MIRA
INFORM REPORT
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Report Date : |
19.04.2007 |
IDENTIFICATION
DETAILS
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Name : |
INDIAN PETROCHEMICALS CORPORATION LIMITED |
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Registered Office : |
P.O. Petrochemicals, Vdodara391 346, Gujarat |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
22.03.1969 |
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Com. Reg. No.: |
1569 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BRD100275C |
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PAN No.: [Permanent
Account No.] |
AAAC14415Q |
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Legal Form : |
Public limited liability company. The company’s shares are listed on the Stock Exchanges |
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Line of Business : |
Manufacturing and Marketing of polymers, ethylene glycol, fibre and fibre intermediates, catalysts, benzene, butadeine, ethylene, ethylene oxide, hydrocyanic acid, propylene, ortho xylene & mixed xylenes, paraxylene and other chemicals. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
RATING
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STATUS |
PROPOSED
CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded
healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
EUR 100000000 |
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Status : |
Satisfactory |
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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. The company's financial position is good. The company is progressing well. The company's payments are always correct and as per commitments. Recently, Reliance Group acquired substantial shares in the company through Government of India’s disinvestment programme. The company can be considered for any normal business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
P.O. Petrochemicals, Vdodara391 346, Gujarat, India |
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Tel. No.: |
91-265-669600 / 7000 |
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Fax No.: |
91-265-6693834 |
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E-Mail : |
investorrelations.corp@ipcl.co.in |
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Website : |
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Factory: |
Allahabad A/10-A/27, UPSIDC Industrial Area, Kailash Nagar, Karchana, E O. T.S.L., Dist. Allahabad - 211 010 Uttar Pradesh Barabanki Dewa Road, Somaiya Nagar, Barabanki - 225 123 Baulpur Baulpur, District Dhenkanal Orissa-759031 Gandhar E O. Dahej, Bharuch - 392 130, Gujarat Hoshiarpur Dharmshala Road, V.EO. Chohal, District Hoshiarpur, Funjab - 146 014 Nagothane E O Petrochemicals Township, Nagothane Raigad - 402 125, Maharashtra Nagpur Village Dahali Mouda Ramtek Road, TehsilMouda- 441104 District Nagpur, Maharashtra Silvassa 342, Kharadpada. Near Silvassa Union Territory of Dadra & Nagar Haveli - 396 235 Vadodara P. O. Petrochemicals Vadodara - 391 346, Gujarat |
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Mumbai Office : |
Air India Building, 19th Floor, Nariman Point,
Mumbai – 400 021, Maharashtra, India |
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Tel. No.: |
91-22-22021674 |
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Fax No.: |
91-22-22022664 |
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New Delhi Office : |
2nd Floor, Himalaya House, 23 Kasturba Gandhi Marg, New Delhi – 110 001, India |
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Tel. No.: |
91-11-23314291 |
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Fax No.: |
91-11-23327223 |
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Regional Office
: |
Commercial Complex, 1-B, 9, Gulmohar Cross Road, Juhu Vile Parle, Mumbai – 400 049, Maharashtra, India Air India Building, 19th Floor, Nariman Point, Mumbai – 400 021, Maharashtra, India Also located at: Bangalore, New Delhi, Ahmedabad, Vadodara, Ludhiana, Chennai and Kolkata |
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Sales Office : |
Located at Rajkot, Bhavnagar, Pune, Kanpur, Nagpur, Indore, Daman, Jaipur, Nagpur and Hyderabad. |
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International
Business Group (Export) : |
Located at Mumbai and Vadodara |
DIRECTORS
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Name : |
Mr. Mukesh D. Ambani |
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Designation : |
Chairman |
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Name : |
Mr. Nikhil R. Meswani |
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Designation : |
Director |
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Name : |
Mr. Anand J. Jain |
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Designation : |
Director |
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Name : |
Mr. Kamal P. Nanavaty |
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Designation : |
Director |
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Name : |
Mr. Rajendra S. Lodha |
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Designation : |
Director |
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Name : |
Mr. Shailesh V. Haribhakti |
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Designation : |
Director |
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Name : |
Mr. Lalit Bhasin |
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Designation : |
Director |
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Name : |
Mr. Sandeep H. Junnarkar |
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Designation : |
Director |
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Name : |
Mr. Shiv Kumar Bhardwaj |
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Designation : |
Director |
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Name : |
Mr. Sandesh K. Anand |
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Designation : |
Whole-time Director |
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Name : |
Mr. G. V. Ramani |
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Designation : |
Chief Financial Officer |
KEY EXECUTIVES
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Name : |
Ms. Shashikala Rao |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No of Share held |
Percentage of
Holding |
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Share Holding Promoter and Promoter Group2 |
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1) Indian |
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a) Individuals/ Hindu Undivided Family |
0 |
0.00 |
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b) Central Government/ States
Government |
0 |
0.00 |
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c) Bodies Corporate |
142370752 |
47.35 |
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d) financial Institutions/ Banks |
0 |
0.00 |
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e) Any Other (Specify) |
0 |
0.00 |
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Sub Total: (A)
(1) |
142370752 |
47.35 |
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2) Foreign |
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a) Individuals(Non Resident Individuals/ Foreign Individula) |
0 |
0.00 |
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b) Bodies Corporate |
0 |
0.00 |
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C) Institutions |
0 |
0.00 |
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d) Any Other (Specify) |
0 |
0.00 |
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SubTotal: (A)
(2) |
0 |
0.00 |
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Total of
Promoter and Promoter Group |
142370752 |
47.39 |
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B) Public
Shareholding 3 |
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1) Institutions |
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a) Mutual Funds/ UTI |
911958 |
3.03 |
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b) Financial Institutions |
7179865 |
2.39 |
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c) Central Government/ State Government |
1040604 |
0.35 |
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d) Venture Capital Funds |
0 |
0.00 |
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e) Insurance Companies |
37809416 |
12.57 |
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f) Foreign Venture Capital Investors |
30405632 |
10.11 |
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h)Any Other (Specify) |
0 |
0.00 |
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Sub Total: (B)
(1) |
85547475 |
28.45 |
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2) Non
Institutions |
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a) Bodies
corporate |
25383854 |
8.45 |
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b) Individuals i. Individual shareholders holding nominal share capital upto Rs.
0.100 Millions |
43646627 |
14.51 |
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ii. Individual Share Holders holding nominal share capital in excess
of Rs.0.100 Millions |
2475009 |
0.82 |
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c) Any Other
(Specify) |
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i. NRIs/ OCBs |
945801 |
0.31 |
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ii. Pending Confirmation |
0 |
0.00 |
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Sub Total:(B)
(2) |
72477457 |
24.10 |
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Total Public
Share Holding B= (B)(1)+(B) (2) |
158024932 |
52.55 |
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Total(A) +(B) |
300395684 |
99.90 |
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C) Sahres held
by Custodians and against which Depository Receipts have been issued |
307114 |
0.10 |
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Grand Total (A)
+ (B) + (C) |
300702798 |
100.00 |
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BUSINESS DETAILS
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Line of Business : |
Manufacturing and Marketing of polymers, ethylene glycol, fibre and fibre intermediates, catalysts, benzene, butadeine, ethylene, ethylene oxide, hydrocyanic acid, propylene, ortho xylene & mixed xylenes, paraxylene and other chemicals. |
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Products : |
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PRODUCTION STATUS
As at 31.03.2006
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Polymers |
MT |
NA |
1252690 |
1176682 |
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Ethylene Glycol * |
MT |
196100 |
264480 |
239149 |
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Catalysts |
MT |
NA |
60 |
-- |
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Benzene |
MT |
55000 |
55000 |
30217 |
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Butadeine |
MT |
36000 |
36000 |
-- |
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Ethylene Oxide |
MT |
830000 |
830000 |
14216 |
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Hydrocynic Acid |
MT |
25000 |
25000 |
17247 |
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Propylene |
MT |
3600 |
3600 |
3208 |
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Polyester Staple Fibre/Chips |
MT |
235460 |
235460 |
279685 |
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Polyester Yarn |
MT |
NA |
268300 |
11313 |
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Polyester Texturised/twist yarn |
MT |
NA |
22800 |
100884 |
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Other Fibre & Fibre Intermediates |
MT |
NA |
132000 |
33863 |
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Ortho Xylene & Mixed Xylene |
MT |
47900 |
94012 |
-- |
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Paraxylene |
MT |
48600 |
47900 |
-- |
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Other Chemicals |
MT |
NA |
1425915 |
424795 |
GENERAL
INFORMATION
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No. of Employees : |
13740 |
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Bankers : |
ABN AMRO Bank Bank of America Bank of Baroda Bank of India Citibank N.A. HDFC Bank Limited ICICI Bank Limited Standard Chartered Bank State Bank of India State Bank of Saurashtra |
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Facilities : |
Notes: 1. Debentures referred to in A(a) above consist of (i) 9.9% 'S' Series
Debenture of Rs.1.000 Millions each aggregating Rs.350.000 Millions redeemable at par on 25th June, 2007 and (ii) 9.6% T' Series Debenture of
Rs.100.000 Millions each aggregating
Rs. 400.000 Millions redeemable at par on 12th July, 2007. The Debentures are secured by way of first equitable mortgage on all
those pieces and parcels of land admeasuring 2.04 acres situated at Village
Angadh, District Vadodara in the State of Gujarat together with all the
structures thereon and on all plant, machinery and equipments both present
and future attached thereto, located at the Vadodara Complex of the Company. 2. (a) Debenture Suspense Account includes Optionally Fully
Convertible Debentures aggregating Rs.1450.000 Millions, the holders of which
have exercised the conversion option by making an application with further
payments of Rs.2610.000 Millions. In terms of and pursuant to the Scheme of
Amalgamation and upon exercise of the conversion option, the aggregate amount
of Rs. 4060.000 Millions has been appropriated and 1,33,55,263 Equity Shares of Rs. 10 each credited as fully paid up have been allotted
on 13th October, 2006 to the debentureholders. (b) Balance Debentures under Debenture Suspense Account aggregating
Rs. 2689.500 Millions are to be allotted to the secured creditors including debenture holders of the transferor companies in terms of the Scheme
of Amalgamation sanctioned by Gujarat High Court. Such debentures shall be secured by the mortgages and charges over the properties
acquired by the Company pursuant to the Scheme. These Debentures are
redeemable at par, in one or more instalments, on various dates, with the
earliest redemption being on 31st March, 2007 and the last being on 6th May,
2015. 3. Term Loans are secured as under: (a) Foreign currency term loan referred to in B(a) above are secured
on land admeasuring 1 acre situated at Village Angadh, District Vadodara in the State of Gujarat together with all the structures thereon and
all plant, machinery & equipments both present and future attached thereto, and the whole of the other fixed assets of Vadodara and
Gandhar Complexes of the Company except all the pieces and parcels of land of the said complexes. (b) Rupee loan referred to in B(b) above are to be secured by way of
first charge over Plant and Machinery situated at Silvassa unit and second charge over fixed assets, present and future, except the assets which
are exclusively charged to other banks/ financial institutions etc. 4. Working capital loans from Banks referred to in C above are
secured/to be secured by hypothecation of stocks of raw materials,
stock-inprocess, finished goods, stores, receivables and goods in transit of our
Vadodara, Gandhar, Nagothane, Allahabad and Silvassa units.
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Messrs Deloitte Raskins & Sells Chartered Accountant Messrs Chaturvedi & Shah Chartered Accountant |
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Memberships : |
Confederation of Indian Industry |
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Collaborators : |
ABB Lummus Crest, U.K. Asahi Chemical Industry, Japan BP Chemicals, U.S.A. Dynamit Nobel, Germany ELF Atochem, France General Electric Company, U.S.A. Krupp GmbH, Germany Technimant, Italy OUP Inc., U.S.A. |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
400000000 |
Equity Shares |
Rs.10/- each |
Rs.4000.00 Millions |
|
400000000 |
Preference Shares |
Rs.10/- each |
Rs.4000.00 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
248225622 |
Equity Shares |
Rs.10/- each |
Rs.2482.200
Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
2490.500 |
2490.500 |
2490.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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Equity Shares Suspense |
391.200 |
0.000 |
0.000 |
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3] Reserves & Surplus |
46819.200 |
26720.000 |
20230.700 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
49700.900 |
29210.500 |
22721.200 |
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LOAN FUNDS |
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1] Secured Loans |
5962.400 |
6598.500 |
11900.300 |
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2] Unsecured Loans |
6051.700 |
1004.000 |
9760.200 |
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TOTAL BORROWING |
12014.100 |
7602.500 |
21660.500 |
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DEFERRED TAX LIABILITIES |
11006.100 |
11011.600 |
9672.300 |
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Liability for Leased Assets |
4599.800 |
4933.900 |
5279.100 |
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TOTAL |
77320.900 |
52758.500 |
59333.100 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
58613.00 |
50050.000 |
53859.300 |
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Capital work-in-progress |
970.700 |
588.000 |
806.600 |
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INVESTMENT |
1798.200 |
1653.300 |
1512.300 |
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DEFERREX TAX ASSETS |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
12261.300
|
6231.200 |
7731.000 |
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Sundry Debtors |
4504.800
|
7010.600 |
4032.900 |
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Cash & Bank Balances |
10795.700
|
6648.200 |
506.100 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
16525.500
|
4565.800 |
3770.800 |
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Total
Current Assets |
44087.300
|
24455.800 |
16040.800 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
23841.000
|
19994.700 |
10885.000 |
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Provisions |
4307.300
|
3993.900 |
2000.900 |
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Total
Current Liabilities |
28148.300
|
23988.600 |
12885.900 |
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Net Current Assets |
15939.0000
|
467.200 |
3154.900 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
77320.900 |
52758.500 |
59333.100 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
Sales Turnover |
109224.000 |
81991.200 |
80695.200 |
|
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Other Income |
2669.300 |
1321.700 |
0.000 |
|
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Variation in stock |
2324.100 |
29.200 |
0.000 |
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Total Income |
114217.400 |
83342.100 |
80695.200 |
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Profit/(Loss) Before Tax |
15941.900 |
10256.500 |
3365.600 |
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Provision for Taxation |
4304.400 |
2399.200 |
630.000 |
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Profit/(Loss) After Tax |
11637.500 |
7857.300 |
2735.600 |
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Earnings in Foreign Currency : |
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Export Earnings |
16042.900 |
16085.200 |
27431.400 |
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Total Earnings |
16042.900 |
32128.100 |
27431.400 |
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Imports : |
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Raw Materials+ |
13610.900 |
12222.300 |
0.000 |
|
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Stores & Spares |
1778.800 |
1391.300 |
0.000 |
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Capital Goods |
648.300 |
123.800 |
0.000 |
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Others |
694.900 |
51.800 |
8669.200 |
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Total Imports |
16732.900 |
13789.200 |
8669.200 |
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Expenditures : |
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|
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Purchase |
1119.700 |
636.500 |
0.000 |
|
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Manufacturing Expenses |
90193.000 |
65769.100 |
0.000 |
|
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Interest |
1347.900 |
1623.00 |
0.000 |
|
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Depreciation & Amortization |
5614.900 |
5057.000 |
77329.600 |
|
Total Expenditure |
98275.500 |
73085.600 |
77329.600 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2006 |
30.09.2006 |
31.12.2006 |
|
Type |
1st
Qtr |
2nd
Qtr |
3rd
Qtr |
|
Sales
Turnover |
3,0180.000 |
3,0480.000 |
3,0560.000 |
|
Other
Income |
620.000 |
1180.000 |
740.000 |
|
Total
Income |
3,0800.000 |
3,1660.000 |
3,1300.000 |
|
Total
Expenditure |
2,4590.000 |
2,4110.000 |
2,3750.000 |
|
Operating
Profit |
6210.000 |
7550.000 |
7550.000 |
|
Interest |
510.000 |
370.000 |
320.000 |
|
Gross
Profit |
5700.000 |
7180.000 |
7230.000 |
|
Depreciation |
1320.000 |
1350.000 |
1440.000 |
|
Tax |
1580.000 |
2100.000 |
1940.000 |
|
Reported
PAT |
2580.000 |
3510.000 |
4050.000 |
200606 EPS is Basic 1. The figures for the corresponding
periods have been restated, wherever necessary, to make them comparable. 2.
Provision for current tax includes provision for Fringe Benefit Tax (FBT) of Rs
9.00 million (US$ 0.2 million) for the quarter ended June 30, 2006 (previous
year Rs 50 million). 3. The Company is a Petrochemicals manufacturing company.
All other activities of the company revolve around the main business. As such,
there are no separate reportable segments, as defined by AS-17 (Segment
Reporting issued by the Institute of Chartered Accountants of India. The
Capital employed as on June 30, 2006 was Rs 60450 million (US $ 1313 million).
4. In accordance with the Accounting Standard 15 (revised 2005) - Employee
Benefits issued by the Institute of Chartered Accountants of India effective
from April 01, 2006, the employee benefits mainly on account of leave
encashment and gratuity has been accounted by adjusting Rs 340 million to the
opening balance of revenue reserves as on April 01, 2006 and Rs 40 million for
the quarter as a charge to the profit and loss account. 5. The Board of
Directors of Indian Petrochemicals Corporation Ltd (IPCL), at their meeting
held on April 25, 2006, had approved the merger of Appollo Fibres Ltd (AFL),
Central India Polyesters Ltd (CIPL), India Polyfibres Ltd (IPL), Orissa
Polyfibres Ltd (OPL), Recron Synthetics Ltd (RSL), and Silvassa Industries Pvt
Ltd (SIPL) (collectively the 'Transferor Companies') with IPCL with effect from
April 01, 2005, subject to necessary approvals. As directed by Hon'ble High
Court of judicature of Gujarat at Ahmedabad, the meetings of equity
shareholders, secured and unsecured creditors of the Transferor Companies and
the Company were held on July 13, 2006 and July 14, 2006 respectively.
Petitions seeking sanction of the Gujarat High Court for the Scheme have been
filed by the Company as well as each of the Transferor Companies. The
accounting effects consequent to the said merger proposal will be given on
completion of the required approvals and the court's sanctions. 6. The above
results were reviewed by the audit committee. The Board of Directors at its
meeting held on July 18, 2006 approved the above results and its release. 7.
The Statutory Auditors of the Company have carried out a Limited Review of the
results for the quarter ended June 30, 2006.
200609 Notes Expenditure includes (Increase)/Decrease in
stock in Trade Rs (1360.00)million Consumption of Raw Materials / Purchases
(including traded goods) Rs 17290.00 million Staff Cost Rs 1210.00 million
Other expenditure Rs 6970.00 million Interest Includes Interest Rs 200.00
million Finance Charge on leased assets Rs 170.00 million Tax Includes
Provision for Current Tax Rs 2100.00 million Deferred Tax (Asset)/Liability Rs
220.00 million EPS is Basic Status of Investor Complaints for the quarter ended
September 30, 2006 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter 313 Complaints disposed off during the
quarter 313 Complaints unresolved at the end of the quarter Nil 1. The figures
for the corresponding periods have been re-stated wherever necessary to make
them comparable. 2. In accordance with the accounting Standard 15 (revised
2005) - Employee Benefits issued by the Institute of Chartered Accountants of
India effective from April 01, 2006 the employee benefits mainly on account of
leave encashment and gratuity has been accounted by adjusting Rs 480 million
including for the acquired units employees (net of deferred tax) to the opening
balance of revenue reserves as on April 01, 2006 and Rs 50 million for the
quarter and Rs 100 million for the half year as a charge to the Profit and Loss
Account. 3. Provision for current tax includes provision for Fringe Benefit Tax
(FBT) of Rs 10 million (US$ 0.25 million) and Rs 20 million (US$ 0.5 million)
for the current quarter/first half of FY 2006-07, respectively and Rs 40
million (US$ 0.87 million) for the year ended March 31, 2006. 4. The Company is
a Petrochemical manufacturing company. All other activities of the Company
revolve around the main business. As such, there are no separate reportable
segments, as defined by AS-17 (Segment Reporting) issued by the Institute of
Chartered Accountants of India. The Capital employed as on September 30, 2006
was Rs 84650 million (US$ 1,843 million). 5. The shareholders of Indian
Petrochemicals Corporation Ltd had approved the scheme of amalgamation of
Appollo Fibres Ltd, Central India Polyester Ltd, India Polyfibres Ltd, Orissa
Polyfibres Ltd, Recron Synthetics Ltd and Silvassa Industries Pvt Ltd with IPCL
with April 01, 2005 as the appointed date. The above scheme has been approved
by Hon'ble High court of Gujarat effective from September 27, 2006. Consequent to
the above merger 5,24,77,176 additional equity shares of the Company were
issued and allotted on October 13, 2006. 6. The above results were reviewed by
the audit committee. The Board of Directors at its meeting held on October 17,
2006 approved the above results and its release. 7. The statutory auditors of
the Company have carried out a Limited Review of the results for the half-year
ended September 30, 2006.
KEY RATIOS
|
PARTICULARS |
310.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity
Ratio |
0.25 |
0.56 |
1.21 |
|
Long
Term Debt-Equity Ratio |
0.23 |
0.37 |
0.66 |
|
Current
Ratio |
0.81 |
0.53 |
0.46 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
1.18 |
0.97 |
0.94 |
|
Inventory |
13.37 |
13.44 |
10.30 |
|
Debtors |
21.47 |
17.00 |
25.72 |
|
Interest
Cover Ratio |
12.83 |
7.32 |
2.61 |
|
Operating
Profit Margin(%) |
18.53 |
18.05 |
13.88 |
|
Profit
Before Interest And Tax Margin(%) |
13.99 |
12.66 |
8.66 |
|
Cash
Profit Margin(%) |
13.96 |
13.76 |
9.57 |
|
Adjusted
Net Profit Margin(%) |
9.41 |
8.37 |
4.34 |
|
Return
On Capital Employed(%) |
35.10 |
29.26 |
15.57 |
|
Return
On Net Worth(%) |
29.64 |
30.26 |
17.17 |
STOCK PRICES
|
Face Value |
Rs.10.00 |
|
High |
Rs.296.40 |
|
Low |
Rs.292.10 |
LOCAL AGENCY
FURTHER INFORMATION
History
The company was incorporated on 22nd March 1969 at Vadodara in Gujarat having Company Registration Number 1569.
It was converted into a public limited company in 1986.
Subject was promoted by Government of India. It commenced its operations in 1973, with an aromatic complex, located at Vadodara. It commissioned a naphtha cracker at the same location with a capacity of 0.13 mn metric tonnes per annum of ethylene. It took up a major expansion by setting up an integrated gas-based petrochemical complex at Nagothane, 120 km from Mumbai. It also took over an ailing catalyst and adsorbent (CATAD) unit from ACC.
Till January 1992, the Government of India was the sole shareholder of the company.
The company’s 60% of the equity capital was held by the Government of India, 17% by the FII/Mutual Fund and balance 23% by the Public.
Reliance Industries has acquired 26% of the equity stake in the company through the divestment made by Government of India on June 4, 2002. With this disinvestment the Government of India’s stake in the company has come down to 34%. The RPIL has made an open offer to the shareholders of company and acquired 49.600 millions shares at a price of Rs. 231/- per share, representing 20% of the total voting capital, thereby increasing the equity stake to 46% in the company.
Today, subject is one of the leading petrochemical companies. Its business
comprises of polymers, synthetic fiber, fiber intermediates, solvents,
surfactants, industrial chemicals, catalysts and adsorbents. Backed by strong
Research Center, Product Application Centers and Technology Management Centres
the company is continuously innovating its processes and products. The company
owns and operates three petrochemical complexes, naphtha based complex at
Vadodara and gas based complexes at Nagothane near Mumbai and at Dahej on
Narmada estuary in Bay of Khambat. The company also owns a catalyst
manufacturing facility at Rabale, Navi Mumbai.
Subject is the main promoter of a joint venture (JV) under the auspices of Gujarat
Chemical Port Terminal Company Limited (GCPTCL), incorporated in 1992. The
objective of this joint venture was to construct and operate a state of the art
liquid chemical handling port at Dahej. This project was promoted as a JV with
six partners. The port had been commissioned and would open up opportunities
for international trade in chemicals in a big way. In view of the strategic
importance of the port the company has increased its stake from present 30% to
37% as part of its consolidation strategy.
Moreover the company and General Electric Plastics (GEP) BV, The Netherlands
has also jointly ventured to manufacture advanced engineering plastics in
India. This was the first time a multinational company joined hands with an
Indian Public Sector with equal equity participation. An agreement was signed
between the company and GEP to form a 50:50 joint venture in 1991. A joint
venture company, General Electric Plastics India Limited (GEPI) was
incorporated during the same period. A key feature of the joint venture is that
it will cover in its territories of operation, the neighbouring countries and
Middle East, which were earlier covered by GE Plastics, The Netherlands. The
company has decided to pullout from this business. The negotiations for sale of
company's stakes to GE Plastics, BV, The Netherlands. The company has decided
to pullout from this business.
The Government of India has directed the company to sell its' Vadodara unit to the Indian Oil Corporation after a proper valuation of assets and at a mutually negotiated price. The two companies, however, has not reached a consensus on the price at which the plant should be sold and hence the same is still pending.
In pursuance of the approval accorded by the Government of India to the formation of the joint venture company, GEPI was incorporated on 9th December 1991 and the Registered Office of the company was based in the State of Gujarat. The joint venture company was incorporated to achieve set objectives and the authorised share capital of the joint venture company was fixed at Rs. 500 millions divided into 5 million equity shares of Rs. 100 each and the shares were subscribed and paid up for in cash, equally by IPCL and GEPE. The share of the company as on 31st March, 2001 was Rs. 250 millions comprising of 2.5 million equity shares of Rs. 100 each in the capital of joint venture company GEPE.
The company is currently focusing on improving its performance by laying continued thrust on supply chain management, capacity utilisation, maximising sales revenue in terms of value and volume by strategic positioning of the products in domestic as well as overseas markets. Emphasis is also laid on optimising the logistic and overall productivity in the manufacturing units of the company.
The company’s main agenda for the current fiscal was consolidation whereby it will be reviewing its investments in non-core sector and concentrating its activities only in chemicals and petrochemicals. In this regard the company will be offloading its stake in GEPI and pulling out of India Vaccines Corporation Limited which is in the business of oral vaccines since they had not contributed significant returns to the company and there was little business synergy.
The company had chalked out expansion plans for the next 5 years which involves capacity addition at Baroda, Nagothane, Gangadhar Complexes and joint ventures in the upstream and down stream units, for efficient resource mobilisation and product utilisation.
However, the company had shelved any major capex for the next two years primarily because of two reasons. During 2002-03 the company has divested its equity in GE Plastics India Limited. The company has made on major investment in Gujarat chemical Port Terminal Company Limited, equipped with an modern liquid cargo handling port facility.
The company together with Department of Biotechnology and Pasteur Merius Serums and Vaccines, France, promited IVCOL to establish commercial production of injectible polio Vaccines in India. After RIL had acquired management control of the company, the IVCOL project was reviewed in depth. Since Reliance Life Sciences Private Limited is engaged in the field of biotechnology research, it had been decided to utilize the expertise in setting up biotechnology based production facilities at IVCOL site. The discussions are underway with Government of India for acquiring the management of IVCOL.
In February 2004, Government of India has disinvested another 28.945% stake through offer for sale. Out of 29%, 5% is reserved for Reliance group. The mode of sale : Sold through Offer for Sale by Government of India. The details of sale are as follows: (1) 3,59,25,020 shares were sold to QIBs @ Rs. 170/- per share. (2) 1,40,44,170 shares were sold to Non-Institutional Investors @ Rs. 170/- per share. (3) 2,18,80,858 shares were sold to Retail Investors @ Rs. 161.50 per share. The shareholding of The Government of India after the sale is 1,24,11,282 shares amounting to 5% of the total share capital of the company.
The company joint venture with:
· Gujarat Chemical Port Terminal Company Limited
· Gujarat State Fertilizers and Chemicals Limited
· Gujarat Industrial Investment Corporation Limited
· Gujarat Maritime Board
· Gujarat Industrial Development Corporation
· Indian Vacines Corporation Limited
Management's Discussion and Analysis Report
Overall Review
Significantly improved business performance in conducive economic
conditions partially offset by the
increased prices of raw materials.
In 2005-06, raw material prices for petrochemical products increased
significantly led by higher crude oil and
natural gas prices. However, strong economic conditions led to a robust
growth in the downstream industries
allowing petrochemical manufacturers to pass on a majority of the impact
of higher raw material costs on to its consumers. As a consequence, prices of
most petrochemicals products increased as compared to the previous year. Under
these conditions, operating rates of ethylene crackers continued to be high
globally on account of sustained demand and lack of new capacities. Margins for
petrochemical products were affected by higher natural gas, naphtha and propane
prices.
Subject is well positioned to benefit from the sustained cyclical
upswing in order to deliver superior returns to its
shareholders.
Amalgamation of six Polyester Companies resulting in forward integration
of petrochemicals chain.
The following six polyester companies have been amalgamated with IPCL:
• Appollo Fibres Limited (AFL)
• Central India Polyesters Limited
(CIPL)
• India Polyfibres Limited (IPL)
• Orissa Polyfibres Limited (OPL)
• Recron Synthetics Limited (RSL)
• Silvassa Industries Private Limited
(SIPL)
The amalgamation was approved by the shareholders and creditors of all the
six companies and IPCL. The Appointed Date of amalgamation is April 1, 2005.
The Scheme of Amalgamation was sanctioned by the Hon'ble High Court of Gujarat
at Ahmedabad by its Order dated August 18, 2006. The said Order was filed with
the Registrar of Companies, Cujarat at Ahmedabad on September 27, 2006 and has
thus become effective.
The exchange ratio for the equity shares as set out in the Scheme was as
under:
• Appollo Fibres Limited
- 1:25
• Central India Polyesters Limited
-1:23
• India Polyfibres Limited
-1:28
• Orissa Polyfibres Limited
-1:28
• Recron Synthetics Limited
-1:34
• Silvassa Industries Private Limited
-1:38
The Company has issued 5,24,77,176
equity shares of Rs. 10/- each to the investors of the transferor
companies in terms of and pursuant to the Scheme of Amalgamation.
Post-amalgamation, IPCL's share capital has increased from 24-82 crore equity
shares to 300.700 Million equity
shares.
The Company has also allotted
debentures aggregating Rs. 2689.500 Millions in terms of the Scheme to
the secured creditors (including debenture holders and bond holders) of the
Transferor Companies. The Company is in the process of creating security on
these debentures and registering charge
thereon.
Superior Financial and Operating Performance
The year 2005-06 was the fourth year of IPCL's operations under the
Reliance management. The initiatives introduced to increase capacity
utilization, improve integration, reduce operating costs, improve financial
management and enhance overall productivity and efficiency have resulted in
continuous improvement in financial and operating performance on a year on year basis.
During the year, IPCUs turnover increased to Rs. 12,3620.000 Millions
which is 32% higher over the previous year, and increase by more than 2 times
from Rs. 5,5270.000 Millions in Financial Year 2001-02. Net Profit increased to
Rs. 1,1640.000 Millions which is 48 % higher over the previous year. The"
net profit has increased from Rs. 1070.000Millions in 2001-02 to Rs. 1,1640.000
Millions in 2005-06, reflecting an increase of 11 times, after Reliance
acquired management control in June 2002.
IPCLs manufacturing complexes at Vadodara and Nagothane achieved the
same high level of production as in 2004- 05 without any significant variation
whereas the Gandhar Complex recorded an increase of 10% in production of major
products. As a consequence, IPCLs total production for the year was at 5,772
KTA, including the production from the merged polyester facilities.
Financial Review
IPCLs Turnover for the year ended March 31, 2006 increased to Rs.
12,3620.000 Millions, as compared to Rs. 9,3860.000 Millions in the previous
year, registering a significant growth of 32% over the previous year. Turnover
includes sale of traded products of Rs. 1170.000 Millions, compared to Rs.
680.000 Millions in the previous year registering a growth of 72%.
Net turnover for the year, excluding excise duty recovered on sales and
sale of traded products increased by 33% to Rs. 10,8050.000 Millions. The increase
reflects the impact of an increase of 4% in product selling prices and 29% in
sales volume thus showing a significant growth in demand and IPCLs market
share.
Outstanding GDR/Warrants/ Convertible Instruments
Outstanding GDRs as on March 31, 2006 represent 307114 shares
constituting 0.12% of the paid up equity share capital of the Company. There
are no other outstanding instruments, which are convertible into Equity Shares
of the Company.
Overview
The turnover for the year increased by 32 1 from Rs. 9,3860.000 Millions
to Rs. 12,3620.000 Millions (US$ 2,771 million). The highlight of the year is
the amalgamation of six polyester companies with IPCL resulting in forward
integration of the petrochemical chain. The Net Profit (PAT) for the
year was Rs. 1,1640.000 Millions, an increase of more than five times in last
three years.
Dividend
The Board of Directors had declared interim dividend of Rs. 5.50 (Rupee
Five and Paisa Fifty) per equity share on 24,82,25,622 equity shares of Rs. 10
each for the financial year 2005-06. The said dividend was paid to
the shareholders of the Company as on the Record Date (May 20, 2006)
fixed for the purpose. Dividend has been paid to the shareholders The dividend
pay-out has been formulated in accordance with the Company's policy to
pay dividend linked to long term performance, keeping in view the
Company's need for capital, its growth plans
and the intent to finance such plans through internal accruals to the
maximum. Your directors believe in sustained increase in shareholder value,
eventually resulting in a higher return threshold and accordingly the Board of
Directors has considered the interim dividend paid as the final dividend for
the year ended March 31, 2006.
Scheme of
Amalgamation
Appollo Fibres Limited, Central India Polyesters Limited, India
Polyfibres Limited, Orissa Polyfibres Limited, Recron Synthetics Limited and
Silvassa Industries Private Limited (collectively the "Transferor
Companies") have been amalgamated with the Company, the Appointed
Date being April 01, 2005. The Scheme of amalgamation was sanctioned by Hon'ble
High Court of Judicature of Gujarat, at Ahmedabad by its Order dated August 18,
2006 and the Scheme has become effective from September 27, 2006.
The amalgamation of the Transferor Companies with IPCL would enhance
efficiency throughout the value chain and ensure optimum utilisation of the
resources.
Pursuant to the Scheme of amalgamation, the Company has issued
5,24,77,176 new equity shares of the Company and these shares are being listed
with the Bombay Stock Exchange Limited and National Stock Exchange of India
Limited.
Fixed Assets:
Own Assets:
Lease hold Land
Freehold Land
Building Plant and Machinery
Railway Sidings
Furniture and Fixture
Vehicles and Locomotives
Jetties
AS PER WEBSITE
Subject is the pioneering petrochemical
company in India. It was established on March 22, 1969 (Chitra, Shukla Paksh 4,
Saka 1891). Today, IPCL is one of the leading petrochemical companies. It's
business comprises of polymers, synthetic fiber, fiber intermediates, solvents,
surfactants, industrial chemicals, catalysts and adsorbents. Backed by strong
Research Center, Product Application Centers, Technology Management Centers and
Customer Relations Centres the company is continuously innovating its processes
and products. The company owns and operates three petrochemical complexes, a
naphtha based complex at Vadodara and gas based complexes at Nagothane near
Mumbai and at Dahej on Narmada estuary in bay of Khambhat. The company also
owns a catalyst manufacturing facility at Rabale, Navi Mumbai. The company
produces over one million tonnes of merchant products and has turnover close to
US $ two billion.
The company was managed by a board nominated by Government of
India till June 4, 2002. The Government of India as a part of its divestment
programme divested 26% of company's equity shares in favor of Reliance
Petroinvestments Ltd. through an open, transparent and competitive bidding
process. The share transfer was effected on June 4, 2002. The company is now a
new entrant to Reliance family, India's fastest growing and most admired
private sector group founded by a visionary entrepreneur late Mr. Dhirubhai H.
Ambani. Reliance has acquired additional 20% of equity shares from public
through public offer and now holds 46% of company's equity shares. The new
board has six members nominated by Reliance, two nominated by Government of
India and four independent members.
The company is the pioneering petrochemical company in India was
incorporated on March 22, 1969. This decision was the outcome of several
studies carried out by scientists as well as economists. The company’s business portfolio today comprises of
polymers, synthetic fibers, fibre intermediaries, surfactants, commodity
chemicals, catalysts and absorbants. The company owns and operates three
petrochemcial complexes, a naphtha based complex at Vadodara and one gas based
complex each at Nagothane and Dahej. The company also owns a catalyst
manufacturing facility at Navi Mumbai.
The company now is managed by Reliance Group set up by Late Mr.
Dhirubhai H. Ambani.
|
DATE |
EVENT |
|
Committee appointed by Government of India under the Chairmanship of
Dr. GP Kane. |
|
|
Committee chaired by Dr. GP Kane submits report. |
|
|
The first technology agreement was signed between President of India
and Fried Krupp G.m.b.h., Chemiean Lagenbao, Federal Republic of Germany.
This agreement was for Gujarat Aromatics Project. |
|
|
IPCL incorporated |
|
|
First logo (seal) of the company adopted in the first board meeting . |
|
|
Dr.Triguna Sen, the then Union Minister for Petroleum and Chemicals and
Mines and Metals laid the foundation stone of Gujarat Aromatics Project . |
|
|
First technology transfer agreement was signed by IPCL Chairman cum
Managing Director with Lummus Company , UK for Gujarat Olefins Project
(Naphtha Cracker) |
|
|
Prime Minister, Mrs. Indira Gandhi laid foundation stone of Gujarat
Olefins Project. |
|
|
Gujarat Aromatics Project (Dimethyl Terephthalate plant) commissioned |
|
|
Gujarat Aromatics Project (Xylenes plant) commissioned |
|
|
First export of IPCL product.State Trading Corporation of India
Ltd.(STC) exported IPCL's orthoxylene through Kandla Port. |
|
|
Gujarat Olefins Project (Naphtha Cracker) Commissioned |
|
|
All plants of Vadodara Petrochemicals Complex Commissioned |
|
|
The Vadodara Complex was dedicated to the nation by Mr. Morarji R.
Desai, Prime Minister of India |
|
|
Government of India approved the setting up of a petrochemicals
complex at Nagothane, (Maharashtra) |
|
|
The foundation stone of Nagothane complex laid by Mr. Narian Dutt
Tiwari, the then Minister of Industry, Government of India |
|
|
First Bond issue totaling INR 400 million offered to public in India
on October 9, 1986. New company logo came in force. Issue closed on earliest
closing day, October 24, 1986. Received INR 960 million. |
|
|
IPCL strategically acquired the loss making Catalysts and Adsorbents
division of Associated Cement Companies (ACC) at Rabale, Navi Mumbai. |
|
|
Mr. Rajiv Gandhi, Prime Minister of India laid the foundation stone
for the petrochemicals and Chlor-Alkali complex at Dahej in Gujarat |
|
|
Trial start up of the gas cracker at Nagothane Complex with an
alternative feed stock, namely LPG, |
|
|
IPCL enters into a joint venture with General Electric Plastic, BV
Netherlands, making it the first time a multinational ties up with a Public
Sector unit from India, with equal equity holdings |
|
|
IPCL was rated as the best performing petrochemical company world wide
by Chemical Insight, London |
|
|
The first lot of shares sold by government of India were transferred.
Unit Trust of India with others became the first set non government share
holders in IPCL. |
|
|
The final investment clearance for setting up Petrochemicals and
Chlor-Alkali complex based on gas from Gandhar oil fields at Dahej in Gujarat
was granted. |
|
|
After a few teething problems at Nagothane Complex, the gas cracker,
along with the low density polyethylene, mono-ethylene glycol and polypropylene
plants, were stabilized. |
|
|
Domestic public issue for 20 million equity shares of face value of INR
10 with a premium of INR 150 in November 1992. The issue opened on November
16, 1992 and closed on November 19, 1992, the earliest closing date, the
issue was oversubscribed by four times. |
|
|
The GDS issue for US $ 85 million opened. The issue was priced at US
13.875 per GDS, with each GDS had underlying three equity share |
|
|
IPCL Receives the prestigious Economic Times - Harvard Business School
Association of India award for outstanding over all performance for the year
1995-96 in the public sector |
|
|
IPCL receives the Sword of Honor from the British Safety Council for
its commitment to adopting high standards of safety in all its units. |
|
|
Captive jetty at Jageshwar in Narmada Estuary commissioned, first ship
carrying vinyl chloride monomer arrives. |
|
|
Caustic Soda and Polyvinyl chloride plant at Dahej (Gandhar Complex)
commissioned. |
|
|
The company offered FCCB's worth US $ 175 million, Conversion price is
US $ 13 per GDS. The first issue from Asia to pierce Sovereign rating . |
|
|
Ethylene cracker at Nagothane Complex expanded from 300,000 MTA
ethylene to 400,000 MTA ethylene, lldPE plant to expanded from 160,000 MTA to
220,000 MTA. |
|
|
IPCL Board reconstituted with induction of four non-official part time
Directors. With this, the Board was given enhance delegation of powers,
principally, to incur capital expenditure without any monetary ceiling. |
|
|
Government of India decides to reduce equity holding to 26% and hand
over management control to a strategic partner. |
|
|
Government of India invites bids from Merchant Bankers to facilitate
disinvestment of 25% equity shares of IPCL to a strategic partner. |
|
|
IPCL became the largest producer of polyethylenes with widest range on
commissioning of 160,000 MTA high density polyethylene plant at Gandhar. |
|
|
Advertisement for inviting Expression of Interest in divestment of 25
% equity of IPCL by GOI. |
|
|
The 100, 000 MTA ethylene glycol plant at Gandhar goes on stream |
|
|
The 300, 000 MTA ethylene cracker is commissioned at Gandhar |
|
|
The Government of India decided to bifurcate IPCL by selling Vadodara Complex
to Indian Oil Corporation Limited. |
|
|
Mr. Sukhdev Singh Dhindsa, Hon'ble Minister of Chemicals and
Fertilizers dedicated Indian Petrochemicals Corporation Limited's Gandhar
Complex to the Nation. |
|
|
Government of India decided not to pursue sale of Vadodara Complex to
IOC and decided to divest 26% equity to a strategic partner with a commitment
to divesting atleast further 25%. |
|
|
Three companies Reliance, Nirma and IOC submitted their financial bids
for acquiring 26% equity from Government of India. |
|
|
Bid by Reliance Petroinvestment Ltd. was accepted by Government of
India as it was the best bid received by the Government. |
|
|
Reliance Petroinvestments Ltd. paid Rs. 1491 crore to GOI, Mr. Mukesh
D. Ambani was nominated as Chairman of the IPCL by the winning bidder. |
|
|
Mr. Mukesh D. Ambani, Chairman seeks approval for investments worth
INR 70 billion form shareholders at 33rd Annual General Meeting. |
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.41.07 |
|
UK Pound |
1 |
Rs.81.69 |
|
Euro |
1 |
Rs.55.84 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
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 |
|