Sime Darby

Page 1 of 6 Fundamental abridgment for SIME DARBY BHD companion Name Stock Code (Bursa) Bloomberg Industry Sub-Sector Company definition Date of depth psychology Financial Year SIME DARBY BHD placard Main Board SIME FBMKLCI TRUE SIMEMK Reuters SIME. KL TRADING SERVICES OIL PALM/RUBBER AND OTH shape PRODUCTION PLANTATION PROP MOTORS INDUSTRIAL ENERGY & adenine UTILITIES. 19-Sep-12 2011 30/6/2011 Price 9. 79 Stock Grade Emerging coronation Grade Profitability Profitability 10 ROI 8 ROI fluidness 6 Efficiency 4 Risks 2 0 Potential offshoot buy & angstrom Hold Returns Potential Growth 65 75 90 50 105 105 acquire & Hold Returns 25 Liquidity 1. 80759 40. 02273 62. 4099 36. 10128 85. 8969 57. 48956 18. 75 7. 97 5. 34 6. 93 7. 22 8. 18 5. 48 7. 5 Risks Efficiency future growth drivers and Risks http//announcements. bursamalaysia. com/edms/edmswebh. nsf/all/FF95B42CEC4045D948257A7A0062 DF67/$ appoint/Press%20release. pdf Due-Diligence All figures in one million millions of Ri nggit Malaysia except per share determines and proportionality Measures 2002 2002/6/30 2003 2003/6/30 2004 2004/6/30 2005 2005/6/30 2006 2006/6/30 2007 2007/6/30 2008 2008/6/30 2009 2009/6/30 2010 2010/6/30 2011 2011/6/30 Importane regularise CommentsProfitability increase Sales r as yetue enhancement Increasing crystallize Income After taxation Increasing Gross Profit Margin (Preferably ? 40%) ROI Increasing mel imprinted ROE (Preferably ? 15%) Increasing ROIC (Preferably ? 15%) Increasing CROIC (Preferably ? 15%) Liquidity Increasing Net hard cash from trading trading operations Increasing Free funds Flow / Sales (Preferably ? 5%) Increasing Quick Ratio (Preferably ? 1) slight & declining immediate payment Conversion Cycle Efficiency Increasing Net Profit Margin (Preferably ? 10%) Increasing OCF/TA (Preferably ? 8%) 12,053 928 29. 9% 13,718 945 30. 4% 14,904 1,015 26. % 18,646 933 24. 4% 20,162 1,203 23. 6% 20,735 1,597 23. 3% 34,045 3,753 26. 2% 31,014 2 ,341 23. 0% 32,845 855 26. 8% 41,859 3,847 25. 7% 10. 7% 8. 0% 4. 5% 10. 2% 8. 0% 5. 2% 10. 9% 8. 0% 3. 3% 10. 0% 9. 0% 3. 6% 12. 7% 7. 0% 5. 2% 15. 8% 8. 0% 7. 1% 16. 2% 12. 0% 9. 1% 10. 7% 9. 0% -1. 1% 3. 6% 5. 0% 6. 8% 15. 2% 13. 0% 6. 5% 647 3. 5% 1. 09 62 930 4. 3% 1. 41 66 652 2. 6% 1. 39 65 737 2. 3% 1. 12 62 1,154 3. 4% 1. 23 67 1,644 4. 8% 1. 27 65 3,936 7. 2% 1. 38 63 937 -1. 0% 1. 00 91 3,570 5. 9% 1. 00 65 3,393 4. 9% 1. 05 65 10. 0% 5. 2% 9. 0% 6. 3% . 0% 4. 2% 7. 0% 4. 5% 8. 0% 6. 6% 10. 0% 8. 4% 15. 0% 10. 9% 10. 0% 2. 6% 5. 0% 9. 5% 13. 0% 7. 9% Risks Declining Debt/Equity Ratio (Preferably &lt1) Operating Income discrepancy Sales Variability Increasing Altman Z Score (Preferably ? 2. 6) Declining Beneish Score (Preferably &lt -2. 22) Potential Growth Increasing sustainable Growth Rate (Preferably ? 8%) Increasing evaluate EBIT Growth N/A (Preferably ? 8%) Quality of Sales Revenue Growth (Preferably ? 80%) N/A 0. 15 1,081 12,053 5. 73 0. 27 1,225 13,718 5. 50 -2. 83 0. 28 1,389 14,904 6. 5 -2. 90 0. 34 1,406 18,646 5. 13 -2. 95 0. 38 1,206 20,162 5. 42 -2. 86 0. 29 1,569 20,735 7. 13 -3. 00 0. 22 4,339 34,045 5. 83 -1. 99 0. 26 3,151 31,014 7. 02 -2. 89 0. 37 2,081 32,845 5. 80 -2. 84 0. 29 5,483 41,859 6. 38 -2. 86 3. 5% 2. 9% 16. 4% 93. 5% 85. 8% 28. 7% 53. 4% 59. 1% 56. 9% 3. 7% 4. 1% 2008 2002-2011 2008 2002-2011 2008 2002-2011 2. 3% 3. 1% 77. 2% 2009 91. 1% 52. 4% 2009 58. 2% 76. 6% 2009 45. 6% 6. 4% 5-Y 4. 4% 9. 9% 7. 9% 14. 9% 74. 6% 2010 59. 2% 2010 14. 9% 2010 2. 9% 19. 4% 5. 0% -5. 0% 69. 4% 2011 17. % 2011 21. 6% 2011 0. 6% 6. 6% 7. 7% 13. 6% 73. 3% 30. 0% 14. 0% 2007 2005-2011 Quality of EBIT Growth (Preferably 2007 ? 80%) 2005-2011 Quality of Operating Cash Flow 2007 Growth (Preferably ? 80%) 2005-2011 Buy & Hold Returns melodic lineholder Wealth Creation Full (Preferably ? 8%) 5. 7% 10-Y -1. 0% 3-Y 11. 5% Investment Strategy Position Strategy Position Lump perfume + Top Up Strategy Buy Criteria Averaging Down Method l ong horse Cost/Value Averaging Criteria 1. The current quarters EPS is up to a greater extent than 15% from the homogeneous quarter the year before. . Price is below Intrinsic Value 3. on-going EY% or roller 4Q EY% gt 6% 4. legitimate DY% or peal 4Q DY% gt 6% 5. Stock price breaks out of consolidation/ dunk on an uptrend. 6. Comparison of P/B ratio (for Financial personal line of credits only) 7. Company owner, EPF, Khazanah and PNB heavy buying Sell Criteria I Remarks Criteria 1. Current EY% or Rolling 4Q EY% lt 6% for more than 2 long time 2. Current DY% or Rolling 4Q DY% lt 6% for more than 2 years 3. either quarter EPS drop for 5 consecutive months 4. Fundamental of craft turns unattractive or bad 5.Found a better opportwholey to replace this stock 6. The stock drops near to my average cost or hit my stop breathing out 7. Long term trend changed from bullish to bearish 8. Company owner, EPF, Khazanah and PNB heavily selling. 9. Did I make a mistake? 10. Has the stock r isen in any case far from its intrinsic value? VI Remarks Discounted Cash Flows Valuation Shares Out. M. O. S. 13 Default Value Custom Value 6009. 46 11 Sustainable Growth % (for Average risk Average Discount % Terminal % 2011 FCF wastefulness Cash Intangibles Intangibles% Decay Rate Extra Decay Growth (for DCF Calc. exchange premium Risk free Assets add to DCF (Yr4E-Yr7E) (Yr8E-Yr10E) reference) rate 20% 5% 8% 5. 50% 3. 68% 9. 2% 2% 2068. 66 4593. 30 86. 00 0% 8% 15% 4% 11. 50% 15% 20% gibbousness of Future Free Cash Flow 2012 Y proterozoic Growth Future Value Discounted Perpetuity Value Present Value 2,151. 41 2013 2,237. 46 2014 2,326. 96 18,023. 58 28,024. 79 3-Y Shares superior Fair Value in demand(p) M. O. S. Buy Under Current Price Actual M. O. S. 4. 66 3. 73 9. 79 -110% 5-Y 6009. 46 4. 69 20% 3. 75 9. 79 -109% 2015 2,364. 67 2016 2,445. 07 15,233. 30 28,183. 22 10-Y 4. 70 3. 76 9. 79 -108% 2017 2,528. 1 2018 2,614. 16 2019 2,564. 07 2020 2,633. 81 2021 2,705. 45 9,780. 64 28,239. 49 Market Timing Analysis Discounted Cash Flow Valuation Fair Value Actual M. O. S. Buy Under Selection 3-Y 4. 66 -110% 3. 73 5-Y 4. 69 -109% 3. 75 10-Y 4. 70 -108% 3. 76 ? 3-Y Fast-growing bon ton be givens in highly competitive, low beach industry 5-Y Solid alliance scarpers with advantage such(prenominal) as upstanding technicalizeing channels, recognizable brand name, or regulatory advantage 10-Y Outstanding growth company operates with very high barriers to entry, dominant market aim or prospectsPrice-to-book Ratio Valuation by Price-to-book Ratio Current EY% or Rolling 4Q EY% gt 6% CU EY% 6. 23 R-4Q EY% 7. 05 4. 26 60 Current DY% or Rolling 4Q DY% gt 6% CU DY% 3. 06 R-4Q DY% 3. 58 Current Cash Return% or MRQ Cash Return% gt 6% 62 CU CR% 4% quarterly Financial Per chassisance MRQ CR% 2% Increasing revenue Increasing net profit Increasing EPS Jun-12s EPS ? 15% from Jun-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 13,059 11,064 11,389 11,027 14,122 1,313 0. 22 1,074 0. 18 1,101 0. 18 876 0. 15 1,099 0. 18 -16%Sime DarbyCOMPANY BACKGROUND Sime Darby Berhad is a transnational company which was launch in 1910 a British businessman William Sime and Henry Darby established Sime, Darby & Co. and is ground in Malaysia. Sime Darby is likewise involved in find growth sector of the national economy, plantations, station, motors, energy & utilities and health tutorship. Business activities accept petroleum medal and the companys original business, the fable of rubber tires, heavy equipment and motor vehicle dispersion, property development, business office generation, and engineering services.Other operations involve the manufacture of paints, cooling tourism product manufacturing, and tourism services, hospitals, and golf courses. Sime Darby is listed on Bursa Malaysia Securities Berhad on the main board. The company is the largest in atomic number 34 Asia and the largest multinational companies in Malaysia. They operate in more than 20 countries and rescue around 100,000 employees military man childlike. William Middleton Sime, a traveler from Scotland. In his efforts to be successful, he has to face two times a failure in the import-export business and other coffee elicit when he left his job as a mercantile assistant in capital of Singapore.Henry Darby was a wealthy 50-year-old English banker who possess property in Union Malaya. The organization is well k immediatelyn in the field of global business and is besides experienced in the field of business. They have a wide cheat on of industries such as Kumpulan Guthrie Berhad and Golden Hope woodlets Berhad for combined and created as a new organization with the mission and vision and new goals. imagery To be a in the lead multinational corporation delivering sustainable value to all stakeholders. MISSION 1. We are committed to developing a gentle portfolio of sustainable businesses 2.We subscribe to good corporate governance and high honest values 3. We continuously strive to deliver superior financial returns by means of operational excellence and high performance standards and 4. We provide an surround for our batch to realize their sufficient potential. CORE AND RELATED BUSINESS Sime Darby is a chance upon player in the Malaysian economy as well as a diversified multinational involved in see growth sectors, to wit, plantations, property, motors, industrial equipment, energy utilities and health heraldic bearing with operations in more than 20 countries. . Sime Darby Plantation Sime Darby Plantation is the largest crude vegetable cover palm plantation in the world to parent about 2. 4 million tons or 6% of the payoff of crude palm oil (CPO) is the world every year, make the Sime Darby Plantation as sustainable producers of edible oils in the world. Sime Darby has two operations, namely I. Upstream operations Sime Darby Plantation has an area of 682. 616 hectares in Malaysia and Indonesia, with the rest of the oil palm planted area of 519. 620 hectares. It has a total of 200 field and 64 oil mills in the two countries.Outside Asia, starting from January 2010 has spread out its upstream operations to Liberia in Africa. Overall, Sime Darby Plantation has 200,000 hectares in Liberia, where 1. 190 hectares have been planted with oil palm until 31 January 2012. As a key player in keeping the industry, Sime Darby plantation division using better practices. 329. 225 of this part have been planting trees for rare and endangered in the conterminous three years, as part of its commitment towards ensuring a more reticent nature. Trees are grown mainly in the area of the holding company, piece of music partially buried along with other companies.II. Downstream Operations Sime Darby Plantation downstream operations operate in 15 countries, covering the production and distribution of oil and fat products for biodiesels, oleochemicals, and nutraceuticals. It is divided into two segments namely based forage and non-food segments carried by eight refineries located in * Malaysia (Sime Darby Jomalina Sdn Bhd, Sime Darby Kempas Sdn Bhd and Sime Darby Austral Co. , Ltd. ) * Singapore (Sime Darby Edible Products Limited) * Thailand (Morakot Industries Public Company Ltd) Vietnam (Golden Hope Nha Be Oils Sdn Bhd) * Netherlands (Sime Darby Unimills B. V. ) * South Africa (Sime Darby Hudson nickname (M) Sdn Bhd) III. Food Sime Darby Plantation as well produces and markets a motley of consumer goods such as cooking oil, fruit juice and cooks the sauce for the Malaysian market. Sime Darby Jomalina which is a subordinate of Sime Darby Berhad produce refined palm oil and palm kernel oil products which include shortening, industrial margarine, frying palm oil, milk fat replacement, vegetable ghee and cooking oil.Also produce oil for frying, application in dairy products, dyes and as a food for the domestic market and for export to Japan, Hong Kong, Europe and the building blocked S tates. Sime Darby likewise niche product the following * Special Animal avoirdupois weight Substitute (Safar) A substitute vegetable fats for animal fats in food products, * Jomalina Quality Assurance (JGQ) products products made from palm oil with a low content of saturated fatty acids, * Golden Joma blushful Olein Red Palm Oil with beta carotene content is very high. IV. enquiry DevelopmentSime Darby Plantation is a draw in the re search development of oil palm, and was the kickoff company in the world to success in full compile, assemble and remark the oil palm genome. Break done with(predicate)s willing allow scientists and our research faculty to discern markers for the valuable features such as features yield, unhealthiness resistance and drought tolerance, and go for these markers to breed a new generation of oil palm. The division now has more than 200 scientists and researchers, who conducted several(prenominal)(a) studies on the efficacy results, outper form practices, calibre, best agricultural practices and food ingredients.Division also has a amply operational along the palm oil value chain from farm to food on the table, He took himself one of the cheapest foods in the form of oil-estate estate, processing of this material in its own farm and later in its own filter factories, and finally, it is also processed cooking oil for domestic market. As a fully integrated player, this means that it can control the quality at every stage by using best practices in all layers of palm oil value chain.This process is done by thinking of the environment and quality, ensuring that while providing a valuable material for the needs of the world, our worldly concern is also protected through best practices. 2. Sime Darby Property Sime Darby Plantation is a leader in research development of oil palm, and was the first company in the world to successfully compile, assemble and annotate the genome of oil palm. The Division has been fully opera tional along the palm oil value chain from farm to food on the table.It released a self cheapest food in the form of coconut plantation estate, the processing of these materials in their own farm and past at refineries themselves, and finally, it is also processed cooking oil for the local market. As a fully integrated player, this means that it can control the quality at every stage by using best practices in all walks of palm oil value chain. This process is done by thinking of the environment and quality, to ensure that when providing valuable material for the needs of the world, our earth is also protected through best practices.Sime Darby Property is one of the lead-in property developers in Malaysia. It is also the largest developers in the country in ground of land area savings. It now has 19. 000 acres of land and has identified savings of 18. 800 acres of land for future development. Sime Darby Propertys core businesses are property development, property investment, hos pitality & leisure and operations in china. Apart from Malaysia, it has a wide paradigm of projects in atomic number 23 dollar bill countries, namely, Singapore, Vietnam, China, Australia and the United Kingdom.Over the past some years, Sime Darby Property has strengthened 10 townships that house a total of 80,000 families and 400,000 nation throughout the Klang Valley and Penang, the Ara Damansara, Subang Jaya, USJ Heights, Putra Heights, Bukit Jelutong, Bandar Bukit Raja, Nature Trail, Melawati, The Dream and Planters Haven. Sime Darby Property also rates limit investment property in Malaysia such as Sime Darby Pavilion is a 3-storey debequest building in Shah Alam, Sime Darby Complex is a 4 ? torey office building, Wisma Guthrie is a six storey purpose built office building in Damansara Heights, Wisma Sime Darby is a 22 storey office building in Jalan Raja Laut, Wisma UEP is a 11-storey office building in Subang Jaya. Sime Darby Property has built a variety of hospita lity in Malaysia such as Sime Darby Convention Centre (SDCC) which was officially launched on December 6, 2007 by the Prime Minister of Malaysia and Resumes Operations since February 2006 at the Bukit Kiara, Kuala Lumpur.Hospitaliti such as PNB Darby parking area Executive Suites Start operations in June 2000 at the Kuala Lumpur. Harvard atmosphere Hotels in Bedong, Kedah. Genting View Resort in Genting full(prenominal)lands, Pahang. Subang Avenue Service Suites in Subang Jaya and Hotel equatorial Melaka in the Lower Town, Melaka. 3. Sime Darby Industrial Sime Darby Industrial is a leading allocator of premium heavy equipment in Malaysia and the Asia Pacific region.It raiseed a all-inclusive range of products and support services equipment in key markets such as plantations, property, mining, devil dog construction, forestry, ports and power systems sectors. Sime Darby Industrial is also the fifth largest Caterpillar head in the world and operates the largest Caterpillar deale rship network in the Asia Pacific region, with more than 100 branches covering more than 20 countries. Heavy equipment business spans crossways Malaysia, Singapore, Brunei, Australia, Hong Kong, China, Christmas Island, the Maldives, raw(a) Caledonia, Papua New Guinea, and the Solomon Islands.To market in Malaysia, Sime Darby Industrial Sdn Bhd offers a comprehensive list of heavy equipment and services, from the sale of machinery, new engines and equipment rental services through a network until CAT Rental Stores outlets nationwide. Other brands represented include * Premium Terberg Terminal Tractor * Kubota Tractor and Agricultural Transplanters * Transport tractor New Holland * Perkins engines * GE bloodline Inspection * Atlas Copco (in Vietnam) * Jacobsen Turf Care Equipment * Former operator of omega 4. Sime Darby MotorsSime Darby Motors is one of the leading players of the automotive industry and automotive luxury in Malaysia, Singapore, China, Australia and New Zealand, w ith business activities that vary from country to country, including import, assembly, distribution and sale of the vehicle. This represents the various brands and luxury brands such as BMW, Mini, Rolls-Royce, Porsche, Jaguar and Lamborghini, Hyundai, Land Rover, Alfa Romeo, Ford, Peugeot, Mitsubishi, Ssang Yong, Jeep, Dodge, McLaren, Suzuki, Chrysler, Audi, Ferrari, Maserati, Volkswagen, Nissan, Mazda and Chevrolet.Sime Darby Motors is also the 3rd largest BMW dealer in the world, while Rolls Roycenya representation in East China is one of the largest in the world in 2011. This section is a dealer for McLaren to Hong Kong, the franchise up for grabs. It also has a distribution business for hummingnghai Bus, Mitsubishi Fuso trucks and buses in Hong Kong and Macau, as well as electric vehicles Smith, apart from organizing Sime Darby Fleet service Australia 4WD, 2WD, bus rental and mechanical services for industry leading market experts and government regional tourism market in Wes tern Australia, Queensland and New South Wales.In terms of installation, Sime Darby Motors to install a variety of Hyundai passenger cars and commercial vehicles, other than passenger vehicles Land Rover and BMW through its subsidiaries, the Corporation Inokom in Kulim, Kedah. It also has the Hertz car rental business in Malaysia and Singapore. With a good distribution network in the Asia Pacific region, the Automotive Division Sime Darby ready for a bright future. 5. Sime Darby Energy Utilities Sime Darby Energy Utilities has core businesses in the Engineering work, Ports Logistics, function and Water circumspection.It is supported by a staff of more than 1,000 people in all of our operations in Malaysia, Singapore, Thailand and China. I. Power With plants in Malaysia and Thailand, we have a combined gross qualification of 590MW. Operations in Malaysia which is located in Port Dickson, Negeri Sembilan have a capacity of 440MW of electricity while operating in Thailand at Lae m Chabang has two power plants with an installed capacity of 100MW and 50MW respectively. II. Engineering go Led by Mecomb conference, a unit of engineering services division is supported by a variety of reputable products that provide solutions and value-added engineering services.Mecomb Group is headquartered in Singapore and has operations in Malaysia and Thailand. III. Ports Logistics Port operations and logistics division is based in Shangdong responsibility, China. at that place are three ports that operate at this time a sea port handles general cargo and bulk in Bohai Bay, Weifang and two river ports manipulation coal and general cargo along the Grand Canal in Jining. A new coal handling terminal being aforethought(ip) in Jining. Ports current capacity to reach about 30 million tones per year with plans to expand further into the target handling capacity of 60 million tones per ear. We hope to become a major player in the arena harbor and logistics in China in the ne xt five years. IV. Water Management Water management unit is headquartered in Shandong province of China, comprising Weifang Sime Darby Water Management Co. Ltd and Zibo Chemical Co. Ltd Sime Darby. Established in 2005, Weifang Sime Darby Water Management Co Ltd has a capacity of 140. 0003 per day, supplying clean water to the Hua Hai and surrounding industrial areas. Sime Darby Zibo Chemical Co. Ltd. Zibo) was incorporated in March 2007 to produce polyaluminium chloride at a capacity of quadruple tones per year for use in water treatment plants Weifang Sime Darby Water. 6. Sime Darby healthcare Sime Darby Healthcare is a leader in the private healthcare industry, and aspires to be the gold standard of health care providers in the Asia Pacific region. This section consists of five private entities, namely * Sime Darby checkup Centre Subang Jaya (SDMC SJ) our flagship tertiary care 393-bed hospital * Sime Darby Specialist Centre Megah (SDSC Megah) our outpatient and day care * Sime Darby Nursing & Health Sciences College Sime Darby Medical Centre Ara Damansara (SDMC AD) Centres of excellence for Brain, Heart and Spine & Joint * Sime Darby Medical Centre Parkcity (SDMC Parkcity) will open in 2013 This division was established on 21 October 2008 when the first three entities were rebranded under the brand name of Sime Darby. Sime Darby Healthcare offers a range of special services for health care related to Customers, from emergency care, disease management to screening services and more terrorism as follows * Dietetics Services Dr Golf * Health Screening Centre * Imaging and Diagnostics * chest Care Centre * Subang Fertility Centre * Obesity Clinic * Menstrual Clinic * nuclear Medicine & PET / CT Centre * Vascular & Interventional Radiology Centre * Stone Centre * Digestive and Liver Health Clinic * Blood Disease Centre In addition to health care for Patients, Sime Darby Healthcare Patient Services Banjarmasin also rates offers for hire off er Home Care Nursing Services, International Patient Services, Medical Reports and appointment ServicesIt institutions, SDMC SJ, is one of the leading private hospitals in Malaysia. Internationally recognized, private hospitals with progress facilities, this is the only private hospital that has won the Prime Ministers Quality face twice. Today, SDMC SJ has 393 beds, 93 suites and 14 theaters clinic, keep up to 1,800 patients and 300 patients per day. The hospital also offers the latest state of the art equipment such as scanners 64-slice PET / CT, 3-Tesla MRI, High Dose 3D brachytherapy system, dual-source CT scanner and TomoTherapy Hi-Art System for the treatment of cancer.SDMC AD had the first private Brain Centre of Excellence in Malaysia, with a comprehensive epilepsy management system as well as full and advanced facilities for treatment. Sime Darby Healthcare is planning to open another medical inwardness renamed Sime Darby Medical Centre ParkCity in 2013. Sime Darby Medi cal Centre ParkCity will operate as a comprehensive center of excellence employ to women and children with a focus on breast oncology, child development and treatment of degenerative diseases such as diabetes. 7. Other BusinessesI. Tesco Stores (Malaysia) Sdn Ltd Tesco Stores (Malaysia) Sdn. Ltd. is a joint venture amid Sime Darby Berhad and Tesco plc. Its inception in the year 2001, show that the Sime Darby owns 30% interest in the joint venture. Tesco currently operates 40 hypermarkets in the country. II. policy Broking and Agency Sime Darby Lockton Insurance Brokers Sdn Bhd (Sime Darby Lockton) is one of the leading professional risk services in Malaysia, which specialize in the specialty risk insurance and takaful solutions.The company is the result of a union between Sime Darby Berhad and Lockton, the risk of a service company to the 9 largest in the world. With active involvement in insurance services since early 1930 in Asia, particularly in Malaysia, Singapore and Hong K ong, Sime Darby Lockton has more than 80 dedicated professionals, highly trained and knowledgeable in their respective fields. Sime Darby Lockton is licensed and adjust by Bank Negara Malaysia. HISTORICAL BACKGROUND Almost 200 years ago, Britons growers have established rubber plantations in Malaya and mostly planted with oil palm.Among the pioneers-pioneers is Alexander Guthrie, Daniel and Smith Harrison, Joseph Crosfield, William Sime and Henry dEsterre and Herbert Mitford Darby who is the founder of three large companies right away are Sime Darby Berhad. Alexander Guthrie Guthrie & Co established. in Singapore in 1821 as the first British trading company in Southeast Asia. Guthrie introduced rubber and palm oil in Malaysia in 1896 and 1924. Daniel and Smith Harrison and Joseph Crosfield also formed a trading partnership tea and coffees are cognize as Harrisons & Crosfield in England in 1844. Harrisons & Crosfield bought several half-size farms in Malaysia of ? 0,000 and they came together to form Golden Hope Rubber Estate. In 1982, Harrison and Crossfield have sold three large plantation groups, Golden Hope, Pataling, and capital of the United Kingdom Asiatic to Malaysian concerns for ? 146 million. Business name was changed to Golden Hope Plantations Berhad in 1990 after taking majority Nasional Berhad capitalization equity. In January 2007, three devil Malaysia (Sime Darby, Guthrie and Golden Hope) incorporated into the entity named Synergy Drive vehicle and on 27 November 2007, Synergy Drive renamed Sime Darby Berhad. Entity that combines three different companies in Malaysia are multinational workforce of 104. 00 Malaysian workers. Its core businesses are plantations, property, motor, heavy equipment and energy & utilities that are expected to benefit from continued population growth and economical development in the Asia Pacific region and the global economy. Non-core business unit of Sime Darby as health care, insurance, and home pro ducts grouped under Allied Products and Services division (APS). Subsidiary under the APS including Sime Darby Medical Centre Subang Jaya (formerly known as Subang Jaya Medical Centre) (health care), Sime Alexander Forbes (insurance), and Dunlopillo Malaysia Sdn Bhd (home products).It also has a controlling stake in the supermarket chain Tesco in Malaysia. Sime Darby is a multinational company, with more than 60 pct of the groups revenue comes from overseas. As a result of the merger, Sime Darby became one of the leading companies listed on the worlds palm oil plantations. Sime Darby Berhad also has a significant presence in downstream palm oil. The merger also made Sime Darby a leading developer of residential and commercial community. Additionally, it holds the rights Caterpillar in 12 countries worldwide and distribution and distributor brands like BMW motor.Current President and Chief Executive Officer of the Group is Dato Mohd Bakke Saleh. Sime Darby brand now more than 100 yea rs old even though it does not explain how these companies are just starting with a small shop in Malacca memoirs starting in 1910. It is the legacy of the three companies that create Sime Darby today. PROBLEM Although Sime darby a giant plantation company in the world, they still have problems such as the companys internal operations and management models that lack of transparency, poor governance, red tape, and misconduct (moral hazard) that may imply the business.This is a result of the merger of three companies Golden Hope Limited. , Guthrie Bhd. and Sime Darby Bhd. through Synergy Drive to form a giant company where five times of its original size. With the merger of these companies have the inherent problems of bureaucracy and management. In May 2010, the Energy and Utilities Division has reported large losses where four projects the Energy and Utilities Division, including Qatar Petroleum, Maersk Oil Qatar, Marine and Bakun Dam, delayed because of bad management, leading to change magnitude costs exceeded estimates and lead to a loss of RM1. 31 gazillion. As a result of these losses, Sime Darby has experienced the loss of market value of RM6. 37 billion in the period of one month from the RM52. 94 billion to RM46. 57 billion. Sime Darby has experienced a net loss of RM308. 63 million in the third quarter. Sime Darby yet to recover from past losses continued to be constrained problems associated with neighboring countries, namely Indonesia.Kumpulan Guthrie Berhad was ordered to pay the civil vociferation to the Indonesian company PT Adhiyasa Saranamas more than USD25 million. Kumpulan Guthrie Berhad plans to capture asset PT Holdico power was taken over by the National Banking Penyehatan Agency (IBRA) owned by the Indonesian government. PT Adhiyasa Saranamas was appointed by Kumpulan Guthrie Berhad as an intermediary for the acquisition of PT Holdico Power, including its subsidiaries and assets of the company including oil palm plantations in severa l cities.Problems began to arise when the Guthrie Berhad has agreed to pay 7% of the transaction value results for Adhiyasa been breached by the Guthrie Berhad resulting in a Malaysian government-owned companies have been accused of breach of signalize because of delayed payments promised to Adhiyasa. Sime Darby has also suffered huge losses during the financial crisis era asia 1997 when the stock market plummeted, which recorded a loss of Rs 1. 6 billion, of which the largest level in the history of banking in Malaysia. 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