|
Report Date : |
12.02.2014 |
IDENTIFICATION DETAILS
|
Name : |
HERA EQUIPMENT LLC |
|
|
|
|
Registered Office : |
Peace Avenue, 5th
Khoroo, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
30.09.2011 |
|
|
|
|
Date of Incorporation : |
18.11.2004 |
|
|
|
|
Legal Form : |
Limited Liability
Company |
|
|
|
|
Line of Business : |
Trading as importers, wholesalers, retailers and distributors of heavy
machines such as excavators, tractors and spare parts. |
|
|
|
|
No. of Employees : |
168 |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Status : |
Moderate |
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|
|
|
Payment Behaviour : |
No complaints |
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|
|
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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 – December 01, 2013
|
Country Name |
Previous Rating (30.09.2013) |
Current Rating (01.12.2013) |
|
Mongolia |
C1 |
C1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
MONGOLIA - ECONOMIC OVERVIEW
Mongolia's extensive mineral
deposits and attendant growth in mining-sector activities have transformed
Mongolia's economy, which traditionally has been dependent on herding and
agriculture. Mongolia's copper, gold, coal, molybdenum, fluorspar, uranium,
tin, and tungsten deposits, among others, have attracted foreign direct
investment. Soviet assistance, at its height one-third of GDP, disappeared
almost overnight in 1990 and 1991 at the time of the dismantlement of the USSR.
The following decade saw Mongolia endure both deep recession, because of
political inaction and natural disasters, as well as economic growth, because
of reform-embracing, free-market economics and extensive privatization of the
formerly state-run economy. The country opened a fledgling stock exchange in
1991. Mongolia joined the World Trade Organization in 1997 and seeks to expand
its participation in regional economic and trade regimes. Growth averaged
nearly 9% per year in 2004-08 largely because of high copper prices globally
and new gold production. By late 2008, Mongolia was hit hard by the global
financial crisis. Slower global economic growth hurt the country's exports,
notably copper, and slashed government revenues. As a result, Mongolia's real economy
contracted 1.3% in 2009. In early 2009, the International Monetary Fund reached
a $236 million Stand-by Arrangement with Mongolia and the country has largely
emerged from the crisis with better regulations and closer supervision. The
banking sector strengthened but weaknesses remain. In October 2009, Mongolia
passed long-awaited legislation on an investment agreement to develop the Oyu
Tolgoi mine, considered to be among the world's largest untapped copper
deposits. Recent calls by nationalist politicians to renegotiate the investment
agreement, however, have called into question the attractiveness of Mongolia as
a destination for foreign direct investment. Negotiations to develop the
massive Tavan Tolgoi coal field face similar obstacles. The economy grew by
6.4% in 2010, 17.5% in 2011, and by more than 12.3% in 2012, largely on the
strength of commodity exports to nearby countries and high government spending
domestically. Mongolia's economy, however, faces near-term economic risks from
the government's loose fiscal policies, which are contributing to high
inflation, and uncertainties in foreign demand for Mongolian exports. Trade
with China represents more than half of Mongolia's total external trade - China
receives more than 90% of Mongolia's exports. Mongolia purchases 95% of its
petroleum products and a substantial amount of electric power from Russia,
leaving it vulnerable to price increases. Due to severe winter weather in
2009-10, Mongolia lost 22% of its total livestock, and meat prices doubled.
Inflation remained higher than 10% for much of 2010-12, due in part to higher
food and fuel prices. The economic slowdown in China during 2011-2012 resulted
in fewer Mongolian exports, a widened trade gap, and decreased government
revenues, putting pressure on Mongolian fiscal policy. Remittances from
Mongolians working abroad, particularly in South Korea, are significant
|
Source
: CIA |
Hera Equipment
LLC
ADDRESS
Building : Hera Business Center Building
Street : Peace Avenue, 5th Khoroo
Area : Gurvaljin Bridge, Bayangol District
P.O.Box No.:
16081
Town : Ulaanbaatar
Country : Mongolia
Telephone : (976 75) 752 121 / (976 70) 182 131 / (976
70) 112 121 / (976 70) 821 121 / (976 70) 182 191 / (976 70) 330 535 / (976 99)
108 030 (Batkhuyag Ganbold) / (976 99) 034 587 / (976 99) 110 305 (Khassuuri
Gankhuyag) /
Fax : (976 70) 182 161 / (976 70) 182 171
E-Mail : batkhuyag@hera.mn / khassuuri@hera.mn
Website : www.hera.mn
Also known as :
Hera Equipment HHK / Hera Ekuypment HHK
Name Position
1. Khassuuri
Gankhuyag Chairman
2. Batkhuyag
Ganbold Chief Executive Officer
3. Venkata
Krishnan Sankara Narayanan Chief Financial Officer
4. Tsevelsuren
Vanchig Chief Operating Officer
5. Will Mc
Manus Chief Operating Officer
6. Tuguldur
Chuluunchimeg Sales & Marketing Director
7. Sunjudmaa
Shagdarsuren Financial Analyst
Total Employees :
168 (subject)
450 (group)
No complaints
have been heard regarding payments from local suppliers or banks.
We consider it is
acceptable to deal with subject for LARGE amounts, although it is normal
accepted practice for international suppliers to deal on secured terms with
Mongolian importers.
Trade risk
assessment: Normal
NAME : TRADE AND DEVELOPMENT BANK OF MONGOLIA
Branch : Juulnchny Gudamj 7
Town : Ulaanbaatar 210646
Telephone: (976
11) 312 362 / 331 133
Fax : (976 11) 325 449
The company also
has an account with the following banks:
1. Golomt Bank of
Mongolia
Main Branch
Bodi Tower, Sukhbaatar Square
Ulaanbaatar
Telephone: (976 11) 311 530
Fax
: (976 11) 312 307
2. Khan Bank of
Mongolia
Peace Avenue
P.O Box-185
Ulaanbaatar
Telephone: (976 11) 457 880
Fax
: (976 11) 457 880
3. Khas Bank
Sukhbaatar district
Ulaanbaatar 14200
Telephone: (976 11) 318 185
Fax : (976 11) 328 701
Private companies
in Mongolia are not required to publish or disclose balance sheets. However,
the subject interviewed offered the following information :
Sales Turnover :
TUGRIK 16,180,078,468.52 - 2009 - exact
: TUGRIK 45,972,019,897.70 - 2010 - exact
: TUGRIK
107,537,885,205.21 - 2011 – exact *
: TUGRIK
81,171,610,189.00 - 2012 - exact
: TUGRIK 81,443,288,363.00 - 2013 - exact
Net Profit : TUGRIK 508,596,802.83 - 2009 - exact
: TUGRIK 3,915,702,918.52 - 2010 - exact
: TUGRIK 15,703,222,729.21 - 2011 – exact *
: TUGRIK 17,227,656,233.00 - 2012 - exact
: TUGRIK 16,730,486,290.00 - 2013 - exact
Total Capital
Investment : TUGRIK 90,558,833,039 (as of February 2014)
Total Value of
Stock Held : TUGRIK 3,486,743,304.50 (as
of March 2012)
Total Value of
Current Contracts : US DLRS 10,000,000 (as of February 2014)
* A significant
increase in sales turnover in 2011 was attributed to favourable market
conditions and expansion of the business.
Financial year
ends 31 December.
The following
balance sheets as at 30 September 2011 applies subject’s affiliated company,
Remicon JSC :
1 Jan 2011 30 Sep 2011
(in TUGRIK)
ASSETS
Current Asset
Cash and cash
equivalent 425,363,450.06 944,129,059.19
Short term
investment - -
Devaluation - -
Accounts
receivable 813,244,874.67 3,277,014,449.31
Allowance for bad
debts - -
Other
receivable 16,727,931.03 64,742,196.11
Inventory 90,415,225.13 865,725,773.98
Work in process - -
Prepayment (870,001.35) 126,557,346.12
Total Current
Asset 1,344,881,479.54 5,278,168,824.71
Fixed asset 4,850,393,928.70 6,351,989,201.62
Accumulated
depreciation (886,707,420.73) (1,190,731,447.53)
Other fixed
assets - -
Building under
construction 584,900.00 584,900.00
Intangible
asset 1,037,748,677.50 2,537,948,677.50
Total Fixed
Assets 5,002,020,085.47 7,699,791,331.59
TOTAL ASSET 6,346,901,565.01 12,977,960,156.30
LIABILITIES AND
SHAREHOLDERS EQUITY
Liability
Current Liability
Accounts
payable 13,980,450.55 3,560,185,217.19
Salaries
Payable -
5,043,372.00
Corporate income
tax 55,442,396.66
190,387,453.19
VAT payable -
233,426,710.19
Social &
health insurance payable (646,391.12) 14,545,309.62
Other
payables 93,564.00 -
Unearned
revenue 250,000.00 250,000.00
Total Current
Liabilities 69,120,020.09 4,003,838,062.19
Long Term
Liabilities
Long term notes
payable - -
Long term loans - -
Long term bonds
payable - -
Other
payables - -
Allowance for
long term liabilities - -
Total Long Term
Liabilities - -
Total
Liabilities 69,120,020.09 4,003,838,062.19
Stockholders'
Equity
Share : а) government
b) private 1,579,075,886.00 -
Treasury
stock -
7,867,946,406.00
Total stock 1,579,075,886.00 7,867,946,406.00
Additional
paid-in capital - -
Other
capital 5,048,820,200.00 -
Retained
earnings (350,114,541.08) 1,106,175,688.11
Current year 421,683,126.18 1,556,042,552.39
Prior period (771,797,667.26) (449,866,864.28)
Total
Stockholders' Equity 6,277,781,544.92 8,974,122,094.11
TOTAL LIABILITIES
& SHAREHOLDERS
EQUITY 6,346,901,565.01 12,977,960,156.30
CASH FLOW
STATEMENT
The following
cash flow statement as at 31 December 2011 applies to subject’s affiliated
company, Remicon JSC :
31 Dec
2010 31 Dec 2011
(in TUGRIK)
Cash flows from
operating activities
Cash inflow 5,216,787,334.70 13,611,164,335.17
Cash sales and
collections
from
customers 5,216,697,933.81 13,589,424,335.17
Cash from
supplementary service
and
manufacturing 89,400.89 21,740,000.00
Cash outflow (4,810,478,187.46) (16,041,106,021.31)
Employees' salary
payment (210,668,551.40) (344,299,380.49)
Social Security
tax payment (63,909,656.00) (96,360,094.48)
Merchandise
purchase (6,108,255.45) (706,877,705.30)
Cash paid for
utility expenses (23,701,723.00) (37,623,645.00)
Fuel, petrol,
transportation fee,
spare part
purchase (40,295,560.00) (121,137,644.00)
Other payments to
suppliers (4,434,253,841.61) (14,488,768,173.63)
Paid
interest (8,580,800.00) (560,000.00)
Tax payments (22,959,800.00) (245,479,378.41)
Net cash from
operating
activities 406,309,147.24 (2,429,941,686.14)
Noncurrent asset
acquisition (4,679,540.00) (200,000.00)
Net cash from
investing
Activities (4,679,540.00) (200,000.00)
Cash flows from
financing
Activities (10,166,640.50) -
Cash from stock
issuance - 1,240,050,320.00
Bank loan - 1,522,276,487.50
Loan payment - (541,321,037.50)
Donations (10,211,507.00) -
Current portion
payment of long
term liabilities - (132,325,858.00)
Interest
income 44866.5 4839405.11
Currency exchange
difference -
(41,511,958.94)
Net cash from
financing
activities (10,166,640.50) 2,052,007,358.17
Net cash
movement 391,462,966.74 (378,134,327.97)
Cash & cash
equivalent at
the beginning of
period 33,900,483.32 425,363,450.06
Cash & cash
equivalent at
the end of period 425,363,450.06 47,229,122.09
Sales
Turnover : TUGRIK 778,000,000.00
- 2009 - exact
: TUGRIK
4,710,892,217.53 - 2010 - exact
: TUGRIK
12,281,492,472.85 - 2011 - exact
Net Profit
(before tax) : TUGRIK (73,857,659)-
2009 - exact
: TUGRIK 471,114,968.84 - 2010 - exact
: TUGRIK 2,348,682,844.22 - 2011 - exact
The following
financial information applies to subject’s affiliated company, Hera Investment
LLC :
Sales
Turnover : US DLRS 1,500,000 - 2005 - exact
: US DLRS 3,000,000 - 2006 - exact
: US DLRS 10,000,000 - 2007 - exact *
: US DLRS 11,000,000 - 2008 - exact
: US DLRS 15,000,000 - 2009 - approx
: TUGRIK 26,426,435,934 -
2010 - exact
: TUGRIK 41,896,799,290 -
2011 - exact
: TUGRIK 56,766,001,978 -
2012 - exact
: TUGRIK 51,618,874,028 -
2013 - exact
Net Profit : TUGRIK 1,033,664,005 - 2010 - exact
: TUGRIK 2,031,491,499 - 2011 – exact
: TUGRIK 3,523,071,754 - 2012 - exact
: TUGRIK 4,510,742,273 – 2013 - exact
Total Capital
Investment : TUGRIK 12,616,291,765 (as of February 2014)
Total Value of
Stock Held : TUGRIK 12,035,745,342 (as of February 2014)
Financial year
ends 31 December.
Date Started : 18
November 2004
History : The
subject company was established in Mongolia on 18 November 2004 and started
trading on 5 June 2005. Until April 2013 subject’s sole shareholder was Mr.
Khassuuri Gankhuyag. Later subject’s shareholding structure changed to the
present.
C.R. No. :
9011058017
Tax No.: 2858614
Authorised
Capital : TUGRIK 2,000,000,000 (increased from TUGRIK 1,000,000 in April 2013)
Paid-Up Capital :
TUGRIK TUGRIK 2,000,000,000 (increased from TUGRIK 1,000,000 in April 2013)
Limited Liability
Company with the following shareholders:
Shareholders Percentage
1. Khassuuri
Gankhuyag
90%
2. Mongolia
Opportunities Fund 10%
Associates
1. Hera
Investment LLC
Hera Business Center Building
Peace Avenue, 5th Khoroo
Gurvaljin Bridge, Bayangol District
P.O.Box No.: 16081
Ulaanbaatar
Telephone: (976 75) 752 121 / (976 99) 110
305 / (976 99) 108 030
Fax
: (976 70) 182 161 / (976 70) 182 171
E-Mail
: khassuuri@hera.mn
President: Khassuuri Gankhuyag
Est.: 21 December 2005
C.R. No. : 9011091053
Tax No: 2787687
2. Remicon JSC
Hera Business Center Building
Peace Avenue, 5th Khoroo
Gurvaljin Bridge, Bayangol District
P.O.Box No.: 16081
Ulaanbaatar
Telephone
: (976 70) 123 333
Fax
: (976 70) 123 333
Managing Director : Enkhbayar Munkhsaikhan
Total Employees : 84
Principal Bank : Trade And Development Bank
of Mongolia
Est. : 2008
C.R. No. : 9010001071
Tax No.: 5191823
Capital : TUGRIK 7,867,946,406.00
Shareholders :
- Gankhuyag Khassuuri 50.8%
- Frontier LLC 12.3%
- Gauli LLC 11.3%
- More than 1,000 minority
shareholders 25.6%
(Manufacturers of ready mixed concrete,
construction materials,
concrete panels and cement blocks)
3. Hera Foods
LLC
4. Hera Mining
Service LLC
5. Hera
Construction LLC
6. Bluebus LLC
7. Ar Zam LLC
8. Belie Medved
LLC
9. Hera
Automotive LLC
10.Hera Mining
Equipment LLC
11.Gobi Equipment
Rental Fleet LLC
12.Main
Technology Marc LLC
13.National
Leasing Service LLC
The Company is
involved in the following activities :
Trading as
importers, wholesalers, retailers and distributors of heavy machines such as excavators,
tractors and spare parts.
Subject also
provides after sales services.
NACE Code : 3312
/ 3320 / 4614 / 4663
Imports from
South Korea, Austria, Belarus, China, Germany, USA,, Japan, Turkey, Finland,
Sweden and Italy.
Subject does not
export, all sales are domestic.
Subject company
is distributor for Hyundai, Daewoo, Hanjin D&B, Junjin CSM and Cummins.
Subject’s
principal suppliers include :
- Hyundai Heavy
Industires Co., LTD (South Korea);
- Wirtgen Group (Germany, dealing with China Office);
- Siemens
(Germany, dealing with China office);
- Cummins (US,
dealing with Mongolia office);
- Tadano Group
(Japan);
- Furukawa Rock
Drill Co., LTD (Japan);
- Wacker Neuson
(Germany, dealing with China Office);
- Denyo Group
(Japan);
- Airman
(Hokuetsu Industries Co., LTD; Japan);
- Anadolu Isuzu
(Turkey);
- Kenworth (US,
dealing with Indonesia Office);
- Iveco (EU,
dealing with China Office);
- Metso
Corporation (Finland & Sweden).
The Company has the
following facilities :
Rented premises
comprising administrative offices and a retail outlet located at the heading
address as well as owned branch offices (3,000 sq. m.), storage facilities
(7,000 sq. m.) and service centre (11,000 sq. m.) located on 7 hectares plot of
land located elsewhere in Ulaanbaatar (see 'Branch Offices' below).
Subject plans to
open service centre and retail outlet in Gobi Region in April 2012.
Hera Business
Center Building
Peace Avenue, 5th
Khoroo
Gurvaljin Bridge,
Bayangol District
P.O.Box No.:
16081
Ulaanbaatar
Hera Industrial
Park
Songinokhairkhan
District, 20th Khoroo
Ulaanbaatar
Interviewed:
Batkhuyag Ganbold (Chief Executive Officer).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.62.43 |
|
|
1 |
Rs.102.48 |
|
Euro |
1 |
Rs.85.28 |
INFORMATION DETAILS
|
Report Prepared
by : |
PDT |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.