MIRA INFORM REPORT

 

 

Report Date :

31.07.2007

 

IDENTIFICATION DETAILS

 

Name :

NATIONAL STEEL AND AGRO INDUSTRIES LIMITED

 

 

Formerly Known As :

NATIONAL STEEL INDUSTRIES LIMITED

 

 

Registered Office :

621, Tulsiani Chambers,  6th Floor, Nariman Point, Mumbai- 400021, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2006

 

 

Date of Incorporation :

09.01.1985

 

 

Com. Reg. No.:

11-2716

 

 

CIN No.:

[Company Identification No.]

U27100MH2003PTC140379

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMN09355D

 

 

Legal Form :

A Public Limited Liability company. The company’s shares are listed on the Stock exchange.

 

 

Line of Business :

Manufacturers and Marketers of G.P/G.C. Coils/Sheets and C.R. Coils/Sheets.

 

 

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 8800000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Slow but Correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well – established company having satisfactory track. Trade relations are fair. Payments are reported as slow but correct.

 

The company can be considered normal for business dealings at usual trade terms and conditions.

 

 

LOCATIONS

 

Registered Office :

621, Tulsiani Chambers,  6th Floor, Nariman Point, Mumbai- 400021, Maharashtra

Tel. No.:

91-22-22025084/22025098

Fax No.:

91-22-22025084

E-Mail :

nsil@bom2.vsnl.net.in

sh_nagori@ruchigroup.com 

p_gupta@ruchigroup.com 

mbajoria@ruchigroup.com

Website :

http://www.ruchigroup.com

 

 

Administrative Office :

401, Mahakosh House, 7/5, South Tukoganj, Nath Mandir Road, Indore – 452 001, Madhya Pradesh

Tel. No.:

91-731-2518167-9/2528133/2526020/(Direct) 5066187

Fax No.:

91-731-2516714

E-Mail :

Nationalsteel@ruchigroup.com

a_ashok@ruchigroup.com

 

 

Factory 1 :

Village – Sejwaya, Tehsil – Dhar, District Dhar, Madhya Pradesh

Tel. No.:

91-7292-277277/277361/277612

Fax No.:

91-7292-277393

 

 

Branches :

Located at:

 

Flat No. SF1, 2nd Floor, 43 Daryaganj, New Delhi

Tel. No. 91-11-23241140/41

Fax. No. 91-11-23264143

E-mail. ruchidel@del3.vsnl.net.in

 

11-G, Nilambar Building, 2nd Floor,  28-B, Shakespeare  Sarani, Kolkata - 700 017, West Bengal

Tel. No. 91-33-22478526/22472611/22478526

Fax. No.91-33-22405187

E-mail.  national@cal2.vsnl.net.in

 

6/90  Kachora  Bazar, Belanganj, Agra - 282004, Uttar Pradesh

Tel. No.91-562-2362587/2362155

           

204-205 Vardan Complex,  77/146, Lnthouche Road, Kanpur - 208001, Uttar Pradesh

Tel. No.91-512-2356370

Fax. No. 91-512-2356370

 

III - H/91, Nehru Nagar, Ghaziabad, Uttar Pradesh

 

 

DIRECTORS

 

Name :

Mr. Santosh Kumar Shahra

Designation :

Managing Director

Date of Birth/Age :

58 years

Qualification :

B.E. (Mech.), M.S. (U.S.A.

Experience :

34 years

Date of Appointment :

01.07. 1986

Previous Employment

Ruchi Private Limited, Mumbai

 

 

Name :

Mr. Kailashchandra Sharma

Designation :

Chairman

 

 

Name :

Mr. P. Srikrishna,

Designation :

Whole Time Director

 

 

Name :

Mr. P. S. Santhanakrishnan

Designation :

Director

 

 

Name :

Mr. P. D. Nagar

Designation :

Director

 

 

Name :

Mr. Ashok Trivedi

Designation :

Director

 

 

Name :

Mr. Navneet Zalani

Designation :

Director (w.e.f. 31.07.2003)

 

 

Name :

Mr. Navin Khandelwal

Designation :

Director

 

 

Name :

Mr. Sudama Rama

Designation :

Director (Nominee IFCI)

 

 

Name :

Mr. R.K.Gupta,

Designation :

Nominee Director - IFCI

 

 

KEY EXECUTIVES

 

Name :

Mr. Ashok K. Agarwal

Designation :

Company Secretary

 

 

Audit Committee :

 

Mr. Navin Khandelwal- Chairman

Mr. Kailashchandra Shahra

Mr. Navneet Zalani

Mr. Sudama Ram (upto 30.10.2004)

Mr. R.K.Gupta (w.e.f. 30.10.2004 upto 17.05.2005)

 

 

Investors Grievance Committee :

Mr. Navin Khandelwal- Chairman

Mr. P. Srikrishna

Mr. Navneet Zalani

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturers and Marketers of G.P/G.C. Coils/Sheets and C.R. Coils/Sheets.

 

 

Products :

Item Code No. (ITC Code)

7210.19/7210.11

Product Description

Galvanised Plain/Corrugated Coils/Sheets

 

 

Item Code No. (ITC Code)

7209.30/7209.20

Product Description

C.R. Coils/Sheets

 

 

Item Code No. (ITC Code)

Color Coated Plain Coil/Sheets

Product Description

7210.30

 

 

Item Code No. (ITC Code)

Color coated Corrugated Coil/Sheets

Product Description

7210.90

 

 

Brand Names :

'APPU BRAND'

 

PRODUCTION STATUS

 

Class of Goods

 

Unit

Installed Capacity

C.P./C.C. Coils/Sheets

MTPA

210000

C. R. Coils

MTPA

240000

Color Coated Coils/Shets

MTPA

80,000

 

 

GENERAL INFORMATION

 

No. of Employees :

611

 

 

Bankers :
  • State Bank of Indore
  • State Bank of India
  • State Bank of Saurashtra
  • State Bank of Travancore
  • Bank of Maharashtra
  • United Bank of India
  • Andhra Pradesh
  • Societe Generale
  • Oriental Bank of Commerce
  • State Bank of Patiala

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

Manoj Khatri & Company

Chartered Accountants

Address :

Indore, Madhya Pradesh

 

 

Associates :

  • Ruchi Private Limited
  • Ruchi Soya Industries Limited
  • M. P. Glychem Industries Limited

 

 

Subsidiaries :

NSIL Exports Limited

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

4,00,00,000

Equity Shares

Rs.10/- each

Rs. 400.000 millions

60,00,000

4% Redeemable Cumulative Preference Shares

Rs. 100/- each

Rs. 600.000 millions

 

Total

 

Rs. 1000.000 millions

 

 

 

 

 

Issued Capital :

No. of Shares

Type

Value

Amount

32,602,942

Equity Shares

Rs.10/- each

Rs.326.030 millions

60,00,000

4% Redeemable Cumulative Preference Shares

Rs. 100/- each

Rs. 600.000 millions

 

                     TOTAL

 

Rs. 926.030 millions

 

 

 

 

 

Subscribed & Paid-up Capital

No. of Shares

Type

Value

Amount

32,602,942

Equity Shares

Rs.10/- each

Rs.326.029 millions

11,87,000

4% Redeemable Cumulative Preference Shares

Rs. 100/- each

Rs. 550.102 millions

 

                     TOTAL

 

Rs. 876.132 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

876.100

876.132

876.132

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

1344.000

1143.921

1000.551

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

2220.100

2020.053

1876.683

LOAN FUNDS

 

 

 

1] Secured Loans

1822.900

1857.774

1385.233

2] Unsecured Loans

350.000

100.000

0.000

TOTAL BORROWING

2172.900

1957.774

1385.233

DEFERRED TAX LIABILITIES

0.000

344.763

287.408

 

 

 

 

TOTAL

4393.000

4322.590

3549.324

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

2106.200

2121.438

1560.647

FIXED ASSETS [Net Block]

0.000

16.701

195.794

Capital work-in-progress

 

 

 

 

 

 

 

INVESTMENT

27.900

27.940

7.940

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
3229.500
2273.033

2225.629

 

Sundry Debtors
1698.100
1701.373

896.310

 

Cash & Bank Balances
482.400
451.619

487.494

 

Other Current Assets
0.000
0.000

0.000

 

Loans & Advances
364.400
399.863

269.395

Total Current Assets

5774.400
4825.888

3878.828

Less : CURRENT LIABILITIES & PROVISIONS

 
 

 

 

Current Liabilities
3388.000
2640.572

2081.573

 

Provisions
127.500
28.805

12.312

Total Current Liabilities

3515.500
2669.377

2093.885

Net Current Assets

2258.900
2156.511

1784.943

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

4393.000

4322.590

3549.324

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2006

31.03.2005

31.03.2004

Sales Turnover

19911.300

14201.900

9935.400

Other Income

873.100

288.500

322.900

Total Income

20784.400

14490.400

10258.300

 

 

 

 

Profit/(Loss) Before Tax

331.500

239.000

158.100

Provision for Taxation

106.400

70.700

42.400

Profit/(Loss) After Tax

225.100

168.300

115.700

 

 

 

 

Earnings in Foreign Currency :

 

 

 

Total Earnings

8594.817

4182.839

86.473

 

 

 

 

Imports :

 

 

 

 

Raw Materials

3538.245

1708.795

6314.243

 

Others

2709.803

1034.296

Total Imports

6248.048

2743.091

6314.243

 

 

 

 

Expenditures :

 

 

 

 

Raw Materials

17679.800

12105.900

8681.400

 

Excise Duty

793.500

532.900

313.600

 

Power & Fuel Cost

447.700

364.700

245.900

 

Other Manufacturing Expenses

206.300

171.700

131.900

 

Employee Cost

109.400

85.500

60.900

 

Selling and Administration Expenses

808.900

692.900

433.500

 

Miscellaneous Expenses

29.900

23.300

22.500

 

Interest & Financial Charges

178.300

114.300

91.200

 

Depreciation

199.100

160.200

119.300

Total Expenditure

20452.900

14251.400

10100.200

 

SUMMARISED RESULTS

 

PARTICULARS

 

 

 

31.03.2007

Type

 

 

Full Year

Sales Turnover

 

 

19191.600

Other Income

 

 

14.000

Total Income

 

 

19205.600

Total Expenditure

 

 

18484.000

Operating Profit

 

 

721.600

Interest

 

 

173.400

Gross Profit

 

 

548.200

Depreciation

 

 

198.000

Tax

 

 

120.600

Reported PAT

 

 

228.500

Dividend (%)

 

 

00.000

 

KEY RATIOS

 

PARTICULARS

 

31.03.2006

31.03.2005

31.03.2004

Debt Equity Ratio

0.97

0.86

0.66

Long Term Debt Equity Ratio

0.58

0.53

0.39

Current Ratio

1.29

1.30

1.32

TURNOVER RATIOS

 

 

 

Fixed Assets

6.08

5.03

4.54

Inventory

7.24

6.31

5.36

Debtors

11.71

10.93

12.30

Interest Cover Ratio

2.86

3.09

2.73

Operating Profit Margin (%)

3.56

3.62

3.71

Profit Before Interest and Tax Margin (%)

2.56

2.49

2.51

Cash Profit Margin (%)

2.13

2.31

2.37

Adjusted Net Profit Margin (%)

1.13

1.19

1.16

Return on Capital Employed (%)

12.18

9.76

9.32

Return on Net Worth (%)

12.94

10.46

8.22

 

STOCK PRICES

 

Face Value

Rs.10.00/-

High

Rs.24.25/-

Low

Rs.22.50/-

 

 

LOCAL AGENCY FURTHER INFORMATION

 

 

The company was originally incorporated on 09.01.1985 at Indore in Madhya Parades having Company Reg. No. 10-2716 later, the registered office of the company was transferred to Mumbai in the year 2003 and a new company Reg. No. 11-140379 of Mumbai ROC was obtained 

 

History

 

National Steel & Agro Industries Limited earlier known as National Steel Industries, a Ruchi group company co-promoted by Madhya Pradesh Audhyogik Vikas Nigam to manufacture galvanised plain (GP) and galvanised corrugated (GC) sheets and coils, set up a GP/GC plant with 40,000-tpa capacity in 1987 in technical collaboration with Cockerill Works, Belgium. The capacity has since been expanded to the present 130000.


Galvanised sheets manufactured by the company are used in building and construction, automobiles, appliances and agriculture, and are marketed under the Peacock brand. Exports are done through international trading companies based in Singapore, Malaysia and Europe. The products are ultimately sold in West Asia, West Africa, Sri Lanka, Bangladesh, Burma, Vietnam, Ghana, Zambia and Kenya. 

 
A unit for cold-rolled steel sheets and coils was set up in 1992-93, in technical collaboration with three world leaders -- CMI, Belgium; Stein Heurty, France; and Phoenix Works, Belgium. The cold-rolling mill started commercial production from Sep.'94 and caters to its GP/GC plant. 

 
The company's fully computerised galvanising line incorporates the world's latest Dagal process, comprising superior surface cleaning and preparation techniques. It also has facilities for computer-aided annealing followed by hot dip galvanising in a zinc bath. The resultant products adhere to Indian and international standards such as ASTM, JIS, DIN and BIS. 

 
The company increased its installed capacity to 130000 TPA for manufacturing G.P./G.C.Coils/Sheets & to 120000 for C.R.Coils/Sheets in 2000-2001.  

 
Since the demand for the Steel is very much optimistic the company is in the process of setting up a Color Coating Plant and also expand its production facilities by 100%. The above said expansion and is expected to go streamline in the second half of the financial year 2004-05. The project is being financed by way of term loans and further issue of share capital. During 2002-03 the company has issued 1187000 RCP Shares at par to NRI and Bodies Corporate on private placement basis to part finance the above said project.

 

 

Fixed Assets

 

v      Freehold Land

v      Buildings

v      Plant & Machinery

v      Furniture & Fixture

v      Office Equipments

v      Vehicles

 

 

Industry Structure and Developments: 

 
Steel Industry is regarded as prime mover and the Engine for the rapid industrial growth and economic growth of the nation. The use of finished steel products continues to show strong growth in all regions of the world. India has a production capacity of over four million ton galvanized steel which is more than double of its own consumption. The coated coil industry's growth has been driven largely by overseas market especially by US and Europe. High quality standard maintained by the country's major producers like National Steel and Agro Industries Limited has helped the industry to make a name in the overseas market. The ability to match overseas market needs and policy to export major quantity of its production has helped the industry sustain growth even though the domestic demand has not kept pace with the capacity increases. The pre-painted coil capacities have also out-paced the domestic demand increase forcing the quality producers to depend on overseas markets for capacity utilization. 
 
The Year 2006 started well for the industry specially galvanized steel industry with US buying huge quantities at good price. However, the party did not last long due to steep rise in zinc prices. High level of zinc price poses a threat to the industry. High cost galvanized steel products, force the consumers to look for substitute products. High zinc price and steep rise in the HR prices have put pressure on the margins of galvanized steel producers. 

 

Out Look: 

 
Overall the industry is bound to do well as economy continues to grow at over 8% and overseas markets like Europe has taken over when US started to decline. Fortunately, China has been unable to dent India's market share in this product segment (galvanized and color coated coils and sheets) due to poor quality of its products. However, the Indian Industry needs to do better than just maintaining good quality. They have to innovate to new products, new applications and new markets to sustain growth. 

 
India's domestic per capita consumption of galvanized steel at 2 Kg is way below as against 60 Kg per capital consumption in the developed countries like US. Domestic consumption is still largely in the form of corrugated sheet for roofing and cladding. Through proper promotions, domestic consumption can be doubled if the versatile products of galvanized steel/sheet are used extensively in the construction industry, automobile industry, appliance and building industry. 

 
The pre-coated metal sheet is now well established in India and has seen demand growth of over 100% during the last one year. It is a new generation product for India. The color coated coil industry is set to benefit from huge investment in infrastructure like, Airports and Ports. NSAIL is in an advantageous position due to its state of the art equipments and technology and motivated team with ability to leverage, opportunities at all times. 

 
The outlook for Agro trade business also expected to be good keeping in view the fairly good monsoon. 

 

Discussion on Financial Performance with respect to Operational Performance: 

 
The Company has achieved higher turnover of Rs. 19922.803 Millions in comparison to 14215.210 Millions during the Previous Year registering a growth of 40%. 

 
The Company has achieved Export turnover of Rs. 10086.700 Millions registering growth of 111%. 

 
The Financial performance with respect to the Operational performance during the year under review was reasonably good. 33.35% increase in Gross Profit over the Previous Year i.e. from Rs.398.906 Millions to Rs.531.940 Millions indicates the same. 

 
The Company could achieve this consistent performance due to continuous modernization and up-gradation of machinery and debottlenecking of various processes during the Financial Year under review. These efforts will continue during the current Financial Year resulting into enhanced production volume and quality products. 
 
The Company did fair in Agro segment also during the year under review. The volume and profit also have grown nearly by 200%. The Company is one of the biggest importers of pulses in India. The Company exported pulses also during the financial year. 

 
NSAIL has implemented Environmental Management System and has been awarded ISO 14001:2004 by reputed certifying agency Underwriters Laboratories Inc. @(UL). They take pride in taking care of their environment through efficient utilization of energy, saving natural resources and adhering to strict Pollution Norms. 

 

As per Website Details

  • A Pioneering Spirit.
  • A Clear Vision Of Future.
  • A Commitment To Achievement.

National Steel And Agro Industries Limited (NSAIL) formerly known as National Steel Industries Limited (NSIL) was set up on the 9th of January 1985 with the objective of Manufacturing Galvanized Plain Steel Coils, Galvanized Plain Steel Sheets and Galvanized Corrugated Steel Sheets. Subject was set up in technical collaboration with three world leaders :

CMI, Belgium

Phoenix Works, Belgium

Stein Heurtey, France

The initial capacity of the plant was 35,000 TPA which has now been enhanced to 1,40,000 TPA.

In 1992, subject integrated backward by setting up a 1,00,000 TPA Cold Rolling (CR) Mill. Subject has also started a 25 MW Power Plant adjacent to its existing steel complex in order to meet the rising demand for power.

Subject manufactures Ultra-thin gauge GP and GC sheets, as low as 0.12 mm and width upto 1220mm for use in roofing, defence, construction, automobile and white goods sector. Subject products are identified by special 'APPU BRAND' printed at approx. one meter interval, over the length.

PRODUCT BRIEF (GP/GC Sheets & Coils)

  • Galvanized Corrugated Steel Sheets as per JIS G 3302, Regular Spangle, Chromated and Unoiled, Bright Finish & Dry

  • Galvanized Plain Sheets as per JIS G 3302, Regular Spangle, Chromated, Unoiled and Dry Lock forming Quality.

  • Galvanized Plain Steel Coils as per JIS G 3302,  Regular Spangle Chromated & Dry.

The Company was awarded with export excellence award for two consecutive years '94-'95 and '95-'96. In '96-'97, Subject was honoured with All India Special Shield for "Highest Exporter For Metals - All Types".

Subject exports about 35% of its total output to South East Asia, African Countries, Middle East and to other neighbouring countries.

Subject's wide range of products include both, plain and corrugated forms of Galvanized Sheets.


Available in annealed and full hard conditions, these sheets are manufactured in thickness varying from 0.16 mm to 1.25 mm and width ranging from 600 mm to 1250 mm, along with coating weight to maximum of 275 gms/sqm. Lock forming and deep drawing qualities of galvanized sheets can be supplied against specific orders.


Coils for bulk requirements are also available in above mentioned range with weights varying from 2 MT  to 8 MT.


Plans are already underway for the introduction of profiled and colour coated sheets.


Subject products are known for their close tolerances, superior finish and perfect flatness, in annealed or full hard conditions.

As the Company's products are corrosion resistant, they can withstand fluctuations in climatic conditions and find wide applications in industries ranging from Construction to Electrical, Furniture to Defence, Chemical to Automobile and Packaging to Agriculture.

 

AGRO TRADING DIVISIONS


They have a strong presence in Myanmar and Singapore. They are extensively dealing in Burmese origin Toor Whole, Green Mung Beans (polished and unpolished), Black Matpe (Urad Bean), Red Kidney Beans, Black Eye Beans, Yellow maize and Sesame Seeds. They are also dealing in Indian Origin Red Split Lentils (Masoor Dal), Moong Dal (husked and unhusked), Channa Dal and Toor Dal.

 

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.40.44

UK Pound

1

Rs.82.03

Euro

1

Rs. 55.42

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

5

--PROFITABILIRY

1~10

5

--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

 

45

 

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