MIRA INFORM REPORT
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Report Date : |
13th May, 2006. |
IDENTIFICATION DETAILS
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Name : |
HEXAWARE TECHNOLOGIES
LIMITED |
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Registered Office : |
152, Millennium Business
Park, Sector – III, A Block, TTC Industrial Area, Mahape, New Mumbai – 400 710, Maharashtra, India |
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Country : |
India |
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Financials (as on) : |
31.12.2004 |
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Date of Incorporation : |
20.11.1992 |
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Com. Reg. No.: |
11-69662 |
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TAN No.: (Tax Deduction &
Collection Account No.) |
BLRH02137C CHEH03372F |
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PAN No.: (Permanent Account No.) |
AABCA3203F AAACH1474L |
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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
providing Software Services and Consultancy. |
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 10000000 |
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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 an old, well
established reputed and leading software service provider. The company offers
powerful process-driven, high quality solutions specialising in Application
Management, EAI, e-Commerce, ERP and embedded systems. The company’s business is
growing extremely well. Trade relations are fair. Payments are correct and as
per commitments. The company can be
considered good for business dealings at usual trade terms and conditions. Subject company is
creditworthy. |
LOCATIONS
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Registered Office : |
152, Millennium Business
Park, Sector – III, A Block, TTC Industrial Area, Mahape, New Mumbai – 400 710, Maharashtra, India |
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Corporate Office : |
Elite Auto House, 54-A, Sir
M. Vasanji Road, Andheri (East), Mumbai - 400 093, Maharashtra, India |
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Tel. No.: |
91-22-26902675/28389831
- 36/28213180 |
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Fax No.: |
91-22-28389828/28392514 |
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Website : |
http://www.aptech-worldwide.com |
DIRECTORS
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Name : |
Mr.
Atul K. Nishar |
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Designation : |
Executive Chairman |
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Name : |
Mr. Rusi Brij |
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Designation : |
Vice Chairman |
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Name : |
Mr. Dr. K. K. Anand |
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Designation : |
Director |
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Name : |
Mrs. Dr. Alka A. Nishar |
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Designation : |
Director |
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Name : |
Mr. L. S. Sarma |
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Designation : |
Director |
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Name : |
Mr. P. G. Kakodkar |
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Designation : |
Director |
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Name : |
Mr. A. P. Kurian |
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Designation : |
Director |
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Name : |
Mr. Rajesh Ghonasgi |
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Designation : |
Chief
Finance officer |
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Name : |
Mr. Harshad Shah |
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Designation : |
Executive
Director |
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Name : |
Mr. Naishadh P. Desai |
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Designation : |
Company
Secretary |
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Name: |
Mr. P. K. Sridhrana |
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Designation: |
Executive Director |
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Age: |
54 Years |
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Qualification: |
M. Tech. |
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Experience: |
30 Years |
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Date of Appoitmrnt: |
01.04.2001 |
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Name: |
Mr. Abhay Sinha |
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Designation: |
Executive Vice President |
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Age: |
50 Years |
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Qualification: |
B. E., MBA |
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Experience: |
26 Years |
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Date of Appoitmrnt: |
19.06.200 |
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Name: |
Mr. Harshad Shah |
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Designation: |
Executive Director |
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Age: |
49 Years |
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Qualification: |
B. Com., ACA |
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Experience: |
26 Years |
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Date of Appoitmrnt: |
01.01.1997 |
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Name: |
Mr. R. V. Ramanan |
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Designation: |
Chief Software Architect |
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Age: |
38 Years |
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Qualification: |
B. Tech. |
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Experience: |
14 Years |
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Date of Appoitmrnt: |
21.10.2002 |
BUSINESS DETAILS
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Line of Business : |
The company is engaged in
providing Software Services and Consultancy. |
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Products / Services : |
v
Software Development v
Software Consultancy |
GENERAL INFORMATION
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No. of Employees : |
2343 |
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Bankers : |
v
IDBI Bank v
Bank of India v
Citi Bank v
ICICI Bank v
Kotak Mahindra Bank |
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Facilities : |
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Banking Relations : |
Satisfactory |
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Auditors : |
Deloitte
Haskins & Sells |
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Qualification: |
Chartered
Accountants |
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Subsidiaries : |
v
Hexaware Technologies
Inc. USA 5,
Independence Way, Princeton, New Jersey, USA Tel.
609 9519195 v
Specsoft Consulting
Inc., USA 2290
N. First Street No. 310, San Jose, CA-95131 Tel.
408 353 1452 v
HTI Europe Limited 2nd
Floor, Buckingham Court, Buckingham
Gardens, SL1, 1 HP UK Tel.
1753 773023 v
Hexaware Technologies
Canada Limited, Canada 1100
South Service Road, West Oakville Ontario, L6L
5T7 Tel.
905 4694375 v
Hexaware Technologies
Asia Pacific Pte. Limited, Singapore 180
Cecil Street, No. 09-03, Bangkok Bank Building, Singapore
– 0659546 Tel.
+653253025 v
Hexawere Technologies
GmbH, Germany v
Hexawere Technologies
Europe Limited, UK v
Aptech Technologies
Pty. Limited, Australia |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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35000000 |
Equity
Shares |
Rs. 10/- each |
Rs. 350.000 Millions |
|
30000000 |
Preference Shares |
Rs. 10/- each |
Rs. 300.000 Millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
23303605 |
Equity
Shares |
Rs. 10/- each |
Rs. 233.036 Millions |
FINANCIAL
DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
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SOURCES OF FUNDS |
31.12.2004 |
31.12.2003 |
31.12.2002 |
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SHAREHOLDERS FUNDS |
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|
233.036 |
226.232 |
222.415 |
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0.561 |
1.009 |
0.000 |
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5.642 |
1.934 |
0.000 |
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2378.095 |
2051.031 |
2019.490 |
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0.000 |
0.000 |
0.000 |
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NETWORTH
|
2617.334 |
2280.206 |
2241.905 |
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LOAN FUNDS |
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1] Secured Loans |
22.142 |
25.948 |
178.447 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL
BORROWING
|
22.142 |
25.948 |
178.447 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL
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2639.476 |
2306.154 |
2428.885 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
710.527 |
720.864 |
853.816 |
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Capital work-in-progress
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93.797 |
0.000 |
0.111 |
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INVESTMENT
|
791.344 |
678.427 |
348.542 |
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DEFERREX TAX ASSETS
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0.000 |
0.000 |
0.532 |
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CURRENT ASSETS, LOANS & ADVANCES
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Inventories
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0.000 |
0.000 |
0.000 |
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Sundry Debtors
|
885.961 |
480.031 |
480.805 |
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Cash & Bank Balances
|
76.402 |
190.101 |
380.347 |
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Other Current Assets
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0.000 |
0.000 |
0.000 |
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Loans & Advances
|
592.067 |
561.834 |
480.972 |
Total Current Assets
|
1554.430 |
1231.966 |
1342.124 |
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Less : CURRENT LIABILITIES & PROVISIONS
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Current Liabilities
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328.853 |
263.920 |
112.009 |
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Provisions
|
181.769 |
61.183 |
4.231 |
Total Current Liabilities
|
510.622 |
325.103 |
116.240 |
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Net Current
Assets
|
1043.808 |
906.863 |
1225.884 |
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
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TOTAL
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2639.476 |
2306.154 |
2428.885 |
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PROFIT & LOSS ACCOUNT
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PARTICULARS |
31.12.2004 |
31.12.2003 |
31.12.2002 |
Sales Turnover [including other income]
|
2664.523 |
1805.005 |
1004.300 |
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Profit/(Loss) Before Tax
|
451.699 |
329.837 |
74.400 |
Provision for Taxation
|
13.996 |
1.246 |
(0.300) |
Profit/(Loss) After Tax
|
437.703 |
328.591 |
74.700 |
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Export Value
|
2449.143 |
1886.449 |
747.960 |
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Import Value
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70.129 |
35.331 |
17.037 |
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Total Expenditure
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2212.823 |
1475.168 |
924.518 |
QUARTERLY /
SUMMARISED RESULTS
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PARTICULARS |
31.12.2005 (Full year) |
|
Sales Turnover |
3557.9 |
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Other Income |
143.0 |
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Total Income |
3700.9 |
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Total Expenditure |
2727.6 |
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Operating Profit |
973.3 |
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Interest |
0.16 |
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Gross Profit |
971.7 |
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Depreciation |
177.3 |
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Tax |
19.0 |
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Reported PAT |
775.4 |
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Dividend (%) |
600.0 |
200512 Quarter 4 –
Notes: EPS is Basic Status of Investor Complaints for the quarter
ended December 31, 2005 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter 27 Complaints disposed off during the
quarter 27 Complaints unresolved at the end of the quarter Nil 1. The audited
results, reviewed and recommended by the Audit Committee, were taken on record
by the Board of Directors of the Company at its meeting held on February 02,
2006. 2. The Board of Directors at their above meeting proposed a Final
dividend of Rs 0.60 per Equity Share of Rs 2/- each, subject to the approval of
the share holders at the Annual General Meeting. 3. Provision for current
income tax has been made u/s 115JB of the Income Tax Act, 1961. Deferred tax
Asset (net) has not been recognised considering the requirements of Accounting
Standard 22 'Accounting for taxes on income'. 4. The Company has issued and
allotted 916,645 (pre split 183,329) equity shares of Rs 2/- (pre split Rs
10/-) each to certain employees pursuant to the exercise of stock options which
has resulted in a marginal increase in the non-promoter shareholding. 5. The
Company, at it Annual General Meeting on April 04, 2005 had obtained approval
of its shareholders for subdivision of equity shares of the Company having
nominal face value of Rs 10/- per share into five equity shares having a
nominal face value of Rs 2/- per share. Accordingly, shares have been issued as
subdivided and earnings per share has been computed on that basis for
thequarter and year, presented in accordance with the Accounting Standard 20 on
'Earning per share'. 6. The Company has investments (long term) in equity
shares of a wholly owned subsidiary company of Rs 306.020 million (provision of
Rs 254.859 million made earlier on account of diminution, being permanent) and
Rs 66.197 million due from the said company towards debts / loans and advances
as on December 31, 2005. The accumulated losses of the said subsidiary company
have eroded its net worth as at December 31, 2005. Though the subsidiary's
losses have increased during the year the Company's plan for merger of the said
subsidiary with another wholly owned subsidiary company, has been approved by
Board of Directors effective subsequent to the year end and steps are being
taken to implement such merger. Consequently, in the opinion of the company,
provisions already made in the accounts is adequate and no additional provision
is considered necessary towards investment and loan / debts at this stage. The
Company expects substantial improvement in the operations of the merged entity,
subsequent to merger. The provision made will be reviewed in the next year on
that basis. 7. The Company had, in an earlier year, entered into
implementation, operation and acquisition agreement (BOT agreement) with a
party for the purpose of setting up of an India Service Centre (ISC), with an
option to the said party to acquire such Service centre at a later date. During
the year, the party, in terms of BOT agreement, exercised the option and
acquired the ISC on slump sale basis as going concern. Accordingly, the said
party has acquired all rights, title and Interest as also obligations and
liabilities as specified in the agreement on such transfer / assignment at
slump price. The gain on such transfer / assignment under the BOT agreement
aggregating to Rs 44.960 million consists of buy out fees and is included in
Other Income'. 8. Depreciation (in consolidated results) includes provision for
impairment aggregating to Rs 10.696 million. 9. Figures for theprevious period
have been regrouped / recasted wherever necessary to conform to the current
period.
KEY RATIOS
|
PARTICULARS |
|
31.12.2004 |
31.12.2003 |
31.12.2002 |
PAT / Total Income
|
(%)
|
16.43 |
18.20 |
7.44 |
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Net Profit Margin
(PBT/Sales) |
(%) |
16.95 |
18.27 |
7.40 |
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Return on Total Assets
(PBT/Total Assets} |
(%) |
14.34 |
12.54 |
2.92 |
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Return on Investment (ROI)
(PBT/Networth) |
|
0.17 |
0.14 |
0.03 |
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Debt Equity Ratio
(Total Liability/Networth) |
|
0.20 |
0.15 |
0.13 |
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Current Ratio
(Current Asset/Current
Liability) |
|
3.04 |
3.79 |
11.55 |
LOCAL AGENCY FURTHER INFORMATION
Offshore Development Centers
·
Unit No. 152, Millennium
Business Park, TTC Industrial Area, Mahape, Navi Mumbai – 400 709, Maharashtra
Tel.
91-22-55919595
·
Unit No. IT 1 & IT
2, Ground Floor, SDF – VII, Seepz, Andheri (East), Mumbai – 400 096,
Maharashtra
Tel.
91-22-56974444
·
Unit No. 128, SDF – V,
Seepz, Andheri (East), Mumbai – 400 096, Maharashtra
Tel.
91-22-28291649
·
6th Floor
& 7th Floor, Janapriya Crest, 96, Panthenon Road, Egmore,
Chennai – 600 008, Tamilnadu
Tel.
91-44-28241970
·
4th Floor
& 1st Floor, Temple Tower, No 476, Anna Salai, Nandanam,
Chennai, Tamilnadu
Tel.
91-44-24335761
·
5th Floor,
Shakthi Tower, 766, Anna Salai, Chennai – 600 002, Tamilnadu
Tel.
91-44-28552792
·
5th Floor,
Prince Kushal Tower, 96, Anna Salai, Chennai – 600 002, Tamilnadu
Tel.
91-44-28604775
HISTORY
Subject was incorporated on
20th November, 1992 at Mumbai in Maharashtra under the name and
style of Aptech Limited having Company Registration Number 69662.
The name of the company has
been changed to the present.
Subject started off as a
division of Apple Finance Limited (then Apple Industries Limited). Later the division was hived off into a
subsidiary. In June, 1996, the company
allotted 5.567 millions equity shares of Rs. 10 each to the shareholders of
Apple Finance Limited and the company ceased to be a subsidiary of Apple
Finance Limited.
A division of Apple
Industries, pursuant to the Scheme of Arrangement and Reconstruction, the
information technology division of AFL was spun off into a separate company.
The business of the information technology division, along with its assets and
liabilities was transferred to Aptech Information Systems Limited with effect
from July, 1995. The company was later renamed as Aptech Limited.
The principal activities are
training, education and consultancy services in the field of information
technology. It has now diversified into software solutions business. It is also
engaged in marketing of training related products and software products. For
this purpose, Aptech enters into franchise agreements with international
training centres.
Aptech, which has introduced
new programmed like ASSET, Hardcore, Centre for Business Transformation, School
of Management, etc, also has tie-ups with Oracle Corporation, J3 Learning,
Novell India, Apple Computers Inc, Tata-IBM, Open University of British
Columbia, Pace University, University of Northumbria, etc. It became the first
computer education institute in the country to be awarded the ISO 9001
certification for education support services in 1993-94 operations.
The company has added 105 new
centres taking the total number of centres to 2,350 as of 30 June 2001. It
added 15 new international centres taking the total number of international
centres to 192 in 44 countries. It now has
40 centres in China, 28 in Bangladesh and 20 in Africa.
In 1999-200, Aptech acquired
a US based company called Specsoft for a consideration of $9.7 million. It also
acquired 37.5% stake in Turbograd.Com Inc., USA (to be renamed as Mentorix).
Microsoft and Aptech had
entered into an alliance under which the former will establish a Centre of
Excellence (CoE) at the computer education major. The CoE, the first of its
kind by Microsoft for computer education in India, will help Aptech design
specific curriculum on Microsoft’s. NET Platform.
The company has approved the
composite Scheme of Arrangement of Reconstruction in respect of the transfer
and demerger of the Training Division of the company to Aptech Training Limited
(Presently a wholly owned subsidiary) and the merger of amalgamation of company
and hence the name of the company was changed from Aptech Limited to the
present name in the year 2002.
The company was awarded with
ISO 9001:2000 in the year 2001 ant TickIT certification during the year 2002.
During 2003, the company has
disinvested its entire investmetns held in Mentorix Technologies, Inc., USA to
Lionbridge Technologie Inc., a Delawere Corporation, USA or to one of its
subsidiaries.
At the end of financial year
2003-04, there were 6 subsidiaries under the company’s fold.
India
operations
The company recorded total
income of Rs. 2664.520 millions in 2004 compared to Rs. 1805.01 million in
2003, a growth of 47.62%. The revenue from Software business grew 64.15% to Rs.
2540.42 million in 2004 from Rs. 1547.59 million in 2003, The profit after tax
jumped to Rs. 437.70 Millions in 2004 from Rs.328.59 Millions in 2003., an
increase of 33.21% overprevious year.
The following factors
differentiate the company’s services within its domain.
·
Large base : the
company’s 2111 engineers represent a large pool of experienced software
professional to address projects of varying complexities in the
airlines/transportation, financial services, banking, insurance and enterprise
solution domains.
·
Domain insight : the
company has emerged as a leading airlines cargo solutions provider and for
niche banking insurance solutions.
·
Center of Excellence :
the company possesses a valuable repository of reusable program components and
business processes in addition to domain dedicated project managers and
software professionals.
·
Robust project
management : the company posses possesses multi-geography project management
skills. This enables projects to be reviewed at periodic intervals and complete
them on schedule. Besides, the company’s SEI CMM level 5 certified quality
practices ensure a consistent quality standard (also refer to the quality section
discussed elsewhere), meeting customer expectations the first time and every
time.
·
Cost effective delivery
– The company has demonstrated an ability to dovetail a low promotion of onsite
working with offshore service delivery routed out of development centres in
India (Mumbai, Chennai and Bangalore), helping customers save costs.
·
24 X 7 capability : Even
though the company and its customers are present in totally diverse
geographies, its projects are unified through a state of the art telecommunication
network.
·
Scalabality : the
company is able to ramp up human resources with a minimum lead time in response
to the emerging requirements of large organizations, making it a dependable
outsourcing partner for the long term.
·
Management commitment :
The company’s management is responsive to dynamic customer needs, leading to
the speedy redressal of issues and a long – term relationship.
·
Repeat Business :
Credible endorsements translated into repeat business from existing customers
to the extent of 76% of the company’s revenue in 2003.
·
State-of-the-art
Infrastructure : The company’s services its clients through a network of 5
state-of-theart software development centres situated in the cities of Mumbai,
Chennai and Bangalore. These are spread over an aggregate area of more than 2
lacs square feet. The seating capacity of the company went up from 1,200 at the
end of December 31, 2002 to 2,900 at the end of December 31, 2003.
The company has been
accredited with ISO 9001:1994 Certification.
Dividend
The
directors are pleased to recommend a dividend of 50% i.e. Rs. 5/- per share
(Previous year Rs. 2/- per share) for the financial year ended on December 31,
2004. The total gross amount of dividend for the year December 31, 2004 is Rs.
117.21 Millions as against Rs. 45.24 Millions for the previous year. The tax on
distributed profits, payable by the company would amount to Rs. 15.30 Millions
(Previous year Rs. 5.80 Millions). The dividend, if approved will be paid to
those members whose names appear in the Register of Members as on the date of
ther Annual General Meeting.
Share
Capital:
During
the year the paid up Share Capital of the company increased from Rs. 226.23
Million from Rs. 233.04 Million comprising 23303605 Equity Shares of Rs. 10/-
each. This increase was a result of the exercise of 759180 warrants (equivalent
to 253060 equity shares) and 427297 options (equivalent to 427297 equity
shares) by employees under Employee Stock Option Scheme-1999 and Employee Stock
Option Plan –2002 issued by the company.
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.45.61 |
|
UK
Pound |
1 |
Rs.85.76 |
|
Euro |
1 |
Rs.58.39 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
8 |
|
--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 |
|
61 |
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 |