export Market

:

EUROPE

ASIA

Credit Term

:

N/A

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

DISTRIBUTORS,MANUFACTURING INDUSTRIES

 

 

OPERATIONS

 

Products manufactured

:

POLYMER, INDUSTRIAL ADHESIVES AND ITS RELATED PRODUCTS

Member(s) / Affiliate(s)

:

SMI ASSOCIATION OF MALAYSIA

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

100

100

100

100

100

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing and distribution of polymer, industrial adhesives and its related products.


The Subject is the one of the leading manufacturers of Pressure Sensitive Adhesives (PSA).

The products are distributed in tanks and for export market the products are distributed in 180kg drums.

Besides that the Subject utilizes advanced automated and semi-automated machineries to ensure production of high quality products.

 

 

RECENT DEVELOPMENT


We have checked with the Malaysian National News Agency's (BERNAMA) database, but no latest development was noted in our investigation.



CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

06-6791800

Match

:

N/A

Address Provided by Client

:

10, JALAN PENGAPIT 15/19,SECTION 15, 40000 SHAH ALAM, SELANGOR DARUL

Current Address

:

LOT 17942-44 & 17950-52, TUANKU JAAFAR INDUSTRIAL PARK, SUNGAI GADUT, 71450 SEREMBAN, NEGERI SEMBILAN, 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 provided belongs to the Subject's Headquarters.

 

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Increased

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Increased

[

2010 - 2014

]

Return on Shareholder Funds

:

Acceptable

[

10.06%

]

Return on Net Assets

:

Acceptable

[

12.63%

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The Subject's management have been efficient in controlling its operating costs. The Subject's management had generated acceptable return for its shareholders using its assets.

Working Capital Control

Stock Ratio

:

Favourable

[

55 Days

]

Debtor Ratio

:

Acceptable

[

63 Days

]

Creditors Ratio

:

Favourable

[

40 Days

]

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The Subject's management was quite efficient in handling its debtors. The Subject's debtors days were at an acceptable range, thus the risk of its debts turning bad was minimised. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Favourable

[

2.49 Times

]

Current Ratio

:

Favourable

[

3.18 Times

]

A minimum liquid ratio of 1 should be maintained by the Subject in order to assure its creditors of its ability to meet short term obligations and the Subject was in a good liquidity position. Thus, we believe the Subject is able to meet all its short term obligations as and when they fall due.

Solvency

Interest Cover

:

Nil

[

0.00 Times

]

Gearing Ratio

:

Favourable

[

0.00 Times

]

The Subject's interest cover was nil as it did not pay any interest during the year. The Subject had no gearing and hence it had virtually no financial risk. The Subject was financed by its shareholders' funds and internally generated fund. During the economic downturn, the Subject, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.

Overall Assessment :

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 did not make any interest payment during the year. The Subject was dependent on its shareholders' funds to finance its business needs. The Subject was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The Subject has good chance of getting loans, if the needs arises.

Overall financial condition of the Subject : STRONG

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

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

 

202 : Manufacture of other chemical products

INDUSTRY :

MANUFACTURING

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

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

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

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

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

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

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

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 1996, the Subject is a Private Limited company, focusing on manufacturing and distribution of polymer, industrial adhesives and its related products. With its long establishment in the market, the Subject has received strong support from its stable customers base. Its business position in the market is quite stable and it is expected to enjoy better market shares over its rivals. The Subject have a strong capital position of MYR 153,923,230. We are confident with the Subject's business and its future growth prospect. Having strong support from its holding company has enabled the Subject to remain competitive despite the challenging business environment.


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 moderate size company, the Subject has a total workforce of 100 employees in its business operations. Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject.

 
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. Return on shareholders' funds of the Subject was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a zero geared company, the Subject virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. Given a positive net worth standing at MYR 170,893,536, 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 promptly.

 

 

 

PROFIT AND LOSS ACCOUNT

 

 

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

TOYOCHEM SPECIALTY CHEMICAL SDN. BHD.

 

Financial Year End

2014-12-31

2013-12-31

2012-12-31

2011-12-31

2010-12-31

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

229,090,299

220,334,622

210,445,400

193,391,168

163,821,437

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

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

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

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

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

Total Turnover

229,090,299

220,334,622

210,445,400

193,391,168

163,821,437

Costs of Goods Sold

(187,074,663)

(181,640,030)

(176,937,007)

(166,892,482)

(148,301,817)

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

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

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

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

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

Gross Profit

42,015,636

38,694,592

33,508,393

26,498,686

15,519,620

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

22,832,991

22,379,760

50,222,519

10,972,546

1,323,233

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

22,832,991

22,379,760

50,222,519

10,972,546

1,323,233

Taxation

(5,636,461)

(5,948,000)

(5,842,334)

(2,114,000)

6,796,500

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

17,196,530

16,431,760

44,380,185

8,858,546

8,119,733

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

26,763,064

14,948,304

(29,431,881)

(38,290,427)

(46,410,160)

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

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

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

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

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

As restated

26,763,064

14,948,304

(29,431,881)

(38,290,427)

(46,410,160)

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

43,959,594

31,380,064

14,948,304

(29,431,881)

(38,290,427)

DIVIDENDS - Ordinary (paid & proposed)

(26,989,288)

(4,617,000)

-

-

-

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

16,970,306

26,763,064

14,948,304

(29,431,881)

(38,290,427)

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Hire purchase

-

-

-

-

9,449

Lease interest

-

-

-

4,727

-

Term loan / Borrowing

-

-

69,224

65,476

1,186,609

Others

-

-

820,835

1,242,557

175,858

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

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

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

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

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

-

-

890,059

1,312,760

1,371,916

-

-

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

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

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

DEPRECIATION (as per notes to P&L)

9,172,778

8,373,509

9,221,559

6,498,151

6,416,237

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

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

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

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

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

9,172,778

8,373,509

9,221,559

6,498,151

6,416,237

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

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

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

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

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

 

 

 

BALANCE SHEET

 

 

TOYOCHEM SPECIALTY CHEMICAL SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

66,123,616

67,007,642

72,177,898

79,201,871

81,954,665

Associated companies

-

20,017,000

20,017,000

64,462,005

64,462,005

Investments

6,951,783

6,598,420

5,789,177

5,158,347

4,788,114

Deferred assets

-

962,000

4,839,000

9,048,000

11,162,000

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

6,951,783

27,577,420

30,645,177

78,668,352

80,412,119

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

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

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

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

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

TOTAL LONG TERM ASSETS

73,075,399

94,585,062

102,823,075

157,870,223

162,366,784

Stocks

34,407,700

34,522,626

39,767,530

38,384,141

32,805,182

Trade debtors

39,253,620

40,181,012

37,450,445

37,754,971

4,079,465

Other debtors, deposits & prepayments

1,328,695

630,780

1,298,162

1,165,902

792,956

Short term deposits

20,250,823

19,023,731

-

-

-

Amount due from holding company

1,120,575

1,708,197

995,140

595,334

212,585

Amount due from related companies

26,844,659

21,443,286

18,067,466

15,139,572

19,458,968

Cash & bank balances

33,817,517

27,935,378

16,551,587

5,443,165

7,101,504

Others

-

-

4,014,433

6,000

16,143,868

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

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

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

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

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

TOTAL CURRENT ASSETS

157,023,589

145,445,010

118,144,763

98,489,085

80,594,528

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

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

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

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

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

TOTAL ASSET

230,098,988

240,030,072

220,967,838

256,359,308

242,961,312

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

20,569,564

24,135,918

23,625,196

20,572,223

20,162,522

Other creditors & accruals

12,204,407

9,039,372

7,766,574

6,348,889

7,721,055

Hire purchase & lease creditors

-

-

-

-

27,808

Short term borrowings/Term loans

-

-

-

6,428,000

6,254,000

Amounts owing to holding company

6,123,095

6,780,289

7,163,234

6,751,475

8,310,306

Amounts owing to related companies

9,355,089

10,216,758

7,814,288

61,759,599

49,977,440

Provision for taxation

1,087,784

1,037,500

-

-

-

Other liabilities

-

-

-

25,000,000

30,131,867

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

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

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

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

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

TOTAL CURRENT LIABILITIES

49,339,939

51,209,837

46,369,292

126,860,186

122,584,998

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

107,683,650

94,235,173

71,775,471

(28,371,101)

(41,990,470)

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

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

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

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

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

TOTAL NET ASSETS

180,759,049

188,820,235

174,598,546

129,499,122

120,376,314

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

153,923,230

153,923,230

153,923,230

153,923,230

153,923,230

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

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

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

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

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

TOTAL SHARE CAPITAL

153,923,230

153,923,230

153,923,230

153,923,230

153,923,230

Retained profit/(loss) carried forward

16,970,306

26,763,064

14,948,304

(29,431,881)

(38,290,427)

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

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

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

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

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

TOTAL RESERVES

16,970,306

26,763,064

14,948,304

(29,431,881)

(38,290,427)

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

170,893,536

180,686,294

168,871,534

124,491,349

115,632,803

Deferred taxation

814,000

-

-

-

-

Retirement benefits provision

9,051,513

8,133,941

5,727,012

5,007,773

4,743,511

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

9,865,513

8,133,941

5,727,012

5,007,773

4,743,511

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

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

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

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

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

180,759,049

188,820,235

174,598,546

129,499,122

120,376,314

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

TOYOCHEM SPECIALTY CHEMICAL SDN. BHD.

 

TYPES OF FUNDS

Cash

54,068,340

46,959,109

16,551,587

5,443,165

7,101,504

Net Liquid Funds

54,068,340

46,959,109

16,551,587

5,443,165

7,101,504

Net Liquid Assets

73,275,950

59,712,547

32,007,941

(66,755,242)

(74,795,652)

Net Current Assets/(Liabilities)

107,683,650

94,235,173

71,775,471

(28,371,101)

(41,990,470)

Net Tangible Assets

180,759,049

188,820,235

174,598,546

129,499,122

120,376,314

Net Monetary Assets

63,410,437

51,578,606

26,280,929

(71,763,015)

(79,539,163)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

22,832,991

22,379,760

51,112,578

12,285,306

2,695,149

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

32,005,769

30,753,269

60,334,137

18,783,457

9,111,386

BALANCE SHEET ITEMS

Total Borrowings

0

0

0

6,428,000

6,281,808

Total Liabilities

59,205,452

59,343,778

52,096,304

131,867,959

127,328,509

Total Assets

230,098,988

240,030,072

220,967,838

256,359,308

242,961,312

Net Assets

180,759,049

188,820,235

174,598,546

129,499,122

120,376,314

Net Assets Backing

170,893,536

180,686,294

168,871,534

124,491,349

115,632,803

Shareholders' Funds

170,893,536

180,686,294

168,871,534

124,491,349

115,632,803

Total Share Capital

153,923,230

153,923,230

153,923,230

153,923,230

153,923,230

Total Reserves

16,970,306

26,763,064

14,948,304

(29,431,881)

(38,290,427)

LIQUIDITY (Times)

Cash Ratio

1.10

0.92

0.36

0.04

0.06

Liquid Ratio

2.49

2.17

1.69

0.47

0.39

Current Ratio

3.18

2.84

2.55

0.78

0.66

WORKING CAPITAL CONTROL (Days)

Stock Ratio

55

57

69

72

73

Debtors Ratio

63

67

65

71

9

Creditors Ratio

40

49

49

45

50

SOLVENCY RATIOS (Times)

Gearing Ratio

0

0

0

0.05

0.05

Liabilities Ratio

0.35

0.33

0.31

1.06

1.10

Times Interest Earned Ratio

0

0

57.43

9.36

1.96

Assets Backing Ratio

1.17

1.23

1.13

0.84

0.78

PERFORMANCE RATIO (%)

Operating Profit Margin

9.97

10.16

23.86

5.67

0.81

Net Profit Margin

7.51

7.46

21.09

4.58

4.96

Return On Net Assets

12.63

11.85

29.27

9.49

2.24

Return On Capital Employed

12.63

11.85

29.27

9.49

2.24

Return On Shareholders' Funds/Equity

10.06

9.09

26.28

7.12

7.02

Dividend Pay Out Ratio (Times)

1.57

0.28

0

0

0

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.64.82

UK Pound

1

Rs.100.12

Euro

1

Rs.73.75

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

Report Prepared by :

ASH

 

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.