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MIRA INFORM REPORT
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Report No. : |
516500 |
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Report Date : |
25.06.2018 |
IDENTIFICATION DETAILS
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Name : |
PARAKH PETROCHEM
DMCC |
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Registered Office : |
Unit No. 3O-01-1473,
Floor No. 1, Building No. 3, Jewellery & Gemplex 3, Plot No:
DMCC-PH2-J&GPlexS, J & G Dmcc, P O Box: 262751, Dubai |
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Country : |
United Arab Emirates |
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Financials (as on) : |
31.12.2016 |
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Year of Establishment : |
2014 |
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Legal Form : |
Limited Liability
Company |
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Line of Business : |
Subject is
engaged in exporting of petrochemical products, especially bitumen,
fertilizer and polymers. |
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No. of Employees : |
5 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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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
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Country Name |
Previous Rating (31.12.2017) |
Current Rating (01.04.2018) |
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United Arab Emirates |
A2 |
A2 |
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Risk Category |
ECGC Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
UNITED ARAB EMIRATES - ECONOMIC OVERVIEW
The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Successful efforts at economic diversification have reduced the portion of GDP from the oil and gas sector to 30%.
Since the discovery of oil in the UAE nearly 60 years ago, the country has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living. The government has increased spending on job creation and infrastructure expansion and is opening up utilities to greater private sector involvement. The country's free trade zones - offering 100% foreign ownership and zero taxes - are helping to attract foreign investors.
The global financial crisis of 2008-09, tight international credit, and deflated asset prices constricted the economy in 2009. UAE authorities tried to blunt the crisis by increasing spending and boosting liquidity in the banking sector. The crisis hit Dubai hardest, as it was heavily exposed to depressed real estate prices. Dubai lacked sufficient cash to meet its debt obligations, prompting global concern about its solvency and ultimately a $20 billion bailout from the UAE Central Bank and Abu Dhabi Government that was refinanced in March 2014.
The UAE’s dependence on oil is a significant long-term challenge, although the UAE is one of the most diversified countries in the Gulf Cooperation Council. Low oil prices have prompted the UAE to cut expenditures, including on some social programs, but the UAE has sufficient assets in its sovereign investment funds to cover its deficits. The government reduced fuel subsidies in August 2015, and has announced plans to introduce excise and value-added taxes by January 1, 2018. The UAE's strategic plan for the next few years focuses on economic diversification, promoting the UAE as a global trade and tourism hub, developing industry, and creating more job opportunities for nationals through improved education and increased private sector employment.
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Source
: CIA |
SUMMARY
Company Name : PARAKH
PETROCHEM DMCC
Country of Origin : Dubai,
United Arab Emirates
Legal Form :
Limited Liability Company
Registration Date : 2014
Issued Capital : UAE Dh
50,000
Paid up Capital : UAE Dh
50,000
Total Workforce : 5
Activities :
Exporting petrochemical products
Financial Condition : Fair
Payments :
No Complaints
Operating Trend : Steady
Person Interviewed : Tariq Qaderi,
Managing Director
COMPANY
NAME
PARAKH PETROCHEM
DMCC
ADDRESS
Registered & Physical
Address
Location : Unit No. 3O-01-1473, Floor No. 1, Building
No. 3, Jewellery & Gemplex 3, Plot No: DMCC-PH2-
J&GPlexS, J & G Dmcc
PO Box : 262751
Town : Dubai
Country : United Arab Emirates
Telephone : (971-4) 8894981 / 8894982
Facsimile : (971-4) 8894983
Mobile : (971-50) 5502751 / 91-99 67174213
Email : info@parakhpetrochem.com
Premises
Subject operates
from a small suite of offices that are rented and located in the Central
Business Area of Dubai.
KEY
PRINCIPALS
Name Nationality Position
·
Tariq
Qaderi Indian Managing Director
LEGAL
FORM & OWNERS
Date of Establishment : 2014
Legal Form :
Limited Liability Company
Issued Capital : UAE Dh 50,000
Paid up Capital : UAE Dh 50,000
Name of Shareholder (s) Percentage
Holding
·
Tariq
Qaderi 100%
OPERATIONS
Activities: Engaged in exporting petrochemical
products, especially bitumen, fertilizer and polymers.
Import
Countries: India
Principal
Suppliers:
·
Blue
Bebaj Dubai
·
Al
Ruwais Petrochem (Fertil) Dubai
Operating Trend: Steady
Subject has a
workforce of 5 employees.
FINANCIAL
DATA
Financial
highlights provided by local sources are given below:
Currency: United
Arab Emirates Dirham (UAE Dh)
Year Sales
Year Ending
31/12/15: UAE Dh
10,300,000
Year Ending
31/12/16: UAE Dh
12,000,000
Local sources
consider subject’s financial condition to be Fair.
Please note that
the above financial figures were provided by Mr Tariq Qaderi, Managing
Director.
Note:
According
to local Commercial Law, only publicly listed companies are required to publish
their financial information. Financial information on other legal forms can
only be obtained from the companies / businesses directly
BANKERS
·
Habib
Bank Ltd
Trade Service Centre
Murshid Bazaar
PO Box: 888
Dubai
Tel: (971-4) 2221281
Fax: (971-4) 2284631
PAYMENT
HISTORY
No complaints
regarding subject’s payments have been reported.
GENERAL
COMMENTS
During the course
of this investigation the following sources were consulted:
- Internal database
- Journals, directories, media & web
searches
- Local Registry office
- Interview with Tariq Qaderi, Managing
Director
During the course
of this investigation nothing detrimental was uncovered regarding subject’s
operating history or the manner in which payments are fulfilled. As such the
company is considered to be a fair trade risk.
COUNTRY
OUTLOOK
Recent
Developments
The UAE’s economy continues to slow down as a result of low oil prices
and fiscal consolidation weighing on non-oil growth. Overall real GDP growth is
estimated at 2.3 percent in 2016, a significant drop from the pre-2014 oil
shock average of 5 percent (2010-14). Austerity measures weakened business and
consumer confidence and slower growth in credit to the private sector. This is
expected to result in lower non-oil growth estimated at 2.4 percent in 2016.
Hydrocarbon GDP growth is also expected to slow down to 2 percent in 2016 from
an estimated 4.6 percent in 2015. The average rate of inflation is estimated to
ease to 3.3 percent in 2016 from 4.1 percent in 2015.
Sustained low oil prices have led fiscal and external balances to
deteriorate, despite significant fiscal consolidation efforts. Authorities have
managed some fiscal consolidation by raising electricity and water tariffs,
removing fuel subsidies and scaling back capital transfers to Government
Related Entities (GREs). Abu Dhabi reduced reliance on government deposits and
issued a US$5 billion Eurobond in April. Despite these measures, the drop in
hydrocarbon revenues has pushed the fiscal balance down from a comfortable
surplus of 10.4 percent of GDP in 2013 to an estimated deficit of 2.1 percent
in 2015 and 3.5 percent in 2016. The Abu Dhabi and Dubai sovereign wealth funds
have recorded lower returns (3 percent y-o-y fall in 2015 net profits)
resulting from global volatility. The current account surplus also fell from
19.1 percent of GDP in 2013 to 3.3 percent in 2015 and an estimated 1.3 percent
of GDP in 2016.
Monetary policy is tightening, as is liquidity in the banking system.
The Central bank raised its policy rate by 25 basis points in December in
response to the US Federal Reserve rate increase and is expected to continue
mirroring the Fed’s rate movements. Reduced government deposits are resulting
in lower liquidity in the banking sector with deposit growth decelerating to
1.8 percent y-o-y at end-March 2016. A recent Credit Sentiment Survey revealed
that banks are increasingly unwilling to lend, especially to SME’s. Dubai’s
property market continues to soften but does not pose a systemic risk. Average
real estate residential prices fell by 11 percent in 2015. Increased supply and
weakening demand amidst financial tightening resulting from low oil prices have
led to office rents falling by up to 10 percent in Q1 2016. Nevertheless,
continued demand in established free zone developments is sustaining non-oil
growth and the real estate loan portfolio remains resilient.
The UAE is yet to fully develop its capacity for a comprehensive
measurement and analysis of household welfare across its seven Emirates. Each
Emirate has an independent statistics agency, and while the federal level
statistical bureau was established in 2009, the harmonization of methods and
statistical agendas for a country-level welfare measurement is yet to be
accomplished.
Outlook
Growth is expected to slowly recover, reaching 3 percent in 2018. Oil
production is expected to rise due to investments in oilfield development.
Non-oil growth is also projected to rebound (i) as the expected improvement in
oil prices and its positive effects on confidence and financial conditions
dampen the effects of fiscal consolidation; (ii) as megaproject implementation
ramps up ahead of Dubai’s hosting of Expo 2020; and (iii) as the lifting of
sanctions on Iran translates into increased trade. Fiscal and external balances
are expected to improve over the medium term; with a reversal of the fiscal
deficit expected and a rebound in the current account surplus to 3.2 percent of
GDP by 2018.
Progress in economic diversification, large buffers and safe haven
status have strengthened the resilience of the economy. The UAE is expected to
implement a GCC-wide value added tax (VAT) by 2018, and is considering
increasing excise taxes and introducing corporate tax. Despite pressures key
investment areas will be maintained, as evident by the recently announced
nuclear energy project. Abu Dhabi’s aerospace manufacturing has secured
contracts with Airbus and Boeing, underscoring its commitment to
diversification. New bankruptcy and investment laws are also being prepared
with a potential positive impact on investment. In addition, as anxiety looms
over the impact of UK’s decision to leave the EU, according to a survey of
financial investment professionals Dubai’s competitiveness as a financial hub
is not expected to be affected.
Risks and
Challenges
However, macro financial risks are increasing; the financial management
of GRE’s megaprojects on the domestic side, and further sustained drop in oil
prices on the external side. In an environment of low oil prices, macro financial
risks could be exacerbated by declining liquidity in the banking system,
increased volatility in the stock markets, and disruptive declines in the real
estate sector. Further, imprudent management of Dubai’s megaprojects could be a
source of macro financial risks for its GREs, its banks, and ultimately the
government. In this context, the recent hike in interest rates in the US could
lead to a tightening of financial markets and increase the costs of financing.
Structural reforms are needed to support the move towards a knowledge
based economy as envisaged by Vision 2021. Easing SME access to finance and
innovation financing should be a priority. Reforming labour admissions policies
is key for private sector job creation since under the current sponsorship
system expatriate labour mobility is limited leading to large scale importation
of expatriate workers, wages below marginal productivity and lower incentives
to upgrade skills. This in turn negatively affects productivity, technology
choice, and contributes to making nationals uncompetitive in the private
sector.
Key Economic
Indicators 2014 2015 2016* 2017* 2018*
Real GDP Growth (%) 3.1
3.8 2.3 2.5 3.0
Inflation Rate (%) 2.3
4.1 3.3 2.8 3.1
Current Account
Balance (% of GDP) 10.1 3.3 1.3
3.0 3.2
Fiscal Balance (%
of GDP) 5.0 -2.1 -3.5 -1.3 0.2
*
forecast
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 67.77 |
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1 |
INR 89.96 |
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Euro |
1 |
INR 78.86 |
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UAE Dh |
1 |
INR 18.54 |
Note:
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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DIV |
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Report Prepared
by : |
NIT |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with moderate
risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on secured
terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
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Promoters
/ Management background
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Payment
record
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Litigation
against the subject
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Industry
scenario / competitor analysis
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Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.