MIRA
INFORM REPORT
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Report Date : |
25TH
May, 2006 |
IDENTIFICATION
DETAILS
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Name : |
DAGGER
FORST TOOLS LIMITED |
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Registered Office : |
First Pokhran Road, Thane – 400 606,
Maharashtra, India |
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Country : |
India |
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Financials (as on) : |
30.06.2005 |
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Date of Incorporation : |
4th
May 1965 |
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Com. Reg. No.: |
11-13198 |
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CIN No.: [Company
Identification No.] |
U99999MH1965PLC013198 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
PNED03234A |
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PAN No.: [Permanent
Account No.] |
AAACD1812A |
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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 : |
Manufacturing,
importing, exporting and trading of all kinds of machine tools |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD
900000 |
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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 and reputed company having fine track. Trade
relations are fair. Financial position is good. Profit margin is under severe
pressure. Payments are correct and as per commitments. The
company can be considered normal for business dealings at usual trade terms
and conditions. |
LOCATIONS
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Registered Office/Factory : |
First Pokhran Road, Thane – 400 606,
Maharashtra, India |
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Tel. No.: |
91-22-2534 3531 (4 Lines)/25882531 |
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Fax No.: |
91-22-2534 0295 |
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E-Mail : |
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Broach Division |
First Pokhran Road, Thane-400 606 F-2, MIDC, Chikalthana, Aurangabad-431 210 |
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Gear Cutting Tools’
Division |
A-3, MIDC, Chikalthana, Aurangabad-431 210 |
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New Plant (Under
Construction) |
Plot No. 127-201, Mithirohar Growth Center
Bachav Road, Gandhidham, Kutch, Gujarat-370201 |
DIRECTORS
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Name : |
Mr.
Yashovardhan Birla |
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Designation : |
Chairman |
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Name : |
Mrs.
Avanti Birla |
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Designation : |
Director |
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Name : |
Mr.
Arun Jain |
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Designation : |
Director
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Name : |
Mr.
Vijay Agarwal |
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Designation : |
Director
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Name : |
Mr.
Shishir Dalal |
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Designation : |
Director
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KEY EXECUTIVES
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Name
: |
Mr. G
L Lath |
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Designation
: |
President / Secretary |
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EXECUTIVES |
Shri P. S. Sainani Joint President Shri.J. B.Bajaj Joint Vice President (Aurangabad) |
MAJOR SHAREHOLDERS
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Names
of Shareholders |
No. of Shares |
Percentage of Holding |
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Promoters |
3384889 |
72.72 |
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Body Corporate |
127828 |
2.75 |
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NRIs |
191895 |
4.12 |
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Banks, Financial Institutions |
450 |
0.01 |
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Public & Others |
949873 |
20.40 |
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Grand Total: |
4654935 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing,
importing, exporting and trading of all kinds of machine tools |
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Products : |
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PRODUCTION
STATUS
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Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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Broaches |
Nos. |
9000 |
9000 |
3979 |
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End Mills, Profiled Tools and other
Cutters (all Cutting Tools) |
Nos. |
10000 |
6000 |
-- |
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Rolls |
Tons |
12 |
12 |
-- |
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Broach Sharpening Machines |
Nos. |
20 |
10 |
4 |
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Gauges |
Nos. |
3000 |
3000 |
2693 |
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Slitting Saws |
Nos. |
20000 |
8000 |
2124 |
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Spline Mandrels |
Nos. |
1500 |
1500 |
140 |
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Master Gears |
Nos. |
750 |
750 |
195 |
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Index Plates |
Nos. |
1200 |
1200 |
37 |
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Gear Hobs |
Nos. |
6000 |
6000 |
3030 |
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Shaper Cutter |
Nos. |
4800 |
4800 |
1268 |
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Tool Bits (Registered Capacity) |
Nos. |
80000 |
80000 |
-- |
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Shaving Cutter |
Nos. |
-- |
1200 |
836 |
GENERAL
INFORMATION
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No. of Employees : |
700 |
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Bankers : |
Central
Bank of India |
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Facilities : |
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Banking Relations : |
Good |
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Auditors : |
M. K. Sureka & Company Chartered Accountants |
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Associates/Subsidiaries : |
Nil |
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
10000000 |
Equity
shares |
Rs. 10/- each |
Rs. 100.000 millions |
Issued,
Subscribed & Paid-up Capital :
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No.
of Shares |
Type |
Value |
Amount |
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46,54,935 |
Equity
shares |
Rs. 10/- each |
Rs. 46.549 millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
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SOURCES OF FUNDS |
30.06.2005 |
30.06.2004 |
30.06.2003 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
46.549 |
46.549 |
46.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
181.958 |
177.691 |
272.500 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
228.507 |
224.240 |
319.000 |
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LOAN FUNDS |
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1] Secured Loans |
98.821 |
106.130 |
113.800 |
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2] Unsecured Loans |
67.448 |
51.541 |
66.300 |
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TOTAL BORROWING |
166.269 |
157.671 |
180.100 |
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DEFERRED TAX LIABILITIES |
12.049 |
6.062 |
0.000 |
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TOTAL |
406.825 |
387.973 |
499.100 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
304.522 |
319.906 |
352.200 |
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Capital work-in-progress |
18.482 |
5.568 |
4.900 |
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INVESTMENT |
4.435 |
4.435 |
45.500 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
65.256
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52.193 |
44.800 |
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Sundry Debtors |
54.357
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51.265 |
75.900 |
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Cash & Bank Balances |
15.725
|
12.345 |
9.400 |
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Other Current Assets |
0.000
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0.000 |
0.000 |
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Loans & Advances |
26.140
|
26.950 |
64.500 |
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Total Current Assets |
161.478
|
142.753 |
194.600 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
49.859
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60.364 |
93.100 |
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Provisions |
32.233
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24.325 |
20.000 |
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Total Current Liabilities |
82.092
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84.689 |
113.100 |
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Net Current Assets |
79.386
|
58.064 |
81.500 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
15.000 |
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TOTAL |
406.825 |
387.973 |
499.100 |
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PROFIT
& LOSS ACCOUNT
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PARTICULARS |
30.06.2005 |
30.06.2004 |
30.06.2003 |
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Sales Turnover [including other income] |
311.395 |
328.634 |
235.000 |
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Profit/(Loss)
Before Tax |
12.305 |
(4.263) |
(1.700) |
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Provision
for Taxation |
8.038 |
3.475 |
10.500 |
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Profit/(Loss)
After Tax |
4.267 |
(7.738) |
(12.200) |
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Export
Value |
20.025 |
25.200 |
NA |
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Import
Value |
16.796 |
19.911 |
NA |
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Total Expenditure |
253.153 |
269.865 |
233.500 |
QUARTERLY
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PARTICULARS |
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30.09.2005 [1ST Quarter] |
31.12.2005 [2nd Quarter] |
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Sales
Turnover |
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73.700 |
72.600 |
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Other
Income |
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0.300 |
0.300 |
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Total Income |
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74.000 |
72.900 |
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Total
Expenditure |
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58.100 |
59.700 |
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Operating
Profit |
|
15.900 |
13.200 |
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Interest |
|
3.500 |
3.600 |
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Gross
Profit |
|
12.400 |
9.600 |
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Depreciation |
|
3.800 |
4.000 |
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Tax |
|
1.000 |
0.800 |
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Reported
PAT |
|
8.400 |
5.600 |
200509
Quarter 1
- Expenditure Includes (Increase) / Decrease in Stock in Trade Rs(0.167)
million Consumption of Raw Materials Rs 14.367 million Staff Cost Rs 26.790
million Other Expenditure Rs 17.027 million Tax Includes Provision for Fringe
Benefit Tax Rs 0.300 million Current Tax Rs 0.750 million Deferred Tax
Rs(0.824)million EPS is Basic and Diluted Status of Investor Complaints for the
quarter ended September 30, 2005 Complaints Pending at the beginning of the
quarter Nil Complaints Received during the quarter 05 Complaints disposed off
during the quarter 05 Complaints unresolved at the end of the quarter Nil 1. The
above results were reviewed by the Audit Committee and approved by the Board of
Directors at their Meeting held on October 28, 2005.' 2. Result for the Quarter
ended September 30, 2004 has been Revised duly incorporating the Scheme of
Arrangement which was passed by the members in their Court convened meeting
held on September 25, 2004, and was approved by the Honble High Court of
Judicature at Bombay vide their order dated November 4, 2004. 3. The Company
continues to adopt the same accounting policies in respect of valuation of the
stock of Finished Goods and Goods in Process on the basis of Estimated Cost or
Net Realisable Value whichever is lower, as has been followed by the Company
since its inception, which is not as per Accounting Standard - 2. 4. The
Company is engaged in manufacturing of Cutting Tools besides Trading business.
However, during the quarter as well as in the previous quarter/Accounting
Period, the Company has not done any Trading businesses. Hence, there is no
separate reportable segment as per Accounting Standard 17 (AS 17), as the
operations related to one segment viz. manufacturing. 5. Company has filed
Draft Offer Document for its forth-coming Rights cum Public Issue aggregating
to the amount of Rs 290.00 million to Security and Exchange Board of India
(SEBI) on August 29, 2005. Bombay Stock Exchange Ltd.(BSE) and National Stock
Exchange of India (NSE) on August 30, 2005. Company has received in principle
approval from BSE for listing of both Rights and public issue vide their letters
reference No List/smg/sm/2005 dated October 21, 2005 and DCS/SMG/SDM/RK/NS/05
dated October 25, 2005. Approval Card from SEBI is to be received. 6. Provision
for Current Tax has been made as per Section 115 JB of the Income Tax Act, 1961
as Company expects no Tax Liability otherwise. 7. The Company has for the
quarter provided depreciation on Plant & Machinery based on the remaining
useful life of the assets as determined by a Chartered Engineer/Valuer; as a
result the depreciation charge is lower by Rs 3.804 million. 8. Corresponding
figures for previous year/quarter have been regrouped wherever necessary.
200512 Quarter 2 - The above results were reviewed by audit committee and approved by the Board of Directors at their meeting held on 30.01.2006. 2.The company contioues to adopt the same accounting policies in respect of valuation of the stock of finished goods and goods in process on the basis of Estimated Cost or Net Realisable Value,whichever is lower,as has been followed by the company since its inception,which is not as per Accounting Standard-2. 3.The company is engeged in manufacturing of Cutting Tools besids Trading business.However,during the quarter as well as in the previous quarter / accounting year,the company has not done any trading business.Hence,there is no separate reportable segment as per Accounting Standard 17 as the operation related to one segment viz.manufacturing. 4.During the quarter ended 31.12.2005 the company has received 11 investors griavences,all of which have been redressed. 5.The company has filed Draft offer Document for its fourth Coming Right cum public issue aggregating to the amount of Rs.29.00 Crores to Security and Exchenge Board of India (SEBI) on 29.08.2005,and Bombay Stock Exchange Ltd(BSE) on 30.08.2005.The company has received in pricipal approval from BSE for listing of both Right and Public issue.The final observation letter for the same from SEBI is to be received. 6.Provision for current tax has been made as per section 115JB of the income tax Act,1961 as company expects no tax Liabilities otherwise. 7.Onward 01.07.2005 the company has provided depreciation on Plant & Machinery based on the remaining useful life of the assets as determined by a Chartered Engineer / Valuer, as a results the depreciation charged is lower by Rs.38.04 lacs per quarter. 8.On 30.12.2005 the company has commenced production at its new plant at Bhuj. As such the operational activities of the said plant has no material impact on the quarter / six months ended 31.12.2005. 9.Corresponding figures for previous year / quarter have been regrouped wherever necessary.
KEY
RATIOS
|
PARTICULARS |
30.06.2005 |
30.06.2004 |
30.06.2003 |
|
Debt
Equity Ratio |
0.72 |
1.10 |
2.43 |
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Long
Term Debt Equity Ratio |
0.16 |
0.43 |
1.27 |
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Current
Ratio |
0.72 |
0.83 |
0.91 |
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TURNOVER
RATIOS |
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Fixed
Assets |
0.50 |
0.51 |
0.55 |
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Inventory
|
5.32 |
5.31 |
4.72 |
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Debtors |
5.92 |
4.05 |
2.75 |
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Interest
Cover Ratio |
1.79 |
0.83 |
0.74 |
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Operation
Profit Margin (%) |
18.61 |
18.24 |
15.32 |
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Profit
Before Interest and Tax Margin (%) |
8.92 |
6.68 |
8.67 |
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Cash
Profit Margin (%) |
11.06 |
13.95 |
8.67 |
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Adjusted
Net Profit Margin (%) |
1.38 |
2.39 |
2.03 |
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Return
on Capital Employed (%) |
7.19 |
5.28 |
7.22 |
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Return
on Net Worth (%) |
1.90 |
3.74 |
4.91 |
STOCK PRICES
|
Face
Value |
Rs.10/- |
|
High |
Rs.79.00/- |
|
Low |
Rs.74.00/- |
LOCAL AGENCY
FURTHER INFORMATION
History
Dagger
Forst Tools (DFTL), incorporated by the Birlas in 1965, set up a broach
manufacturing plant in Thane, Maharashtra, with technical collaboration and
equity participation from Oswald Forst, Germany and its nominee -- German
Investment and Development Company. The foreign counterparts currently hold
around 12% of equity.
To cater to the increasing demand for broaches, in 1974, DFTL set up
another broach manufacturing unit at Aurangabad, 350 km away from its Thane
plant. In 1977, a unit was set up with British collaboration to manufacture
spline guages at Aurangabad. It has also set up another plant in the same
industrial area to manufacture slitting saws.
In 1984, the company purchased a gear-cutting-tool plant at Aurangabad
where hobs and shaper cutters are being manufactured. Since then, it has
expanded the manufacturing capacity of this plant with technical collaboration
from Klingelnberg, Germany. After taking over this plant, Dagger-Forst became a
manufacturer of the entire range of tailor-made cutting tools. Its products are
used by the automobile industry and the Defence sector. It also manufactures
broach sharpening machines, developed with technical know-how from Central
Machine Tools Industries (CMTI), Bangalore.
Under the expansion programme, it had set up facility to manufacturing of
Shaving Cutters in collaboration with Samputensili, Italy,
BUSINESS
The
company is engaged in manufacturing, importing, exporting and trading of all
kinds of machine tools.
It also
manufactures and develops broach sharpening machine with technical know-how
from Central Machine Tools Industries, Bangalore.
Fixed
assets
v
Land
v
Leasehold
land
v
Building
v
Residential
flats
v
Plant
& machinery
v
Electrical
installations
v
Furniture,
fixtures & equipment
v
Vehicles
v
Machineries
on lease
v
Vehicles
on lease
DIVIDENDS
Keeping in view the need to conserve the
Company's resources to meet the enhanced demand of funds for Implementation of
upcoming new projects, your Directors do not recommend any dividend for the
Year ended 30th June 2005.
OPERATIONS
The overall performance of the company has shown
improvement over last year. The turnover for the year Rs.312.680 Millions shows
an increase of 21.46% over last year on annualized basis. The profit before tax
and depreciation on revalued cost of asset has increased by 80.96%. This
improvement is mainly due to upbeat in automobile and allied sector including
engineering sector due to improved economical condition, besides better
realization and improved productivity. To meet the raising demand for broaches
and Gear Cutting tools, the company is setting up a new plant at Gandhidham to
expand the existing capacity to manufacture the said products. Company is also
in a lookout for setting up another plant at Uttaranchal or any other suitable
place to manufacture cutting tools or any other range of products. The
Construction of Gandhidham plant is near completion and major Plant and
Machinery have already been ordered and some machines have already arrived and
some more are expected shortly. The company is hopeful of starting production
from this unit at the end of December 2005. Rights cum Public issue: Members
are aware that they have approved the right cum public issue aggregating to an
amount of Rs 290.000 Millions in their meeting held on 22nd July 2005. Accordingly the Company has filed the
draft offer document with Security and Exchange Board of India(SEBI) on 29th August 2005 , Bombay Stock Exchange Ltd (BSE)
and National Stock Exchange of India Limited (NSE) on 30th August 2005. Company has received communication
from SEBI. BSE and NSE asking certain Details for which necessary replies are
being sent. The Silent features of forthcoming Comprosite Issue are as under:
Right
Issue of 33,24,954 Equity shares of Rs. 10/- each for cash at a premium of
Rs.23/- Per Shares (i.e. at a price of Rs. 33 Per Share) aggregating to
Rs.1,09.723 Millions to the Existing Equity Shareholders of the Company in the
ratio of 5 Equity Shares for every 7 Equity shares held as on record date to be
declared in due course.
Public issue: Equity issue of 10/- each for cash
at a price band of Rs.65 to Rs 78 inclusive of premium aggregating to Rs.
180.277 Millions of which 10,000 shares being offered to lead managers on a
firm basis at a price band of Rs 657- to Rs 78/- inclusive of premium.
Directors expect member's wholehearted support for this forth-coming composite
issue.
INDUSTRIAL RELATIONS
The Directors are happy to report that the
industrial relations in all the Units have remained cordial throughout the
period.
FIXED DEPOSITS
The Company has not accepted any Fixed Deposits
within the meaning of Section 58A of the Companies Act, 1956 and the rules made
thereunder.
INSURANCE
The Company's assets are adequately insured
against fire and other risks. DIRECTORS Smt. Avanti Birla retires by rotation
and being eligible offers herself for her reappointment. The Board recommends
her reappointment. Shri Shishir Dalai has been appointed as an additional
director of the Company in the meeting of the Board of Directors, held on 28th January, 2005 and holds office upto the date of
the ensuing Annual General Meeting. The Company has received a notice from a
member proposing his candidature for being appointed as a director of the
Company. Shri U.S.Setriia has resigned from the Board of Directors of the
Company with effects from 28th September 2005. The Board of Directors place on record their deep
Appreciations and thanks for the valuable services rendered by him during
his association with the Company.
CORPORATE GOVERNANCE AND MANAGEMENT ANALYSIS
REPORT
As required under clause 49 of the Listing
Agreement, separate report on Corporate Governance and Management Analysis are
incorporated as a part of this Annual Report.
Industry Structure & Development:
The Company is pioneer in the manufacture of
high-tech precision cutting tools, such as, broaches and gear cutting tools.
The Company has vast experience of over 39 years in developing and producing
these high-tech products to meet the challenging requirements of various
automobile companies, defence organizations, power projects,engineering and
several international customers. The tools produced by the Company are accepted
as the benchmark of precision. Besides us, there is only one major player in the
organized sector producing broaches and three in the production of gear cutting
tools. Your Company hold more than 70% of share of domestic market for broaches
and around 35% for gear cutting tools,50% for Shaving Cutter and 90% for
Gauges. Company is having a good export market in Europe, Australia, Taiwan,
Korea, Iran, South Africa, etc.
Opportunities & Threats.
There is a huge potential for export market,
since Company has several West European Collaborations with renowned world
leaders of these products, viz. Forst Technologie (formerly Oswald Forst) of
Germany for broaches, Samputensili of Italy for shaving cutters, etc. and
addition of latest CNC Machines. The Company's products are well accepted and
hence there is growing potential for export market and Company is all set to
exploit this opportunity. The major threat is that we are primarily depended on
Automobile Industry, which is fluctuating. However, we are trying to counter
this by developing larger share of exports.
Future Outlook:
Improvement in overall economic scenario is
expected to provide stimulus to automobile business. The growth in production
of Commercial Vehicles, Cars and Two-Wheelers has already pushed up our order
bank significantly. To expand the existing capacity of existing products V.z
Gear Cutting tools & Broaches etc, by setting up a new plant at
Gandhidham, kutch Gujarat and a unit at Uttaranchal.
Risks & Concerns:
Normal business risk is associated with Tool
industry, such as need for continuous technological up-gradation to meet
customer's high expectations and stringent quality requirements. Besides, there
is new competition for imported tooling and excessive use of protective
coatings to tools. Presently there is continuous rise in the price of High
Speed Steel in the International Market, which will adversely affect the cost
of raw material. All these risks are continuously addressed in the
business plans, functional strategies and management review, and acted
upon. Foreign exchange risks are
inherent in export of products, import of raw materials, capital goods, etc.
The Company has a well-defined exposure management system to review its
exchange exposure and to take appropriate measures to mitigate losses.
Financial highlights:
1. Sales
Sales (net of Excise) and other income during
the year was Rs.278.899 Millions against Rs.289.521 Millions (15 months) during
the last financial year 2003-04,
2. Profit:
During the financial year 2004-05, the Company
has earned a profit of Rs.28.227 Millions before Tax and depreciation on
revalued cost of assets against Rs. 15.599 Millions during the financial year
2003-04(15 Months). However, after taking into consideration tax adjustment,
Deferred Tax Liability and Depreciation on Revalued Assets, the net profit of
the Company during the year was Rs.4.267 Millions against net profit of
Rs.7.739 Millions for the year 2003-04(15 Months).
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 records 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.45.85 |
|
UK
Pound |
1 |
Rs.85.82 |
|
Euro |
1 |
Rs.58.62 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
50 |
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 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 |
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 |