Dutch Lady

4825 Words Jul 13th, 2009 20 Pages
Introduction
The listed company that our group chose is Dutch Lady Milk Industries Berhad (DLMI). Dutch Lady Milk Industries Berhad (DLMI) is incorporated in 1963 and operating based on dairy business. Dutch Lady is the first dairy company who listed in Bursa Malaysia and the top three companies in Malaysia which produce dairy product. Royal Friesland Company, in Netherlands is the holding company of Dutch Lady and the second largest holding Dutch Lady shares is Permodalan National Berhad. The primary activities of Dutch Lady are manufacture dairy products and distribute locally or export. During the 45 years of management, the business operation of Dutch Lady has been well expanded throughout Malaysia. The chilled plant of Dutch
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In the balance sheet for the year 2007, the trade payables are RM69, 737,000 which is RM 25,891,000 higher than in 2006. The interest expense charge by the suppliers on the trade credit facilities offered is RM 59,000,000 in 2007.

b) Banker Acceptance
Banker acceptance is a short term credit instrument. It is a bill of exchange that created by customers and guarantee by bank. It obliges the bank to pay the amount stated to the third party that present on demand at a certain date. In return, the customer is required to repay the full amount with some additional payment for the bank. The banker acceptance is mostly used in the international trade. In Dutch Lady Milk Industries Berhad, there is a short term lending (overdraft and bankers acceptance). As the end of the year of 2007, the Company has bank overdraft and bankers acceptance that amount RM54 million compare to the year of
2006: RM54 million that obtained from a local licensed bank. The interest rates of the
1cbdd.wsu.edu/kewlcontent/cdoutput/TOM505/page36.htm
facilities ranging is from 3.58% to 3.75% per annum and are secured by a negative pledge on all the assets of the Company. The interest expense for the banker acceptance is RM172, 000.
c) Overdraft
The provision of funds through an overdraft facility is one of the most common sources of short term finance in Dutch Lady Milk Industries Berhad. An overdraft is an agreed

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