MIRA INFORM REPORT

Report Date :

07.11.2014

IDENTIFICATION DETAILS

Name :	OPTIMISTIC ORGANIC SDN. BHD.
Registered Office :	Symphony House, D13, Pusat Dagangan Dana, 1, Jalan PJU 1A/46, Level 18, 47301 Petaling Jaya, Selangor
Country :	Malaysia
Financials (as on) :	31.03.2014
Date of Incorporation :	24.09.2009
Com. Reg. No.:	873094-V
Legal Form :	Private Limited
Line of Business :	Manufacture and Wholesale of Chemical Products.
No. of Employees :	121 [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 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
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. 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.

:

873094-V

COMPANY NAME

:

OPTIMISTIC ORGANIC SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

24/09/2009

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SYMPHONY HOUSE, D13, PUSAT DAGANGAN DANA, 1, JALAN PJU 1A/46, LEVEL 18, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 3351, TELOK KALONG INDUSTRIAL ESTATE, 24007 KEMAMAN, TERENGGANU, MALAYSIA.

TEL.NO.

:

09-8633029

FAX.NO.

:

09-8633085

CONTACT PERSON

:

PAREKH NARESHKUMAR KHIMCHAND ( VICE PRESIDENT )

INDUSTRY CODE

:

20299

PRINCIPAL ACTIVITY

:

MANUFACTURE AND WHOLESALE CHEMICAL PRODUCTS

AUTHORISED CAPITAL

:

MYR 10,000,000.00 DIVIDED INTO
ORDINARY SHARE 10,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 10,000,000.00 DIVIDED INTO
ORDINARY SHARES 10,000,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 144,725,851 [2014]

NET WORTH

:

MYR 47,276,126 [2014]

STAFF STRENGTH

:

121 [2014]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

HISTORY / BACKGROUND

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

The Subject is principally engaged in the (as a / as an) manufacture and wholesale chemical products.

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

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

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
15/02/2013	MYR 10,000,000.00	MYR 10,000,000.00
24/09/2009	MYR 100,000.00	MYR 2.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
CHEMINVEST PTE. LTD.	10, JALAN BESAR, 10-09, SIM LIM TOWER, 208787, SINGAPORE.	200909241H	10,000,000.00	100.00
			---------------	------
			10,000,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	NARAYANASWAMY ULAGANATHAN
Address	:	PT 10580, JALAN DELIMA 8, LOT 144, 24000 KEMAMAN, TERENGGANU, MALAYSIA.
IC / PP No	:	Z1714022
Nationality	:	MALAYSIAN INDIAN
Date of Appointment	:	01/06/2011

DIRECTOR 2

Name Of Subject	:	PAREKH NARESHKUMAR KHIMCHAND
Address	:	50, JALAN DELIMA, LOT 144, 24000 KEMAMAN, TERENGGANU, MALAYSIA.
IC / PP No	:	G1170183
Nationality	:	MALAYSIAN
Date of Appointment	:	01/06/2011

DIRECTOR 3

Name Of Subject	:	NAMBIRAJAN NARAYANAN
Address	:	1, STATE BANK OFFICERS, COLONY POLICE MANICKAM, STREET AYANAVARAM, CHENNAI 600 032, TAMILNADU, INDIA.
IC / PP No	:	G3384829
Nationality	:	INDIAN
Date of Appointment	:	10/06/2013

DIRECTOR 4

Name Of Subject	:	SUBRAMANIAM NEELAKANTAN
Address	:	38, DEFENCE COLONY, CHENNAI 600 032, TAMILNADU, INDIA.
IC / PP No	:	Z1759412
Nationality	:	INDIAN
Date of Appointment	:	10/06/2013

MANAGEMENT

1)	Name of Subject	:	PAREKH NARESHKUMAR KHIMCHAND
	Position	:	VICE PRESIDENT

AUDITOR

Auditor	:	ERNST & YOUNG
Auditor' Address	:	KOMPLEKS TERUNTUM, JALAN MAHKOTA, 11TH FLOOR, 25000 KUANTAN, PAHANG, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. SEE SIEW CHENG
	IC / PP No	:	A0735809
	New IC No	:	670505-10-5880
	Address	:	17, JALAN ARA, SD7/4G, BANDAR SRI DAMANSARA, 52200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

2)	Company Secretary	:	MS. LEONG SHIAK WAN
	IC / PP No	:	A1393261
	New IC No	:	691117-10-5486
	Address	:	207, BLOCK E, PARADESA TROPICA, 7, PERSIARAN MERANTI PJU 9, BANDAR SRI DAMANSARA, 52200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	13/03/2013	ASSIGNMENT AND CHARGE OVER	INDIA INTERNATIONAL BANK MALAYSIA BERHAD	MYR 32,000,000.00	Unsatisfied
2	13/03/2013	MEMORANDUM OF DEPOSIT	INDIA INTERNATIONAL BANK MALAYSIA BERHAD	MYR 32,000,000.00	Unsatisfied
3	13/03/2013	DEBENTURE	INDIA INTERNATIONAL BANK MALAYSIA BERHAD	MYR 32,000,000.00	Unsatisfied
4	11/06/2013	LANG CHARGE	INDIA INTERNATIONAL BANK MALAYSIA BERHAD	MYR 32,000,000.00	Unsatisfied
5	30/04/2014	MEMORANDUM OF DEPOSIT	INDIA INTERNATIONAL BANK (MALAYSIA) BHD.	-	Unsatisfied

LITIGATION CHECK AGAINST SUBJECT

* A check has been conducted in our databank againt the Subject whether the Subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank.

No winding up petition was found in our databank

.

DEFAULTER CHECK AGAINST SUBJECT

* We have checked through the Subject in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection.

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

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	YES
Overseas	:	YES

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

OVERALL PAYMENT HABIT
Prompt 0-30 Days	[	]	Good 31-60 Days	[	X	]	Average 61-90 Days	[	]
Fair 91-120 Days	[	]	Poor >120 Days	[		]

CLIENTELE

Local	:	YES	Percentage	:	10%
Domestic Markets	:	MALAYSIA
Overseas	:	YES	Percentage	:	90%
Export Market	:	WORLDWIDE
Credit Term	:	N/A
Payment Mode	:	CHEQUES TELEGRAPHIC TRANSFER (TT)

OPERATIONS

Products manufactured

:

PLASTIC AND CHEMICAL PRODUCTS

Total Number of Employees:
YEAR	2014
GROUP	N/A
COMPANY	121

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) manufacture and wholesale chemical products.

The Subject is engaged in the manufacturing of petrochemicals for the following industries:

* Plastic

* Paints

* Cosmetics

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	09-8633029
Match	:	N/A
Address Provided by Client	:	N/A
Current Address	:	LOT 3351, TELOK KALONG INDUSTRIAL ESTATE, 24007 KEMAMAN, TERENGGANU, MALAYSIA.
Match	:	N/A
Latest Financial Accounts	:	YES

Other Investigations

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

FINANCIAL ANALYSIS

Profitability
Turnover	:	Erratic	[	2011 - 2014	]
Profit/(Loss) Before Tax	:	Decreased	[	2011 - 2014	]
Return on Shareholder Funds	:	Acceptable	[	13.43%	]
Return on Net Assets	:	Unfavourable	[	9.59%	]
The fluctuating turnover reflects the fierce competition among the existing and new market players.The dip in profit could be due to the stiff market competition which reduced the Subject's profit margin. The Subject's management had generated acceptable return for its shareholders using its assets.
Working Capital Control
Stock Ratio	:	Favourable	[	14 Days	]
Debtor Ratio	:	Acceptable	[	62 Days	]
Creditors Ratio	:	Favourable	[	27 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	[	1.00 Times	]
Current Ratio	:	Unfavourable	[	1.21 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	:	Acceptable	[	4.90 Times	]
Gearing Ratio	:	Unfavourable	[	1.37 Times	]
The Subject's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the Subject is able to generate sufficient income to service its interest and repay the loans. The Subject was highly geared, thus it had a high financial risk. The Subject was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the Subject will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the Subject has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the Subject's turnover and the interest it needs to pay.
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. The Subject had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the Subject's profit, we do believe the Subject is able to generate sufficient cash flow to service its interest payment. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.
Overall financial condition of the Subject : FAIR

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators:	2010	2011	2012	2013	2014**
Population ( Million)	28.35	28.70	29.30	29.80	30.30
Gross Domestic Products ( % )	7.2	5.1	5.6	5.3	6.0
Domestic Demand ( % )	6.3	8.2	9.4	5.6	6.4
Private Expenditure ( % )	8.1	8.2	8.0	7.4	7.9
Consumption ( % )	6.7	7.1	1.0	5.7	6.5
Investment ( % )	17.7	12.2	11.7	13.3	12.0
Public Expenditure ( % )	3.8	8.4	13.3	1.2	2.3
Consumption ( % )	0.2	16.1	11.3	(1.2)	2.1
Investment ( % )	2.8	(0.3)	15.9	4.2	2.6
Balance of Trade ( MYR Million )	118,356	116,058	106,300	110,700	52,314
Government Finance ( MYR Million )	(40,482)	(45,511)	(42,297)	(39,993)	(37,291)
Government Finance to GDP / Fiscal Deficit ( % )	(5.6)	(5.4)	(4.5)	(4.0)	(3.5)
Inflation ( % Change in Composite CPI)	5.1	3.1	1.6	2.5	3.3
Unemployment Rate	3.9	3.3	3.2	3.0	3.0
Net International Reserves ( MYR Billion )	329	415	427	-	417
Average Risk-Weighted Capital Adequacy Ratio ( % )	2.20	3.50	2.20	-	-
Average 3 Months of Non-performing Loans ( % )	15.30	14.80	14.70	-	-
Average Base Lending Rate ( % )	6.30	6.60	6.53	6.53	-
Business Loans Disbursed( % )	14.7	15.3	32.2	-	-
Foreign Investment ( MYR Million )	22,517.9	23,546.1	26,230.4	38,238.0	-
Consumer Loans ( % )	-	-	-	-	-
Registration of New Companies ( No. )	44,148	45,455	45,441	46,321	-
Registration of New Companies ( % )	6.2	3.0	(0.0)	1.9	-
Liquidation of Companies ( No. )	25,585	132,476	-	-	-
Liquidation of Companies ( % )	(34.5)	417.8	-	-	-
Registration of New Business ( No. )	271,414	284,598	324,761	329,895	-
Registration of New Business ( % )	-	-	-	-	-
Business Dissolved ( No. )	19,738	20,121	-	-	-
Business Dissolved ( % )	2.0	1.9	-	-	-
Sales of New Passenger Cars (' 000 Unit )	543.6	535.1	552.2	-	-
Cellular Phone Subscribers ( Million )	32.8	35.3	38.5	43.0	-
Tourist Arrival ( Million Persons )	24.6	24.7	25.0	25.7	-
Hotel Occupancy Rate ( % )	63.0	60.6	62.4	62.6	-
Credit Cards Spending ( % )	14.1	15.6	12.6	-	-
Bad Cheque Offenders (No.)	33,568	32,627	26,982	28,876	-
Individual Bankruptcy ( No.)	18,119	19,167	19,575	21,984	-
Individual Bankruptcy ( % )	11.7	5.8	2.1	12.3	-

INDUSTRIES ( % of Growth ):	2010	2011	2012	2013	2014**
Agriculture	2.4	5.8	1.0	2.1	3.8
Palm Oil	(3.4)	10.8	(0.3)	2.6	-
Rubber	9.9	6.1	(7.9)	(10.1)	-
Forestry & Logging	(3.3)	(7.6)	(4.5)	(7.8)	-
Fishing	5.6	2.1	4.3	1.6	-
Other Agriculture	7.9	7.1	6.4	8.2	-
Industry Non-Performing Loans ( MYR Million )	508.4	634.1	-	-	-
% of Industry Non-Performing Loans	2.1	3.2	-	-	-
Mining	(0.3)	(5.4)	1.4	0.9	(0.8)
Oil & Gas	0.5	(1.7)	-	-	-
Other Mining	-	-	-	-	-
Industry Non-performing Loans ( MYR Million )	49.7	46.5	-	-	-
% of Industry Non-performing Loans	0.1	0.1	-	-	-
Manufacturing #	11.9	4.7	4.8	3.4	6.6
Exported-oriented Industries	12.1	4.1	6.5	3.3	5.6
Electrical & Electronics	28.4	(4.0)	12.7	6.9	13.3
Rubber Products	25.3	20.7	3.0	11.7	(0.3)
Wood Products	20.1	(5.1)	8.7	(2.7)	5.1
Textiles & Apparel	(0.4)	13.2	(7.1)	(2.6)	11.5
Domestic-oriented Industries	16.3	10.7	1.7	6.8	9.4
Food, Beverages & Tobacco	3.0	4.8	2.7	3.6	6.1
Chemical & Chemical Products	16.2	10.0	10.8	5.6	-
Plastic Products	2.4	3.8	-	-	-
Iron & Steel	29.3	2.2	(6.6)	5.0	0.1
Fabricated Metal Products	14.9	21.8	13.8	9.9	2.9
Non-metallic Mineral	20.2	12.1	2.9	(2.0)	5.4
Transport Equipment	36.5	12.0	3.4	13.8	22.9
Paper & Paper Products	18.7	9.5	3.1	1.8	4.7
Crude Oil Refineries	(11.4)	9.3	-	-	-
Industry Non-Performing Loans ( MYR Million )	6,217.5	6,537.2	-	-	-
% of Industry Non-Performing Loans	23.8	25.7	-	-	-
Construction	11.4	4.7	18.6	10.9	10.0
Industry Non-Performing Loans ( MYR Million )	4,038.5	3,856.9	-	-	-
% of Industry Non-Performing Loans	10.7	10.2	-	-	-
Services	7.4	7.0	6.4	5.9	6.2
Electric, Gas & Water	7.8	3.5	4.4	4.2	3.6
Transport, Storage & Communication	7.7	6.5	7.1	7.3	7.5
Wholesale, Retail, Hotel & Restaurant	4.7	5.2	4.7	5.9	6.9
Finance, Insurance & Real Estate	6.10	6.90	9.70	3.70	4.65
Government Services	5.9	12.4	9.4	8.3	6.1
Other Services	4.4	5.1	3.9	5.1	4.8
Industry Non-Performing Loans ( MYR Million )	7,384.6	6,825.2	-	-	-
% of Industry Non-Performing Loans	25.7	23.4	-	-	-
* Estimate / Preliminary
** Forecast
# Based On Manufacturing Production Index

INDUSTRY ANALYSIS

MSIC CODE
20299 : Manufacture of other chemical products n.e.c.
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 domesticoriented 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 sevenmonths of 2012 in line with the increase in sales value of manufactured products by 6.5% to RM363.1 billion. Output from domesticoriented 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 goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such assolar 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 2009, the Subject is a Private Limited company, focusing on manufacture and wholesale chemical products. The Subject has been in business for less than 5 years and it has slowly been building up contact with its clients while competing in the industry. However, it has yet to enjoy a stable market shares as it need to compete many well established players in the same field. The Subject is a large entity with strong capital position of MYR 10,000,000. 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. The Subject is a fairly large and rapidly growing company with over 121 staff in its 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.

The Subject's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. 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 average 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. The high gearing ratio clearly implied that the Subject was supported by more debt than equity. Thus, the Subject is exposed to high financial risk. Given a positive net worth standing at MYR 47,276,126, 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)

OPTIMISTIC ORGANIC SDN. BHD.

Financial Year End	2014-03-31	2013-03-31	2012-03-31	2011-03-31
Months	12	12	12	11
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	SUMMARY
Currency	MYR	MYR	MYR	MYR
TURNOVER	144,725,851	158,456,810	121,439,826	-
Other Income	69,312	330,471	7,639,122	-
	----------------	----------------	----------------	----------------
Total Turnover	144,795,163	158,787,281	129,078,948	-
Costs of Goods Sold	(119,534,156)	(130,950,844)	(114,447,240)	-
	----------------	----------------	----------------	----------------
Gross Profit	25,261,007	27,836,437	14,631,708	-
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	8,004,501	11,214,730	3,969,561	18,186,130
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	8,004,501	11,214,730	3,969,561	18,186,130
Taxation	(1,655,756)	(2,883,925)	538,474	-
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	6,348,745	8,330,805	4,508,035	18,186,130
	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	30,927,381	22,596,576	18,088,541	(97,589)
	----------------	----------------	----------------	----------------
As restated	30,927,381	22,596,576	18,088,541	(97,589)
	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	37,276,126	30,927,381	22,596,576	18,088,541
	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	37,276,126	30,927,381	22,596,576	18,088,541
	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Others	2,050,564	2,539,697	862,034	-
	----------------	----------------	----------------	----------------
	2,050,564	2,539,697	862,034	-
	=============	=============	=============

BALANCE SHEET

OPTIMISTIC ORGANIC SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	99,114,652	90,705,542	95,624,389	99,520,000
Deferred assets	-	-	538,474	-
	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	-	-	538,474	-
	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	99,114,652	90,705,542	96,162,863	99,520,000
Stocks	5,679,154	3,741,846	7,705,500	-
Trade debtors	24,479,003	18,608,595	243,567	-
Other debtors, deposits & prepayments	956,727	5,554,187	5,230,573	-
Short term deposits	1,200,000	103,305	100,000	-
Amount due from holding company	201,897	312,027	10,389,478	-
Cash & bank balances	74,874	2,647,784	3,824,282	-
	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	32,591,655	30,967,744	27,493,400	116,914
	----------------	----------------	----------------	----------------
TOTAL ASSET	131,706,307	121,673,286	123,656,263	99,636,914
	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	8,730,303	2,369,662	4,712,762	-
Other creditors & accruals	5,271,772	3,718,662	1,371,187	-
Other borrowings	11,098,152	-	-	-
Amounts owing to holding company	1,795,423	7,863,151	5,699,632	-
Other liabilities	-	-	6,531,384	-
	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	26,895,650	13,951,475	18,314,965	71,548,373
	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	5,696,005	17,016,269	9,178,435	(71,431,459)
	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	104,810,657	107,721,811	105,341,298	28,088,541
	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	10,000,000	10,000,000	10,000,000	10,000,000
	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	10,000,000	10,000,000	10,000,000	10,000,000
Retained profit/(loss) carried forward	37,276,126	30,927,381	22,596,576	18,088,541
	----------------	----------------	----------------	----------------
TOTAL RESERVES	37,276,126	30,927,381	22,596,576	18,088,541
	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	47,276,126	40,927,381	32,596,576	28,088,541
Other long term borrowings	53,533,324	64,448,979	72,744,722	-
Deferred taxation	4,001,207	2,345,451	-	-
	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	57,534,531	66,794,430	72,744,722	-
	----------------	----------------	----------------	----------------
	104,810,657	107,721,811	105,341,298	28,088,541
	=============	=============	=============	=============

FINANCIAL RATIO

OPTIMISTIC ORGANIC SDN. BHD.

TYPES OF FUNDS
Cash	1,274,874	2,751,089	3,924,282	-
Net Liquid Funds	1,274,874	2,751,089	3,924,282	-
Net Liquid Assets	16,851	13,274,423	1,472,935	(71,431,459)
Net Current Assets/(Liabilities)	5,696,005	17,016,269	9,178,435	(71,431,459)
Net Tangible Assets	104,810,657	107,721,811	105,341,298	28,088,541
Net Monetary Assets	(57,517,680)	(53,520,007)	(71,271,787)	(71,431,459)
BALANCE SHEET ITEMS
Total Borrowings	64,631,476	64,448,979	72,744,722	-
Total Liabilities	84,430,181	80,745,905	91,059,687	71,548,373
Total Assets	131,706,307	121,673,286	123,656,263	99,636,914
Net Assets	104,810,657	107,721,811	105,341,298	28,088,541
Net Assets Backing	47,276,126	40,927,381	32,596,576	28,088,541
Shareholders' Funds	47,276,126	40,927,381	32,596,576	28,088,541
Total Share Capital	10,000,000	10,000,000	10,000,000	10,000,000
Total Reserves	37,276,126	30,927,381	22,596,576	18,088,541
LIQUIDITY (Times)
Cash Ratio	0.05	0.20	0.21	-
Liquid Ratio	1.00	1.95	1.08	-
Current Ratio	1.21	2.22	1.50	0.00
WORKING CAPITAL CONTROL (Days)
Stock Ratio	14	9	23	-
Debtors Ratio	62	43	1	-
Creditors Ratio	27	7	15	-
SOLVENCY RATIOS (Times)
Gearing Ratio	1.37	1.57	2.23	-
Liabilities Ratio	1.79	1.97	2.79	2.55
Times Interest Earned Ratio	4.90	5.42	5.60	-
Assets Backing Ratio	10.48	10.77	10.53	2.81
PERFORMANCE RATIO (%)
Operating Profit Margin	5.53	7.08	3.27	-
Net Profit Margin	4.39	5.26	3.71	-
Return On Net Assets	9.59	12.77	4.59	64.75
Return On Capital Employed	9.59	12.77	4.59	64.75
Return On Shareholders' Funds/Equity	13.43	20.36	13.83	64.75
Dividend Pay Out Ratio (Times)	0.00	0.00	0.00	-
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.39
UK Pound	1	Rs.98.00
Euro	1	Rs.76.99

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	NIT

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%)