MIRA INFORM REPORT

 

 

Report Date :

07.03.2013

 

IDENTIFICATION DETAILS

 

Name :

LOTTE CHEMICAL TITAN (M) SDN. BHD.

 

 

Formerly Known As :

TITAN PETCHEM (M) SDN. BHD.

 

 

Registered Office :

Tkt 6,Bgn.Malaysia Re, 17,Lorong Dungun, Damansara Heights;Kuala Lumpur., 50490 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

01.08.1986

 

 

Com. Reg. No.:

154990-W

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Manufacture and sale of petrochemical products and polyolefin resins

 

 

No. of Employees :

1000 [2013]

 

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 :

Usually Correct

 

 

Litigation :

Clear 

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

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. 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 strained government finances, has forced Kuala Lumpur to begin to reduce government subsidies. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies more than 40% of government revenue. The 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 has raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but he has encountered significant opposition, especially from Malay nationalists and other vested interests.

 

Source : CIA

 

 

* Adopted abbreviations :

SC - Subject Company (the company enquired by you)

 

 

N/A - Not Applicable

 

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

154990-W

COMPANY NAME

:

LOTTE CHEMICAL TITAN (M) SDN. BHD.

FORMER NAME

:

TITAN PETCHEM (M) SDN. BHD. (20/12/2012)
TITAN PP POLYMERS (M) SDN BHD (09/12/2004)
TITAN HIMONT POLYMERS (M) SDN BHD (10/06/1996)
TITAN POLYPROPYLENE (M) SDN BHD (31/05/1989)
ASIA PACIFIC POLYMER (M) SDN BHD (25/02/1989)
ASIA POLYMER (M) SDN BHD (24/06/1987)

INCORPORATION DATE

:

01/08/1986

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

TKT 6,BGN.MALAYSIA RE, 17,LORONG DUNGUN, DAMANSARA HEIGHTS;KUALA LUMPUR., 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

PLO 312, JALAN TEMBAGA 4, PASIR GUDANG INDUSTRIAL ESTATE, 81700 PASIR GUDANG, JOHOR, MALAYSIA.

TEL.NO.

:

07-2538888

FAX.NO.

:

07-2517881

WEB SITE

:

WWW.TITANGROUP.COM

CONTACT PERSON

:

CHEONG PENG KHUAN ( VICE PRESIDENT )

 

 

 

INDUSTRY CODE

:

20291

PRINCIPAL ACTIVITY

:

MANUFACTURE AND SALE OF PETROCHEMICAL PRODUCTS AND POLYOLEFIN RESINS

AUTHORISED CAPITAL

:

MYR 150,000,000.00 DIVIDED INTO
ORDINARY SHARE 149,800,000.00 OF MYR 1.00 EACH.
PREFERENCE SHARE 200,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 133,575,871.00 DIVIDED INTO
ORDINARY SHARES 133,410,000 CASH OF MYR 1.00 EACH.
PREFERENCE SHARES 165,871 OTHERWISE OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 6,264,411,000 [2011]

NET WORTH

:

MYR 4,102,039,000 [2011]

M1000 OVERALL RANKING

:

78[2011]

M1000 INDUSTRY RANKING

:

2[2011]

 

 

 

STAFF STRENGTH

:

1000 [2013]

BANKER (S)

:

CIMB BANK BHD
MALAYAN BANKING BHD

LITIGATION

:

TRACED

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

HISTORY / BACKGROUND

 

The SC 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 SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC 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 SC is insolvent. The SC 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 SC is principally engaged in the (as a / as an) manufacture and sale of petrochemical products and polyolefin resins.

 

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

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

 

 

 

 

 

 

YEAR

2011

2009

2008

2005

2004

 

OVERALL RANKING

78

53

50

216

252

 

INDUSTRY RANKING

2

2

2

3

4

 

The immediate holding company of the SC is LOTTE CHEMICAL TITAN HOLDING SDN. BHD., a company incorporated in MALAYSIA.

 

The ultimate holding company of the SC is HONAM PETROCHEMICAL CORP, a company incorporated in SOUTH KOREA.

 

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

Name

Address

IC/PP/Loc No

Shareholding

(%)

LOTTE CHEMICAL TITAN HOLDING SDN. BHD.

PLO 312, JALAN TEMBAGA 4, PASIR GUDANG INDUSTRIAL ESTATE, 81700 PASIR GUDANG, JOHOR, MALAYSIA.

222357

133,511,934.00

99.95

TITAN PETROCHEMICALS (M) SDN. BHD.

MALAYSIA

171052

63,937.00

0.05

 

 

 

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

------

 

 

 

133,575,871.00

100.00

 

 

 

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

=====

 

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. CHEONG PENG KHUAN

Address

:

NO.3, LORONG HIJAU TIGA, GREEN LANE, 11600 PULAU PINANG, PULAU PINANG, MALAYSIA.

 

 

 

New IC No

:

580222-07-5125

Date of Birth

:

22/02/1958

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

23/02/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

LEE HUNKI

Address

:

UNIT A-22-3A, KIARAVILLE CONDO, JALAN CHANGKAT DUTA KIARA, MONT KIARA, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

M77788778

 

 

 

 

 

 

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

09/11/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

CHUN MYUNG JIN

Address

:

NO.25, JALAN REDANG 1/1, TAMAN REDANG, 81100 JOHOR BAHRU, JOHOR, MALAYSIA.

IC / PP No

:

M89809195

 

 

 

 

 

 

 

 

 

 

 

 

Date of Appointment

:

02/06/2011

 

 

 

 

 

 

 

 

 

 

 

 



MANAGEMENT

 

 

 

1)

Name of Subject

:

CHEONG PENG KHUAN

 

Position

:

VICE PRESIDENT

   

                                

 

AUDITOR

 

Auditor

:

DELOITTE & TOUCHE

Auditor' Address

:

L19, UPTOWN 1, 1 JALAN SS21/58, DAMANSARA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

 

                              

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. KONG CHOCK HOON

 

 

 

 

 

New IC No

:

600101-01-6001

 

Address

:

92, JALAN DATUK SULAIMAN 6, TAMAN TUN DR ISMAIL, 60000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

CIMB BANK BHD

 

 

 

 

 

2)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

The SC enjoys normal banking routine with above mentioned banker(s). No adverse record was found during our investigation.

 

 

ENCUMBRANCE (S)



ENCUMBRANCE 1

Date of Creation

:

15/11/2011

Description Of Charge

:

N/A

Amount Secured

:

N/A

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

STANDARD CHARTERED BANK, OFFSHORE LABUAN

 

 

 

 

 

 

 

Form 40 Dated 13/12/2011

Registered and Numbered 19 In The Register of Charges



ENCUMBRANCE 2

Date of Creation

:

15/11/2011

Description Of Charge

:

N/A

Amount Secured

:

N/A

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

STANDARD CHARTERED BANK, OFFSHORE LABUAN

 

 

 

 

 

 

 

Form 40 Dated 13/12/2011

Registered and Numbered 18 In The Register of Charges



ENCUMBRANCE 3

Date of Creation

:

15/11/2011

Description Of Charge

:

N/A

Amount Secured

:

N/A

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

STANDARD CHARTERED BANK, OFFSHORE LABUAN

 

 

 

 

 

 

 

Form 40 Dated 13/12/2011

Registered and Numbered 17 In The Register of Charges



ENCUMBRANCE 4

Date of Creation

:

15/11/2011

Description Of Charge

:

N/A

Amount Secured

:

MYR116,592,800.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

STANDARD CHARTERED BANK, OFFSHORE LABUAN

 

 

 

 

 

 

 

Form 40 Dated

Registered and Numbered 018 In The Register of Charges



ENCUMBRANCE 5

Date of Creation

:

15/11/2011

Description Of Charge

:

N/A

Amount Secured

:

RM116,592,800.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

STANDARD CHARTERED BANK, OFFSHORE LABUAN

 

 

 

 

 

 

 

Form 40 Dated

Registered and Numbered 019 In The Register of Charges



ENCUMBRANCE 6

Date of Creation

:

15/11/2011

Description Of Charge

:

N/A

Amount Secured

:

RM116,592,800.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

STANDARD CHARTERED BANK, OFFSHORE LABUAN

 

 

 

 

 

 

 

Form 40 Dated

Registered and Numbered 017 In The Register of Charges

 

LEGAL CHECK AGAINST SC


* A check has been conducted in our databank against the SC whether the subject has been involved in any litigation.

LEGAL ACTION

 

 

 

Code No

:

22

Case No

:

520

Year

:

2006

Place

:

KUALA LUMPUR

Court

:

HIGH COURT

 

 

 

Solicitor

:

JASBEER NUR HAKIMAH & RAJPAL

 

 

 

Plaintiff

:

EQUINOX EQUIPMENT (M) SDN BHD

 

 

 

Defendants

:

TITAN PETCHEM M SDN BHD (154990)

BGN MALAYSIA RE, 17 LRG DUNGUN, D'SARA HEIGHTS, 6TH FLR, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

Amount Claimed

:

0.00

 

 

 

 

 

 

 

 

Nature of Claim

:

GENERAL DAMAGES

 

 

 

 

 

 

 

 

Remark

:

LIST

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Code No

:

72

Case No

:

94520

 

 

 

 

 

Year

:

2006

Place

:

KUALA LUMPUR

 

 

 

 

 

Court

:

MAGISTRATE COURT

 

 

 

 

 

 

 

 

Solicitor

:

CHIN LING HAU & PARTNERS

 

 

 

 

 

 

 

 

Plaintiff

:

KONICA MINOLTA PHOTO IMAGING MALAYSIA SDN BHD

 

 

 

Defendants

:

TITAN PETCHEM M SDN BHD (154990)

BGN MALAYSIA RE, 17 LRG DUNGUN, D'SARA HEIGHTS, 6TH FLR, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

Amount Claimed

:

1,121.00

 

 

 

 

 

 

 

 

Nature of Claim

:

GDS SOLD & DELIVERED

 

 

 

 

 

 

 

 

Remark

:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTE:

Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed. The person wo has been sued has the same name as the subject. However, we are unable to determine whether the person sued is the one and the same person.

 

No winding up petition was found in our databank

 

 

 

 

 

 

DEFAULTER CHECK AGAINST SC


* We have checked through the SC 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 since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed.

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


PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

YES

 

 

 



The SC 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

[

 

]

 

Average 61-90 Days

[

X

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

 

 

 

Export Market

:

AUSTRALIA

ASIA

Credit Term

:

30 - 60 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)
LETTER OF CREDIT (LC)

Type of Customer

:

PLASTIC MANUFACTURER,ELECTRICAL & ELECTRONIC INDUSTRIES

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Products manufactured

:

PETROCHEMICAL PRODUCTS AND POLYOLEFIN RESINS

 

 

 

Competitor(s)

:

PETRONAS CHEMICALS GROUP BHD

 

 

 

Member(s) / Affiliate(s)

:

MALAYSIAN PLASTICS MANUFACTURERS ASSOCIATION (MPMA)

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

 

 

 

Ownership of premises

:

OWNED

Production Capacity

:

DEPEND BASED ON CUSTOMERS' REQUIREMENTS

 

Total Number of Employees:

 

YEAR

2013

2012

2011

2010

2009

 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

1000

1,027

1,000

1,000

1,000

 

 

 

 

 

Branch

:

YES

 

Other Information:


The SC is principally engaged in the (as a / as an) manufacture and sale of petrochemical products and polyolefin resins.

The SC produces a range olefins, aromatics and polyolefins.

The SC's products and primary uses as follows:

* Ethylene - Polyethylene, ethylene dichloride, ethylbenzene, ethylene oxide/ethylene glycol. Downstream uses: VCM, styrene, antifreeze, polyester for fibers and PET.

* Propylene - Polypropylene, propylene oxide, acrylonitrile. Downstream uses: Detergent and ABS.

* Olefin co-products - Downstream uses: Synthetic rubber, polyester, acrylics and fuels.

* Low Density Polyethylene - Film for bread bags, dry cleaning bags, food wraps; paper and foil coatings for milk cartons and snack packages.

* Linear Low Density / High Density Polyethylene - Film for shrink wrap, trash and carry bags; containers such as tubs, pails and bottles.

* High Density Polyethylene - Ultra strong pipes and ultra-thin films.

* Polypropylene - Fibers and filaments for fabrics and carpets; components for autos and appliances, electronic equipment housing, film for packaging and bottles.

The SC utilizes advanced automated and semi-automated machineries to ensure production of high quality products.

Besides that the SC also has a warehouse located at the same premises to keep stocks and materials.

 

 

PROJECTS


No projects found in our databank


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

07-2538888

Match

:

N/A

 

 

 

Address Provided by Client

:

PLO 312, JALAN TEMBAGA 4, PASIR GUDANG INDUSTRIAL ESTATE,81700,PASIR GUDANG,JOHOR.

Current Address

:

PLO 312, JALAN TEMBAGA 4, PASIR GUDANG INDUSTRIAL ESTATE, 81700 PASIR GUDANG, JOHOR, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations

we contacted one of the staff from the SC and she provided some information on the SC.


FINANCIAL ANALYSIS

 

Profitability

 

 

 

 

 

 

Turnover

:

Increased

[

2007 - 2011

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2007 - 2011

]

 

Return on Shareholder Funds

:

Unfavourable

[

<0.24%>

]

 

Return on Net Assets

:

Unfavourable

[

1.62%

]

 

 

 

 

 

 

 

 

The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The management had succeeded in turning the SC into a profit making company. The profit could be due to better control of its operating costs and efficiency in utilising its resources. The SC's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

53 Days

]

 

Debtor Ratio

:

Favourable

[

14 Days

]

 

Creditors Ratio

:

Favourable

[

23 Days

]

 

 

 

 

 

 

 

 

The SC'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 SC. The SC had a favourable creditors' ratio as evidenced by its favourable collection days. The SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Liquid Ratio

:

Unfavourable

[

0.71 Times

]

 

Current Ratio

:

Unfavourable

[

1.48 Times

]

 

 

 

 

 

 

 

 

A low liquid ratio means that the SC may be facing working capital deficiency. If the SC cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Unfavourable

[

2.08 Times

]

 

Gearing Ratio

:

Favourable

[

0.10 Times

]

 

 

 

 

 

 

 

 

The SC'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 SC was lowly geared thus it had a low financial risk. The SC was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the SC 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 higher turnover had helped to reduce the SC's losses. Due to its weak liquidity position, the SC will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the SC. If there is a fall in the SC's profit or any increase in interest rate, the SC may not be able to generate sufficient cash-flow to service its interest. The SC 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 SC : LIMITED

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Population ( Million)

27.73

28.13

28.35

28.70

29.10

Gross Domestic Products ( % )

4.6

<0.5>

7.2

5.5

5.3

Domestic Demand ( % )

6.9

2.9

6.3

4.8

7.6

Private Expenditure ( % )

7.1

<2.7>

8.1

7.0

8.7

Consumption ( % )

8.4

0.7

6.7

6.3

7.1

Investment ( % )

1.5

<17.2>

17.7

16.2

15.9

Public Expenditure ( % )

6.5

5.2

3.8

7.6

4.7

Consumption ( % )

11.6

3.1

0.2

8.9

3.0

Investment ( % )

0.7

8.0

2.8

0.6

7.0

 

 

 

 

 

 

Balance of Trade ( MYR Million )

129,563

89,650

118,356

116,058

-

Government Finance ( MYR Million )

<34,462>

<28,450>

<40,482>

<45,511>

<43,021>

Government Finance to GDP / Fiscal Deficit ( % )

<4.8>

<4.8>

<5.6>

<5.4>

<4.7>

Inflation ( % Change in Composite CPI)

<3.3>

<5.2>

5.1

3.1

-

Unemployment Rate

3.7

4.5

3.9

3.3

-

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

388

331

329

415

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

1.91

2.87

2.20

3.50

-

Average 3 Months of Non-performing Loans ( % )

13.24

11.08

15.30

14.80

-

Average Base Lending Rate ( % )

6.72

5.53

6.30

6.60

-

Business Loans Disbursed( % )

11.6

10.5

14.7

15.3

-

Foreign Investment ( MYR Million )

23,261.4

22,156.8

22,517.9

23,546.1

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,599

41,578

44,148

-

-

Registration of New Companies ( % )

<4.0>

<0.1>

6.2

-

-

Liquidation of Companies ( No. )

27,992

39,075

25,585

-

-

Liquidation of Companies ( % )

23.7

39.6

<34.5>

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

269,866

312,581

271,414

-

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

18,885

19,345

19,738

-

-

Business Dissolved ( % )

<7.6>

2.4

2.0

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

497.5

486.3

543.6

363.0

-

Cellular Phone Subscribers ( Million )

25.1

30.1

32.8

35.3

-

Tourist Arrival ( Million Persons )

21.5

23.6

24.6

25.3

-

Hotel Occupancy Rate ( % )

68.0

58.0

63.0

51.3

-

 

 

 

 

 

 

Credit Cards Spending ( % )

17.1

12.8

14.1

15.6

-

Bad Cheque Offenders (No.)

34,834

36,667

33,568

27,208

-

Individual Bankruptcy ( No.)

13,907

16,228

18,119

16,155

-

Individual Bankruptcy ( % )

5.1

16.7

11.7

<10.8>

-

 

 

 

 

 

 



INDUSTRIES ( % of Growth ):

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Agriculture

3.6

0.4

2.1

4.7

4.1

Palm Oil

7.0

<1.1>

<3.4>

7.3

-

Rubber

<1.1>

<19.8>

9.9

6.4

-

Forestry & Logging

<1.5>

<5.9>

<3.3>

<4.7>

-

Fishing

4.0

5.5

5.6

2.8

-

Other Agriculture

5.9

9.0

7.9

8.5

-

Industry Non-Performing Loans ( MYR Million )

393.0

413.7

508.4

634.1

-

% of Industry Non-Performing Loans

<2.0>

1.3

2.1

3.2

-

 

 

 

 

 

 

Mining

<0.8>

<3.8>

0.2

<2.4>

2.5

Oil & Gas

12.7

2.1

0.5

<1.7>

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

36.0

44.2

49.7

46.5

-

% of Industry Non-performing Loans

0.1

0.1

0.1

0.1

-

 

 

 

 

 

 

Manufacturing #

1.3

<9.4>

11.4

5.6

4.5

Exported-oriented Industries

2.7

<19.0>

12.1

2.8

-

Electrical & Electronics

2.4

<30.3>

28.4

<4.9>

-

Rubber Products

4.2

<10.1>

25.3

15.4

-

Wood Products

<6.0>

<24.1>

20.1

<7.3>

-

Textiles & Apparel

1.9

<19.5>

<0.4>

14.8

-

Domestic-oriented Industries

9.9

<9.8>

16.3

6.3

-

Food, Beverages & Tobacco

9.5

0.2

3.0

4.2

-

Chemical & Chemical Products

1.4

<7.7>

16.2

5.6

-

Plastic Products

6.5

<9.1>

2.4

3.8

-

Iron & Steel

16.8

<32.7>

29.3

2.4

-

Fabricated Metal Products

14.7

<2.5>

14.9

25.2

-

Non-metallic Mineral

8.3

<15.5>

20.2

16.3

-

Transport Equipment

27.1

<13.5>

36.5

<9.4>

-

Paper & Paper Products

8.6

<5.0>

18.7

15.6

-

Crude Oil Refineries

7.8

0.2

<11.4>

9.3

-

Industry Non-Performing Loans ( MYR Million )

5,729.4

6,007.3

6,217.5

6,537.2

-

% of Industry Non-Performing Loans

16.8

18.3

23.8

25.7

-

 

 

 

 

 

 

Construction

2.1

5.8

5.1

4.4

7.0

Industry Non-Performing Loans ( MYR Million )

4,149.8

3,241.8

4,038.5

3,856.9

-

% of Industry Non-Performing Loans

12.2

9.9

10.7

10.2

-

 

 

 

 

 

 

Services

7.3

2.6

6.5

6.4

6.5

Electric, Gas & Water

5.0

0.4

8.5

5.6

4.8

Transport, Storage & Communication

7.8

1.6

7.7

6.5

7.3

Wholesale, Retail, Hotel & Restaurant

10.0

2.8

4.7

5.2

6.9

Finance, Insurance & Real Estate

9.2

3.8

6.1

6.3

6.5

Government Services

8.6

2.0

6.7

7.6

5.6

Other Services

5.9

4.4

4.2

5.4

5.7

Industry Non-Performing Loans ( MYR Million )

8,281.4

6,631.3

7,384.6

6,825.2

-

% of Industry Non-Performing Loans

24.3

20.2

25.7

23.4

-

 

 

 

 

 

 

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 

# Based On Manufacturing Production Index
(Source : Department of Statistics / Economic Report / Bank Negara Report)

 

INDUSTRY ANALYSIS

 

MSIC CODE

20291 : Manufacture of photographic plates, films, sensitized paper and other sensitized unexposed materials

 

 

INDUSTRY :

MANUFACTURING

 

 

 


The manufacturing sector is expected to be driven by higher value-added activities in Malaysia.The GDP growth for first quarter 2012 indicating manufacturing maintain its growth of 4.5%, similar to year 2011.Malaysia recorded a 12% jump in approved investments in the manufacturing sector in the first quarter of 2012 compared with the corresponding period 2011. According to Federation of Malaysian Manufacturers (FMM), manufacturing sector expected to improve in the third quarter 2012 despite concerns over external developments and the rising cost of production.


The rubber products sub-sector is expected to remain resilient supported by continuous improvements in medical and healthcare standards in emerging markets as well as demand from niche markets such as the oil and gas sector for rubber hoses. Malaysia rubber exports are forecast to grow at 10%, at the end of 2012 driven by global demand for medical gloves as well as rubber tyres and tubes.Rubber glove exports make up 70 % of total rubber shipments in Malaysia due to hospitals and clinics place more intrest on rising health and hygiene awareness.


The Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.


Chemical production are expected to show 6.2% in year 2012 and 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.


According to Malaysian Iron and Steel Industry Federation, first half of 2012 would remain weak for the local steel industry due to eurozone crisis, slowdown in China's economy and less robust construction activities in the developed countries. At first quarter 2012, the average local steel price is trading atRM2,300 per tonne compared with the average international price of US$740 (RM2,331) per tonne.


According to the Department of Statistics, Malaysia during the first quarter 2012, the manufacturing output increased due to activities in major sub-sectors such as petroleum, chemical, rubber and plastic products (10.5 %), and non-metallic mineral products, basic metal and fabricated metal products (3.9 %). Meanwhile, it's also announced that the manufacturing sector's sales grew by 10 % in May 2012 to record RM52.5 billion compared with RM47.7 billion in May 2011. The Industrial Production Index (IPI ) increased 7.6 % in May (2012) due to increases in manufacturing (6.5 %).


Tax and non-tax incentives provided by goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such as solar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 1986, the SC is a Private Limited company, focusing on manufacture and sale of petrochemical products and polyolefin resins. The SC has been in business for over two decades. It has built up a strong clientele base and good reputation will enable the SC to further enhance its business in the near term. The SC is expected to enjoy a stable market shares. Having strong support from its holding company has enabled the SC to remain competitive despite the challenging business environment. The SC is a large entity with strong capital position. We are confident with the SC's business and its future growth prospect.


Over the years, the SC has penetrated into both the local and overseas market. The SC has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the SC to further enhance its business in the near term. Being a large entity, the SC has a steady workforce of 1,000 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 SC's management capability is average. This indicates that the SC has greater potential to improve its business performance and raising income for the SC.


We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Due to its weak liquidity position, the SC may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the SC. Fortunately, being a lowly geared company, the SC 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 4,102,039,000, the SC should be able to maintain its business in the near terms.


Having a strong assets backing, the SC possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The SC'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 SC has a good control over its resources.


The SC's payment habit is average. With its adequate working capital, the SC should be able to pay its short term debts.


The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the SC is expected to benefit from the favourable outlook of the industry.


Based on the above condition, we recommend credit be granted to the SC normally.



 

PROFIT AND LOSS ACCOUNT

 

 

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

LOTTE CHEMICAL TITAN (M) SDN. BHD.

 

Financial Year End

31/12/2011

31/12/2010

31/12/2009

31/12/2008

31/12/2007

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

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

6,264,411,000

5,039,243,000

4,458,102,000

5,947,246,000

5,394,102,000

Other Income

49,937,000

30,739,000

-

-

-

 

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

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

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

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

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

Total Turnover

6,314,348,000

5,069,982,000

4,458,102,000

5,947,246,000

5,394,102,000

Costs of Goods Sold

<6,138,246,000>

<4,832,921,000>

-

-

-

 

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

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

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

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

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

Gross Profit

176,102,000

237,061,000

-

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

37,244,000

<13,226,000>

265,419,000

180,221,000

197,631,000

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

37,244,000

<13,226,000>

265,419,000

180,221,000

197,631,000

Taxation

<47,103,000>

68,728,000

<92,070,000>

169,460,000

<57,971,000>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

<9,859,000>

55,502,000

173,349,000

349,681,000

139,660,000

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

2,531,149,000

2,475,660,000

2,302,311,000

1,200,114,000

797,594,000

Prior year adjustment

-

<13,000>

-

752,516,000

262,860,000

 

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

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

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

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

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

As restated

2,531,149,000

2,475,647,000

2,302,311,000

1,952,630,000

1,060,454,000

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

2,521,290,000

2,531,149,000

2,475,660,000

2,302,311,000

1,200,114,000

CAPITALISATION FOR BONUS ISSUES

<21,770,000>

-

-

-

-

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

2,499,520,000

2,531,149,000

2,475,660,000

2,302,311,000

1,200,114,000

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

-

-

72,000

76,000

-

Revolving loans

19,577,000

22,483,000

1,440,000

9,750,000

-

Others

14,814,000

12,165,000

50,648,000

68,194,000

-

 

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

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

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

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

 

 

34,391,000

34,648,000

52,160,000

78,020,000

 

 

 

 

BALANCE SHEET

 

 

LOTTE CHEMICAL TITAN (M) SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

3,457,352,000

3,461,024,000

3,969,335,000

4,288,407,000

4,171,234,000

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Subsidiary companies

2,226,000

2,163,000

-

-

-

Deferred assets

382,805,000

416,893,000

386,119,000

480,582,000

-

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

385,031,000

419,056,000

386,119,000

480,582,000

-

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

3,842,383,000

3,880,080,000

4,355,454,000

4,768,989,000

4,171,234,000

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Short term quoted/unquoted investments

36,000

903,000

128,000

166,958,000

-

Stocks

917,388,000

929,762,000

844,749,000

523,213,000

-

Trade debtors

239,699,000

235,436,000

262,065,000

253,630,000

-

Other debtors, deposits & prepayments

52,043,000

57,779,000

44,026,000

56,385,000

-

Short term deposits

-

16,524,000

5,678,000

-

-

Amount due from holding company

2,746,000

-

-

-

-

Amount due from related companies

488,054,000

895,393,000

944,586,000

848,778,000

-

Cash & bank balances

62,989,000

3,672,000

5,344,000

84,599,000

-

Others

-

-

1,063,000

1,351,000

-

 

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

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

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

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

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

TOTAL CURRENT ASSETS

1,762,955,000

2,139,469,000

2,107,639,000

1,934,914,000

1,970,065,000

 

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

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

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

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

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

TOTAL ASSET

5,605,338,000

6,019,549,000

6,463,093,000

6,703,903,000

6,141,299,000

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

382,584,000

459,226,000

367,444,000

222,132,000

-

Other creditors & accruals

137,221,000

246,986,000

125,003,000

119,608,000

-

Bank overdraft

3,779,000

22,550,000

354,000

7,174,000

-

Other borrowings

74,742,000

-

-

166,823,000

-

Bill & acceptances payable

137,000,000

105,077,000

92,408,000

365,770,000

-

Amounts owing to holding company

-

889,237,000

923,969,000

943,617,000

-

Amounts owing to related companies

232,408,000

1,454,777,000

1,541,836,000

1,369,061,000

-

Provision for taxation

92,000

89,000

-

-

-

Other liabilities

226,451,000

79,742,000

51,106,000

94,451,000

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

1,194,277,000

3,257,684,000

3,102,120,000

3,288,636,000

3,580,694,000

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

568,678,000

<1,118,215,000>

<994,481,000>

<1,353,722,000>

<1,610,629,000>

 

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

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

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

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

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

TOTAL NET ASSETS

4,411,061,000

2,761,865,000

3,360,973,000

3,415,267,000

2,560,605,000

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

133,410,000

133,410,000

133,410,000

133,410,000

133,410,000

Preference share capital

166,000

-

-

-

-

 

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

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

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

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

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

TOTAL SHARE CAPITAL

133,576,000

133,410,000

133,410,000

133,410,000

133,410,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Share premium

1,665,431,000

6,887,000

6,887,000

6,887,000

1,373,000

Revaluation reserve

-

14,517,000

14,517,000

14,517,000

-

Retained profit/(loss) carried forward

2,499,520,000

2,531,149,000

2,475,660,000

2,302,311,000

1,200,114,000

Others

<196,488,000>

<275,462,000>

<22,256,000>

8,300,000

-

 

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

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

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

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

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

TOTAL RESERVES

3,968,463,000

2,277,091,000

2,474,808,000

2,332,015,000

1,201,487,000

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

4,102,039,000

2,410,501,000

2,608,218,000

2,465,425,000

1,334,897,000

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Long term loans

309,022,000

351,364,000

752,755,000

949,842,000

-

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

309,022,000

351,364,000

752,755,000

949,842,000

1,225,708,000

 

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

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

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

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

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

 

4,411,061,000

2,761,865,000

3,360,973,000

3,415,267,000

2,560,605,000

 

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

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

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

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

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

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

LOTTE CHEMICAL TITAN (M) SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

62,989,000

20,196,000

11,022,000

84,599,000

-

Net Liquid Funds

59,210,000

<2,354,000>

10,668,000

77,425,000

-

Net Liquid Assets

<348,710,000>

<2,047,977,000>

<1,839,230,000>

<1,876,935,000>

<1,610,629,000>

Net Current Assets/(Liabilities)

568,678,000

<1,118,215,000>

<994,481,000>

<1,353,722,000>

<1,610,629,000>

Net Tangible Assets

4,411,061,000

2,761,865,000

3,360,973,000

3,415,267,000

2,560,605,000

Net Monetary Assets

<657,732,000>

<2,399,341,000>

<2,591,985,000>

<2,826,777,000>

<2,836,337,000>

 

 

 

 

 

 

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

407,120,000

396,397,000

754,549,000

1,133,589,000

-

Total Liabilities

1,503,299,000

3,609,048,000

3,854,875,000

4,238,478,000

4,806,402,000

Total Assets

5,605,338,000

6,019,549,000

6,463,093,000

6,703,903,000

6,141,299,000

Net Assets

4,411,061,000

2,761,865,000

3,360,973,000

3,415,267,000

2,560,605,000

Net Assets Backing

4,102,039,000

2,410,501,000

2,608,218,000

2,465,425,000

1,334,897,000

Shareholders' Funds

4,102,039,000

2,410,501,000

2,608,218,000

2,465,425,000

1,334,897,000

Total Share Capital

133,576,000

133,410,000

133,410,000

133,410,000

133,410,000

Total Reserves

3,968,463,000

2,277,091,000

2,474,808,000

2,332,015,000

1,201,487,000

 

 

 

 

 

 

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.05

0.01

0.00

0.03

-

Liquid Ratio

0.71

0.37

0.41

0.43

-

Current Ratio

1.48

0.66

0.68

0.59

0.55

 

 

 

 

 

 

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

53

67

69

32

-

Debtors Ratio

14

17

21

16

-

Creditors Ratio

23

35

30

14

-

 

 

 

 

 

 

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.10

0.16

0.29

0.46

-

Liabilities Ratio

0.37

1.50

1.48

1.72

3.60

Times Interest Earned Ratio

2.08

0.62

6.09

3.31

-

Assets Backing Ratio

33.02

20.70

25.19

25.60

19.17

 

 

 

 

 

 

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

0.59

<0.26>

5.95

3.03

3.66

Net Profit Margin

<0.16>

1.10

3.89

5.88

2.59

Return On Net Assets

1.62

0.78

9.45

7.56

7.72

Return On Capital Employed

1.62

0.76

9.44

7.52

7.72

Return On Shareholders' Funds/Equity

<0.24>

2.30

6.65

14.18

10.46

 

 

 

 

 

 



FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.54.71

UK Pound

1

Rs.82.79

Euro

1

Rs.71.43

 

INFORMATION DETAILS

 

Report Prepared by :

MNL

 

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.