MIRA INFORM REPORT

 

 

Report Date :

06.04.2007

 

IDENTIFICATION DETAILS

 

Name :

GUJARAT PIPAVAV PORT LIMITED

 

 

Registered Office :

Port Pipavav , Post Ucchaiya. Via Rajula, District Amreli, Gujarat-365 560

 

 

Country :

India

 

 

Financials (as on) :

31.12.2005

 

 

Date of Incorporation :

05.08.1992

 

 

Com. Reg. No.:

04-18106

 

 

CIN No.:

[Company Identification No.]

U63010GJ1992PTC018106

 

 

IEC No.:

0891020161

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMG04191F / RKTG00431E

 

 

PAN No.:

[Permanent Account No.]

AAACG6975B

 

 

Legal Form :

A closely held public limited liability company.

 

 

Line of Business :

Subject is engaged in Port Development and Operation

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.

Small

 

Maximum Credit Limit :

USD 8000000

 

 

Status :

Moderate

 

 

Payment Behaviour :

Slow

 

 

Litigation :

Clear

 

 

Comments :

Subject is an old and established company having moderate track. Company’s profitability is under severe pressure. It has some accumulated losses. Payments are reported as slow but correct.

 

The company can be considered normal for small business dealings at usual trade terms and conditions, with slight caution initially.

 

 

LOCATIONS

 

Registered Office :

Port Pipavav , Post Ucchaiya. Via Rajula, District Amreli, Gujarat-365 560, India

Tel. No.:

91-2794-286001

Fax No.:

91-2794-286044

E-Mail :

iyerr@port07pipavav.com

manish@portofpipavav.com

Website :

http://www.pipavav.com

 

 

Corporate Office :

CG House, 1st Floor, Dr. Annie Besant Road, Worli Colony, Mumbai - 400 030
India.

 

 

DIRECTORS

 

Name :

Mr. Rajeeva Sinha

Designation :

Managing Director (from 10th November 2005)

Date of Birth/Age :

55 Years

Qualification :

M.A., M. Sc., LLB, MBA, FICS

Experience :

31 Years

Date of Appointment :

10.11.2005

Previous Employment :

Principal Secretary - (Transport) Govt. of Maharashtra

 

 

Name :

Mr. Hans-Ole Madsen

Designation :

Chairman

 

 

Name :

Mr. Jack D. Helton

Designation :

Director

 

 

Name :

Mr. Johan Herman Van Kerkhof

Designation :

Director (from 10lh November 2005)

 

 

Name :

Mr. Christian Moller Laursen

Designation :

Director

 

 

Name :

Mr. Dinesh Kumar Lai

Designation :

Director

 

 

Name :

Mr. H. K. Dash, I. A. S.

Designation :

Director

 

 

Name :

Mr. Luis Miranda

Designation :

Director (from 10th November 2005)

 

 

Name :

Mr. Krishan Sehgal

Designation :

Director

 

 

Name :

Mr. Rajeev Thakore

Designation :

Director

 

 

Name :

Mr. S. Ravi

Designation :

Nominee IDBI

 

 

Name :

Mr. Hariharan Iyer

Designation :

Alternate to Mr. Jack D. Helton

 

 

Name :

Mr. Darius Pandole

Designation :

Director (upto 10th November 2005)

 

 

KEY EXECUTIVES

 

Name :

Mr. Bhupendra Parekh

Designation :

President Marketing

Date of Birth/Age :

52 Years

Qualification :

B.Com.

Experience :

31 Years

Date of Appointment :

12.01.1996

Previous Employment :

S.K.I.L.

 

 

Name :

Mr. Henrik S. Christensen

Designation :

Chief Operating Officer

Date of Birth/Age :

53 Years

Qualification :

Masters License In Navigation

Experience :

31 Years

Date of Appointment :

13.10.2003

Previous Employment :

A.P.Moller

 

 

Name :

Mr. C. S. Venkiteswaran

Designation :

Financial Controller

Date of Birth/Age :

47 Years

Qualification :

B.Com., ACA, ACS

Experience :

23 Years

Date of Appointment :

26.11.2001

Previous Employment :

TTK Maersk Medical

 

 

Name :

Mr. Manish Agnihotri

Designation :

Company Secretary

 

 

BUSINESS DETAILS

 

Line of Business :

Subject is engaged in Port Development and Operation

 

 

Products :

Port Development and Operation

 

 

GENERAL INFORMATION

 

Customers :

˜                  Larsen & Toubro Limited

˜                  Gujarat Heavy Chemicals Limited

˜                  Peter Cremer

˜                  Essar Steel

˜                  Gujarat Sidhee Cement Limited

˜                  Gujarat State Fertilisers & Chemicals Limited

˜                  Indian Oil Corporation Limited

˜                  Indian Potash Limited

˜                  Maersk Sealand Limited

˜                  Shipping Corporation of India Limited

 

 

Bankers :

˜                  Central Bank of India, Mumbai

 

˜                  Exim Bank, Mumbai

 

˜                  Dena Bank, Industrial Finance Branch, 9th Floor, Maker Tower F, Cuffe Parade, Mumbai – 400 005

 

˜                  Bank of Bahrain and Kuwait, Jolly Maker Chambers II, Nariman Point, Mumbai – 400 021

 

˜                  HDFC Bank Limited, 1st Floor, Tulsiani Chambers, Free Press Marg, Nariman Point, Mumbai – 400 021

 

˜                  State Bank of Saurashtra, 1st Floor, Sharda Sadan, B.S. Road, Fort, Mumbai

 

˜                  Citibank N.A., Bombay Mutual Building, Sir D. N. Road, Mumbai – 400 001

 

 

Facilities :

Secured Loans

Rs. In Millions

1,610,760 ( March 2005: 5,699,006 ) 10.50 % Non convertible debentures (NCD) of Rs. 100 each

161.080

Deferred interest on the above

32.060

Term loans

 

Long Term Loans

 

From Banks

 

Rupee term loan

 

- Exisiting Lenders

404.200

- New Lenders

46.600

Foreign Currency Term Loan

 

- Existing Lenders

48.110

Funded Interest Term Loan

 

- Existing Lenders

234.050

From Financial Institutions

 

Rupee Term Loans

 

- Existing Lenders

1561.830

- New Lenders

462.570

Foreign Currency Term Loans

 

- Existing Lenders

231.930

Funded Interest Term Loan

 

- Existing Lenders

661.960

 

 

Amounts repayable within one year Rs 241. 53

 

Redemption of debentures

 

The 10.50 % Non-convertible Debentures (NCD) of Rs 161.08 ( March 2005: 569.90) were redeemable in 3 annual instalments on 1 October 2009, 1 October 2010 and 1 October 2011.

 

During the year, Corporate Debt Restructuring Cell have approved early redemption of 10.50 % NCD's and replaced with Funded Interest Term Loan on similar terms . Accordingly NCD's aggregating to Rs.408.82 were converted to Funded Interest Term Loan and balance NCD's of Rs.161.08 have since been redeemed after balance sheet date.

 

The Company has not created a debenture redemption reserve due to unavailability of profits.

 

Consequent to redemption of NCD, the deferred interest is considered a part of Funded Interest Term Loan.

 

Deferred interest on 1 0.5% NCD would be paid as per CDR terms.

 

Nature of security

(i) The existing debt comprising of 10.5 % NCD, Rupee Term Loans, Foreign Currency Term Loans and Funded Interest Term Loan (FITL) are secured by way of first mortgage, on pari passu basis, of the entire immovable properties of the Company, both present and future, situated at Pipavav Port, Taluka Rajula, Gujarat, and hypothecation of all the Company's movables including movable plant and machinery, machinery spares and stores, tools and accessories, both present and future subject to prior charges in favour of the Company's bankers on the stock of raw materials, semi-finished goods, consumable stores and books debts and other movables towards working capital facilities. The extension of mortgage for FITL in replacement of 10.50% NCD's, are being completed.

 

(ii) The said loans are also secured by pledge of shares held by AP Moller Maersk Group (APMM), to the extent of 26% of the equity share capital of the company, in place of Corporate Guarantee and Personal Guarantee of some

directors belonging to erstwhile promoter group. The pledge process are being completed.

 

(iii) The New Debt is secured by way of first mortgage, on a pari passu basis, over the assets mentioned in 3 (i) above and by pledge of shares by APMM to the extent of 26% of the equity share capital of the Company, assignment of Project Documents, charge on Cash Flows and intangible properties.

 

(iv) IDFC Limited, acting as Security Trustee for new Lenders, would also act as Security Trustee for existing lenders. Documentation formalities are under completion.

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

B.S.R. & Company

Chartered Accountants

Address :

KPMG House, Kamala Mills Compound, 448, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013

Tel. No.:

91-22-24913030 / 24913131

Fax No.:

91-22-24988368

 

 

Associates/Subsidiaries :

Ø       Maersk India Private Limited

Ø       Masersk India Private Limited - acting as agents for AP Moller - Maersk A/S.

Ø       Safmarine India Private Limited - acting as agents for Safmarine Container Lines N.V.

Ø       APM Terminals Mauritius Limited

Ø       APM Terminals International B.V.

 

 

Joint Venture :

Pipavav Railway Corporation Limited

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

245,000,000

Equity Shares

Rs. 10/- each

Rs. 2450.000 Millions

55,000,000

8.4% Optionally Convertible Cumulative Redeemable Preference shares

Rs. 10/- each

Rs. 550.000 Millions

 

Total

 

Rs. 3000.000 Millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

196,346,241

Equity Shares

Rs. 10/- each

Rs. 1963.460 Millions

51,780,000

8.4% Optionally Convertible Cumulative Redeemable Preference shares

Rs. 10/- each

Rs. 517.800 Millions

 

Total

 

Rs. 2481.260 Millions

 

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.12.2005

31.03.2005

31.03.2004

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

2481.260

2118.760

1600.960

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

3873.040

2421.940

2421.940

4] (Accumulated Losses)

[4316.500]

[4038.080]

[3523.860]

NETWORTH

2037.800

502.620

499.040

LOAN FUNDS

 

 

 

1] Secured Loans

3844.390

3625.640

3704.210

2] Unsecured Loans

137.500

285.000

52.860

TOTAL BORROWING

3981.890

3910.640

3757.070

DEFERRED TAX LIABILITIES

 

 

 

 

 

 

 

TOTAL

6019.690

4413.260

4256.110

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

4299.550

4375.450

4080.410

Capital work-in-progress

497.430

101.330

170.980

 

 

 

 

INVESTMENT

780.000

570.000

0.000

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
14.000

18.210

11.620

 

Sundry Debtors
44.900

29.240

7.670

 

Cash & Bank Balances
820.130

95.220

33.500

 

Loans & Advances
389.260

309.260

473.050

Total Current Assets
1268.290

451.930

525.840

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
670.520

970.200

448.290

 

Provisions
155.060

115.250

72.830

Total Current Liabilities
825.580

1085.450

521.120

Net Current Assets
442.710

[633.520]

4.720

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

6019.690

4413.260

4256.110

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.12.2005

31.03.2005

31.03.2004

Sales Turnover

676.230

762.090

492.850

Other Income

29.920

21.690

26.910

Total Income

706.150

783.780

519.760

 

 

 

 

Profit/(Loss) Before Tax

[276.700]

[513.320]

[2837.790]

Provision for Taxation

1.720

0.900

[24.170]

Profit/(Loss) After Tax

[278.420]

[514.220]

[2813.620]

 

 

 

 

Earnings in Foreign Currency :

 

 

 

 

Deemed foreign currency receipts 

409.250

471.940

317.650

Total Earnings

409.250

471.940

317.650

 

 

 

 

 

Stores & Spares

21.280

248.280

0.000

 

Capital Goods

0.490

2.420

0.040

Total Imports

21.770

250.700

0.040

 

 

 

 

Expenditures :

 

 

 

 

Operation and other expenses

511.210

525.500

532.540

 

Borrowing costs

310.030

438.730

410.410

 

Depreciation

161.610

193.250

250.470

 

Prior period items

0.000

9.620

0.000

 

Impairment loss on fixed assets

0.000

0.000

2164.130

Total Expenditure

982.850

1167.100

3357.550

 

KEY RATIOS

 

PARTICULARS

 

31.12.2005

31.03.2005

31.03.2004

Debt-Equity Ratio

3.11

7.66

1.91

Long Term Debt-Equity Ratio

3.11

7.66

1.91

Current Ratio

0.96

0.79

0.87

TURNOVER RATIOS

 

 

 

Fixed Assets

0.12

0.11

0.07

Inventory

56.00

51.15

46.49

Debtors

24.33

41.31

102.67

Interest Cover Ratio

0.11

0.13

[5.92]

Operating Profit Margin(%)

28.82

32.69

[441.80]

Profit Before Interest And Tax Margin(%)

4.92

7.32

[492.63]

Cash Profit Margin(%)

[17.27]

[24.98]

[520.11]

Adjusted Net Profit Margin(%)

[41.17]

[50.35]

[570.94]

Return On Capital Employed(%)

0.00

0.00

0.00

Return On Net Worth(%)

0.00

0.00

0.00

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Fixed Assets

 

Ø       Land and site development

Ø       Dredging

Ø       Buildings

Ø       Plant and machinery

Ø       Railway sidings

Ø       Vehicles

Ø       Furniture and fixtures

Ø       Leasehold improvements

 

CHANGE IN FINANCIAL YEAR: 

 
As reported earlier, the company has changed its financial year from April - March to calendar basis and accordingly this Annual Report covers a period of 9 months from April to December 2005. 

 

PROJECT IMPLEMENTATION INITIATIVES: 

 
The project implementation has gained momentum during the year with achieving financial closure. The works relating to widening of existing jetty to facilitate use of quay cranes, augmentation of power supply from 220 KV power line & internal power distribution works, are under way. Capital dredging to facilitate berthing of vessels calling the port at a draught of 12.5 Meters has commenced in January 2006. Further new contracts have been awarded for construction of post Panamax Container Berth, development of container yard, and orders have been placed for purchase of 8 Nos. Rubber Tired Gantry Cranes. Negotiations for purchase of new post Panamax Quay Cranes are progressing and the orders would be placed shortly. The company has also initiated implementation of Environment Management Plan. The total amount of capital expenditure incurred till February 2006 is Rs.627.69 Million and capital commitments under implementation as on that date are Rs.1315.027 Million. 
 
All efforts are being taken to complete the project quickly and to recoup the time lost due to delay in change of shareholding and restructuring of the company.


Upon completion of dredging expected mid 2006, the port expects to improve its cargo throughput significantly. 

 
YEAR IN RETROSPECT & OTHER KEY DEVELOPMENTS: 

 
A brief statistical profile on port operations during the nine months period ended 31st December 2005 comprising of ships calling at Pipavav and volume of cargo handled is as under: 

 

 

Particulars

April-December 2005

April 2004- March 05 

No. of vessel calls at Pipavav

501

747

Bulk Cargo Handled (In MT.)

1,679,778

2,007,590

Containers Handled (TEU)

62,488

68,885 

 

With continued emphasis on improving performance & productivity levels, the company has been able to report better financial performance. 

 
PIPAVAV RAILWAY CORPORATION LIMITED (PRCL): 

 
With the opening of container train operations to the private sector, PRCL has obtained permission from Ministry of Railways to operate container trains. 

 
In addition, Railways recently flagged off the inaugural double stack container train for the first time in the country, from Jaipur to Pipavav, which on regular operations, is expected to improve volumes at reduced costs. 

 

Business

 

Subject is developing a private port known as "Pipavav Port".  It is under construction.

Subject is located in the Saurashtra region of the state of Gujarat at a distance of about 135 kms. South West of Bhavnagar. The potential of the Pipavav site, for the development of a deep-water port was known since 1937. For decades the port was functioning as Pipavav anchorage serving the then existing minor Port called 'Port Albert Victor'.

Port Pipavav India's first port in the private sector is operated by APM Terminals, the third largest container terminal operator in the World. APM Terminals is the largest shareholder in the port, the other shareholders of the company include New York Life International India Fund (Mauritius) LLC, IDFC Infrastructure Fund, The Infrastructure Fund of India, IL&FS Trust Company Limited, Jacob Ballas Capital India Private Limited, Unit Trust of India, Industrial Development Bank of India and India Infrastructure Fund.

Under Phase-I, three dry cargo berths and one LPG/Liquid cargo berth have been constructed. The three dry cargo berths have been constructed as a single length jetty of 725 meters, employing equipment capable of handling containers and bulk cargo. The fourth berth is an exclusive LPG/liquid cargo berth. The operations at the dry cargo berth began in November 1996 and the liquid cargo berth was commissioned in March 1999. The Port has handled more than 10.5 million tons of cargo till FY 05 and more than Rs. 7 billion has been invested in the development of the Port till now.

It has now embarked on a plan to create a world class container terminal and further enhance the bulk cargo handling facilities at the port. The plan provides the basis for creating a container terminal with a capacity to handle 1 million TEU's and handle 5 million MT of bulk cargo annually.

For further details, contact:
Mumbai
President Marketing
Tel: 91-22-2438 3301 / 30011300
Fax: 91-22-2438 3332

Port

Senior Vice President Operations
Tel: 91-2794-286001 / 092 / 041
Fax: 91-2794-286044

project milestones

 

1991

Sea King Engineers Limited submitted a proposal to the Government of Gujarat to develop Pipavav Port

1992

GPPL incorporated in August

1993-94

Studies done by Central Water Power Research Station (CWPRS), Pune; Howe India and DHV Environment, The Netherlands

1996

Commissioned the first berth in November.  Trial operations again

1998

30 year Concession Agreement Signed with Government of Gujarat / Gujarat Maritime Board

 

Strategic Alliance with PSA Corporation, Singapore

 

All dry cargo berths commissioned and operation

1999

Liquid Berth commissioned in March.  Gottwald Crane commissioned

2000

MOU signed with Indian Railways to set up joint venture for gauge conversion of Surendranagar – Rajula Line and laying new line till Pipavav.

 

Won IDFC Award for excellence in infrastructure

 

Technical studies done by National Institute of Ocean Technology, Chennai

2001

Pipavav Railway Corporation Limited (PRCL) incorporated.  Concession agreement signed with Indian Railways

 

Strategic Investment by A. P. Moller Group

 

Master plan prepared by Scott Wilson Kirk Patrick

2002

Nominated for an award by Lloyd’s List as an emerging container terminal in Asia

2003

Commissioning of the 269 kms long Broad Gauge Railway Line between Port Pipavav and Surendranagar.

 

Subject is India’s first port in the private sector.  The project is located in Pipavav, Gujarat.   It commissioned the first berth for trial runs in end 1996 and is today an operational port.  The company was previously a joint venture between the Government of Gujarat (Gujarat Maritime Board) and India’s Nikhil Gandhi Group (Sea King Infrastructure Limited).  In line with its port policy the Government disinvested its stake once the project was operational.  The current shareholders of f the company include A. P. Moller – Maersk Group (the world’s largest Container Shipping Line and 3rd largest Global Terminal Container Operator), PSA Corporation (2nd largest Global Terminal Operator), CDC UK, AMP Australia, New York Life, Industrial Development Bank of India and Unit Trust of India.

 

Over the past five years, the company has successfully overcome a number of risks and hurdles in difficult business conditions :

 

˜                  Formulating a legal and regulatory framework for private ports in India

˜                  Commissioning of a broad gauge railway line to the port (271 km) in April, 2003

˜                  Upgrading road infrastructure

˜                  Attracting credible anchor customers to support its business plan.  Today, the project has completed its gestation and is now poised to capitalize on its potential.

 

 

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.43.15

UK Pound

1

Rs.85.22

Euro

1

Rs.57.63

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

9

OPERATING SCALE

1~10

2

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

-

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

5

--RESERVES

1~10

4

--CREDIT LINES

1~10

3

--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

NO

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

39

 

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