MIRA INFORM REPORT

 

 

Report No. :

309270

Report Date :

04.03.2015

 

IDENTIFICATION DETAILS

 

Name :

CHEMSTATION DCCM SDN. BHD.

 

 

Registered Office :

70b, Lebuh Beringin, 42000 Pelabuhan Klang, Selangor

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

06.12.2000

 

 

Com. Reg. No.:

534096-M

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

Trading of chemical products

 

 

No. of Employee :

10 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

 

 

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 – December 31, 2014

 

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

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.

:

534096-M

COMPANY NAME

:

CHEMSTATION DCCM SDN. BHD.

FORMER NAME

:

DOVECHEM DCCM SDN BHD (01/03/2013)
DCC DISTRIBUTION (MALAYSIA) SDN BHD (09/01/2009)

INCORPORATION DATE

:

06/12/2000

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

70B, LEBUH BERINGIN, 42000 PELABUHAN KLANG, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 15795 (2823), 5 1/2 MILES, JALAN KEBUN, KAMPUNG JAWA, SEKSYEN 32, 42450 SHAH ALAM, SELANGOR, MALAYSIA.

TEL.NO.

:

03-55212020

FAX.NO.

:

03-51615006

WEB SITE

:

WWW.DOVECHEM.COM

CONTACT PERSON

:

NG IET PEW ( DIRECTOR )

INDUSTRY CODE

:

46691

PRINCIPAL ACTIVITY

:

TRADING OF CHEMICAL PRODUCTS

AUTHORISED CAPITAL

:

MYR 2,000,000.00 DIVIDED INTO
ORDINARY SHARE 2,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,500,000.00 DIVIDED INTO
ORDINARY SHARES 1,500,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 31,603,093 [2013]

NET WORTH

:

MYR 3,152,552 [2013]

STAFF STRENGTH

:

10 [2015]

BANKER (S)

:

HSBC BANK MALAYSIA BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

HIGH

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) trading of chemical products.

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

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

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/06/2014

MYR 2,000,000.00

MYR 1,500,000.00

20/11/2010

MYR 2,000,000.00

MYR 1,000,000.00

25/03/2003

MYR 500,000.00

MYR 500,000.00

05/12/2002

MYR 500,000.00

MYR 300,000.00

06/12/2000

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

(%)

CHEMSTATION SPECIALTY PTE. LTD.

19, KEPPEL ROAD, 03-05, JIT POH BUILDING, 089058, SINGAPORE.

200903709Z

1,500,000.00

100.00

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

------

1,500,000.00

100.00

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

=====

+ Also Director

 

DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

MR. YAP CHIN GUAN

Address

:

28, JALAN SUNGAI PULOH 9, OFF JALAN HAJI SIRAT, 42100 KLANG, SELANGOR, MALAYSIA.

IC / PP No

:

A0465767

New IC No

:

660831-10-5027

Date of Birth

:

31/08/1966

Nationality

:

MALAYSIAN

Date of Appointment

:

03/07/2009

 

DIRECTOR 2

 

Name Of Subject

:

ONG ONGGO TJANDRA HENDRAWAN

Address

:

METRO PERMATA C1/8, 002/011, KARANG MULYA, KARANG TENGAH TANGERANG, JAKARTA, INDONESIA, INDONESIA.

IC / PP No

:

A3572605

Nationality

:

INDONESIAN

Date of Appointment

:

25/09/2009

 

DIRECTOR 3

 

Name Of Subject

:

DATO' NG IET PEW

Address

:

6, JALAN REDANG 1/1, TAMAN REDANG, 81100 JOHOR BAHRU, JOHOR, MALAYSIA.

New IC No

:

600313-01-5879

Date of Birth

:

13/03/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

06/12/2000

 

DIRECTOR 4

 

Name Of Subject

:

CHRISTINA NG

Address

:

47, GREENBANK PARK, 589408, SINGAPORE.

IC / PP No

:

E2044124L

Nationality

:

SINGAPOREAN

Date of Appointment

:

07/11/2005

 

DIRECTOR 5

 

Name Of Subject

:

ANTA NG

Address

:

19, DAIRY FARM ESTATE, 10-02, 679044, SINGAPORE.

IC / PP No

:

E4311650K

Date of Appointment

:

03/07/2009



MANAGEMENT

 

 

1)

Name of Subject

:

NG IET PEW

Position

:

DIRECTOR

 

2)

Name of Subject

:

JAMES

Position

:

CREDIT CONTROLLER

 

 

AUDITOR

 

Auditor

:

TOR & CO.

Auditor' Address

:

14, PERSIARAN 65C, PEKELILING BUSINESS CENTRE, JALAN PAHANG BARAT, OFF JALAN TUN RAZAK, 53000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. TAN CHWEE LENG

New IC No

:

780422-10-5102

Address

:

23, JALAN MUDA, OFF JALAN MERU, 41050 KLANG, SELANGOR, MALAYSIA.

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

HSBC BANK MALAYSIA BHD

 

 


 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

18/11/2010

TRADE FINANCING GENERAL AGREEMENT

HSBC 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

Percentage

:

40%

Overseas

:

YES

Percentage

:

60%

Import Countries

:

KOREA,SINGAPORE,CHINA



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

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

Credit Term

:

30 - 60 DAYS

Payment Mode

:

LETTER OF CREDIT (LC)
CASH

 

OPERATIONS

Goods Traded

:

CHEMICALS

Ownership of premises

:

LEASED/RENTED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

10

10

10

10

6

 

Branch

:

YES

 

Other Information:


The Subject is principally engaged in the (as a / as an) trading of chemical products.

The Subject trades a wide range of chemicals including Polyvinyl Alcohol(PVOH), Natural Red Iron Oxide, Epoxidise Soya Bean Oil (ESBO),Melamine Crystal, PVC Paste Resin and others.

We were informed that the Subject's chemicals used for various industries such as paint & coating, adhesive & sealants, printing ink & packaging, rubber & plastic, house hold cleaning, personal care and cosmetic chemical.

Besides that, the Subject sells the chemicals in bags and drums. In addition, the Subject's chemicals are comes in liquid and powder forms.



 

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-55212020

Match

:

N/A

Address Provided by Client

:

L O T 15795 2823 5 1 2 MILES 42450 SELANGOR MALAYSIA

Current Address

:

LOT 15795 (2823), 5 1/2 MILES, JALAN KEBUN, KAMPUNG JAWA, SEKSYEN 32, 42450 SHAH ALAM, SELANGOR, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


On 25th February 2015 we contacted one of the staff from the Subject and she provided some information.

The address provided is incomplete.


FINANCIAL ANALYSIS

 

Profitability

Turnover

:

Erratic

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Decreased

[

2009 - 2013

]

Return on Shareholder Funds

:

Acceptable

[

11.13%

]

Return on Net Assets

:

Acceptable

[

18.04%

]

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 Subject's management had generated acceptable return for its shareholders using its assets.

Working Capital Control

Stock Ratio

:

Favourable

[

27 Days

]

Debtor Ratio

:

Unfavourable

[

77 Days

]

Creditors Ratio

:

Favourable

[

18 Days

]

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The high debtors' ratio could indicate that the Subject was weak in its credit control. However, the Subject could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. 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

[

1.23 Times

]

Current Ratio

:

Unfavourable

[

1.52 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

[

2.87 Times

]

Gearing Ratio

:

Unfavourable

[

1.99 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 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. 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'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 : LIMITED

 

 

 

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
(Source : Department of Statistics / Economic Report / Bank Negara Report)



INDUSTRY ANALYSIS

MSIC CODE

 

46691 : Wholesale of industrial chemicals

INDUSTRY :

TRADING

The wholesale and retail trade is expected to increase 7.1% in 2015 (2014: 7.7%) driven by strong domestic consumption and higher tourist arrivals following the Malaysia Year of Festivals 2015. Besides, in 2014, the wholesale and retail trade subsector is expected to increase 7.7% (2013: 6.4%) supported by strong domestic consumption.

According to Retail Group Malaysia (RGM), the pharmacy and personal care sub-sector had slow growth rate of 2.6% for the first quarter of 2014, while "other specialty stores" grew at a rate of 3.5%. During the first quarter of 2014, fashion and fashion accessories recorded a sustainable growth of 6.3% as compared with the same period last year (3.6%).

The retail segment increased 10.1% (January - June 2013: 7.1%) attributed to brisk sales in retail outlets such as hypermarkets and large-scale superstores. Since the launch of the Small Retailer Transformation programme (TUKAR) in January 2011 up to end-July 2014, 1,761 small retailer stores (end-July 2013: 1,381) have been modernized to improve their competitiveness. In addition, the strong growth of the retail segment was supported by 1Malaysia Unified Sales held from 29 June 2014 to 1 September 2014 to attract foreign and local tourists to shop in Malaysia. Meanwhile, the wholesale segment expanded 8.2% (January - June 2013: 4.9%) due to higher sales of non-agricultural intermediate products, such as petrol, diesel, lubricants and household goods. Furthermore, food and beverage outlets, laundry outlets, car wash centres, abd health and beauty outlets took a hit from the water rationing in the Klang Valley since February this year.

On the other hand, in 2014, Malaysia's total trade is expected to grow 5.2% to RM1.44 trillion (2013: 4.5%; RM1.37 trillion) underpinned by recovery in key advanced economies, resilient regional demand, and partly due to the base effect arising from sluggish exports in the corresponding period last year. Gross exports are anticipated to expand 6% to RM762.8 billion while import decreased 4.3% to RM677.2 billion (2013: 2.4%; RM719.8 billion; 7%; RM 649.1 billion). Consequently, the trade surplus is expected to be higher at RM85.6 billion or 7.9% of GDP in 2014 (2013: RM70.7 billion; 7.2%).

Furthermore, gross exports rebounded by 10.7% to RM441.3 billion during the first seven months of 2014 (January - July 2013: -2.8%; RM398.5 billion), with manufactured and mining exports rising at a double digit pace of 11.4% and 12.5%. Shipment of agriculture products grew at a slower pace of 2.7%, primarily due to lower receipts of crude rubber (-24.6%) while export growth of other commodities remained steady. Consequently, exports of manufactured and mining products are expected to grow 6.1% and 6.4% in 2014 (2013: 5.1%; 3.3%). Meanwhile, agriculture exports are expected to rebound sharply by 4.5% in 2014 (2013: -14.4%) despite moderating commodity prices. Malaysia's top 3 trading partners are China, Singapore, and Japan.

Over 60% of Gross Domestic Product (GDP) is contributed by domestic consumption. Therefore the wholesale and retail sector plays a crucial role in driving Malaysia's growth over the next decade despite the ongoing global economic slowdown. By 2020, Malaysia's wholesale and retail sector is expected to boost the country's total Gross National Income (GNI) by RM156 billion, creating 454,190 new jobs.

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 2000, the Subject is a Private Limited company, focusing on trading of chemical products. Having been in the industry for over a decade, the Subject has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. A paid up capital of MYR 1,500,000 allows the Subject to expand its business more comfortably. With a strong backing from its holding company, the Subject enjoys timely financial assistance should the needs arise.

Over the years, the Subject should have build up its clientele base and received supports from its regular customers. Investigation revealed that the Subject's interest lies mostly in the local market. Thus, any adverse changes to the local economy might have a negative impact on the Subject's business performance. Being a small company, the Subject's business operation is supported by 10 employees. 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 3,152,552, the Subject should be able to maintain its business in the near terms.

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 normally.

 



PROFIT AND LOSS ACCOUNT

 

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

CHEMSTATION DCCM SDN. BHD.

 

Financial Year End

2013-12-31

2012-12-31

2011-12-31

2010-12-31

2009-12-31

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

31,603,093

38,076,950

29,014,290

17,110,250

15,760,807

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

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

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

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

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

Total Turnover

31,603,093

38,076,950

29,014,290

17,110,250

15,760,807

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

518,710

841,511

788,420

285,950

130,285

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

518,710

841,511

788,420

285,950

130,285

Taxation

(167,716)

(225,241)

(237,616)

(81,469)

(66,320)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

350,994

616,270

550,804

204,481

63,965

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

1,102,346

786,076

235,272

30,791

(33,174)

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

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

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

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

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

As restated

1,102,346

786,076

235,272

30,791

(33,174)

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

1,453,340

1,402,346

786,076

235,272

30,791

DIVIDENDS - Ordinary (paid & proposed)

-

(300,000)

-

-

-

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

1,453,340

1,102,346

786,076

235,272

30,791

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bankers' acceptance

170,705

189,053

180,187

111,453

-

Hire purchase

4,147

4,307

5,806

4,703

-

Term loan / Borrowing

68,825

46,083

38,582

-

-

Others

33,617

61,454

-

111,453

122,186

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

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

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

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

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

277,294

300,897

224,575

227,609

122,186

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

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

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

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

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

 


 

 

BALANCE SHEET

 

CHEMSTATION DCCM SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

111,233

82,821

115,731

144,785

21,275

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

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

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

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

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

TOTAL LONG TERM ASSETS

111,233

82,821

115,731

144,785

21,275

Stocks

2,376,467

2,618,594

3,048,016

1,907,315

1,860,600

Trade debtors

6,686,794

8,969,233

6,355,104

4,809,357

3,645,374

Other debtors, deposits & prepayments

415,984

49,169

320,378

33,445

34,339

Amount due from related companies

2,011,602

1,020,762

2,167,616

3,289,120

3,301,517

Cash & bank balances

1,037,811

792,917

595,509

269,380

788,899

Others

76,750

43,000

-

22,674

34,243

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

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

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

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

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

TOTAL CURRENT ASSETS

12,605,408

13,493,675

12,486,623

10,331,291

9,664,972

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

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

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

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

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

TOTAL ASSET

12,716,641

13,576,496

12,602,354

10,476,076

9,686,247

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

1,579,888

2,221,563

1,429,385

1,328,428

822,833

Other creditors & accruals

332,471

705,361

773,304

170,198

162,685

Hire purchase & lease creditors

42,857

29,003

27,505

26,006

-

Bill & acceptances payable

6,162,210

5,846,268

4,536,988

2,790,000

3,126,000

Amounts owing to related companies

186,464

224,451

162,042

4,449

423,224

Provision for taxation

-

-

23,198

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

8,303,890

9,026,646

6,952,422

4,319,081

4,534,742

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

4,301,518

4,467,029

5,534,201

6,012,210

5,130,230

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

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

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

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

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

TOTAL NET ASSETS

4,412,751

4,549,850

5,649,932

6,156,995

5,151,505

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

1,500,000

1,500,000

1,500,000

1,000,000

500,000

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

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

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

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

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

TOTAL SHARE CAPITAL

1,500,000

1,500,000

1,500,000

1,000,000

500,000

Exchange equalisation/fluctuation reserve

199,212

236,019

195,611

96,823

(46,932)

Retained profit/(loss) carried forward

1,453,340

1,102,346

786,076

235,272

30,791

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

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

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

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

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

TOTAL RESERVES

1,652,552

1,338,365

981,687

332,095

(16,141)

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

3,152,552

2,838,365

2,481,687

1,332,095

483,859

Hire purchase creditors

60,172

40,981

69,984

97,488

-

Deferred taxation

3,000

3,000

3,000

3,500

3,600

Others

1,197,027

1,667,504

3,095,261

4,723,912

4,664,046

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

1,260,199

1,711,485

3,168,245

4,824,900

4,667,646

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

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

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

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

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

4,412,751

4,549,850

5,649,932

6,156,995

5,151,505

 

 

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

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

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

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

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

 

FINANCIAL RATIO

 

CHEMSTATION DCCM SDN. BHD.

 

TYPES OF FUNDS

Cash

1,037,811

792,917

595,509

269,380

788,899

Net Liquid Funds

(5,124,399)

(5,053,351)

(3,941,479)

(2,520,620)

(2,337,101)

Net Liquid Assets

1,925,051

1,848,435

2,486,185

4,104,895

3,269,630

Net Current Assets/(Liabilities)

4,301,518

4,467,029

5,534,201

6,012,210

5,130,230

Net Tangible Assets

4,412,751

4,549,850

5,649,932

6,156,995

5,151,505

Net Monetary Assets

664,852

136,950

(682,060)

(720,005)

(1,398,016)

BALANCE SHEET ITEMS

Total Borrowings

6,265,239

5,916,252

4,634,477

2,913,494

3,126,000

Total Liabilities

9,564,089

10,738,131

10,120,667

9,143,981

9,202,388

Total Assets

12,716,641

13,576,496

12,602,354

10,476,076

9,686,247

Net Assets

4,412,751

4,549,850

5,649,932

6,156,995

5,151,505

Net Assets Backing

3,152,552

2,838,365

2,481,687

1,332,095

483,859

Shareholders' Funds

3,152,552

2,838,365

2,481,687

1,332,095

483,859

Total Share Capital

1,500,000

1,500,000

1,500,000

1,000,000

500,000

Total Reserves

1,652,552

1,338,365

981,687

332,095

(16,141)

LIQUIDITY (Times)

Cash Ratio

0.12

0.09

0.09

0.06

0.17

Liquid Ratio

1.23

1.20

1.36

1.95

1.72

Current Ratio

1.52

1.49

1.80

2.39

2.13

WORKING CAPITAL CONTROL (Days)

Stock Ratio

27

25

38

41

43

Debtors Ratio

77

86

80

103

84

Creditors Ratio

18

21

18

28

19

SOLVENCY RATIOS (Times)

Gearing Ratio

1.99

2.08

1.87

2.19

6.46

Liabilities Ratio

3.03

3.78

4.08

6.86

19.02

Times Interest Earned Ratio

2.87

3.80

4.51

2.26

2.07

Assets Backing Ratio

2.94

3.03

3.77

6.16

10.30

PERFORMANCE RATIO (%)

Operating Profit Margin

1.64

2.21

2.72

1.67

0.83

Net Profit Margin

1.11

1.62

1.90

1.20

0.41

Return On Net Assets

18.04

25.11

17.93

8.34

4.90

Return On Capital Employed

17.87

24.95

17.84

8.31

4.90

Return On Shareholders' Funds/Equity

11.13

21.71

22.19

15.35

13.22

Dividend Pay Out Ratio (Times)

0.00

0.49

0.00

0.00

0.00

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 

 

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.84

UK Pound

1

Rs.95.14

Euro

1

Rs.69.25

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

Report Prepared by :

ASH

 

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.