MIRA INFORM REPORT

 

 

Report No. :

328739

Report Date :

24.06.2015

 

IDENTIFICATION DETAILS

 

Name :

OPTIMISTIC ORGANIC SDN. BHD.

 

 

Registered Office :

Symphony House Dana 1, Jalan Pju 1a/46, Level 8, 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 (Limited By Share)

 

 

Line of Business :

Manufacture of petro-chemical products.

 

 

No. of Employee :

120 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Status :

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 – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

MALAYSIA ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. 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 previously profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. Falling global oil prices in the second half of 2014 have strained government finances, shrunk Malaysia’s current account surplus and put downward pressure on the ringgit. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplied about 29% of government revenue in 2014. 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. Malaysia is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.

 

Source : CIA

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

873094-V

COMPANY NAME

:

OPTIMISTIC ORGANIC SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

24/09/2009

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SYMPHONY HOUSE DANA 1, JALAN PJU 1A/46, LEVEL 8, 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

:

SUBRAMANIAM NEELAKANTAN ( DIRECTOR )

INDUSTRY CODE

:

20299

PRINCIPAL ACTIVITY

:

MANUFACTURE OF PETRO-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

:

120 [2015]

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 of petro-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, SINGAPORE(208787), SINGAPORE.

XLZ00216150

10,000,000.00

100.00

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

------

10,000,000.00

100.00

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

SUBRAMANIAM NEELAKANTAN

Address

:

NO. 38, DEFENCE COLONY, CHENNAI 600 032, TAMILNADU, INDIA.

IC / PP No

:

Z1759412

Nationality

:

INDIAN

Date of Appointment

:

10/06/2013

 

DIRECTOR 2

 

Name Of Subject

:

NAMBIRAJAN NARAYANAN

Address

:

1, STATE BANK OFFICERS, COLONY POLICE MANICKAM, STREET, AYANAVARAM, CHENNAI 600 023, TAMILNADU, INDIA.

IC / PP No

:

G3384829

Nationality

:

INDIAN

Date of Appointment

:

10/06/2013

 

DIRECTOR 3

 

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 4

 

Name Of Subject

:

MR. MOHD ALI BIN AYUB

Address

:

169, PERSIARAN CINTA SAYANG, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

IC / PP No

:

6230128

New IC No

:

610914-01-5013

Date of Birth

:

14/09/1961

Nationality

:

MALAYSIAN

Date of Appointment

:

01/09/2014


MANAGEMENT

 

 

 

1)

Name of Subject

:

SUBRAMANIAM NEELAKANTAN

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. 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

:

PETRO-CHEMICAL PRODUCTS

 

Total Number of Employees:

YEAR

2015

2014

GROUP

N/A

N/A

COMPANY

120

121

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) manufacture of petro-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

:

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

Current Address

:

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

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 24th June 2015 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:

2011

2012

2013

2014*

2015**

Population ( Million)

28.7

29.3

29.8

30.3

30.5

Gross Domestic Products ( % )

5.1

5.6

5.3

6.0

6.0

Domestic Demand ( % )

8.2

9.4

5.6

6.4

6.2

Private Expenditure ( % )

8.2

8.0

8.6

7.9

6.9

Consumption ( % )

7.1

1.0

5.7

6.5

5.6

Investment ( % )

12.2

11.7

13.3

12.0

10.7

Public Expenditure ( % )

8.4

13.3

4.4

2.3

4.2

Consumption ( % )

16.1

11.3

(1.2)

2.1

3.8

Investment ( % )

(0.3)

15.9

4.2

2.6

4.7

Balance of Trade ( MYR Million )

116,058

106,300

71,298

52,314

-

Government Finance ( MYR Million )

(45,511)

(42,297)

(39,993)

(37,291)

-

Government Finance to GDP / Fiscal Deficit ( % )

(5.4)

(4.5)

(4.0)

(3.5)

(3.0)

Inflation ( % Change in Composite CPI)

3.1

1.6

2.5

3.3

4.0

Unemployment Rate

3.3

3.2

3.0

3.0

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

-

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

-

-

Business Loans Disbursed( % )

15.3

32.2

-

-

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

-

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

-

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

-

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

-

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

-

-

Registration of New Business ( No. )

284,598

324,761

329,895

-

-

Registration of New Business ( % )

5.0

14.0

2.0

-

-

Business Dissolved ( No. )

20,121

20,380

18,161

-

-

Business Dissolved ( % )

1.9

1.3

(10.9)

-

-

Sales of New Passenger Cars (' 000 Unit )

535.1

552.2

576.7

598.4

610.3

Cellular Phone Subscribers ( Million )

35.3

38.5

43.0

43.8

-

Tourist Arrival ( Million Persons )

24.7

25.0

25.7

28.0

-

Hotel Occupancy Rate ( % )

60.6

62.4

62.6

-

-

Credit Cards Spending ( % )

15.6

12.6

-

-

-

Bad Cheque Offenders (No.)

32,627

26,982

28,876

-

-

Individual Bankruptcy ( No.)

19,167

19,575

21,984

-

-

Individual Bankruptcy ( % )

5.8

2.1

12.3

-

-



INDUSTRIES ( % of Growth ):

2011

2012

2013

2014*

2015**

Agriculture

5.8

1.0

2.1

3.8

3.1

Palm Oil

10.8

(0.3)

2.6

6.7

-

Rubber

6.1

(7.9)

(10.1)

(10.4)

-

Forestry & Logging

(7.6)

(4.5)

(7.8)

(4.2)

-

Fishing

2.1

4.3

1.6

2.7

-

Other Agriculture

7.1

6.4

8.2

6.2

-

Industry Non-Performing Loans ( MYR Million )

634.1

-

-

-

-

% of Industry Non-Performing Loans

3.2

-

-

-

-

Mining

(5.4)

1.4

0.9

(0.8)

2.8

Oil & Gas

(1.7)

-

-

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.6

5.5

Exported-oriented Industries

4.1

6.5

3.3

5.6

-

Electrical & Electronics

(4.0)

12.7

6.9

13.3

-

Rubber Products

20.7

3.0

11.7

(0.3)

-

Wood Products

(5.1)

8.7

(2.7)

5.1

-

Textiles & Apparel

13.2

(7.1)

(2.6)

11.5

-

Domestic-oriented Industries

10.7

1.7

6.8

9.4

-

Food, Beverages & Tobacco

4.80

2.70

3.60

6.13

6.13

Chemical & Chemical Products

10.0

10.8

5.6

-

-

Plastic Products

3.8

-

-

-

-

Iron & Steel

2.2

(6.6)

5.0

0.1

-

Fabricated Metal Products

21.8

13.8

9.9

2.9

-

Non-metallic Mineral

12.1

2.9

(2.0)

5.4

-

Transport Equipment

12.0

3.4

13.8

22.9

-

Paper & Paper Products

9.5

3.1

1.8

4.7

-

Crude Oil Refineries

9.3

-

-

-

-

Industry Non-Performing Loans ( MYR Million )

6,537.2

-

-

-

-

% of Industry Non-Performing Loans

25.7

-

-

-

-

Construction

4.7

18.6

10.9

12.7

10.7

Industry Non-Performing Loans ( MYR Million )

3,856.9

-

-

-

-

% of Industry Non-Performing Loans

10.2

-

-

-

-

Services

7.1

6.4

5.9

5.9

5.6

Electric, Gas & Water

3.5

4.4

4.2

3.6

3.9

Transport, Storage & Communication

6.50

7.10

7.30

7.50

7.15

Wholesale, Retail, Hotel & Restaurant

5.2

4.7

5.9

6.9

6.5

Finance, Insurance & Real Estate

6.90

9.70

3.70

4.65

4.25

Government Services

12.4

9.4

8.3

6.1

5.6

Other Services

5.1

3.9

5.1

4.8

4.5

Industry Non-Performing Loans ( MYR Million )

6,825.2

-

-

-

-

% of Industry Non-Performing Loans

23.4

-

-

-

-

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index 

 


INDUSTRY ANALYSIS

 

MSIC CODE

20299 : Manufacture of other chemical products n.e.c.

INDUSTRY :

MANUFACTURING

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

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

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

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

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

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

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

OVERALL INDUSTRY OUTLOOK : Average Growth



 

 

CREDIT RISK EVALUATION & RECOMMENDATION

 

 


Incorporated in 2009, the Subject is a Private Limited company, focusing on manufacture of petro-chemical products. Having been in business for more than 5 years, the Subject has established a remarkable clientele base for itself which has contributed to its business growth. 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 120 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 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. 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)

 

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

 

 

 

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

 

 

 

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)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

0

0

0

-

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

0

0

0

-

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.63.64

UK Pound

1

Rs.100.41

Euro

1

Rs.71.63

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAS

 

 

Report Prepared by :

ANK

 

 

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.