MIRA INFORM REPORT

 

 

Report Date :

06.08.2014

 

IDENTIFICATION DETAILS

 

Name :

PETRONAS CHEMICALS DERIVATIVES SDN. BHD.

 

 

Formerly Known As :

OPTIMAL CHEMICALS (MALAYSIA) SDN BHD (23/03/2012)

 

 

Registered Office :

Tower 1, Petronas Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

31.07.1998

 

 

Com. Reg. No.:

466586-D

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing & Marketing of Ethylene Oxide Derivatives, Propylene Derivative Products & Related Chemical Products

 

 

No of Employees :

600 [2014]

 

 

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 – June 01, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderate Low Risk

 

B1

Moderate Risk

 

B2

Moderate High Risk

 

C1

High Risk

C2

Very High Risk

 

D

 


 

MALAYSIA ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has 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. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 32% of government revenue in 2013. Bank Negara Malaysia (central bank) maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB earlier raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays

 

Source : CIA

 

 


 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

466586-D

COMPANY NAME

:

PETRONAS CHEMICALS DERIVATIVES SDN. BHD.

FORMER NAME

:

OPTIMAL CHEMICALS (MALAYSIA) SDN BHD (23/03/2012)

INCORPORATION DATE

:

31/07/1998

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

TOWER 1, PETRONAS TWIN TOWERS, KUALA LUMPUR CITY CENTRE, 50088 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

KERTEH INDUSTRIAL AREA KM 106 JALAN KUALA TERENGGANU KUANTAN, 24300 KERTEH, TERENGGANU, MALAYSIA.

TEL.NO.

:

09-8307700

FAX.NO.

:

09-8307797

WEB SITE

:

WWW.OPTIMAL.COM.MY

CONTACT PERSON

:

MOHD YUSRI BIN MOHAMED YUSOF ( DIRECTOR )

 

 

 

INDUSTRY CODE

:

20

PRINCIPAL ACTIVITY

:

MANUFACTURING & MARKETING OF ETHYLENE OXIDE DERIVATIVES, PROPYLENE DERIVATIVE PRODUCTS & RELATED CHEMICAL PRODUCTS

AUTHORISED CAPITAL

:

MYR 550,000,000.00 DIVIDED INTO
ORDINARY SHARE 935,162.00 OF MYR 500.00 EACH.
PREFERENCE SHARE 164,838.00 OF MYR 500.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 247,579,000.00 DIVIDED INTO
ORDINARY SHARES 330,320 CASH OF MYR 500.00 EACH.
PREFERENCE SHARES 164,838 CASH OF MYR 500.00 EACH.

 

 

 

SALES

:

MYR 1,424,260,299 [2012]

NET WORTH

:

MYR 1,373,710,617 [2012]

M1000 OVERALL RANKING

:

235[2011]

M1000 INDUSTRY RANKING

:

11[2011]

 

 

 

STAFF STRENGTH

:

600 [2014]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

HISTORY / BACKGROUND

 

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

 

The Subject is principally engaged in the (as a / as an) manufacturing & marketing of ethylene oxide derivatives, propylene derivative products & related chemical products.

 

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

 

According to the Malaysia 1000 publication, the Subject's ranking are as follows:

 

 

 

 

 

 

YEAR

2011

2009

2008

2005

 

OVERALL RANKING

235

194

149

175

 

INDUSTRY RANKING

11

10

6

2

 

 

The immediate holding company of the Subject is PETRONAS CHEMICALS GROUP BERHAD, a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

18/04/2013

MYR 550,000,000.00

MYR 247,579,000.00

31/03/2000

MYR 550,000,000.00

MYR 165,160,000.00

21/01/2000

MYR 550,000,000.00

MYR 202,000.00

18/08/1998

MYR 550,000,000.00

MYR 1,000.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

PETRONAS CHEMICALS GROUP BERHAD
[ORDINARY SHARES: 330320 UNITS & PREFERENCE SHARES: 164838 UNITS]

TOWER 1, PETRONAS TWIN TOWERS, KUALA LUMPUR CITY CENTRE, 50088 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

459830K

495,158.00

100.00

 

 

 

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

------

 

 

 

495,158.00

100.00

 

 

 

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

=====

+ Also Director



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. MOHD YUSRI BIN MOHAMED YUSOF

Address

:

12, JALAN 49, KAWASAN PERUMAHAN RANTAU, PETRONAS, 24300 KERTEH, TERENGGANU, MALAYSIA.

IC / PP No

:

A0369817

New IC No

:

660328-11-5113

Date of Birth

:

28/03/1966

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

02/07/2012

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. SAMSUDIN BIN MISKON

Address

:

DL 8, JALAN MUTIARA, TAMAN BUKIT AMPANG, 68000 AMPANG, SELANGOR, MALAYSIA.

IC / PP No

:

6012702

New IC No

:

601110-01-5435

Date of Birth

:

10/11/1960

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

01/10/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

MR. AKBAR BIN MD THAYOOB

Address

:

23, JALAN USJ 6/2J, 47610 SUBANG JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

7121205

New IC No

:

630629-07-5613

Date of Birth

:

29/06/1963

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

29/01/2014

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 4

 

Name Of Subject

:

MS. FARINA BINTI FARIKHULLAH KHAN

Address

:

27, JALAN ELITIS ARCA BELANTARA, VALENCIA NORTH GOLF PRECINT, 47000 SUNGAI BULOH, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

720308-11-5230

Date of Birth

:

08/03/1972

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

29/01/2014

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 5

 

Name Of Subject

:

MR. MUHAMMAD FARID BIN NGAH

Address

:

20, LORONG TOK SIRA 23, MEDAN TOK SIRA, 25050 KUANTAN, PAHANG, MALAYSIA.

IC / PP No

:

5981303

New IC No

:

600913-11-5099

Date of Birth

:

13/09/1960

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

20/03/2014

 

 

 

 

 

 

 

 

 

 

 

 



MANAGEMENT

 

 

1)

Name of Subject

:

MOHD YUSRI BIN MOHAMED YUSOF

 

Position

:

DIRECTOR

 

 

 

 

 

AUDITOR

 

Auditor

:

ERNST & YOUNG

Auditor' Address

:

MENARA MILENIUM, JALAN DAMANLELA,, PUSAT BANDAR DAMANSARA, DAMANSARA HEIGHTS, LEVEL 23A, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. MEK YAM @ MARIAM BINTI HASSAN

 

IC / PP No

:

A2742752

 

New IC No

:

740210-03-5388

 

Address

:

11, JALAN SUAKASIH 3/6, BANDAR TUN HUSSEIN ONN, 43200 CHERAS, SELANGOR, 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

17/09/2004

CHARGE ON ACCOUNT

MALAYAN BANKING BERHAD

-

Unsatisfied

2

17/09/2004

DEBENTURE

MALAYAN BANKING BERHAD

-

Unsatisfied

3

17/09/2004

DEED OF ASSIGNMENT

MALAYAN BANKING BERHAD

-

Unsatisfied

4

01/06/2006

OPEN CHARGE

MALAYAN BANKING BERHAD

-

Unsatisfied

 

LEGAL CHECK AGAINST SUBJECT


* A check has been conducted in our databank against 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 since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed.


No blacklisted record & debt collection case was found in our defaulters' databank.



PAYMENT RECORD

 

 

 

SOURCES OF RAW MATERIALS:

 

Local

:

YES

Percentage

:

50%

Overseas

:

YES

Percentage

:

50%

Import Countries

:

ASIA


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

 

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

 

]

 

Good 31-60 Days

[

X

]

 

Average 61-90 Days

[

 

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

80%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

20%

Export Market

:

ASIA

Credit Term

:

30 - 90 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

END USERS

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Products manufactured

:

OXO ALCOHOL AND OTHER CHEMICALS

 

 

 

Award

:

1 ) MS ISO 9001 : 2000 Year :2006

 

 

 

 

Member(s) / Affiliate(s)

:

MALAYSIAN INTERNATIONAL CHAMBER OF COMMERCE AND INDUSTRY (MICCI)

 

 

 

Ownership of premises

:

LEASED/RENTED

 

 

Total Number of Employees:

 

YEAR

2014

2013

2012

2011

2010

 

 

 

 


GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

600

600

600

600

580

 

 

 

 

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing & marketing of ethylene oxide derivatives, propylene derivative products & related chemical products.


The Subject's products can be found in various commonly used items and industrial applications. These include personal care products i.e. soaps and shampoos; cosmetics; pharmaceuticals; industrial, institutional and household cleaners; synthetic lubricants; and oil and gas processing.


Besides, the Subject's products are heavily used as the main ingredients in solvents, paints, inks, coatings and adhesives, and brake fluids.


The Subject's petrochemical products from basic feedstock of Ethylene and Propylene, to intermediate products like Ethylene Oxide, Ethylene Glycol, Butanol and various Ethylene Oxide Derivatives as well as basic and high performance chemicals.


The manufacturing plant is located in Kerteh.

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

 

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

09-8307700

Match

:

N/A

 

 

 

Address Provided by Client

:

KERTEH INDUSTRIAL AREA KM 106 JALAN KUALA TERENGGANU KUANTAN 24300

Current Address

:

KERTEH INDUSTRIAL AREA KM 106 JALAN KUALA TERENGGANU KUANTAN, 24300 KERTEH, TERENGGANU, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


We contacted one of the staff from the Subject and she provided some information.



FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2010 - 2012

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2010 - 2012

]

 

Return on Shareholder Funds

:

Unfavourable

[

1.11%

]

 

Return on Net Assets

:

Unfavourable

[

2.43%

]

 

 

 

 

 

 

 

 

The fluctuating turnover reflects the fierce competition among the existing and new market players. The Subject's profit fell sharply because of the high operating costs incurred. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

35 Days

]

 

Debtor Ratio

:

Acceptable

[

56 Days

]

 

Creditors Ratio

:

Favourable

[

11 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

[

1.86 Times

]

 

Current Ratio

:

Favourable

[

2.26 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

:

Unfavourable

[

2.77 Times

]

 

Gearing Ratio

:

Favourable

[

0.12 Times

]

 

 

 

 

 

 

 

 

The Subject's interest cover was low. If its profits fall or when interest rate rises, it  may not be able to meet all its interest payment. The Subject was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

The Subject recorded lower profits as its turnover showed a erratic trend. The Subject's management was unable to control its costs efficiently as its profit showed a downward trend. 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. If there is a fall in the Subject's profit or any increase in interest rate, the Subject may not be able to generate sufficient cash-flow to service its interest. The Subject as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

 

 

 

 

 

 

 

Overall financial condition of the Subject : LIMITED

 

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Population ( Million)

28.13

28.35

28.70

29.30

29.80

Gross Domestic Products ( % )

(0.5)

7.2

5.1

5.6

5.3

Domestic Demand ( % )

2.9

6.3

8.2

9.4

5.6

Private Expenditure ( % )

(2.7)

8.1

8.2

8.0

7.4

Consumption ( % )

0.7

6.7

7.1

1.0

5.7

Investment ( % )

(17.2)

17.7

12.2

11.7

13.3

Public Expenditure ( % )

5.2

3.8

8.4

13.3

1.2

Consumption ( % )

3.1

0.2

16.1

11.3

(1.2)

Investment ( % )

8.0

2.8

(0.3)

15.9

4.2

 

 

 

 

 

 

Balance of Trade ( MYR Million )

89,650

118,356

116,058

106,300

110,700

Government Finance ( MYR Million )

(28,450)

(40,482)

(45,511)

(42,297)

(39,993)

Government Finance to GDP / Fiscal Deficit ( % )

(4.8)

(5.6)

(5.4)

(4.5)

(4.0)

Inflation ( % Change in Composite CPI)

(5.2)

5.1

3.1

1.6

2.5

Unemployment Rate

4.5

3.9

3.3

3.2

3.0

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

331

329

415

427

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

2.87

2.20

3.50

2.20

-

Average 3 Months of Non-performing Loans ( % )

11.08

15.30

14.80

14.70

-

Average Base Lending Rate ( % )

5.53

6.30

6.60

6.53

-

Business Loans Disbursed( % )

10.5

14.7

15.3

32.2

-

Foreign Investment ( MYR Million )

22,156.8

22,517.9

23,546.1

26,230.4

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,578

44,148

45,455

45,441

-

Registration of New Companies ( % )

(0.1)

6.2

3.0

(0.0)

-

Liquidation of Companies ( No. )

39,075

25,585

132,476

-

-

Liquidation of Companies ( % )

39.6

(34.5)

417.8

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

312,581

271,414

284,598

324,761

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

19,345

19,738

20,121

-

-

Business Dissolved ( % )

2.4

2.0

1.9

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

486.3

543.6

535.1

552.2

-

Cellular Phone Subscribers ( Million )

30.1

32.8

35.3

38.5

-

Tourist Arrival ( Million Persons )

23.6

24.6

24.7

25.0

-

Hotel Occupancy Rate ( % )

58.0

63.0

60.6

62.4

-

 

 

 

 

 

 

Credit Cards Spending ( % )

12.8

14.1

15.6

12.6

-

Bad Cheque Offenders (No.)

36,667

33,568

32,627

26,982

-

Individual Bankruptcy ( No.)

16,228

18,119

19,167

19,575

-

Individual Bankruptcy ( % )

16.7

11.7

5.8

2.1

-

 

 

 

 

 

 



INDUSTRIES ( % of Growth ):

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Agriculture

0.4

2.1

5.9

0.6

2.4

Palm Oil

(1.1)

(3.4)

10.8

(2.8)

-

Rubber

(19.8)

9.9

6.1

(0.6)

-

Forestry & Logging

(5.9)

(3.3)

(7.6)

(2.2)

-

Fishing

5.5

5.6

2.1

(0.7)

-

Other Agriculture

9.0

7.9

7.1

6.4

-

Industry Non-Performing Loans ( MYR Million )

413.7

508.4

634.1

-

-

% of Industry Non-Performing Loans

1.3

2.1

3.2

-

-

 

 

 

 

 

 

Mining

(3.8)

0.2

(5.7)

1.5

2.7

Oil & Gas

2.1

0.5

(1.7)

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

44.2

49.7

46.5

-

-

% of Industry Non-performing Loans

0.1

0.1

0.1

-

-

 

 

 

 

 

 

Manufacturing #

(9.4)

11.4

4.7

4.2

4.9

Exported-oriented Industries

(19.0)

12.1

2.8

4.1

-

Electrical & Electronics

(30.3)

28.4

(4.9)

1.6

-

Rubber Products

(10.1)

25.3

15.4

3.6

-

Wood Products

(24.1)

20.1

(4.9)

4.6

-

Textiles & Apparel

(19.5)

(0.4)

14.8

(7.1)

-

Domestic-oriented Industries

(9.8)

16.3

6.5

8.6

-

Food, Beverages & Tobacco

0.2

3.0

4.2

-

-

Chemical & Chemical Products

(7.7)

16.2

5.5

9.9

-

Plastic Products

(9.1)

2.4

3.8

-

-

Iron & Steel

(32.7)

29.3

2.4

-

-

Fabricated Metal Products

(2.5)

14.9

25.2

-

-

Non-metallic Mineral

(15.5)

20.2

27.1

6.6

-

Transport Equipment

(13.5)

36.5

(10.4)

13.7

-

Paper & Paper Products

(5.0)

18.7

14.8

(7.8)

-

Crude Oil Refineries

0.2

(11.4)

9.3

-

-

Industry Non-Performing Loans ( MYR Million )

6,007.3

6,217.5

6,537.2

-

-

% of Industry Non-Performing Loans

18.3

23.8

25.7

-

-

 

 

 

 

 

 

Construction

5.8

5.1

4.4

15.5

11.2

Industry Non-Performing Loans ( MYR Million )

3,241.8

4,038.5

3,856.9

-

-

% of Industry Non-Performing Loans

9.9

10.7

10.2

-

-

 

 

 

 

 

 

Services

2.6

6.5

6.4

5.5

5.6

Electric, Gas & Water

0.4

8.5

5.6

4.8

-

Transport, Storage & Communication

1.6

7.7

6.5

7.3

-

Wholesale, Retail, Hotel & Restaurant

2.8

4.7

5.2

6.9

-

Finance, Insurance & Real Estate

3.8

6.1

6.3

6.5

-

Government Services

2.0

6.7

7.6

5.6

-

Other Services

4.4

4.2

5.4

5.7

-

Industry Non-Performing Loans ( MYR Million )

6,631.3

7,384.6

6,825.2

-

-

% of Industry Non-Performing Loans

20.2

25.7

23.4

-

-

 

 

 

 

 

 

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 

# Based On Manufacturing Production Index

 

 

INDUSTRY ANALYSIS

 

MSIC CODE

20 : MANUFACTURE OF CHEMICALS AND CHEMICAL PRODUCTS

 

 

INDUSTRY :

MANUFACTURING

 

 

 

The Manufacturing sector is one of the important sectors to the growth of the Malaysian economy. According to Ministry of Finance, the manufacturing sector is expected to grow 4.9% in year 2013. Export oriented-industries are expected to benefit from the higher growth of global trade, while domestic oriented industries expand in line with the better consumer sentiment and business confidence. The resource-based industries are envisaged to grow steadily attributed to improved demand for petroleum, chemical, rubber and plastic products. With better job prospects and higher disposable income, the transportation equipment subsector, in particular, the passenger car segment is expected to expand.

 

Value-added of the manufacturing sector expanded 5% during the first half of 2012. Output of the sector rose 5.2% during the first seven months of 2012 in line with the increase in sales value of manufactured products by 6.5% to RM363.1 billion. Output from domestic oriented industries continued to expand 8.6% while export-oriented industries grew 4.1%.

 

According to the Department of Statistics, the sales value of the Manufacturing sector in January 2013 posted a growth of 7.4% (RM3.6 billion) to record RM52.4 billion as compared to RM48.8 billion reported in year 2012. Meanwhile, month-on-month basis, the sales value has decreased by 0.4% (RM0.2 billion) as compared with the preceding month. The sales value in December 2012 has been revised positive 7.5% year-on-year to record RM52.6 billion.

 

Output of rubber products increased 3.6% in the first seven month of 2012 mainly supported by continuous demand for rubber gloves. Output of rubber gloves grew 5.9% on account of the expansion in the global healthcare industry and wider usage of gloves in other sectors. Similarly, output of catheters, especially for use in medical appliances, also registered a strong growth of 12.6%. Nevertheless, production of rubber tyres and tubes reduced 10.9% in tandem with slowing external demand from the automotive industry, especially China.

 

Meanwhile, production of wood and wood products rebounded 4.6% largely supported by higher demand for wooden and cane furniture (33.5%). The positive performance was attributed to vibrant higher demand from major export destinations such as China and the United States (US) for Malaysian-made furniture. Demand from China accelerated further following the country’s rising income level and the implementation of zero import duty on Malaysian made-furniture. Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.

 

The output of chemicals and chemical products rose 9.9% in the first seven month of year 2012 on account of increasing demand for plastic products (11.8%) and basic chemicals (11.1%). External demand for plastic packaging materials surged during the early part of the year 2012, particularly from Japan and Thailand, as manufacturers resumed operations, which were interrupted by natural calamities and power outages. Chemical production are expected to show 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.

 

Tax and non-tax incentives provided by government encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by government in the manufacturing sector such as solar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 1998, the Subject is a Private Limited company, focusing on manufacturing & marketing of ethylene oxide derivatives, propylene derivative products & related chemical 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. Having a strong shareholders' backing , the Subject has the advantage to compete with its rivals and it is expected to enjoy timely financial assistance should the needs arise. The Subject is a large entity with strong capital position. We are confident with the Subject's business and its future growth prospect.


Over the years, the Subject has penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. Being a large entity, the Subject has a steady workforce of 600 personnel to support its business operations. Its future prospects seem to be fairly good as its business operations are running relatively stable. 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.


Financially, the Subject registered a higher turnover compared to previous year. However, its profits showed a reverse trend. The lower profit achieved was a result of higher operating cost and increased competition. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The Subject however 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 lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 1,373,710,617, the Subject should be able to maintain its business in the near terms.


Having a strong assets backing, the Subject possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The Subject's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the Subject has a good control over its resources.


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


The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the Subject is expected to benefit from the favourable outlook of the industry.


Based on the above condition, we recommend credit be granted to the Subject promptly.

 

 

 

PROFIT AND LOSS ACCOUNT

 

 

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

PETRONAS CHEMICALS DERIVATIVES SDN. BHD.

 

Financial Year End

2012-12-31

2011-12-31

2011-03-31

2010-03-31

Months

12

9

12

12

Consolidated Account

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

 

 

 

 

 

TURNOVER

1,424,260,299

1,199,698,128

1,497,658,043

1,599,590,466

 

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

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

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

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

Total Turnover

1,424,260,299

1,199,698,128

1,497,658,043

1,599,590,466

Costs of Goods Sold

(1,189,553,763)

(936,445,473)

(1,404,078,669)

(1,606,290,118)

 

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

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

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

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

Gross Profit

234,706,536

263,252,655

93,579,374

(6,699,652)

 

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

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

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

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

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

23,843,889

113,149,652

61,727,672

(54,010,592)

 

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

23,843,889

113,149,652

61,727,672

(54,010,592)

Taxation

(8,637,685)

(31,415,072)

164,326,469

16,566,277

 

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

15,206,204

81,734,580

226,054,141

(37,444,315)

 

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

As previously reported

863,668,413

812,342,215

586,288,074

623,732,389

Prior year adjustment

-

(30,408,382)

-

-

 

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

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

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

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

As restated

863,668,413

781,933,833

586,288,074

623,732,389

 

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

878,874,617

863,668,413

812,342,215

586,288,074

 

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

878,874,617

863,668,413

812,342,215

586,288,074

 

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

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

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

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

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

Others

13,499,934

10,570,779

16,964,753

22,652,062

 

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

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

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

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

 

13,499,934

10,570,779

16,964,753

22,652,062

 

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

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

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

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

 

 

 

 

BALANCE SHEET

 

 

PETRONAS CHEMICALS DERIVATIVES SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

FIXED ASSETS

932,918,709

1,025,901,981

926,285,762

937,187,278

 

 

 

 

 

Deferred assets

178,829,685

185,753,127

205,596,000

39,957,000

Others

50,095

103,329

125,471

55,455,472

 

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

178,879,780

185,856,456

205,721,471

95,412,472

 

 

 

 

 

 

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

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

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

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

TOTAL LONG TERM ASSETS

1,111,798,489

1,211,758,437

1,132,007,233

1,032,599,750

 

 

 

 

 

Stocks

135,173,330

182,087,203

125,275,697

156,928,645

Trade debtors

219,556,504

204,450,338

190,495,818

301,840,701

Other debtors, deposits & prepayments

16,761,985

12,517,069

5,723,483

8,309,360

Short term deposits

275,633,125

341,710,952

232,814,310

254,872,391

Amount due from holding company

-

-

292,248

-

Amount due from related companies

106,337,523

44,743,310

78,771,047

43,263,161

Cash & bank balances

6,731,231

2,131,861

4,230,479

37,772,053

Others

336,553

267,208

86,868

34,277

 

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

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

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

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

TOTAL CURRENT ASSETS

760,530,251

787,907,941

637,689,950

803,020,588

 

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

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

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

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

TOTAL ASSET

1,872,328,740

1,999,666,378

1,769,697,183

1,835,620,338

 

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

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

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

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

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Trade creditors

36,529,178

8,739,274

2,276,000

24,600,726

Other creditors & accruals

175,085,611

85,671,150

110,845,191

110,959,676

Short term borrowings/Term loans

-

91,500,958

90,382,586

43,217,644

Other borrowings

-

25,069,015

38,133,496

-

Amounts owing to holding company

33,243,397

4,511,375

6,636,413

-

Amounts owing to related companies

73,579,964

105,885,073

26,402,218

198,825,363

Other liabilities

18,190,585

17,324,368

-

51,763,563

 

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

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

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

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

TOTAL CURRENT LIABILITIES

336,628,735

338,701,213

274,675,904

429,366,972

 

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

423,901,516

449,206,728

363,014,046

373,653,616

 

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

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

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

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

TOTAL NET ASSETS

1,535,700,005

1,660,965,165

1,495,021,279

1,406,253,366

 

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

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

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

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

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

Ordinary share capital

247,579,000

247,579,000

247,579,000

247,579,000

 

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

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

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

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

TOTAL SHARE CAPITAL

247,579,000

247,579,000

247,579,000

247,579,000

 

 

 

 

 

RESERVES

 

 

 

 

Share premium

247,257,000

247,257,000

247,257,000

247,257,000

Retained profit/(loss) carried forward

878,874,617

863,668,413

812,342,215

586,288,074

Others

-

(3,305,452)

(1,599,371)

(3,406,387)

 

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

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

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

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

TOTAL RESERVES

1,126,131,617

1,107,619,961

1,057,999,844

830,138,687

 

 

 

 

 

 

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

1,373,710,617

1,355,198,961

1,305,578,844

1,077,717,687

 

 

 

 

 

Long term loans

161,989,388

180,179,969

41,804,090

144,363,209

Others

-

125,586,235

147,638,345

184,172,470

 

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

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

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

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

TOTAL LONG TERM LIABILITIES

161,989,388

305,766,204

189,442,435

328,535,679

 

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

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

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

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

 

1,535,700,005

1,660,965,165

1,495,021,279

1,406,253,366

 

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

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

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

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

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

PETRONAS CHEMICALS DERIVATIVES SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

Cash

282,364,356

343,842,813

237,044,789

292,644,444

Net Liquid Funds

282,364,356

343,842,813

237,044,789

292,644,444

Net Liquid Assets

288,728,186

267,119,525

237,738,349

216,724,971

Net Current Assets/(Liabilities)

423,901,516

449,206,728

363,014,046

373,653,616

Net Tangible Assets

1,535,700,005

1,660,965,165

1,495,021,279

1,406,253,366

Net Monetary Assets

126,738,798

(38,646,679)

48,295,914

(111,810,708)

BALANCE SHEET ITEMS

 

 

 

 

Total Borrowings

161,989,388

296,749,942

170,320,172

187,580,853

Total Liabilities

498,618,123

644,467,417

464,118,339

757,902,651

Total Assets

1,872,328,740

1,999,666,378

1,769,697,183

1,835,620,338

Net Assets

1,535,700,005

1,660,965,165

1,495,021,279

1,406,253,366

Net Assets Backing

1,373,710,617

1,355,198,961

1,305,578,844

1,077,717,687

Shareholders' Funds

1,373,710,617

1,355,198,961

1,305,578,844

1,077,717,687

Total Share Capital

247,579,000

247,579,000

247,579,000

247,579,000

Total Reserves

1,126,131,617

1,107,619,961

1,057,999,844

830,138,687

LIQUIDITY (Times)

 

 

 

 

Cash Ratio

0.84

1.02

0.86

0.68

Liquid Ratio

1.86

1.79

1.87

1.50

Current Ratio

2.26

2.33

2.32

1.87

WORKING CAPITAL CONTROL (Days)

 

 

 

 

Stock Ratio

35

55

31

36

Debtors Ratio

56

62

46

69

Creditors Ratio

11

3

1

6

SOLVENCY RATIOS (Times)

 

 

 

 

Gearing Ratio

0.12

0.22

0.13

0.17

Liabilities Ratio

0.36

0.48

0.36

0.70

Times Interest Earned Ratio

2.77

11.70

4.64

(1.38)

Assets Backing Ratio

6.20

6.71

6.04

5.68

PERFORMANCE RATIO (%)

 

 

 

 

Operating Profit Margin

1.67

9.43

4.12

(3.38)

Net Profit Margin

1.07

6.81

15.09

(2.34)

Return On Net Assets

2.43

7.45

5.26

(2.23)

Return On Capital Employed

2.43

7.45

5.26

(2.23)

Return On Shareholders' Funds/Equity

1.11

6.03

17.31

(3.47)

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

0.00

NOTES TO ACCOUNTS

 

 

 

 

Contingent Liabilities

0

0

0

0

 

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs. 60.86

UK Pound

1

Rs. 102.67

Euro

1

Rs. 81.69

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

DPT

 

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.