MIRA INFORM REPORT

 

 

Report Date :

6th November, 2006

 

IDENTIFICATION DETAILS

 

Name :

WELSPUN INDIA LIMITED

 

 

Registered Office :

Survey No. 76, Village and P. O. Morai, Vapi, District Valsad,

Gujarat – 396191, India

 

 

Country :

India

 

 

Financials (as on) :

31.03.2006

 

 

Date of Incorporation :

29.10.1997

 

 

Com. Reg. No.:

04-33271

 

 

CIN No.:

[Company Identification No.]

L17110GJ1985PLC033271

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

RKTW00055G

 

 

PAN No.:

[Permanent Account No.]

AAACW1259N

 

 

Legal Form :

Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturing of Cotton Terry Towels and Cotton Yarns.

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

 

 

Maximum Credit Limit :

USD 21750000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established company having satisfactory track. Financial position is satisfactory. Payments are usually correct and as per commitments. The company is doing well. It can be considered good for any normal business dealings at usual trade terms and conditions.  

 

LOCATIONS

 

Registered Office :

Survey No. 76, Village and P. O. Morai, Vapi, District Valsad, Gujarat – 396191, India

Tel. No.:

91-260-2437001-4

Fax No.:

91-260-2437088

E-Mail :

wttvapi.welspun@wbbs.vapi.net

Website :

http://www.welspun.com

 

 

Corporate Office :

B Wing, 9th Floor, Trade World Premises, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013, Maharashtra, India

Tel. No.:

91-22-5650 3000 / 5650 3333 / 2490 8000

Fax No.:

91-22-2490 8020 / 2490 8021

E-Mail :

mohan_manikkan@welspun.com

 

 

Factory 1 :

Survey No. 76, Village and P. O. Morai, Vapi, District Valsad, Gujarat – 396191, India

Tel. No.:

91-260-2437001-4

Fax No.:

91-260-2437088

E-Mail :

wttvapi.welspun@wbbs.vapi.net

 

 

Factory 2 :

Welspun City, Taluka Anjar, Kutch – 370 110, Gujarat, India

Tel. No.:

91-2836-573428/9

Fax No.:

91-2836-247070

 

DIRECTORS

 

Name :

Mr. G. R. Goenka

Designation :

Chairman

 

 

Name :

Mr. B. K. Goenka

Designation :

Vice Chairman and Managing Director

Date of Birth/Age :

15/08/1965

Qualification :

B. Com.

Date of Appointment :

17/01/1985

 

 

Name :

Mr. R. R. Mandawewala

Designation :

Joint Managing Director

 

 

Name :

Mr. M. L. Mittal

Designation :

Director (Finance)

 

 

Name :

Mr. M. G. Diwan

Designation :

Director

 

 

Name :

Mr. Kamal Kishore

Designation :

Director – (Nominee – IFCI Limited)

 

 

Name :

Mr. F. Q. Kolman

Designation :

Director (Nominee – UTI)

 

 

Name :

Mr. P. K. Gupta

Designation :

Director – Nominee – IDBI

 

 

Name :

Mrs. Renuka Ramnath

Designation :

Director (Nominee  ICICI Venture)

 

 

Name :

Mr. Bala Deshpande

Designation :

Director (Nominee  ICICI Venture)

 

 

Name :

Mr. A. K. Dasgupta

Designation :

Director

 

 

Name :

Mr. S. Ravikumar

Designation :

Director (Nominee – UTI)

 

 

Name :

Mr. Padmanabh Sinha

Designation :

Director (Nominee Dunearn Investments (Mauritius) Pte. Limited)

 

 

Name :

Mr. Arun Kumar

Designation :

Director (Nominee IFCI Limited)

 

 

Name :

Mr. Dadi B Engineer

Designation :

Director

 

KEY EXECUTIVES

 

Name :

Mr. D. K. Patil

Designation :

Company Secretary

 

 

 

 

AUDIT COMMITTEE :

 

 

Name :

Mr. Bala Deshpande

Designation :

Director (Nominee  ICICI Venture)

 

 

Name :

Mr. Padmanabh Sinha

Designation :

Director (Nominee Dunearn Investments (Mauritius) Pte. Limited)

 

 

Name :

Mr. Arun Kumar

Designation :

Director (Nominee IFCI Limited)

 

 

Name :

Mr. Dadi B Engineer

Designation :

Director

 

 

 

 

REMUNERATION COMMITTEE:

 

 

Name :

Mr. Bala Deshpande

Designation :

Director (Nominee  ICICI Venture)

 

 

Name :

Mr. Padmanabh Sinha

Designation :

Director (Nominee Dunearn Investments (Mauritius) Pte. Limited)

 

 

Name :

Mr. Arun Kumar

Designation :

Director (Nominee IFCI Limited)

 

 

Name :

Mr. A. K. Dasgupta

Designation :

Director

 

 

 

 

SHARE TRANSFER AND INVESTOR GRIEVANCE COMMITTEE :

 

 

Name :

Mr. A. K. Dasgupta

Designation :

Director

 

 

Name :

Mr. B. K. Goenka

Designation :

Vice Chairman and Managing Director

 

 

Name :

Mr. R. R. Mandawewala

Designation :

Joint Managing Director

 

 

Name :

Mr. M. L. Mittal

Designation :

Director (Finance)

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of Cotton Terry Towels and Cotton Yarns.

 

 

Products :

Item Code Number

58-02

Product Description

Terry Towels

 

 

 

GENERAL INFORMATION

 

No. of Employees :

Around 4000

 

 

Bankers :

Ř       State Bank of Bikaner and Jaipur

Ř       State Bank of India

Ř       Punjab National Bank

Ř       Canara Bank

Ř       Bank of India

Ř       Andhra Bank

Ř       State Bank of Patiala

Ř       Oriental Bank of Commerce

Ř       Exim Bank Limited

Ř       Bank of Baroda

 

 

Facilities :

Secured Loan

(Rs. in millions)

 

2006

Debentures

171.600

Term Loans

-- From Financial Institutions

   -- in Rupee

   -- in Foreign Currency

 

-- From Banks

   -- in Rupee

   -- in Foreign Currency

 

 

423.860

195.600

 

 

4977.000

248.640

Working Capital Loans from Banks

1946.680

Hire Purchase Finance Loan from Banks

0.720

Interest Accrued and due on Term Loans 

8.070

Total

7972.170

 

Unsecured Loans

(Rs. in millions)

 

2006

Interest Free Sales Tax Loan

1.750

(Repayable in six annual installments tor each disbursement till October 7, 2010) (Repayable within one year Rs. 0.83 million; March 31, 2005 : Rs. 1.90 million)

 

Short Term Loans from Banks

421.330

Total

423.080

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

Price Waterhouse and Company

Chartered Accountants

 

 

Associates :

Ř       Eupec Welspun Pipe Coatings India Limited

A joint venture with the second largest pipe coating company in the world :  Eupec Pipe Coating, Germany

 

Subject has a 50:50 which was formed in 1999 through a joint venture between WGSRL and Eupec Pipe Coatings GmbH, Germany (2nd largest pipe coating company in the world). The state of the art plant was set up for coating of steel pipes, mainly produced by WGSRL. The Company is in the process of being merged with WGSRL (pending High Court approval).

 

            Eupec Welspun was founded in 1999 as a Joint Venture with

            Eupec Pipe Coating GmbH of Germany. EUPEC Pipe Coatings is

            recognized as one of the world's leading pipe coating specialists

            and have pioneered the new generation coating systems now

            widely used by the pipeline Industry.


            The coating plant is located adjacent to Welspun's pipe mills, thus

            giving complete solutions to clients. The mill is capable of coating

            pipes in diameters ranging from 4 inch to 64 inch for external

            coating and from 16 inch Dia to 64 in Dia for internal coating.

            EWPCL participates in the export orders of WGSRL for providing

            coating facilities.

 

 

Ř       Welspun Cotspin Industries Limited

 

Ř       Welspuns Gujarat Stahl Rohren Limited

The company with the widest range of submerged arc welded pipes, lingtitudinal and spiral

A joint venture with Vincenzo Zucchi with international brands such as Calvin Klein, Tommy Hilfiger, Versace, etc.

 

The company’s houses a steel pipe manufacturing mill at Bharuch, near Dahej, Gujarat. The state-of-the-art LSAW plant was sourced from a world-renowned supplier, Mannesman Demag, Germany. The Spiral plant technology was sourced from Capello Tubi of Italy. WGSRL is the second largest manufacturer of SAW pipes in India. It's products are approved by National/International agencies. The Company has the distinction of having supplied pipes of various dimensions to USA, China, Columbia, Iran, Egypt, etc.

 

The Welspun Group diversified into steel pipes in the year 1997, by setting up a world-class plant for manufacturing Submerged Arc Welded (SAW) pipes.
WGSRL is an Indo-German venture, set up with a technical collaboration from Intertec GmbH, Germany and the equity participation of Gujarat Industrial Investment corporation and also Intertec. This integrated complex, strategically located at Dahej on the western coast of India, includes mills to manufacture Longitudinal SAW (L SAW) Pipes and also Spiral Welded Pipes.
In the tough global competition WGSRL recently bagged prestigious export orders amounting around Rs. Crores from the middle east as well as from the USA.

 

Ř       Welspun Syntex Limited

 

A leading manufacturer of specialty polyester filament yarn from 

India.  It furnishes the stylists with 200 new colours every month.

 

Subject has a Specialty Polyester Filament Yarn manufacturing facility at Silvassa , Union Territory of Dadra & Nagar Haveli and yarn processing units at Silvassa and Palghar. WSL is the largest manufacturer of Specialty Polyster Filament Yarn in India. The product range - Fully Drawn Yarn (Grey & Dope Dyed), Mono Filament Yarn, Air Textured Yarn, etc - provides competitive edge in the market for achieving better realization.

 

Welspun Syntex Limited is an ISO 9001 company, Manufactures world-class Specialty Polyester Filament Yarn (PTY), Polyester Air Texturised Yarn (ATY), Fully Drawn Yarn (FDY), Partially Oriented Yarn (POY) & Mono Filament Yarn (MFY) in SD, Bright, Full Dull, Dope Dyed and Package Dyed. WSL has a Customer base spread across 40 countries around the Globe.

 

Ř       Welspun Polybuttons Limited

A world of art from the world leaders in buttons

 

Ř       GloFame Cotspin Industries Limited

Cutting-edge technology and state-of-the-art machinery for processing the cotton yarn to engineer different thickness of it.

 

Subject is engaged in the manufacture of Cotton Yarn and has a

world-class manufacturing facility at Vapi, Gujarat The

company's

product range includes high value-added specialty yarn like PVA

yarns, Zero twist yarn and Slub yarn - catering to a niche in the

international markets. The Company is in the process of being

merged

with company (pending High Court approval).

 

Ř       Welspun Zucchi Textiles Limited

A joint venture with Vincenzo Zucchi that’s synonymous with internatilnal brands such as Calvin Klein, Tommy Hilfiger, Versace.

 

Subject has a 50:50 Joint Venture between WIL and Vincenzo Zucchi S.p.A, Italy, was established in 1997. WZTL has a plant to manufacture bathrobes at Vapi, Gujarat. The foreign collaborator is the licencee of a large number of esteemed brands in readymade garments like Ferrari, Pierre Cardin, Lacoste, Valentino, Chipie, etc. As the bathrobes are produced from terry fabric mainly sourced from WIL (located in the same premises), both the companies enjoy synergy of operations and expertise of each other's management.

 

             Welspun Zucchi specializes in the manufacture of bathrobes. It is

             a 50-50% Joint Venture with Zucchi of Italy. Set up as an Export                

             oriented unit in 1997, It has been promoted by Vincenzo Zucchi

             Sp.A of Italy and Welspun India limited of India. WZTL

             manufactures high quality bathrobes in various types of fabrics,

             patterns, colours, and sizes. The unit exports its production to

             Europe, Australia, Japan, and the Middle East.

 

           

Ř       Welspun Polybuttons Limited

Welspun Polybuttons offer a fascinating fashion expression. A world of art from the world leaders in buttons.

 

Ř       Welspun Trading Limited

 

Ř       Welspun Mercantile Limited

 

Ř       Good Value Polyplast Limited

 

Ř       Mertz Securities Limited

 

Ř       Refined Salts Private Limited

 

Ř       Welspun Power & Steel Limited

 

 

 

Subsidiaries :

  1. Welspun USA Inc., USA

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

81500000

Equity Shares

Rs. 10/-

Rs. 815.000 millions

1100000

Redeemable Cumulative Preference Shares

Rs. 100/-

Rs. 110.000 millions

23500000

Redeemable Cumulative Preference Shares

Rs. 10/-

Rs. 235.000 millions

 

Total

 

Rs. 1160.000 millions

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

73089519

Equity Shares

Rs. 10/-

Rs. 730.900 millions

9333333

13% Optionally Convertible Cumulative Preference Shares

Rs. 10/-

Rs. 93.330 millions

300000

12.50% Redeemable Cumulative Preference Shares

Rs. 100/-

Rs. 30.000 millions

500000

0% Redeemable Cumulative Preference Shares

Rs. 100/-

Rs. 50.000 millions

50000

12.50% Optionally Convertible Cumulative Preference Shares

Rs. 100/-

Rs. 5.000 millions

8000000

13% Optionally Convertible Cumulative Preference Shares

Rs. 10/-

Rs. 80.000 millions

45000

10% Redeemable Cumulative Preference Shares

Rs. 100/-

Rs. 4.500 millions

 

Total

 

Rs. 993.730 millions

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2006

31.03.2005

31.03.2004

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

993.700

958.800

623.600

2] Reserves & Surplus

4466.500

2708.300

1705.600

NETWORTH

5460.200

3667.100

2329.200

LOAN FUNDS

 

 

 

1] Secured Loans

7972.200

5949.600

2098.800

2] Unsecured Loans

423.100

3.700

105.500

TOTAL BORROWING

8395.300

5953.300

2204.300

 

 

 

 

TOTAL

13855.500

9620.400

4533.500

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

8785.100

5714.800

1910.900

Capital work-in-progress

1471.200

2571.300

210.800

 

 

 

 

INVESTMENT

1057.200

115.200

449.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
1951.300

1298.800

607.600

 

Sundry Debtors
417.300

348.500

335.300

 

Cash & Bank Balances
810.100

799.000

470.800

 

Loans & Advances
1411.100

1049.400

1410.500

Total Current Assets
4589.800

3495.700

2824.200

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
1923.400

2190.100

839.100

 

Provisions
124.400

86.500

22.300

Total Current Liabilities
2047.800

2276.600

861.400

Net Current Assets
2542.000

1219.100

1962.800

 

 

 

 

TOTAL

13855.500

9620.400

4533.500

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2006

31.03.2005

31.03.2004

Sales Turnover [including other income]

7096.400

4843.400

3942.300

 

 

 

 

Profit/(Loss) Before Tax

632.800

606.300

446.400

Provision for Taxation

217.300

220.500

146.100

Profit/(Loss) After Tax

415.500

385.800

300.300

 

 

 

 

Export Value

5242.010

3647.260

2725.451

 

 

 

 

Import Value

1093.160

3233.590

172.425

 

 

 

 

Total Expenditure

5594.000

3683.100

3106.300

 

QUARTERLY RESULTS

 

PARTICULARS

 

 

30.09.2006

30.06.2006

Type

 

2nd Qtr

1st Qtr

Sales Turnover

 

2764.500

1988.900

Other Income

 

128.400

0.000

Total Income

 

2892.900

1988.900

Total Expenditure

 

2341.800

1614.300

Operating Profit

 

551.100

374.600

Interest

 

122.000

111.800

Gross Profit

 

429.100

262.800

Depreciation

 

156.900

144.400

Tax

 

1.800

2.400

Reported PAT

 

183.400

75.400

 

KEY RATIOS

 

PARTICULARS

 

31.03.2006

31.03.2005

31.03.2004

Debt Equity Ratio

1.57

1.36

0.95

Long Term Debt Equity Ratio

1.26

1.04

0.62

Current Ratio

1.07

1.19

1.70

TURNOVER RATIOS

 

 

 

Fixed Assets

0.71

0.94

1.33

Inventory

3.90

4.82

7.03

Debtors

16.54

13.44

8.94

Interest Cover Ratio

2.65

3.10

2.84

Operating Profit Margin (%)

23.72

25.25

24.61

Profit Before Interest and Tax Margin (%)

16.05

19.46

20.29

Cash Profit Margin (%)

14.23

14.18

13.17

Adjusted Net Profit Margin (%)

6.56

8.39

8.84

Return on Capital Employed (%)

8.66

12.64

16.10

Return on Net Worth (%)

9.81

14.19

14.90

 

STOCK PRICES

 

Face Value

Rs. 10/-

High

Rs. 93.90

Low

Rs. 82.55

 

 

LOCAL AGENCY FURTHER INFORMATION

 

History

 

Subject was originally incorporated on 17th January, 1985 at Mumbai in Maharashtra under the name and style of Welspun Polyester India Limited having Company Registration Number 35092. The name of the company was changed to the present.

 

The Registered office of the company was changed to the present with effect from 29th October, 1997 and having New Registration Number 33271.

 

The company is the largest producer of Terry Towel in Asia and one of the 10 leading in the world, possessing a state-of-the-art, fully integrated terry towel unit at Vapi, Gujarat. The company, the flagship company of the Rs 8000.000 millions Welspun group. The company's Plant with state-of-the-art technology, has got ISO 9002 accreditation. Being an environment friendly manufacturing process company, it has been awarded the OKOTEX certification.  
 

The company transferred the Spinning division with its assets and liabilities to Welspun Cotton Yarn Limited. The company continues to manufacture terry towels, but the yarn spinning is carried out by the new company - Welspun Cotton Yarn Limited (WCYL). The demerger involved equity swapping in the ratio of 7:3. For every 10 shares of the comapny, shareholders were issued seven shares of the company and three shares of WCYL.  

 

In order to give impetus to the market share, the company has embarked upon direct marketing. The company has set up a wholly owned subsidiary in the name of Welspun USA Inc. in New York to focus on the US markets. It has started using Egyption Cotton Yarn & American Pima Cotton in the manufacture of premium quality towels and above same was registered trademark user of 'Egyptian Cotton' & 'Supima'. 


The company has started direct marketing by way of 100% subsidiary in USA and has made grounds for tie-ups with the best in the market for floating the products in the market. The company chalked out an expansion plan by setting up a 20 looms at a capital outlay of Rs.350.000 millions which is under implementation and out of which 11 looms have been installed and production has commenced. With this expansion the capacity has been enhanced to 10800 MTPA.

 

Review of Performance 

 

The year 2005-06 saw a turnover of Rs. 6537.340 millions as against Rs. 4763.100 millions in 2004-05

registering a growth of 37%. Profit before tax for the year is Rs. 632.810 millions, whereas it was Rs 606.330 million in the previous year. The net profit increased by Rs. 28.480 million for 2005-06 to Rs.415.490 million from Rs. 385.800 million.

 

During the year under report, production and sates of Terry Towels at 20026 MT and 19981 MT, respectively, were higher by 61% and 68%, respectively, over those in the previous year. Cotton Yarn

production quantity remained by and large unchanged whereas sales was down by 38% mainly due to increased captive consumption. Despite being 1st year (three months production) of Bed Linen, production of 3971 MT and sales of 3801 MT shows creditable response to Welspun's entry in the line.

 

The profitability remained under pressure, mainly on account of higher Power and Fuel Cost on one hand and higher initial cost due to lower utilization of new capacities on the other hand. However your directors are confident that this was only a -temporary phenomenon and the current year will show improved cost to sales relationship.

 

The company has joint venture with :-

 

  1. Welspun Zuchi Textiles Limited

 

The company’s fixed assets of important value include Freehold Land, Buildings, Plant & Machinery, Vehicles, Furniture & Fixtures and Office Equipments.

 

Corporate Profile

 

These words sum up our whole philosophy in a nutshell. It isn't a statement but a promise that we strive for, proving it time and again.

 

Thereby raising the bar of human and technological achievements for ourselves and the industry as the whole. Instilling a fierce determination of achieving the unattainable and setting the landmarks for others to emulate. From a flagship company of Welspun Group, is diversified into various areas of perfection, from Speciality Polyester Filament Yarn, Polyester Buttons to high grade SAW Pipes.

 

A successful group cannot thrive in isolation and we are totally committed to the welfare of the society in general, so the group has diversified into well-equipped medical facilities and educational facilities.

Welspun etches a saga of success with various companies spanning from Cotton Yarn, Terry Towel and Bath Robes to SAW Pipes.

 

Contact

 

Corporate Office

Welspun India Limited
Trade World, 'B'-wing, 9 th Floor, Kamala Mills Compound, Senapati Bapat Marg,
Lower Parel, Mumbai 400 013, Maharashtra, India. 

Tel. No. : 91-22-56503000/ 56503333/ 24908000

Fax No. : 91-22-24908020/ 24908021

Emails  :  subrata_pal@welspun.com

               

Registered Office and Factory

Welspun India Limited
Survey No.76, Village and P.O. Morai, Vapi District Valsad, Gujarat-396 194, India. 

Tel. No. : 91-0260-2437001/4

Fax No. : 91-0260-2437088

 

 

 

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.44.45

UK Pound

1

Rs.84.83

Euro

1

Rs.57.12

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

6

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

6

--LIQUIDITY

1~10

6

--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

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

54

 

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

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions