MIRA INFORM REPORT

 

 

Report No. :

344813

Report Date :

20.10.2015

 

IDENTIFICATION DETAILS

 

Name :

LOT CONS LLC

 

 

Registered Office :

Building No. 7, Apartment No. 38 Chingeltei District, 5th Khoroo Ulaanbaatar 15141

 

 

Country :

Mongolia

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

18.10.2005

 

 

Legal Form :

Limited Liability Company

 

 

Line of Business :

Trading as importers, wholesalers and retailers of plumbing materials and its spare parts.

 

 

No. of Employee :

12

 

 

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

 

Maximum Credit Limit :

Tugrik 22,400,000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

No complaints

 

 

Litigation :

Clear

 

 

NOTES :

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

 

 

ECGC Country Risk Classification List – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Mongolia

B2

B2

 

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 (FDI). 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 strong economic growth because of market reforms 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 emerged from the crisis with a stronger banking sector and needed reforms to the government’s fiscal management. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi (OT) mine, considered to be among the world's largest untapped copper-gold deposits. However, Mongolia's ongoing dispute with foreign investors developing Oyu Tolgoi has called into question the attractiveness of Mongolia as a destination for foreign investment. This caused a loss of investor confidence, a severe drop in FDI, and a slowing economy, leading to the dismissal of Prime Minister ALTANKHUYAG in November. The new government has made restoring investor trust and reviving the economy its top priority, but it will be challenged to unwind the monetary and fiscal stimulus programs in use since 2013 to counteract the fall in foreign investment. In December 2014 the government awarded a deal to develop the massive Tavan Tolgoi (TT) coal field to a consortium comprising Energy Resources/MCS (Mongolia), Shenhua (China), and Sumitomo (Japan); talks continue to hammer out the financing and the operating details. The economy grew more than 10% per year since 2010, largely on the strength of commodity exports to nearby countries and high government spending domestically, before slowing to 7.8% in 2014. Mongolia's economy faces near-term economic risks from the government's loose fiscal and monetary policies, which are contributing to high inflation, and from uncertainties in foreign demand for Mongolian exports. Trade with China represents nearly 62% of Mongolia's total external trade - China receives some 90% of Mongolia's exports and supplies Mongolia with more than one-third of its imports. Mongolia has relied on Russia for energy supplies, leaving it vulnerable to price increases; in 2014, Mongolia purchased nearly 90% of its gasoline and diesel fuel from Russia. A drop in FDI has put pressure on Mongolia's external finances. Remittances from Mongolians working abroad, particularly in South Korea, are significant.

 

Source : CIA

 

Company name

 

LOT CONS LLC (CORRECT)

LOTCONS CO LTD (REQUESTED)

 

 

ADDRESS

 

Building            : Building No. 7, Apartment No. 38

 

Area                 : Chingeltei District, 5th Khoroo

 

Town                 : Ulaanbaatar 15141

Country             : Mongolia

 

Telephone         : (976 76) 035 299 / Mobiles (976 99) 081 262 & 085 299

                        (Gan-Erdene Tserenvanchig)

Fax                   : (976 76) 035 299

E-Mail               : lotcns@yahoo.com

 

Also Known As : Lotcons Co Ltd / Lot Cons XXK

 

 

SENIOR COMPANY PERSONNEL

 

Name                                                               Position

 

Gan-Erdene Tserenvanchig                    Managing Director

 

Total Employees : 12

 

 

PAYMENTS

 

No complaints have been heard regarding payments from local suppliers or banks.

 

We consider it is acceptable to deal with subject for SMALL amounts.

Although it is normal accepted practice for international suppliers to deal on secured terms with Mongolian importers.

 

Opinion on maximum credit : TUGRIK 22,400,000

 

Trade risk assessment : Normal

 

 

PRINCIPAL BANKERS

 

NAME               : STATE BANK OF MONGOLIA

 

Branch              : Chingeltei District, 1 khoroo

Town                : Ulaanbaatar

 

Telephone         : (976) 1800 1881

Fax                   : (976) 1800 1881     

 

Account No.      : 109500041269 MNT

 

Subject 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

 

 

FINANCIAL INFORMATION

 

Balance Sheets as at 31 December 2014 Showed :

 

                                                                        01/01/2013        31/12/2014

                                                                                                (in TUGRIK)

ASSETS

 

Current assets

Cash and bank                                                  180,125,705.05     14,690,032,57

Accounts receivable                                         -                            0.00

Receivable from tax and SHI                              -                             5,686,912.53

Other receivable                                                90,000.00                 –

Inventory                                                           20,847,168.87        292,624,206.59

Non-current assets for commercial purpose        -                             17,996,318.18

Total current assets                                            201,062,873.92     330,997,469,87

 

Non-current assets

Fixed assets                                                     19,461,641.34        33,306,990.24

Total non-current assets                                     19,461,641.34        33,306,990.24

Total Assets                                                      220,524,515.26      364,304,460.11

 

 

LIABILITIES AND OWENER’S EQUITY

 

Liabilities

 

Current liabilities

Accounts payable                                             0.00                      88,000,000.00

Taxes payable                                                   30,893,666.92       3,760,001.20

Short term loan                                                 71,109,895.66       77,104,698.54

Prepaid revenue                                                2,267,680.00         14,014,810.00

Total current liabilities                                        104,271,242.58     182,879,509.73

 

Long term liabilities

 

Total liabilities                                                   104,271,242.58      182,879,509.73

 

Owner’s equity

 

Owner’s equity –Government                               -                 -             

               -Private                                              1,160,000.00        1,160,000.00

Other parts of owner’s equity                             15,000,000.00       15,000,000.00

Retained earnings                                              100,093,272.68     165,264,950.38

Current earnings                                                -                            65,171,677.70

Retained earnings of prior periods                     –                           100,093,272.68

Total owner’s equity                                           116,253,272.68      181,424,950.38

Total Liabilities and Equity                                 220,524,515.26      364,304,460.11

 

 

INCOME STATEMENT

 

Net sales                                                          1,189,741,000.95           1,119,877,990.24

Cost of goods sold                                           1,009,693,134.10           912,084,101.54

Gross profit/loss                                               180,047,866.85               207,793,888.70

Other revenue                                                    –                                  229,526.70

Distribution and marketing expenses                  3,976,960.00                 –

Administrative expenses                                    69,683,512.26               107,169,529.02

Financing expenses                                           17,836,395.66                28,466,414.12

Other expenses                                                 26,345,000.00                 –

Other profit/loss                                                 -                                  -

Income before tax                                             62,205,993.93                72,387,472.25

Income tax expenses                                         8,855,099.39                 7,215,794.56

Income after tax                                                53,350,894.54                 65,171,677.69

Net current profit                                               53,350,894.54                65,171,677.69

Other gain/loss                                                   -                                   -

Total revenue                                                    53,350,894.54                65,171,677.69

 

Financial year ends 31 December.

 

Balance Sheets as at 30 June 2015 (quarterly results) showed :

 

                                                                                    01/01/2015        30/06/2015

                                                                                                             (in TUGRIK)

 

ASSETS

 

Current assets

Cash and bank                                                              14,690,032.57      2,284,602.89

Accounts receivable                                                                  -                          0.00

Receivable from tax and SHI                                          5,686,912.53        11,962,666.07

Other receivable                                                            -                            –

Inventory                                                                       292,624,206.59      431,032,642.68

Non-current assets for commercial

purpose                                                                        17,996,318.18        17,996,318.18

Total current assets                                                       330,997,469.87       463,276,229.82

 

Non-current assets

Fixed assets                                                                 33,306,990.24         30,837,598.48

 

Total non-current assets                                                 33,306,990.24         30,837,598.48

Total Assets                                                                  364,304,460.11      4694,113,828.30

 

LIABILITIES AND OWENER’S EQUITY

 

Liabilities

Current liabilities

Accounts payable                                                          88,000,000.00       78,000,000.00

Taxes payable                                                               3,760,001.20          7,455,645.05

Short term loan                                                             77,104,698.54        177,089,359.66

Prepaid revenue                                                            14,014,810.00         20,965,890.00

Total current liabilities                                                    182,879,509.73        283,510,894.70

 

Long term liabilities

Total liabilities                                                               182,879,509.73        283,510,894.70

 

Owner’s equity

 

Owner’s equity –Government                                          -                                   -             

               -Private                                                          1,160,000.00          1,160,000.00

Other parts of owner’s equity                                         15,000,000.00        15,000,000.00

Retained earnings                                                          165,264,950.38      194,442,933.60

Current earnings                                                            -                             29,177,983.22

Retained earnings of prior periods                                 –                             165,294,960.38

Total owner’s equity                                                           181,424,950.38      210,602,933.60

Total Liabilities and Equity                                                364,304,460.11     494,113,828.30

 

INCOME STATEMENT

 

Net sales                                                                      -                       308,040,781.84

Cost of goods sold                                                       -                         223,816,145.88

Gross profit/loss                                                           -                       84,224,635.96

Other revenue                                                                –                      31,988.56

Administrative expenses                                                -                       31,338,781.98

Financing expenses                                                       -                       20,501,415.46

Income before tax                                                         -                       32,416,427.07             

Income tax expenses                                                     -                       3,238,443.85

Income after tax                                                            -                        29,177,983.22

Net current profit                                                           -                       29,177,983.22

Total revenue                                                                -                        29,177,983.22

 

Financial year ends 31 December.

 

 

LEGAL STATUS AND HISTORY

 

Date Started : 18 October 2005

 

History : Subject was established in Ulaanbaatar on 18 October 2005, however origins of subject's business activities can be traced back to June 1998.

 

Tax Card No. : 5024277 (issued on : 11 October 2006)

 

Authorized Capital : TUGRIK 1,160,000

 

Paid-Up Capital : TUGRIK 1,160,000

 

Limited Liability Company with the following director and sole shareholder :

 

Director

 

Gan-Erdene Tserenvanchig

(Mongolian national)

 

Shareholder

 

Gan-Erdene Tserenvanchig                         100%

(Mongolian national)

 

 

ACTIVITIES

 

The Company is involved in the following activities :

 

Trading as importers, wholesalers and retailers of plumbing materials and its spare parts.

 

Subject’s main suppliers include :

 

- OOO“Santechcomplect” ul. belokamennoyoe shosse 1, Vidnoe Moscow

  Russia;

- US Steel Kosice s.r.o vstupny sreal Kosice, Slovak Republic;

- Bossini Bortolo  & Figli SRL Via delle Ferriere,2 Sarrezo Italy;

- Broen S.A ul.pieszycka 10, Dzierzoniow , Poland.

 

NACE Code : 4674

 

Imports from Russia, Slovakia, Poland and Italy.

 

Subject does not export, all sales are domestic.

 

 

FACILITIES

 

The Company has the following facilities :

 

130 sq. m. rented premises comprising administrative offices located at the heading address as well as two retail shops located elsewhere in Ulaanbaatar (see 'Branch Offices' below).

 

Subject previously used the following telephone numbers :

 

Telephone: (976 11) 365 561 / 322 546

 

 

BRANCH OFFICES

 

1. Hermes Centre, A3 pavilion

   Narni zam 20/1

   Bayangol District

   Ulaanbaatar

 

2. Buudai Shop

   Tsagdaagiin gudamj Street 11

   Sukhbaatar District

   Ulaanbaatar

 

SPECIAL NOTES

 

You enquired on : “LOTCONS CO LTD”. Please note that subject is also known by this name. Subject's correct registered name is as per heading.

 

The address given by you : “Ul Chingeltei District 5 Khoroo, 38/7” is misspelt. Please note that the correct spelling is as per heading.

 

Interviewed : Gan-Erdene Tserenvaanchig (Managing Director).

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.64.82

UK Pound

1

Rs.100.12

Euro

1

Rs.73.75

 

 

INFORMATION DETAILS

 

Analysis Done by :

HNA

 

 

Report Prepared by :

ANK

 

 

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.