MIRA INFORM REPORT
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Report Date : |
6th May, 2006. |
IDENTIFICATION DETAILS
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Name : |
BHARAT HOTEL
INTERCONTINENTAL- PROP. BHARAT HOTELS LIMITED |
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Registered Office : |
Bahrakhamba Lane, New Delhi
– 110 001, India |
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Country : |
India |
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Financials (as on) : |
31.03.2005 |
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Date of Incorporation : |
1981 |
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Com. Reg. No.: |
55-11274 |
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CIN No.: |
U74899dl1981plc011274 |
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Legal Form : |
A
Public Limited Liability Company. The company’s shares are listed on the
stock exchanges. |
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Line of Business : |
The
Company is engaged in the business of Hoteliering |
RATING & COMMENTS
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MIRA’s Rating : |
A |
RATING
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STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 13500000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established company having mediocre performance. Directors are reported as
experienced, respectable and having satisfactory means of their own. Their
trade relations are reported as fair. Payments are usually correct and as per
commitments. The
company can be considered good for any normal business dealings. |
LOCATIONS
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Registered Office : |
Bahrakhamba Lane, New Delhi
– 110 001, India |
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Tel. No.: |
91-11-23411001/23320101/23709000 |
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Fax No.: |
91-11-23325335/23412233 |
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E-Mail : |
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Website : |
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Branches : |
Located at: - ·
Grand Inter-Continental,
New Delhi ·
World Trade Centre and
World Trade Tower, New Delhi ·
The Grand Palace
Inter-Continental, Srinagar ·
Grand
Inter-Continental Mumbai ·
Goa Grand
Inter-Continental Resort, Goa ·
Grand Ashok Bangalore
including Airport Restaurant and Flight Catering ·
Grand Laxmi Vilas
Palace, Udaipur |
DIRECTORS
|
Name : |
Mr. Lalit Suri |
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Designation : |
Chairman-cum- Managing
Director |
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Date of Birth/Age : |
54 Years |
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Qualification : |
B. Com (Hons.) |
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Experience : |
33 Years |
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Date of Appointment : |
01.01.1984 |
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Name : |
Mrs. Jyotsna Suri |
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Designation : |
Joint Managing Director |
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Date of Birth/Age : |
49 Years |
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Qualification : |
B. A. (Hons.) |
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Experience : |
25 Years |
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Date of Appointment : |
02.11.1989 |
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Name : |
Mr. Ramesh Suri |
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Designation : |
Director |
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Name : |
Mr. Tikka Hanuwant Singh |
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Designation : |
Director |
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Name : |
Mr. Dharam Veer Batra |
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Designation : |
Director |
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Name : |
Mr. Abhay Navalmal Firodia |
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Designation : |
Director |
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Name : |
Mr. Chakor Lalchand Doshi |
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Designation : |
Director |
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Name : |
Mr. Lalit Bhasin |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Vijay K. Verma |
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Designation : |
Vice President and Company
Secretary |
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Name : |
Mr. Arvind Sachdev |
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Designation : |
Vice President (Finance) |
BUSINESS DETAILS
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Line of Business : |
The
Company is engaged in the business of Hoteliering |
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Products and Services : |
·
Rooms, Restaurants,
Banquets and other Services ·
Food and Beverages ·
Maintenance Charges |
GENERAL INFORMATION
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No. of Employees : |
2200 |
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Bankers : |
·
Jammu and Kashmir Bank
Limited ·
Banque Nationale De
Paris ·
Corporation Bank |
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Facilities : |
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Banking Relations : |
Satisfctory |
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Auditors : |
V.
Sankar Aiyar & Company |
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Qualification: |
Chartered
Accountants |
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Address: |
202-301, Satyam Cinema
Complex, Ranjit Nagar Community Centre,
New Delhi – 110 008 |
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Associates: |
·
Jyotsna Holding
Private Limited ·
Deeksha Holding
Limited ·
Responsible Builders
Private Limited ·
Special Protection
Services Private Limited ·
Premium Exports
Limited ·
Prima Telecom Limited ·
Premium Holdings
Limited ·
Rohan Motors Limited ·
Subros Limited ·
Hemkunt Service
Station Private Limited ·
Mercantile Capital and
Financial Services Limited |
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Subsidiaries: |
·
Udaipur Hotels Private
Limited (Since 26.02.2002) ·
Jyoti Limited |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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100000000 |
Equity Shares |
Rs.10/- each |
Rs. 1000.000 Millions |
Issued, Subscribed
& Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
71891199 |
Equity Shares |
Rs.10/- each |
Rs.718.911 Millions |
FINANCIAL
DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
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SOURCES OF FUNDS |
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31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
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718.911 |
239.637 |
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2] Share Application Money |
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0.000 |
0.000 |
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3] Reserves & Surplus |
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2677.616 |
3126.256 |
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4] (Accumulated Losses) |
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0.000 |
0.000 |
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NETWORTH
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3396.527 |
3365.893 |
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LOAN FUNDS |
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1] Secured Loans |
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557.543 |
530.811 |
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2] Unsecured Loans |
|
226.220 |
272.936 |
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TOTAL
BORROWING
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|
783.763 |
803.747 |
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DEFERRED TAX LIABILITIES |
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202.560 |
188.200 |
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Deposits Towards
Sub-Licence |
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486.333 |
497.583 |
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TOTAL
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4869.183 |
4855.423 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
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3601.356 |
3467.617 |
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Capital work-in-progress
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2.791 |
536.173 |
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INVESTMENT
|
|
396.113 |
396.114 |
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DEFERREX TAX ASSETS
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0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES
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Inventories
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104.127 |
106.677 |
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Sundry Debtors
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164.694 |
162.961 |
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Cash & Bank Balances
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|
359.533 |
95.845 |
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Other Current Assets
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0.000 |
0.000 |
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Loans & Advances
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|
663.503 |
624.383 |
Total Current Assets
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1291.857 |
989.866 |
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Less : CURRENT LIABILITIES & PROVISIONS
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Current Liabilities
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451.648 |
589.206 |
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Provisions
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25.951 |
18.028 |
Total Current Liabilities
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477.599 |
607.234 |
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Net Current
Assets
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814.258 |
382.632 |
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MISCELLANEOUS EXPENSES
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|
54.665 |
72.887 |
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TOTAL
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4869.183 |
4855.423 |
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PROFIT & LOSS ACCOUNT
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PARTICULARS |
|
31.03.2005 |
31.03.2004 |
Sales Turnover [including other income]
|
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1998.149 |
1132.453 |
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Profit/(Loss) Before Tax
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|
48.994 |
(12.326) |
Provision for Taxation
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|
18.360 |
0.000 |
Profit/(Loss) After Tax
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|
30.634 |
0.285 |
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Export Value
|
|
7194.51 |
2760.05 |
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Import Value
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316.880 |
631.92 |
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Total Expenditure
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1462.405 |
1023.994 |
KEY RATIOS
|
Year |
31.03.2005 |
31.03.2004 |
31.03.2003 |
|
Debt-Equity Ratio |
0.38 |
0.43 |
0.66 |
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Long Term Debt-Equity Ratio |
0.38 |
0.43 |
0.55 |
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Current Ratio |
1.47 |
0.87 |
1.00 |
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TURNOVER RATIOS |
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Fixed Assets |
0.40 |
0.33 |
0.38 |
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Inventory |
17.57 |
13.19 |
14.31 |
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Debtors |
11.31 |
7.98 |
7.67 |
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Interest Cover Ratio |
1.74 |
1.01 |
1.03 |
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Operating Profit Margin(%) |
28.93 |
10.72 |
10.10 |
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Profit Before Interest And Tax
Margin(%) |
6.23 |
2.43 |
2.68 |
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Cash Profit Margin(%) |
24.35 |
8.32 |
7.49 |
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Adjusted Net Profit Margin(%) |
1.65 |
0.03 |
0.07 |
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Return On Capital Employed(%) |
2.51 |
0.63 |
0.53 |
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Return On Net Worth(%) |
0.91 |
0.01 |
0.02 |
LOCAL AGENCY FURTHER INFORMATION
FIXED ASSETS:
Land, building, plant &
machinery, furniture & fixture and vehicles, Speed Boat, Aircraft, etc.
INDUSTRIES:
Indian Hotels Company Ltd
(IHCL) operating under the Taj brand, is the largest hotel chain in the
country. EIH operating under the Oberoi brand is the second largest hotel chain
followed by ITC Hotels (ITCH). Asian Hotels (AHL), Bharat Hotels (BHL),
Oriental Hotels as well as Hotel Leela Venture (HLV) are other major hotels.
While the 5-star and 5-star
deluxe and to some extent the 4-star hotels are the domain of renowned hotel
companies, an unorganized market exists for hotels operating below these
ratings. Hotel companies such as EIH and ITCH as well as international hotel
chains are aggressively entering into the mid-budget hotel segment.
Average room rate (ARR) and
occupancy are the two most critical factors that determine the profitability,
since most of the marginal revenue gets added to the bottom-line. ARR in turn
depends upon location, brand image, star rating, quality of facilities and
services offered and the seasonal factor.
Land comprises 45-50% of the
total project cost and is therefore the single largest cost item in the
construction of a hotel in India. It is estimated that the construction cost
for a 300 rooms hotel in Delhi works out to Rs20mn/room. Since fixed costs
constitute 60-65% of the total operating cost, break even levels are very high.
Demand for hotels in cities
like Mumbai and Delhi are the highest. In fact at present, out of the total of
19,000 5-star and 5-star deluxe rooms in the country, 50% are accounted for by
these two cites. These cities along with Bangalore and Chennai serve as gateway
to important tourist destinations.
Presently, the total 5 &
4-star room capacity in the four metro cities is close to 13,000rooms. Mumbai
and Delhi account for the bulk of the total room availability. In Mumbai room
availability is expected to increase by another 3,100 rooms in the next 2-3
years.
Chain hotels like IHCL, EIH
and ITCH are better placed than single locations hotels like BHL, AHL. Though
the latter have hotels at strategic location (Delhi) the risk associated with
single location hotel is always higher.
In the short term the outlook
for the industry appears bleak due to a significant oversupply and weak
socio-economic conditions. In the long-term the hotel industry in India has
latent potential for growth. This is because India is an ideal destination for
tourists as its is the only country with the most diverse topography. At
present India attracts approximately 2.5mn tourists every year which is just
0.4% of the world tourist arrivals. Countries such as Thailand and Malaysia
attract thrice as many tourists.
The hotel industry is at
present going through one the toughest periods. Weak economic conditions have
lead to a steep decline in foreign as well as Indian business arrivals. Tourist
arrivals have also seen a marginal decline due to devaluation of the Asian
currencies, which have made these countries cheaper than India.
Substantial additions to room
supply especially in metros like Mumbai will further put pressure on room
rentals. The next 2-3 years is not expected to provide any succor to hotel
industry due to the overall recession in India and Asia.
This has resulted in most of
the five star hotels operate at very low occupancy rates. They have been forced
to offer discounts on the rack rates. Average room rentals have therefore taken
a beating. During April-December 1998 revenue per room declined by 17.2% in
Delhi, 9.7% in Mumbai and 0.3% in Chennai.
As there was hereto not much
competition, the big five hotel majors were able to unabatedly increase their
room tariffs. However, with the major international hotel chains having evinced
interest in setting up hotels, there is bound to be a price war. India will
become a normal market like the South East Asia with demand and the quality of
services offered determining the room rentals
Another trend, which has been
witnessed during the economic slowdown, has been the increasing demand for
medium budget hotels due to the exorbitant rates charged by 5-star hotels.
Quality budget hotels are expected to be the future of India's hotel industry.
Companies in future would like to house their middle level managers in these
budget hotels having reasonably good facilities rather than the expensive
5-star deluxe hotels.
In this regard the Taj group
and the Oberoi (through the Trident brand) have made a strong foray into
smaller cities having a strong industrial base. Earnings from these hotels are
likely to be more stable than the earnings of 5-star hotels.
In the long-term the hotel
industry in India has latent potential for growth. This is because India is an
ideal destination for tourists as its is the only country with the most diverse
topography. At present India attracts approximately 2.5mn tourists every year
which is just 0.4% of the world tourist arrivals. Countries such as Thailand
and Malaysia, attract thrice as many tourists.
Globally, leisure and entertainment
are seen to be growing industries. Hence stable socio-political and economic
conditions coupled with an improvement in infrastructure facilities (roads,
airports etc) will improvement the sentiments of the tourists towards India.
If the above conditions are
met tourist arrivals can increase five-fold from the present levels. In such a
situation there will be a surge in demand for rooms in gateway cities like
Mumbai and Delhi as well as in certain tourist destinations.
Delisting
Of Equity Shares From The Stock Exchanges:
The promoters of the company
propose to acquire further shares by making an open offer pursuant to SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and had
advised the Board of Directors to de list the equity shares listed on the Stock
Exchanges as their holding exceeds 90% of the total share capital carrying
voting rights. Furthermore as per SEBI guidelines and listing requirements of
the Stock Exchanges if the public holding in a listed company falls below 10%,
the company’s shares cannot continue to be listed on the Stock Exchanges. They
further advised that the listing of the Equity Shares of the company at the
Stock Exchanges will not result into any benefits/advantages to the
shareholders as the hospitality industry was passing through downward trend for
the past few years. Profitability of the company had substantially declined
resulting in lower yields per share. Considering the above and also the
business scenario the profitability was expected to remain subdued for the next
few years. The promoters of the company had considered it appropriate that the
minority shareholders should get an opportunity to avail of the exit option and
then to delist the shares from the Stock Exchanges where these are listed.
OPERATIONS :
Bharat Hotels Limited, promoters of The Grand Group has SEVEN operational
luxury hotels in the country, offering more than 1600 rooms in the 5-star
deluxe segment. These include Inter Continental The Grand hotels in New Delhi,
Srinagar, Mumbai & Goa and `The Grand' hotels in Bangalore, Udaipur &
Khajuraho.
During the year 2004-05, the Group consolidated its position and ensured
enhanced market share for all its hotels - specially the newly commissioned
properties in Mumabi & Goa. Further renovations have almost been completed
in Bangalore and Udaipur. Plans for the coming year include a dramatic make
over of the Group's flagship hotel in New Delhi. The unit in Khajuraho will
also be completely renovated to present it as a classic boutique hotel
-shortly.
They will be delighted to know that their new properties in Mumbai & Goa,
have been very well received by customers. Intercontinental The Grand Mumbai, a
369-room super luxury hotel located near Sahar International Airport and the
new commercial developments of North Mumbai, boasts of a soaring 8-storey high
atrium lobby-the largest in Asia. The hotel's accommodation options are
luxurious as well as fitted with the most modern facilities and services. There
are 31 suites, 48 Club Intercontinental rooms and 290 deluxe rooms, 6 dining
& entertainment options, extensive banquets, a state of the art business
centre. a spacious fitness club, outdoor swimming pool, salon and a host of
other facilities. Adding an additional dimension is adjoining commercial
complex, which has show rooms, offices, service apartments, a movie preview
theatre and a specialty Chinese restaurant.
Intercontinental The Grand Resort Goa, offering 255 suites style
accommodation, is spread out on 85 acres with almost a kilometer long beach
front. Straddled between two rivers and lapped by the Arabian sea, the resort
is one of the finest in Goa. An international standard golf course spread out
on 40 acres, where one can play the entire 18-holes; fresh and seawater sports
facilities, a state-of-the-art fitness spa with special services for slimming
and body rejuvenation make the resort unique in the guest facilities that it
offers. Besides, the resort has a free form swimming pool, an extensive banquet
& meeting rooms, kids corner, 6 food & beverage outlets, a sports
center with squash and tennis courts. Beside a modern gaming club, is to be
commissioned shortly.
In the company's acquired properties from ITDC, namely The Grand hotels
in Bangalore, Udaipur and Khajuraho - a new management ethos has been infused
and widely acknowledged by both our guests and employees, as highly successful.
The extensive product renovation/refurbishment programmed for these properties
is also well underway.
At The Grand Ashok Bangalore, the first phase of the renovation
programmed is complete. Under this, 90 guestrooms have been totally renovated
along with the hotel lobby, a new state-of-the-art business center, the rooftop
Chinese restaurant, the 24-hour restaurant, specialty Indian restaurant. By the
season of 2005 all areas will be completed. These include, balance suites and
rooms, an exciting new bar, a modern and well-equipped health spa, landscaping
the gardens and additions to the banquet facilities.
At The Grand Laxmi Vilas Palace Udaipur-which already has a wonderful
heritage setting-the refurbishment is complete. The lobby and the fagade of the
one-time majestic palace, built in 1911 by Maharana Bhupal Singh, have been
given a makeover. The end-result is at once stunning and grand.
Indeed, the interest in the newly refurbished hotel has come from the
leisure market. All the rooms - the 41 deluxe palace rooms and the 14 luxurious
suites have been refurbished and brand new conference facilities and an
international standard spa has been added. They are now adding a new wing with
additional rooms and suites. This will be completed by the year end.
EXPANSION PLANS & PROSPECTS :
The company has already acquired land for a Luxury Resort at Bekal,
Kerala and also negotiating for acquisition of sites for hotels at Jaipur,
Amritsar and Ahmedabad. The company also proposes to set up hotels at Chennai
and Hyderabad and is accordingly looking for good opportunities to expand its
presence in other destinations around the country.
To meet costs of these projects, the company is in the process of
negotiating further issue of capital by way of private placement/preferential
issue as well as borrowing at competitive rates. The company will also use
internal accruals to meet the costs.
CHANGE IN METHOD OF CHARGING
DEPRECIATION:
The hotel Industry is witnessing rapid changes globally in technology,
decor and concepts. This has led to faster redundancy of fixed assets, more
specifically plant & machinery, equipment, furniture and fixture.
Therefore, it is considered prudent by the company to change the method of
depreciation from straight-line method to written down value method for its new
hotel units at Mumbai and Goa. Accordingly, the company has charged higher depreciation
for the current year by a sum of Rs. 257.2 Millions.
AS
PER WEBSITE:
Bharat Hotels Limited
Bharat Hotels was incorporated in 1981. The company owns
the 450-room New Delhi Hilton (formerly Holiday Inn Crowne Plaza) as well as
two commercial complexes -- World Trade Centre and World Trade Tower. The
company earlier had a tie-up with Holiday Inn to manage its hotel. In Jun.'95,
it entered into a co-operation agreement and several site management agreements
with Hilton International, covering the management of Bharat's New Delhi hotel
and two new hotels which are under construction in Bombay and Goa. Hilton
operates more than 160 hotels in almost 50 countries.
During the year 1996-97, the company entered into an agreement with the
world renowned restaurants chain " The Blue Elephant" specialising
the Thai Cuisine for its roof top restaurants. Malbros Hotels, which was its
subsidairy has been merged with the company. Also, it issued bonus shares in
the ratio of 1:3.
BHL terminated its co-operation and management pact with
HiltonInternational for its New Delhi hotel and proposed hotels at Mumbai and
Goavia a Master Termination Agreement dated February 18, 1998.
During 1998-99, the company also commenced the construction works for its
hotel projects at Bombay and Goa after obtaining all necessary approvals and
clearence from authorities.
During the year 2000-2001, the Company's heritage property in Srinagar
was converted to an inter-continental hotel and now operates as Grand Palace
Inter-continental Srinagar.
The Company has been short listed for various properties of HCI and ITDC
in the dis-investment process announced by Government of India.
CMT REPORT [Corruption, Money laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the
subject of any formal or informal allegations, prosecutions or other official
proceeding for making any prohibited payments or other improper payments to
government officials for engaging in prohibited transactions or with designated
parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered against
subject: None
7] Criminal
Records
No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.
8] Affiliation
with Government :
No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.
9] Compensation
Package :
Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.
10] Press Report :
No press reports / filings exists on the subject.
CORPORATE
GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a company’s
management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN
EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.96 |
|
UK
Pound |
1 |
Rs.83.42 |
|
Euro |
1 |
Rs.57.00 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
60 |
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%)
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 |
Unfavourable &
favourable factors carry similar weight in credit consideration. Capability
to overcome financial difficulties seems comparatively below average/normal. |
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 |