MIRA INFORM REPORT

 

 

Report Date :

20.11.2006

 

IDENTIFICATION DETAILS

 

Name :

NIKHIL ADHESIVES LIMITED

 

 

Registered Office :

Vadkun, College Road, Dahanu, Dist. Thane - 401602

 

 

Country :

India

 

 

Financials (as on) :

31.03.2006

 

 

Date of Incorporation :

29.09.1986

 

 

Com. Reg. No.:

11-41062

 

 

CIN No.:

[Company Identification No.]

U51900MH1986PTC041062

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMN04256A / MUMN10097D

 

 

PAN No.:

[Permanent Account No.]

AAACN1436G

 

 

Legal Form :

A Public Limited Liability Company. The Company’s shares are listed on the Stock Exchange.

 

 

Line of Business :

The company is engaged in trading of Vinyl Acetate Monomer, Butyl Acrylate Monomer and Co-polymer & Homo Polymer Emulsion

 

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 200000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Slow but correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is an established company having satisfactory track. Trade relations are fair. General financial position is satisfactory. Payments are reported as slow but correct. However the company can be considered normal for business dealings at usual trade terms and conditions.

 

LOCATIONS

 

Registered Office :

Vadkun, College Road, Dahanu, Dist. Thane - 401602

Website :

http://www.nikhildhesives.com

 

 

Head Office :

Trading Division

39, Gundivali, Near Little Flower School,
Off. Sir. M.V. Road,
Andheri (East), Mumbai - 400069.

Tel. No.: 91-22 - 26833655 / 56787655 / 56787656

Marketing Division

501/502, Mathuria Apartments,
'A' Wing, 5th Floor,
M.V. Road,
Andheri (East), Mumbai -400069.

Tel. No.: 91-22 - 30911058 / 26835864

 

 

Factory 1 :

Shreeji Industrial Estate, College Road, Vadkun, Dahanu, Thane - 401 602

Tel. No.:

91-2528 - 224173 / 224463

Fax No.:

91-2528 - 223107

 

 

Factory 2 :

683, Diamond Harbour Road, Hindustan Park,  Kolkata - 700039

Tel. No.:

91-9830187978

 

 

Branches :

Ahmedabad

22, Salvik Complex,
9, Kalpana Society,
Behind Navranpura,
Ahmedabad, India.

Tel. No.: 91-79 - 26568152 / 26422093
Fax No.: 91-79 - 26441764
Mob. No.: 9824018561                          

 

Chennai

East coast chambers
C / Mezzanine Floor,
92, G.N. Chetty Road, T.Nagar,
Chennai - 660017, India.

Tel. No.: 91-44 - 30913716 / 52024853
Fax No.: 91-44 - 52024853
Mob. No.: 91-9381016948

 

New Delhi

Flat No. 501, Pragati Towers,
26 Rajendra Place,
New Delhi - 110008.

Tel. No.: 91-11 - 51539533
Fax No.: 91-11 - 33171533                 

 

Vadodara

Jalaram Complex,
2bd Floor, Salalwala Char Rasta,
Vadodara 390001

 

DIRECTORS

 

Name :

Shri. Rajendra J. Sanghavi

Designation :

Executive Chairman

 

 

Name :

Shri. Umesh J. Sanghavi

Designation :

Managing Director

 

 

Name :

Shri. Tarak J. Sanghavi

Designation :

Executive Director

 

 

Name :

Dr. P. S. Samant

Designation :

Executive Director

 

 

Name :

Shri. S. R. Sanghavi

Designation :

Non Executive, Independent Director

 

 

Name :

Shri. H. S. Kamath

Designation :

Non Executive, Independent Director

 

 

Name :

Shri. Madhu M. Vora

Designation :

Non Executive, Independent Director

 

MAJOR SHAREHOLDERS

 

Names of Shareholders

No. of Shares

Percentage of Holding

Promoter's holding

 

 

Promoters

 

 

Indian promoters

1,906,520

61.62

Foreign promoters

 

 

Persons acting in concert

 

 

Sub - total

1,906,520

61.62

Non-Promoters holding

 

 

Institutional investors

 

 

Mutual funds and UTI

900

0.03

Banks, financial instituitions, insurance companies (central/ State Government institutions/ non-government instituitions)

 

 

FII's

 

 

Sub - total

900

0.03

 

 

 

Others

 

 

Private corporate bodies

142566

4.61

Indian public

1039630

33.60

NRI’s/ OCBs

2562

0.08

(Clearing Members)

1722

0.05

Grand Total

3094300

100.000

 

BUSINESS DETAILS

 

Line of Business :

The company is engaged in trading of Vinyl Acetate Monomer, Butyl Acrylate Monomer and Co-polymer & Homo Polymer Emulsion

 

 

Products :

Item Code No (ITC Code)

Product Description

29159000

Vinyl Acetate Monomer

29160000

Butyl Acrylate Monomer

39051000

Co-polymer & Homo Polymer Emulsion

 

GENERAL INFORMATION

 

No. of Employees :

79

 

 

Bankers :

v      Bank of India

v      Bank of Maharashtra

v      ICICI Bank Limited

v      HDFC Bank Limited

 

 

Facilities :

Secured Loans

(Rs in millions)

From Bank of India

 

Cash Credit Facility

22.201

Term Loan

9.126

From Bank of Maharashtra

 

Cash Credit Facility

22.336

Term Loan

9.555

From ICICI Bank Limited

 

Vehicle Finance

0.258

From HDFC Bank Limited

 

Vehicle Finance

0.169

The above working capital facilities and letters of credit facilities (inland / foreign) from the consortium banks viz. Bank of India and Bank of Maharashtra are secured against hypothecation of stock of raw & packing materials, finished goods, book debts, and plant & machineries of the company on pan passu basis. Further the above credit facilities are collaterally secured against equitable mortgage of factory block.

 

 

The term loan facilities from the consortium banks are secured on pan passu basis against hypothecation of the plant & machineries & equitable mortgage of factory block. All the credit facilities mentioned in note no. 1 & 2 above are secured by personal guarantees of the promoter directors and are collaterally secured against equitable mortgage of certain residential flats of the promoter directors in favour of the said banks on pan passu basis.

 

The principal amounts of the vehicle loan instalments due within 1 year from the date of balance sheet is Rs.0.239(Previous Year Rs.0.214).The loans are secured against hypothecation of the vehicles financed.

Unsecured Loans

 

Sales Tax Deferral (Under Package Scheme of Incentives)

2.856

From Directors

0.008

From Other Companies

17.516

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

P. D. Desai & Associates

Chartered Accountants

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

3950000

Equity Shares

Rs. 10/- each

Rs. 39.500 millions

50000

8% Non Cumulative Redeemable Preference Shares

Rs. 10/- each

Rs. 0.500 millions

 

Total

 

Rs. 40.000 millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

3094300

Equity Shares

Rs. 10/- each

Rs. 30.943 millions

 

Add : Forfeited Shares Account

 

Rs. 0.107 millions

 

Total

 

Rs. 31.050 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

31.050

31.050

31.049

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

17.980

13.506

8.516

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

49.030

44.556

39.565

LOAN FUNDS

 

 

 

1] Secured Loans

63.647

51.681

54.812

2] Unsecured Loans

20.381

6.654

11.810

TOTAL BORROWING

84.028

58.335

66.622

DEFERRED TAX LIABILITIES

6.130

5.771

5.830

 

 

 

 

TOTAL

139.188

108.662

112.017

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

40.992

45.682

42.617

Capital work-in-progress

0.000

0.000

0.000

 

 

 

 

INVESTMENT

0.037

0.036

0.036

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories

60.104

64.347

35.869

 

Sundry Debtors

132.051

82.058

108.730

 

Cash & Bank Balances

25.358

28.531

19.829

 

Other Current Assets

0.000

0.000

0.000

 

Loans & Advances

9.448

7.805

7.233

Total Current Assets

226.961

182.741

171.661

Less : CURRENT LIABILITIES & PROVISIONS

 

 

 

 

Current Liabilities

122.369

118.217

101.883

 

Provisions

6.433

1.580

0.414

Total Current Liabilities

128.802

119.797

102.297

Net Current Assets

98.159

62.944

69.364

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

139.188

108.662

112.017

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2006

31.03.2005

31.03.2004

Sales Turnover [including other income]

542.424

421.495

308.200

 

 

 

 

Profit/(Loss) Before Tax

13.001

13.448

8.702

Provision for Taxation

 

4.924

3.214

Profit/(Loss) After Tax

8.002

8.524

5.488

 

 

 

 

Export Value

1.856

61.215

NA

 

 

 

 

Import Value

242.830

225.821

103.839

 

 

 

 

Total Expenditure

529.423

408.046

299.498

 

QUARTERLY RESULTS

 

PARTICULARS

 

 

30.06.2006

(1st Quarter)

30.09.2006 (2nd Quarter)

 Sales Turnover

 

234.600

233.200

 Other Income

 

0.000

0.000

 Total Income

 

234.600

233.200

 Total Expenditure

 

223.400

224.400

 Operating Profit

 

11.200

8.800

 Interest

 

2.700

3.400

 Gross Profit

 

8.500

5.400

 Depreciation

 

1.800

1.400

 Tax

 

2.300

1.700

 Reported PAT

 

4.400

2.300

 

200606 Quarter 1  - 1. The above results were taken on record at the meeting of the Board of Directors held on 31.07.2006. 2. The previous year corresponding quarter figures wherever necessary have been regrouped to confirm with those the current quarter. 3. The provision for taxation includes provision for curren tax deffered tax and fringe benefit tax. 4. No investor complaints was pending at the beginning as well as at the end of the quarter ended 30.06.2006. The company did not receive any investor complaint during the said quarter

 

200609 Quarter 2  - Expenditure Includes (Increase) / Decrease in Stock in Trade Rs (12.792) million Consumption of Raw Materials/Purchase of Trading Goods Rs 224.369 million Staff Cost Rs 3.143 million Other Expenditure Rs 9.735 million EPS is Basic Status of Investor Complaints for the quarter ended 30.09.2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 1 Complaints disposed off during the quarter 1 Complaints unresolved at the end of the quarter Nil 1. The above results were taken on record at the meeting of the Board of Directors held on 31.10. 2006. 2. The Previous year and Corresponding quarter figures, wherever necessary, have been regrouped to confirm with those of the current quarter. 3. The provision for taxation includes provision for current tax, deferred tax and fringe benefit tax.

 

 

KEY RATIOS

 

PARTICULARS

 

31.03.2006

31.03.2005

31.03.2004

Debt-Equity Ratio

1.52

1.49

1.10

Long Term Debt-Equity Ratio

0.84

0.93

0.55

Current Ratio

1.26

1.26

1.30

TURNOVER RATIOS

 

 

 

Fixed Assets

9.00

7.66

8.71

Inventory

9.31

8.94

9.60

Debtors

5.41

4.70

3.99

Interest Cover Ratio

2.25

2.32

2.30

Operating Profit Margin(%)

5.23

6.54

5.87

Profit Before Interest And Tax Margin(%)

4.04

5.18

4.81

Cash Profit Margin(%)

2.57

3.26

2.78

Adjusted Net Profit Margin(%)

1.38

1.90

1.72

Return On Capital Employed(%)

19.83

22.20

19.21

Return On Net Worth(%)

17.11

20.24

14.38

 

STOCK PRICES

 

Face Value

Rs. 10.00/-

High

Rs. 23.85/-

Low

Rs. 21.20/-

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Fixed assets

 

v      Factory Land

v      Factory Buildings

v      Plant & Machinery

v      Computers

v      Vehicles

v      Furniture & Fixtures

v      Intangible Assets

v      Goodwill

v      Technical Know How

v      Trademark

v      MDC Logo

v      Know Compete Agreement

 

Trade terms with

 

1) Associated Progressive Engineering Limited

2) Ashwathi Forms

3) Nayakem Organics Private Limited

4) Ravi Corporation

5) Yash Synthetics Private Limited

 

RESULT OF OPERATIONS

 

The sales turnover (net of VAT / Sales Tax and Excise Duty) has increased from Rs. 406.300 Millions to Rs. 533.400 Millions registering the growth of 31%. Other income from operations for the year is Rs. 7.600 Milions as against Rs. 15.000 Millions for the previous year. The decline is mainly due to the discontinuance of job work production in favor of Company's own production and due to reduction in the service charges income from Rs. 8.000 Millions to Rs. 1.800 Millions caused by the change in business operations in the trading segment. The operating profit before depreciation and tax is Rs. 19.878 Millions compared to 19.519 Millions in the previous year. The operating profit has been maintained to the comparable level of the previous year even after considering the foreign exchange rate difference loss of Rs. 2.400 Millions. The profit after depreciation and tax is Rs. 800.200 Millions which is nominally lower than Rs. 8.525 Millions for the previous year. The nominal reduction in the net profit is due to increase in depreciation from Rs. 607.000 Millions for the previous year to Rs. 6.876 Millions for the current year. The analysis on the performance of the Company is discussed in the Management Discussion and Analysis Report forming part of this report.

 

EXPANSION

 

During the year under consideration the manufacturing capacity of emulsions and adhesives has been increased from 7500 MT per annum to 8500 MT per annum. Considering the increase in demand for the Company's products it is proposed to further enhance the manufacturing capacity to 20000 MT per annum in two phases. Barring unforeseen circumstances it is expected that the first phase of the expansion raising the capacity to 13500 MT per annum will be achieved by the end of December 2006 and the second phase of the expansion raising the capacity to 20000 MT per annum will be achieved by

March 2007. To augment the long term resources for part funding of the proposed expansion and for the purpose of meeting with the increased working capital requirements and for other corporate purposes, the company intends to issue further equity shares. To facilitate the issue of shares mentioned above it is also proposed to increase the authorized capital of the Company from Rs. 40.000 Millions to Rs. 50.000 Millions as detailed in the notice for the Annual General Meeting.

 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

 

INDUSTRY STRUCTURE AND DEVELOPMENT

 

The Company manufactures variety of polymer emulsions having applications as adhesives for furniture, packaging and label/lamination industry, as binder and finishing agent for textile and paint industry, etc. The Company sells its products in two market segments viz. Industrial products and Consumer and Bazaar products. In the industrial emulsions segment, products include adhesives for packaging such as BOPP tape, sticker/label and lamination application, emulsions for manufacture of paint, textile, etc. In each of these products there are few medium to large size Companies having national presence and many smaller Companies with regional activity. The share of imported products is less than 10% of Indian consumption. In retail segment of branded consumer and bazaar products, the Company's products include wood adhesives, construction and paint chemicals, sealants, etc. which find use by carpenters, civil contractors, painters, plumbers, households, students, etc.

 

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

 

Manufacturing Division

 

After the acquisition of plant & machinery for emulsions manufacturing from Mafatlal Dyes and Chemicals Ltd. before two years and relocating the same at Company's existing facility at Dahanu, Maharashtra, further modifications at the plant were carried out in the current year raising the manufacturing capacity to 8500 MT /year of emulsions. The production for the financial year under reference has increased to 5828 MT as compared to 5251 MT in the previous year (inclusive of job work production for the financial year 416 MT as against previous year of 1809 MT) registering an increase of about 11%. The manufacturing sale has increased to Rs.236.900 Millions in the year under review as compared to Rs.157.000 Millions for the previous year registering an increase of about 51%. The job work receipts are at Rs.0.860 Millions as against previous year of Rs.5.380 Millions. The reduction in job work receipts is due to increase in manufacturing of their own product.

 

Trading Division

 

In the trading segment, the sales have increased to Rs. 284.100 Millions against previous year of Rs.246.100 Millions, an increase of about 15%. The volume growth registered an increase of about 14%. In the service segment, the gross revenue from the services has declined from Rs.9.338 Millions in the previous year to Rs. 3.628 Millions in the current year due to the change in the method of business operations.

 

Foreign Exchange Fluctuations

 

The financial performance of the Company for the year was adversely affected due to the depreciation of Indian currency. The Company has taken further steps to strengthen the currency risk management.

 

OPPORTUNITIES. THREATS, RISKS, CONCERNS

 

Their country is experiencing steady economic growth with increased demand in the local as well as international markets. India is also fast improving its competitiveness against manufacturers from China and other South East Asian countries. The economic growth and particularly the growth in real estate construction segment is likely to result into higher demand for textile products, packaging products, paint and adhesives for wood and other applications. The Company's products find applications in all these sectors and thus providing good opportunity for growth. The Company's major raw materials are imported from reputed manufacturers in South East and North

 

East Asia with whom it possess long term association. The Company also trade in these chemicals and cater to medium to small customers and thus see an opportunity to economize the cost of purchasing with large volume and timely sourcing. With the implementation of VAT in most of the states, they see improving competitiveness. Although there is good opportunity for growth of business, it is not free from threats and risks. With every year reduction in customs duty in line with WTO agreement, they expect competition from manufacturers of Chinese and other South East Asian countries. Further, the raw materials required for manufacturing emulsions attract lower import tariffs in countries like China, Taiwan, South Korea etc. it is likely that imported emulsions can pose threat to domestic manufacturers and also threat to their export potential to other countries like Sri Lanka, Bangladesh, Middle East etc. The rising oil prices, depreciation of Indian Currency and increase in the rate of interest may reduce their margins. In spite of the threats, polymer emulsion industry has seen steady growth with increased applications, withstood all the challenges and will continue to grow.

 

OUTLOOK

 

After having acquired the brand and technology of manufacturing polymer emulsions products from Mafatlal Dyes & Chemicals (MDC), they have fully absorbed the technology of manufacturing and have undertaken improvement where required on an ongoing basis. Their products are well approved and accepted by the industry resulting into widening of their customer base. Their products find applications in various industries like Textiles, Packaging, Paint, Furniture and other miscellaneous industries. Paint industries are growing by more than 10% hence; their paint emulsion has good demand. Considering a healthy growth seen in some of the above industries like paint, textiles, packaging, thecompany's future in industrial segment appears encouraging. With small beginning in retail space of wood adhesives in last two years and with the introduction of many new products they expect steady growth in this segment too under their brand Mahacol.

 

 

 

AS PER WEBSITE

Vision

Nikhil adhesives will create an environment by incorporating best business practices for all the associates. They shall take ut most care and make every endeavors to enhance value for the customers by providing value added products and economically efficient solutions. For the share holders, maximize their returns through growth in sales and reductions in cost by using all modern tools of management.

Company History


The Company was incorporated in September 1986 as Hans Marketing & Services Pvt, Ltd. Its main activity since incorporation was marketing adhesives manufactured by M/s Nikhil Industries (a Partnership firm) under the brand name 'FORMISOL'. With a view to achieve backward integration the Company joined as a partner in M/s Nikhil Indsutries on 1st October 1992. The firm was engaged in the manufacture of Adhesives and Emulsions marketed by the Company. The Company was later converted as Public Limited Company in 1992 and changed its name as Nikhil Adhesives Ltd. On 24 march, 2003 Nikhil Adhesives Ltd. has acquired the emulsion business of M/s Mafatlal Dyes & Chemicals Ltd. (formerly known as Hoechst Dyes & Chemicals Ltd.)

Company Activities

Nikhil Adhesives is mainly in the Business of Manufacturing, Marketing and Trading.

 

Industrial Products:

Adhesives

Textile

Paints


Consumer Products

 

Products

Application

Mahacol SH

Its a water based medium setting adhesive used for gluing wood, plywood to plywood, decorative laminates to plywood, veneers, blockboard/hard board.

Mahacol Tatkal

Its a fast setting adhesive used for gluing wood, plywood to plywood, decorative laminates to plywood, veneers, blockboard/hard board.

Mahacol HV

Its a high viscosity adhesive used for gluing wood, plywood to plywood, decorative laminates to plywood, veneers, blockboard/hard board.

Mahacol 71

Adhesive with longer setting time used for gluing wood, plywood to plywood, decorative laminates to plywood, veneers, blockboard/hard board.

Formisol

Its a synthetic resin adhesive used for gluing wood, plywood to plywood, decorative laminates to plywood, veneers, blockboard/hard board.

Formisol 707

Formisol ABSR

Its a rubber adhesive used for bonding soles made of neolite rubber/leather/micro cellular rubber to uppers made of leather. rubber, synthetic fabrics, etc. in manufacturing quality footwear

Mafbond

Used for bonding soles made of PVC, polyurethane, TPR, EVA to leather, synthetic fabric



Trading

Products

 

v      Vinyl Acetate Monomer

v      Butyl Acetate Monomer

v      Polyvinyl Alcohol

v      Cyclohexanone

v      Cyclohexane

 

 

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. 44.75

UK Pound

1

Rs. 85.14

Euro

1

Rs. 57.55

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

5

--PROFITABILIRY

1~10

4

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

5

--RESERVES

1~10

5

--CREDIT LINES

1~10

5

--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

 

44

 

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

 

 

 

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