MIRA INFORM REPORT

 

 

Report No. :

344634

Report Date :

15.10.2015

 

IDENTIFICATION DETAILS

 

Name :

PETRONAS CHEMICALS DERIVATIVES SDN. BHD.

 

 

Formerly Known As :

OPTIMAL CHEMICALS (MALAYSIA) SDN BHD

 

 

Registered Office :

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

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

31.07.1998

 

 

Com. Reg. No.:

466586-D

 

 

Legal Form :

Private Limited

 

 

Line of Business :

The Subject is principally engaged in manufacturing & marketing of ethylene oxide derivatives, propylene derivative products & related chemical products.

 

 

No. of Employees :

600 [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. Malaysia is vulnerable to a fall in world commodity prices or a general slowdown in global economic activity.

The NAJIB administration 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. Gross exports of goods and services constitute more than 80% of GDP. The oil and gas sector supplied about 29% of government revenue in 2014. 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 trying to lessen its dependence on state oil producer Petronas.

Bank Negara Malaysia (the central bank) maintains healthy foreign exchange reserves; a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. In order to attract increased investment, NAJIB 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.

:

466586-D

COMPANY NAME

:

PETRONAS CHEMICALS DERIVATIVES SDN. BHD.

FORMER NAME

:

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

INCORPORATION DATE

:

31/07/1998

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

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

BUSINESS ADDRESS

:

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

TEL.NO.

:

09-8307700

FAX.NO.

:

09-8307797

WEB SITE

:

WWW.OPTIMAL.COM.MY

CONTACT PERSON

:

MOHD YUSRI BIN MOHAMED YUSOF ( DIRECTOR )

INDUSTRY CODE

:

20

PRINCIPAL ACTIVITY

:

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

AUTHORISED CAPITAL

:

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

ISSUED AND PAID UP CAPITAL

:

MYR 237,579,000.00 DIVIDED INTO
ORDINARY SHARES 330,320 CASH OF MYR 500.00 EACH.
PREFERENCE SHARES 144,838 CASH OF MYR 500.00 EACH.

SALES

:

MYR 1,528,023,945 [2014]

NET WORTH

:

MYR 1,271,507,384 [2014]

M1000 OVERALL RANKING

:

235[2011]

M1000 INDUSTRY RANKING

:

11[2011]

STAFF STRENGTH

:

600 [2015]

 

 

 

BANKER (S)

 

MALAYAN BANKING BHD

 

 

 

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

HISTORY / BACKGROUND

 

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

 

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

 

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

 

 

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

 

 

YEAR

2011

2009

2008

2005

OVERALL RANKING

235

194

149

175

INDUSTRY RANKING

11

10

6

2

 

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

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

24/04/2015

MYR 550,000,000.00

MYR 237,579,000.00

31/03/2000

MYR 550,000,000.00

MYR 165,160,000.00

21/01/2000

MYR 550,000,000.00

MYR 202,000.00

18/08/1998

MYR 550,000,000.00

MYR 1,000.00

 

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

 

Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

PETRONAS CHEMICALS GROUP BERHAD

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

459830K

475,158.00

100.00

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

------

475,158.00

100.00

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

=====

+ Also Director

 

Former Shareholder(s) :

Name

Country

IC/PP/Loc No

Shareholding

Last Updated

PETROLIAM NASIONAL BERHAD (PETRONAS)

MALAYSIA

20076K

247,579.00

29/10/2009

UNION CARBIDE CORPORATION

N/A

XLZ000000990

247,579.00

03/01/2011

 

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. SAMSUDIN BIN MISKON

Address

:

DL 49, JALAN AM, JALAN BUKIT AMPANG, 68000 AMPANG, SELANGOR, MALAYSIA.

IC / PP No

:

6012702

New IC No

:

601110-01-5435

Date of Birth

:

10/11/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

01/10/2013

 

DIRECTOR 2

 

Name Of Subject

:

MR. MUHAMMAD FARID BIN NGAH

Address

:

20, JALAN 23, MEDAN TOK SIRA, 25000 KUANTAN, PAHANG, MALAYSIA.

IC / PP No

:

5981303

New IC No

:

600913-11-5099

Date of Birth

:

13/09/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

20/03/2014

 

DIRECTOR 3

 

Name Of Subject

:

MR. MOHD YUSRI BIN MOHAMED YUSOF

Address

:

2A, JALAN PALMA 1A, TWIN PALM, KEMENSAH, 53100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

A0369817

New IC No

:

660328-11-5113

Date of Birth

:

28/03/1966

Nationality

:

MALAYSIAN

Date of Appointment

:

02/07/2012

 

DIRECTOR 4

 

Name Of Subject

:

MS. FARINA BINTI FARIKHULLAH KHAN

Address

:

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

New IC No

:

720308-11-5230

Date of Birth

:

08/03/1972

Nationality

:

MALAYSIAN

Date of Appointment

:

29/01/2014

 

DIRECTOR 5

 

Name Of Subject

:

MR. AKBAR BIN MD THAYOOB

Address

:

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

IC / PP No

:

7121205

New IC No

:

630629-07-5613

Date of Birth

:

29/06/1963

Nationality

:

MALAYSIAN

Date of Appointment

:

29/01/2014



MANAGEMENT

 

 

 

1)

Name of Subject

:

MOHD YUSRI BIN MOHAMED YUSOF

Position

:

DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

ERNST & YOUNG

Auditor' Address

:

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

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. MEK YAM @ MARIAM BINTI HASSAN

IC / PP No

:

A2742752

New IC No

:

740210-03-5388

Address

:

11, JALAN SUAKASIH 3/6, BANDAR TUN HUSSEIN ON, 43200 BALAKONG, SELANGOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

17/09/2004

CHARGE ON ACCOUNT

MALAYAN BANKING BERHAD

-

Unsatisfied

2

17/09/2004

DEBENTURE

MALAYAN BANKING BERHAD

-

Unsatisfied

3

17/09/2004

DEED OF ASSIGNMENT

MALAYAN BANKING BERHAD

-

Unsatisfied

4

01/06/2006

OPEN CHARGE

MALAYAN BANKING BERHAD

-

Satisfied

 

 

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

:

50%

Overseas

:

YES

Percentage

:

50%

Import Countries

:

ASIA



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

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

X

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

80%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

20%

Export Market

:

ASIA

Credit Term

:

30 - 90 DAYS

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

END USERS

 

 

OPERATIONS

 

Products manufactured

:

OXO ALCOHOL AND OTHER CHEMICALS

Award

:

1 ) MS ISO 9001 : 2000 Year :2006

Member(s) / Affiliate(s)

:

MALAYSIAN INTERNATIONAL CHAMBER OF COMMERCE AND INDUSTRY (MICCI)

Ownership of premises

:

LEASED/RENTED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

600

600

600

600

600

 

Branch

:

NO

Other Information:


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

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

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

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

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

09-8307700

Match

:

N/A

Address Provided by Client

:

MALAYSIA, KM 106, JIN KUANTON - KUALA TERENGGANU, 24300 KERTECH,

Current Address

:

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

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


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

The address provided is incomplete.

 

 

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2011 - 2014

]

Profit/(Loss) Before Tax

:

Decreased

[

2011 - 2014

]

Return on Shareholder Funds

:

Unfavourable

[

(1.70%)

]

Return on Net Assets

:

Unfavourable

[

(0.56%)

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.The Subject could be more efficient in controlling its operating costs and had managed to reduce its losses during the year. The Subject's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

33 Days

]

Debtor Ratio

:

Favourable

[

8 Days

]

Creditors Ratio

:

Favourable

[

6 Days

]

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. 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

[

1.61 Times

]

Current Ratio

:

Unfavourable

[

1.98 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

[

(0.96 Times)

]

Gearing Ratio

:

Favourable

[

0.11 Times

]

The Subject incurred losses in the year. It did not generate sufficient income to service its interest.  If the situation does not improve, the Subject may be vulnerable to default in servicing the interest. The Subject was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

Overall Assessment :

The Subject's turnover showed a volatile trend but its losses were lower when compared to the previous corresponding period. This could suggest that the Subject was more efficient in its operating cost control and was more competitive. 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's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. The Subject as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

Overall financial condition of the Subject : LIMITED

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

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

3.2

4.0

Unemployment Rate

3.3

3.2

3.0

2.9

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

4.00

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

6.85

-

Business Loans Disbursed( % )

15.3

32.2

-

56.0

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

43,486.6

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

49,144

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

6.1

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

21,753

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

(17.7)

-

Registration of New Business ( No. )

284,598

324,761

329,895

332,723

-

Registration of New Business ( % )

5.0

14.0

2.0

1.0

-

Business Dissolved ( No. )

20,121

20,380

18,161

21,436

-

Business Dissolved ( % )

1.9

1.3

(10.9)

18.0

-

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

63.2

-

Credit Cards Spending ( % )

15.6

12.6

-

13.5

-

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)

-

-

3.0

-

Other Mining

-

-

-

46.6

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.4

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

1.4

-

Plastic Products

3.8

-

-

2.7

-

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

-

-

13.0

-

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

20 : MANUFACTURE OF CHEMICALS AND CHEMICAL PRODUCTS

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 1998, the Subject is a Private Limited company, focusing on manufacturing & marketing of ethylene oxide derivatives, propylene derivative products & related chemical products. With its long establishment in the market, the Subject has received strong support from its stable customers base. Its business position in the market is quite stable and it is expected to enjoy better market shares over its rivals. The Subject is a large entity with strong capital position of MYR 237,579,000. 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 penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. Being a large entity, the Subject has a steady workforce of 600 personnel to support its business operations. Its future prospects seem to be fairly good as its business operations are running relatively stable. Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject. To improve its quality products and services, we noted that the Subject has received a number of certifications & awards. This will improve the customer's confidence level to the Subject.


Despite the higher turnover, the Subject suffered pre-tax losses which reflected a highly competitive business environment. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 1,271,507,384, 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 promptly.

 



PROFIT AND LOSS ACCOUNT

 

 

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

 

 

Financial Year End

2014-12-31

2013-12-31

2012-12-31

2011-12-31

2011-03-31

Months

12

12

12

9

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

1,528,023,945

1,107,458,421

1,424,260,299

1,199,698,128

1,497,658,043

Other Income

25,356,075

22,414,582

-

-

-

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

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

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

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

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

Total Turnover

1,553,380,020

1,129,873,003

1,424,260,299

1,199,698,128

1,497,658,043

Costs of Goods Sold

(1,408,525,865)

(1,034,280,325)

(1,189,553,763)

(936,445,473)

(1,404,078,669)

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

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

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

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

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

Gross Profit

144,854,155

95,592,678

234,706,536

263,252,655

93,579,374

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

(15,855,415)

(54,224,762)

23,843,889

113,149,652

61,727,672

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

(15,855,415)

(54,224,762)

23,843,889

113,149,652

61,727,672

Taxation

(5,726,111)

13,603,055

(8,637,685)

(31,415,072)

164,326,469

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

(21,581,526)

(40,621,707)

15,206,204

81,734,580

226,054,141

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

838,252,910

878,874,617

863,668,413

812,342,215

586,288,074

Prior year adjustment

-

-

-

(30,408,382)

-

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

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

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

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

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

As restated

838,252,910

878,874,617

863,668,413

781,933,833

586,288,074

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

816,671,384

838,252,910

878,874,617

863,668,413

812,342,215

TRANSFER TO RESERVES - General

(10,000,000)

-

-

-

-

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

806,671,384

838,252,910

878,874,617

863,668,413

812,342,215

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Others

8,099,469

9,008,998

13,499,934

10,570,779

16,964,753

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

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

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

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

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

8,099,469

9,008,998

13,499,934

10,570,779

16,964,753

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

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

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

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

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

 

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

844,864,612

933,559,565

932,918,709

1,025,901,981

926,285,762

Deferred assets

186,624,534

192,350,645

178,829,685

185,753,127

205,596,000

Others

-

20,573

50,095

103,329

125,471

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

186,624,534

192,371,218

178,879,780

185,856,456

205,721,471

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

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

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

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

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

TOTAL LONG TERM ASSETS

1,031,489,146

1,125,930,783

1,111,798,489

1,211,758,437

1,132,007,233

Stocks

137,292,349

131,909,073

135,173,330

182,087,203

125,275,697

Trade debtors

32,734,631

56,490,740

219,556,504

204,450,338

190,495,818

Other debtors, deposits & prepayments

6,507,574

5,715,715

16,761,985

12,517,069

5,723,483

Short term deposits

-

-

275,633,125

341,710,952

232,814,310

Amount due from holding company

20,665,985

8,013,964

-

-

292,248

Amount due from related companies

274,873,190

277,779,140

106,337,523

44,743,310

78,771,047

Cash & bank balances

262,121,932

278,598,810

6,731,231

2,131,861

4,230,479

Others

618,993

618,993

336,553

267,208

86,868

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

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

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

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

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

TOTAL CURRENT ASSETS

734,814,654

759,126,435

760,530,251

787,907,941

637,689,950

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

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

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

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

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

TOTAL ASSET

1,766,303,800

1,885,057,218

1,872,328,740

1,999,666,378

1,769,697,183

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

21,509,688

38,758,089

36,529,178

8,739,274

2,276,000

Other creditors & accruals

84,150,483

189,677,439

175,085,611

85,671,150

110,845,191

Hire purchase & lease creditors

20,055,120

19,100,114

-

-

-

Short term borrowings/Term loans

-

-

-

91,500,958

90,382,586

Other borrowings

-

-

-

25,069,015

38,133,496

Amounts owing to holding company

86,503,613

43,804,910

33,243,397

4,511,375

6,636,413

Amounts owing to related companies

159,743,359

117,738,482

73,579,964

105,885,073

26,402,218

Other liabilities

-

-

18,190,585

17,324,368

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

371,962,263

409,079,034

336,628,735

338,701,213

274,675,904

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

362,852,391

350,047,401

423,901,516

449,206,728

363,014,046

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

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

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

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

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

TOTAL NET ASSETS

1,394,341,537

1,475,978,184

1,535,700,005

1,660,965,165

1,495,021,279

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

237,579,000

247,579,000

247,579,000

247,579,000

247,579,000

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

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

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

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

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

TOTAL SHARE CAPITAL

237,579,000

247,579,000

247,579,000

247,579,000

247,579,000

RESERVES

Share premium

217,257,000

247,257,000

247,257,000

247,257,000

247,257,000

Retained profit/(loss) carried forward

806,671,384

838,252,910

878,874,617

863,668,413

812,342,215

Capital redemption reserve

10,000,000

-

-

-

-

Others

-

-

-

(3,305,452)

(1,599,371)

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

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

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

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

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

TOTAL RESERVES

1,033,928,384

1,085,509,910

1,126,131,617

1,107,619,961

1,057,999,844

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

1,271,507,384

1,333,088,910

1,373,710,617

1,355,198,961

1,305,578,844

Long term loans

-

-

161,989,388

180,179,969

41,804,090

Lease obligations

122,834,153

142,889,274

-

-

-

Others

-

-

-

125,586,235

147,638,345

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

122,834,153

142,889,274

161,989,388

305,766,204

189,442,435

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

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

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

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

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

1,394,341,537

1,475,978,184

1,535,700,005

1,660,965,165

1,495,021,279

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

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

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

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

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

 

 

 

 

FINANCIAL RATIO

 

 

TYPES OF FUNDS

Cash

262,121,932

278,598,810

282,364,356

343,842,813

237,044,789

Net Liquid Funds

262,121,932

278,598,810

282,364,356

343,842,813

237,044,789

Net Liquid Assets

225,560,042

218,138,328

288,728,186

267,119,525

237,738,349

Net Current Assets/(Liabilities)

362,852,391

350,047,401

423,901,516

449,206,728

363,014,046

Net Tangible Assets

1,394,341,537

1,475,978,184

1,535,700,005

1,660,965,165

1,495,021,279

Net Monetary Assets

102,725,889

75,249,054

126,738,798

(38,646,679)

48,295,914

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

(7,755,946)

(45,215,764)

37,343,823

123,720,431

78,692,425

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

(7,755,946)

(45,215,764)

37,343,823

123,720,431

78,692,425

BALANCE SHEET ITEMS

Total Borrowings

142,889,273

161,989,388

161,989,388

296,749,942

170,320,172

Total Liabilities

494,796,416

551,968,308

498,618,123

644,467,417

464,118,339

Total Assets

1,766,303,800

1,885,057,218

1,872,328,740

1,999,666,378

1,769,697,183

Net Assets

1,394,341,537

1,475,978,184

1,535,700,005

1,660,965,165

1,495,021,279

Net Assets Backing

1,271,507,384

1,333,088,910

1,373,710,617

1,355,198,961

1,305,578,844

Shareholders' Funds

1,271,507,384

1,333,088,910

1,373,710,617

1,355,198,961

1,305,578,844

Total Share Capital

237,579,000

247,579,000

247,579,000

247,579,000

247,579,000

Total Reserves

1,033,928,384

1,085,509,910

1,126,131,617

1,107,619,961

1,057,999,844

LIQUIDITY (Times)

Cash Ratio

0.70

0.68

0.84

1.02

0.86

Liquid Ratio

1.61

1.53

1.86

1.79

1.87

Current Ratio

1.98

1.86

2.26

2.33

2.32

WORKING CAPITAL CONTROL (Days)

Stock Ratio

33

43

35

55

31

Debtors Ratio

8

19

56

62

46

Creditors Ratio

6

14

11

3

1

SOLVENCY RATIOS (Times)

Gearing Ratio

0.11

0.12

0.12

0.22

0.13

Liabilities Ratio

0.39

0.41

0.36

0.48

0.36

Times Interest Earned Ratio

(0.96)

(5.02)

2.77

11.70

4.64

Assets Backing Ratio

5.87

5.96

6.20

6.71

6.04

PERFORMANCE RATIO (%)

Operating Profit Margin

(1.04)

(4.90)

1.67

9.43

4.12

Net Profit Margin

(1.41)

(3.67)

1.07

6.81

15.09

Return On Net Assets

(0.56)

(3.06)

2.43

7.45

5.26

Return On Capital Employed

(0.55)

(3.02)

2.43

7.45

5.26

Return On Shareholders' Funds/Equity

(1.70)

(3.05)

1.11

6.03

17.31

Dividend Pay Out Ratio (Times)

0

0

0

0

0

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.65.11

UK Pound

1

Rs.99.50

Euro

1

Rs.74.24

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

VNT

 

               

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.