MIRA INFORM REPORT

 

 

Report Date :

22.03.2013

 

IDENTIFICATION DETAILS

 

Name :

LOTTE CHEMICAL TITAN TRADING SDN. BHD.

 

 

Formerly Known As :

TITAN TRADING CORP. SDN BHD

 

 

Registered Office :

Bangunan Malaysia Re, 17,Lorong Dungun, Damansara Heights, 6th Floor, 50490 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

27.04.1988

 

 

Com. Reg. No.:

170232-H

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Trading of high density polyethlene, lenear low density, high density polyethylene, ethylene, propylene olefin co-products

 

 

No. of Employees :

60

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Status :

Good

 

 

Payment Behaviour :

Regular 

 

 

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.

:

170232-H

COMPANY NAME

:

LOTTE CHEMICAL TITAN TRADING SDN. BHD.

FORMER NAME

:

TITAN TRADING CORP. SDN BHD (20/12/2012)
TITAN POLYETHYLENE (MALAYSIA) SDN BHD (24/11/2005)
ASIA PACIFIC POLYETHYLENE (MALAYSIA) SDN BHD (21/03/1989)
POLIETILENA ASIA PASIFIK (MALAYSIA) SDN BHD (24/05/1988)

INCORPORATION DATE

:

27/04/1988

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

BANGUNAN MALAYSIA RE, 17,LORONG DUNGUN, DAMANSARA HEIGHTS, 6TH FLOOR, 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

EMAIL

:

MTAN@TITANGROUP.COM

WEB SITE

:

WWW.TITANGROUP.COM

CONTACT PERSON

:

CHEONG PENG KHUAN ( DIRECTOR )

 

 

 

INDUSTRY CODE

:

46691

PRINCIPAL ACTIVITY

:

TRADING OF HIGH DENSITY POLYETHLENE, LENEAR LOW DENSITY, HIGH DENSITY POLYETHYLENE, ETHYLENE, PROPYLENE OLEFIN CO-PRODUCTS

AUTHORISED CAPITAL

:

MYR 310,000,000.00 DIVIDED INTO 
ORDINARY SHARE 310,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 292,500,000.00 DIVIDED INTO 
ORDINARY SHARES 292,500,000 CASH OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 3,437,047,000 [2011]

NET WORTH

:

MYR 575,709,000 [2011]

M1000 OVERALL RANKING

:

161[2011]

M1000 INDUSTRY RANKING

:

4[2011]

 

 

 

STAFF STRENGTH

:

60 [2013]

BANKER (S)

:

MALAYAN BANKING BHD
RHB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

GOOD

 

 

 

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) trading of high density polyethlene, lenear low density, high density polyethylene, ethylene, propylene olefin co-products.

 

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

2004

 

OVERALL RANKING

161

139

174

 

INDUSTRY RANKING

4

5

3

 

 

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

292,500,000.00

100.00

 

 

 

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

------

 

 

 

292,500,000.00

100.00

 

 

 

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

=====

 

+ Also Director

 

The SC interest in other companies (Subsidiaries/Associates) are shown as follow :

Local No

Country

Company

(%)

As At

 

 

TITAN TRADING CORP LIMITED

100

31/12/2011

 

 

 

 

 

 

 

 

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

:

DIRECTOR

 

 

 

 

 

2)

Name of Subject

:

AZHAR NASRON

 

Position

:

VICE PRESIDENT

 

 

 

AUDITOR

 

Auditor

:

DELOITTE & TOUCHE

Auditor' Address

:

UPTOWN 1, 1 JALAN SS21/58, DAMANSARA UPTOWN, LEVEL 19, 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

:

MALAYAN BANKING BHD

 

 

 

 

 

2)

Name

:

RHB BANK 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

:

DEBENTURE

 

Amount Secured

:

USD116,592,800.00

Description Of Property Affected

:

ALL LAND AND IMMOVABLE PROPERTY OF THE CHARGOR

 

Name & Address Of Chargee

:

STANDARD CHARTERED BANK OFFSHORE LABUAN

MAIN OFFICE TOWER, LABUAN FINANCIAL PARK, JALAN MERDEKA, LEVEL 101(F), 87000 LABUAN, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

Form 40 Dated 18/11/2011

Registered and Numbered 9 In The Register of Charges



ENCUMBRANCE 2

Date of Creation

:

15/11/2011

Description Of Charge

:

INSURANCE ASSIGNMENT

 

Amount Secured

:

USD116,592,800.00

Description Of Property Affected

:

THE INSURANCES AND THE INSURERS

 

Name & Address Of Chargee

:

STANDARD CHARTERED BANK OFFSHORE LABUAN

MAIN OFFICE TOWER, LABUAN FINANCIAL PARK, JALAN MERDEKA, LEVEL 10(F), 87000 LABUAN, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

Form 40 Dated 18/11/2011

Registered and Numbered 10 In The Register of Charges

 

LEGAL CHECK AGAINST SC


* A check has been conducted in our databank againt the SC 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 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

[

X

]

 

Average 61-90 Days

[

 

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

60%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

40%

Export Market

:

AUSTRALIA

SINGAPORE

ASIA

Credit Term

:

AS AGREED

 

 

 

 

 

 

Payment Mode

:

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

Type of Customer

:

MANUFACTURING INDUSTRIES

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Goods Traded

:

HIGH DENSITY POLYETHLENE, LENEAR LOW DENSITY, HIGH DENSITY POLYETHYLENE, ETHYLENE, PROPYLENE OLEFIN CO-PRODUCTS

 

 

 

 

Services

:

MARKETING ARM FOR ITS RELATED COMPANIES AND TRADING AS AN INTERNATIONAL PROCUREMENT CENTRE

 

 

 

 

Brand Name

:

TITANEX , TITANLENE , TITANZEX

 

 

 

 

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

 

 

 

Ownership of premises

:

LEASED/RENTED

 

 

Total Number of Employees:

 

YEAR

2013

2012

2011

2010

2009

 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

60

60

50

66

40

 

 

 

 

 

Branch

:

NO

 

 

Other Information:


The SC is principally engaged in the (as a / as an) trading of high density polyethlene, lenear low density, high density polyethylene, ethylene, propylene olefin co-products. 

Besides that the SC also acts as the International Procurement Centre (IPC).

We were informed that the SC is under the Titan Chemicals Group of Companies and it also acts as the marketing arm for its group.

The SC's products are includes Ethylene, Propylene, Olefin co-products, Low Density Polythylene Film and others.

The SC's products are mainly used in a variety of consumer and industrial applications, including packaging film, trash bags, automotive parts, plastic bottles and caps, and compounds for wire and cable insulation.

The SC's IPC's status allow the Group to specialize in and centralize all procurement and international sales of raw materials, components and finished products for its operations in Malaysia and Indonesia.


PROJECTS


No projects found in our databank 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

072538888

Current Telephone Number

:

07-2538888

Match

:

YES

 

 

 

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

:

Acceptable

[

24.36%

]

 

Return on Net Assets

:

Acceptable

[

24.92%

]

 

 

 

 

 

 

 

 

The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The dip in profit could be due to the stiff market competition which reduced the SC's profit margin. The SC's management had generated acceptable return for its shareholders using its assets.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Nil

[

0 Days

]

 

Debtor Ratio

:

Favourable

[

41 Days

]

 

Creditors Ratio

:

Favourable

[

0 Days

]

 

 

 

 

 

 

 

 

As the SC is a service oriented company, the SC does not need to keep 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

:

Favourable

[

11.10 Times

]

 

Current Ratio

:

Favourable

[

11.10 Times

]

 

 

 

 

 

 

 

 

A minimum liquid ratio of 1 should be maintained by the SC in order to assure its creditors of its ability to meet short term obligations and the SC was in a good liquidity position. Thus, we believe the SC is able to meet all its short term obligations as and when they fall due.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Favourable

[

48.95 Times

]

 

Gearing Ratio

:

Favourable

[

0.00 Times

]

 

 

 

 

 

 

 

 

The interest cover showed that the SC was able to service the interest. The favourable interest cover could indicate that the SC was making enough profit to pay for the interest accrued. The SC had no gearing and hence it had virtually no financial risk. The SC was financed by its shareholders' funds and internally generated fund. During the economic downturn, the SC, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

Although the SC's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the SC's profit margin. The SC was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations. With the favourable interest cover, the SC could be able to service all the accrued interest without facing any difficulties. The SC was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The SC has good chance of getting loans, if the needs arises.

 

 

 

 

 

 

 

Overall financial condition of the SC : STRONG

 

 

 

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

46691 : Wholesale of industrial chemicals

 

 

INDUSTRY :

TRADING

 

 

 


The wholesale and retail trade sector grew 7.1% in the first half of the year 2011 supported by strong consumer spending amid favourable labour market conditions and sustained disposable income. This was reflected in the higher distributive trade index which increased 15.9%, with wholesale and retail trade indices increasing 19.2% and 7.8%, respectively. 


It is anticipated that the retail industry will grow 6.0 per cent in the year 2012.


Malaysia's retail sector for 2011 is expected to grow 6 per cent or RM81.59 billion worth of retail sales, similar to the year 2010, due to concerns of high oil prices, declining purchasing power and high cost of doing business. The Middle East and North Africa civil wars have caused the world oil prices to climb. This has led to further rise in the cost of running retail businesses, especially in terms of transportation cost. Many retailers have no choice but to pass the increased cost to end consumers. At the same time, natural disasters (tsunamis, floods, droughts, snow storms, tornadoes and earthquakes) that occurred in all parts of the world has also led to a shortage in the supply of food and raw materials. The phenomenon has pushed retail prices up.In addition, the continual removal of government subsidies since 2010 has pushed inflation upwards. Consequently, rising prices of retail goods contributed to an expectation of moderate performance.


During the first seven months of 2011, other consumption indicators such as imports of consumption goods and credit card spending increased 12.8% and 11.8%, respectively. Sales of motor vehicles declined 3% on account of supply chain disruptions following devastating March 2011 earthquake and tsunami in Japan.


Growth of the sector is anticipated to remain encouraging with ongoing efforts by the Government to increase its contribution to the economy. Major initiatives include increasing the number of large format stores such as hypermarkets, superstores and departmental stores are carried out to boost the economy.


Meanwhile, the Government has introduced the Retail Shop Transformation (TUKAR) programme. Under this programme, selected large format retailers will assist small retailers to improve their premises and layout which include attractive product display shelves, enhanced lighting and point-of-sales system to manage product inventory,

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 1988, the SC is a Private Limited company, focusing on trading of high density polyethlene, lenear low density, high density polyethylene, ethylene, propylene olefin co-products. 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 shareholder 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 established an extensive clientele base in the market. Besides catering to the local market, the SC has penetrated into other countries. With the contribution of both local and overseas customers, the SC is likely to be exposed to lower commercial risk. Hence, we believe that the SC has better business expansion opportunities in the future. Being a moderate size company, the SC has a total workforce of 60 employees in its business operations. The SC has a good management capability. Its capable management team has enabled the SC to keep its business on going. Hence, the future prospect of the SC is bright.


Financially, the SC registered a higher turnover compared to previous year. However, its profits showed a reverse trend. The lower profit achieved was a result of higher operating cost and increased competition. Return on shareholders' funds of the SC was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The SC 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 zero geared company, the SC virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. Given a positive net worth standing at MYR 575,709,000, the SC should be able to maintain its business in the near terms.


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.


Overall, the SC's payment habit is good as the SC 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 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 promptly.

 

PROFIT AND LOSS ACCOUNT

 

 

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

LOTTE CHEMICAL TITAN TRADING 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

FULL

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

3,437,047,000

2,687,470,000

2,414,517,000

2,881,921,000

2,325,442,000

Other Income

-

25,186,000

-

-

-

 

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

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

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

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

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

Total Turnover

3,437,047,000

2,712,656,000

2,414,517,000

2,881,921,000

2,325,442,000

Costs of Goods Sold

<3,254,972,000>

<2,511,577,000>

-

-

-

 

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

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

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

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

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

Gross Profit

182,075,000

201,079,000

-

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

140,549,000

164,838,000

137,822,000

47,909,000

122,739,000

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

140,549,000

164,838,000

137,822,000

47,909,000

122,739,000

Taxation

<287,000>

12,000

1,565,000

<2,416,000>

3,434,000

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

140,262,000

164,850,000

139,387,000

45,493,000

126,173,000

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

195,796,000

30,946,000

<108,441,000>

<153,934,000>

<280,107,000>

Prior year adjustment

<1,818,000>

-

-

-

-

 

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

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

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

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

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

As restated

193,978,000

30,946,000

<108,441,000>

<153,934,000>

<280,107,000>

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

334,240,000

195,796,000

30,946,000

<108,441,000>

<153,934,000>

DIVIDENDS - Ordinary (paid & proposed)

<161,900,000>

-

-

-

-

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

172,340,000

195,796,000

30,946,000

<108,441,000>

<153,934,000>

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Others

2,931,000

3,409,000

3,302,000

5,199,000

3,089,000

 

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

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

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

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

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

 

2,931,000

3,409,000

3,302,000

5,199,000

3,089,000

 

 

 

BALANCE SHEET

 

 

LOTTE CHEMICAL TITAN TRADING SDN. BHD.

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Subsidiary companies

3,000

3,000

3,000

3,000

3,000

Deferred assets

27,000

24,000

2,000

19,000

845,000

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

30,000

27,000

5,000

22,000

848,000

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

30,000

27,000

5,000

22,000

848,000

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Trade debtors

385,006,000

219,689,000

261,112,000

272,120,000

301,505,000

Other debtors, deposits & prepayments

363,000

363,000

487,000

353,000

516,000

Short term deposits

56,987,000

11,050,000

-

26,555,000

29,000,000

Amount due from holding company

8,470,000

1,318,000

1,318,000

1,318,000

1,309,000

Amount due from subsidiary companies

-

80,000

379,000

799,000

885,000

Amount due from related companies

168,542,000

461,789,000

331,324,000

150,792,000

85,022,000

Cash & bank balances

13,301,000

633,000

2,014,000

28,400,000

11,631,000

Others

-

431,000

428,000

-

474,000

 

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

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

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

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

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

TOTAL CURRENT ASSETS

632,669,000

695,353,000

597,062,000

480,337,000

430,342,000

 

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

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

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

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

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

TOTAL ASSET

632,699,000

695,380,000

597,067,000

480,359,000

431,190,000

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

44,000

-

-

-

-

Other creditors & accruals

12,658,000

7,535,000

8,909,000

7,290,000

19,533,000

Amounts owing to subsidiary companies

803,000

-

-

-

-

Amounts owing to related companies

43,481,000

110,763,000

124,894,000

139,630,000

148,004,000

Provision for taxation

4,000

-

-

1,289,000

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

56,990,000

118,298,000

133,803,000

148,209,000

167,537,000

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

575,679,000

577,055,000

463,259,000

332,128,000

262,805,000

 

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

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

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

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

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

TOTAL NET ASSETS

575,709,000

577,082,000

463,264,000

332,150,000

263,653,000

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

292,500,000

292,500,000

292,500,000

292,500,000

292,500,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

292,500,000

292,500,000

292,500,000

292,500,000

292,500,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Exchange equalisation/fluctuation reserve

110,869,000

88,786,000

139,818,000

148,091,000

125,087,000

Retained profit/(loss) carried forward

172,340,000

195,796,000

30,946,000

<108,441,000>

<153,934,000>

 

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

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

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

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

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

TOTAL RESERVES

283,209,000

284,582,000

170,764,000

39,650,000

<28,847,000>

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

575,709,000

577,082,000

463,264,000

332,150,000

263,653,000

 

 

 

 

 

 

 

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

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

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

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

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

 

575,709,000

577,082,000

463,264,000

332,150,000

263,653,000

 

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

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

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

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

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

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

LOTTE CHEMICAL TITAN TRADING SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

70,288,000

11,683,000

2,014,000

54,955,000

40,631,000

Net Liquid Funds

70,288,000

11,683,000

2,014,000

54,955,000

40,631,000

Net Liquid Assets

575,679,000

577,055,000

463,259,000

332,128,000

262,805,000

Net Current Assets/(Liabilities)

575,679,000

577,055,000

463,259,000

332,128,000

262,805,000

Net Tangible Assets

575,709,000

577,082,000

463,264,000

332,150,000

263,653,000

Net Monetary Assets

575,679,000

577,055,000

463,259,000

332,128,000

262,805,000

 

 

 

 

 

 

BALANCE SHEET ITEMS

 

 

 

 

 

Total Liabilities

56,990,000

118,298,000

133,803,000

148,209,000

167,537,000

Total Assets

632,699,000

695,380,000

597,067,000

480,359,000

431,190,000

Net Assets

575,709,000

577,082,000

463,264,000

332,150,000

263,653,000

Net Assets Backing

575,709,000

577,082,000

463,264,000

332,150,000

263,653,000

Shareholders' Funds

575,709,000

577,082,000

463,264,000

332,150,000

263,653,000

Total Share Capital

292,500,000

292,500,000

292,500,000

292,500,000

292,500,000

Total Reserves

283,209,000

284,582,000

170,764,000

39,650,000

<28,847,000>

 

 

 

 

 

 

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

1.23

0.10

0.02

0.37

0.24

Liquid Ratio

11.10

5.88

4.46

3.24

2.57

Current Ratio

11.10

5.88

4.46

3.24

2.57

 

 

 

 

 

 

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Debtors Ratio

41

30

39

34

47

Creditors Ratio

0

-

-

-

-

 

 

 

 

 

 

SOLVENCY RATIOS (Times)

 

 

 

 

 

Liabilities Ratio

0.10

0.20

0.29

0.45

0.64

Times Interest Earned Ratio

48.95

49.35

42.74

10.22

40.73

Assets Backing Ratio

1.97

1.97

1.58

1.14

0.90

 

 

 

 

 

 

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

4.09

6.13

5.71

1.66

5.28

Net Profit Margin

4.08

6.13

5.77

1.58

5.43

Return On Net Assets

24.92

29.15

30.46

15.99

47.72

Return On Capital Employed

24.92

29.15

30.46

15.99

47.72

Return On Shareholders' Funds/Equity

24.36

28.57

30.09

13.70

47.86

Dividend Pay Out Ratio (Times)

1.15

-

-

-

-

 

 

 

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.54.28

UK Pound

1

Rs.82.06

Euro

1

Rs.70.23

 

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.