MIRA
INFORM REPORT
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Report Date : |
11.08.2007 |
IDENTIFICATION DETAILS
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Name : |
CIPLA LIMITED |
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Registered Office : |
289, J. B. B. Marg, Mumbai Central, Mumbai – 400 008, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
17.08. 1935 |
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Com. Reg. No.: |
11-2380 |
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CIN No.: [Company
Identification No.] |
U24239MH1935PLC002380 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMC00352C |
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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 of Chemicals, Tablets and Capsules, Liquids, Creams, Aerosols, Injections, Sterile Solution and Agrochemicals and Formulations. The company manufactures and markets bulk drugs and
formulations. |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 120000000 |
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Status : |
Good |
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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 pharmaceutical company having fine track records. Available information indicates high financial responsibility of the company. Financial position of the company is considered as good. Business is active. The company can be considered normal for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered/Corporate
Office : |
289, J. B. B. Marg, Mumbai Central, Mumbai – 400 008, |
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Tel. No.: |
91-22-23095521/23082891/23023272 |
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Fax No.: |
91-22-23070013/23070393/85/23008101 |
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E-Mail : |
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Website : |
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Factory : |
MIDC, Patalganga – 410 220, District Raigad, D7, MIDC Industrial Area, Kurkumbh – 413 802, District
Pune, LBS Marg, Vikhroli (West), Mumbai – 400 083, Virgonagar, Verna Industrial Estate, Verna-403722, Salcette, Panaji, |
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Sales Office: |
Located At : Kochi, Ghaziabad, Kolkata, Chennai, Hyderabad, Delhi, Assam, Nagpur, Chandigarh, Patna, Ambala Cantt., Patna, Vijayawada, Varanasi, Rajasthan, Lucknow, Ahmedabad, Indore, Mumbai, Madhya Pradesh, Pune and Bangalore. |
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Branches : |
289, |
DIRECTORS
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Name : |
Dr. H. R. Manchanda |
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Designation : |
Non-Executive Director |
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Qualification : |
M.B.B.S., F.R.C.S. |
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Experience : |
1.
Consultant Surgeon at 2.
Professor of Surgery and Head of Surgery at Haffkine Institute – Board Member |
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Date of Appointment : |
1983 |
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Name : |
Mr. S. A. A. Pinto |
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Designation : |
Non-Executive Director |
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Qualification : |
M.A.(Economics), LL.B |
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Experience : |
1. Kotak Mahindra Finance Limited – Director and Member of Audit Committee and Chairman of Investor Relations Committee 2. Kotak Mahindra Private-Equity Trustee Limited – Chairman |
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Date of Appointment : |
1983 |
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Name : |
Dr. Y. K. Hamied |
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Designation : |
Chairman & Managing Director |
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Name : |
Mr. Amar Lulla |
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Designation : |
Joint Managing Director |
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Name : |
Mr. M. K. Hamied |
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Designation : |
Joint Managing Director |
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Name : |
Mr. V. C. Kotwal |
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Designation : |
Non-Executive Director |
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Name : |
Mr. M. R. Raghavan |
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Designation : |
Non-Executive Director |
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Name : |
Mr. Ramesh Shroff |
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Designation : |
Non-Executive Director |
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Name : |
Mr. M. K. Gurjar |
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Designation : |
Non-Executive Director |
KEY EXECUTIVES
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Name : |
Mr. N R Moorthy |
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Designation : |
Practising company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
Promoters'
holdings
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Indian Promoters |
23,950,112 |
39.94% |
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Non
promoter's holdings
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Mutual Funds and UTI |
3,564,975 |
5.94% |
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Banks, Financial Institutions and Insurance Companies |
6,127,356 |
10.22% |
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FIIs |
5,184,232 |
8.64% |
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Private Corporate Bodies |
1,369,319 |
2.28% |
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Others |
133,782 |
0.22% |
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NRIs / OCBs |
2,121,742 |
3.54% |
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General Public |
17,520,831 |
29.21% |
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Grand Total |
59,972,349 |
100.00% |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of Chemicals, Tablets and Capsules, Liquids, Creams, Aerosols, Injections, Sterile Solution and Agrochemicals and Formulations. The company manufactures and markets bulk drugs and
formulations. |
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Products : |
PRODUCTION STATUS
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Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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Bulk Drugs (including Malts) |
Tonnes |
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1598.0 |
1054.3 |
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Tablets and Capsules |
Million |
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12296.0 |
11167.8 |
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Liquids |
Kilolitre |
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1404.0 |
6711.0 |
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Creams |
Tonnes |
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616.0 |
541.4 |
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Aerosols/Inhalation Devices |
Thousand |
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53580.0 |
43018.4 |
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Injections/Sterile Solutions |
Kilolitre |
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1071.0 |
1296.3 |
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Others |
Million |
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-- |
2.3 |
GENERAL INFORMATION
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Suppliers: |
v Aar Aar Arts Private Limited v Albert Printing Works v Bhavani Industries v Bhavani Seals Private Limited v Canton Laboratories Private Limited v Coral Drugs Private Limited v Danna Laminates v Elam Pharma Private Limited v Flex Art Foil private Limited v Glide Chem. Private Limited v Healing Cross Pharma Private Limited v Indo Woosung Vacuum Company Private Limited v Jasmine Art Printers Private Limited v K K Dani Consultants and Engineering private Limited v Laxmi Industries v M K Precision Metal Parts Private Limited v Nirmal Print Art v Okay Paper Products Private Limited v Pink Packaging and Moulding Private Limited v Rakshit Drugs Private Limited v Sam Services v Themis Laboratories Private Limited v Valco Valve Manufacturing Company v Wax Oils Private Limited v
Xal Engineering ( v Yagnesh Printing Company Private Limited |
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No. of Employees : |
2200 |
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Bankers : |
v
Bank of v
Canara Bank, Mumbai, v
Corporation Bank, Mumbai, v
Indian Overseas Bank, Mumbai, v
Standard Chartered Grindlays Bank Limited,
Mumbai, v
The Hong Kong & Shanghai Banking
Corporation Limited, Mumbai, v
Corporation Limited, Mumbai, v
Union Bank of |
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Facilities : |
Notes:
I.
A sum of Rs. 1109.600 millions (Previous year Rs.
3866.000 millions) is payable out of Unsecured Loans within the next 12
months.
II.
There are no amounts due and outstanding to be
credited to Investor Education and Protection Fund. |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
v R. S. Bharucha & Company Chartered Accountants v R. G. N. Price & Company Chartered Accountants |
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Address : |
Mumbai, |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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875000000 |
Equity Share |
Rs. 2.00 each |
Rs. 1750.000 millions |
Issued Capital :
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No. of Shares |
Type |
Value |
Amount |
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778294752 |
Equity shares |
Rs. 2.00 each |
Rs. 1556.600 millions |
Subscribed and Paid up Capital :
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No. of Shares |
Type |
Value |
Amount |
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777291357 |
Equity Shares |
Rs. 2.00 each |
Rs. 1554.600 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
1554.600 |
599.700 |
599.700 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
30808.100 |
19233.000 |
14936.600 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
32362.700 |
19832.700 |
15536.300 |
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LOAN FUNDS |
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1] Secured Loans |
72.500 |
512.700 |
412.400 |
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2] Unsecured Loans |
1163.100 |
4176.400 |
1499.600 |
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TOTAL BORROWING |
1235.600 |
4689.100 |
1912.000 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
33598.300 |
24521.800 |
17448.300 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
13880.700 |
10566.100 |
7389.100 |
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Capital work-in-progress |
731.900 |
870.100 |
1059.600 |
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INVESTMENT |
1178.000 |
224.300 |
183.000 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
9786.000 |
9570.000 |
7456.800 |
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Sundry Debtors |
10287.800 |
8759.600 |
5873.200 |
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Cash & Bank Balances |
1314.900 |
444.800 |
112.000 |
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Other Current Assets |
0.000 |
0.000 |
0.000 |
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Loans & Advances |
6958.100 |
4148.500 |
4048.400 |
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Total
Current Assets |
28346.800
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22922.900
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17490.400 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
6437.800 |
7338.500 |
5834.000 |
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Provisions |
4101.300 |
2723.100 |
2839.800 |
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Total
Current Liabilities |
10539.100
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10061.600
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8673.800 |
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Net Current Assets |
17807.700 |
12861.300 |
8816.600 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
33598.300 |
24521.800 |
17448.300 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
35331.700 |
30196.800 |
23276.300 |
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Other Income |
2305.500 |
2161.000 |
1552.400 |
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Stock Adjustments |
(307.300) |
943.500 |
668.700 |
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Total Income |
37329.900 |
33301.300 |
25497.400 |
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Profit/(Loss) Before Tax |
8079.800 |
7098.400 |
5146.100 |
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Provision for Taxation |
1399.500 |
1022.000 |
1050.000 |
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Profit/(Loss) After Tax |
6680.300 |
6076.400 |
4096.100 |
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Earning in Foreign Currency : |
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Export Earnings |
1784.400 |
15136.400 |
NA |
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Technical Know-how/ Fees |
764.700 |
415.600 |
NA |
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Others |
81.600 |
104.300 |
NA |
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Total Earnings |
2630.700 |
15656.300 |
NA |
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Imports |
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Raw Materials / Packing Materials |
5432.900 |
4624.100 |
NA |
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Components and Spare Parts |
119.800 |
60.000 |
NA |
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Capital Goods |
948.500 |
1065.500 |
NA |
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Total Imports |
6501.200 |
5749.600 |
12250.800 |
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Expenditures: |
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Raw Materials |
16948.500 |
15059.200 |
11615.600 |
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Excise Duty |
949.300 |
1283.200 |
1463.700 |
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Power and Fuel Cost |
867.100 |
630.800 |
372.900 |
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Other Manufacturing Expenses |
2998.700 |
2745.200 |
2101.200 |
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Employee Cost |
1620.500 |
1273.200 |
1004.800 |
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Selling and Administration Expenses |
4010.800 |
3463.800 |
2748.400 |
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Miscellaneous Expenses |
709.900 |
785.000 |
377.600 |
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Interest and financial Charges |
111.600 |
160.700 |
116.600 |
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Depreciation |
1033.700 |
801.800 |
550.500 |
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Total Expenditure |
29250.100 |
26202.900 |
20351.300 |
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QUARTRLY RESULTS
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PARTICULARS |
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30.06.2007 (1st
Quarter) |
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Sales Turnover |
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|
9018.300 |
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Other Income |
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|
185.400 |
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Total Income |
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|
9203.700 |
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Total Expenditure |
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|
7411.400 |
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Operating Profit |
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|
1792.300 |
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Interest |
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|
8.200 |
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Gross Profit |
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|
1784.100 |
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Depreciation |
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|
302.500 |
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Tax |
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|
221.500 |
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Reported PAT |
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|
1197.600 |
200706 (1st
Quarter)
Notes: Expenditure Includes (Increase) / Decrease in Stock
in Trade Rs (202.20) million Consumption of Raw Materials Rs 4694.40 million
Staff Cost Rs 645.70 million Other Expenditure Rs 2273.50 million Tax Includes
Provision for Current Tax Rs 211.50 million Deferred Tax Rs 62.50 million
Fringe Benefit Tax Rs 10.00 million Status of Investor Complaints for the
quarter ended June 30, 2007 Complaints Pending at the beginning of the quarter
Nil Complaints Received during the quarter 12 Complaints disposed off during
the quarter 11 Complaints unresolved at the end of the quarter 01 1. The
Company is exclusively in the pharmaceutical business segment. 2. The Directors
at their meeting held on July 20, 2007 recommended payment of dividend of Rs 2
per equity share (face value of Rs 2) for the year 2006-2007 amounting to Rs 1554.60
million. 3. The Company had challenged the inclusion of the drugs - Salbutamol,
Theophylline, Ciprofloxacin, Cloxacillin and Norfloxacin - within the ambit of
price control. The petition filed by the Company had been decided in favour of
the Company by the Bombay High Court, which held that the said drugs were
outside the ambit of price control. However, on an appeal filed by the
government, the Supreme Court remanded the matter to the Bombay High Court for
further and more detailed examination in the light of the principles laid down
by the Supreme Court. Pending this, the Supreme Court also gave liberty to
government to recover 50% of the amount that they had claimed was overcharged.
The government had sent notices to the Company demanding an aggregate of Rs
1803.70 million in respect of the said drugs, which, according to them, was 50%
of the amount allegedly overcharged by the Company till July 2003. The Company
had not deposited the amount demanded, as in another petition challenging the
price fixation notifications of these drugs, the Karnataka High Court had
granted an interim stay against the government. Subsequently, in separate
proceedings on the same basis as before the Karnataka High Court, the Allahabad
High Court had ruled that the prices fixed by the government in respect of the
said drugs were ultra vires, illegal and void. On an appeal filed by the
government against this ruling, the Supreme Court stayed the judgment of the
Allahabad High Court but directed that no prosecution should be launched or
coercive action taken against the Company for recovery, till the appeal was
finally decided. The Company has, subsequently, in April 2007 received demand
notices for the entire 100% of the aforesaid amount along with interest,
aggregating Rs 7482.70 million - contrary to the orders of the Supreme Court.
In May 2007. The Company has received further demand notices for Rs 1936.50
million inclusive of interest which according to them was allegedly overcharged
by the Company during the period August 2003 to March 2006 in respect of the
same five drugs. The Company has received legal advice that the demand notices
of the government are not tenable and sustainable. 4. The figures of the
previous year have been regrouped / recast to render them comparable with the
figures of the current year. 5. The above results after being reviewed by the
Audit Committee were approved and taken on record at the meeting of the Board
of Directors held on July 20, 2007.
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt
Equity Ratio |
0.11 |
0.19 |
0.15 |
|
Long
Term Debt Equity Ratio |
0.10 |
0.16 |
0.12 |
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Current
Ratio |
2.42 |
2.06 |
1.89 |
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TURNOVER
RATIOS |
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Fixed
Assets |
2.24 |
2.59 |
2.73 |
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Inventory
|
3.65 |
3.55 |
3.54 |
|
Debtors |
3.71 |
4.13 |
4.29 |
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Interest
Cover Ratio |
73.40 |
45.17 |
39.73 |
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Operating
Profit Margin (%) |
26.11 |
26.69 |
22.27 |
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Profit
Before Interest and Tax Margin (%) |
23.18 |
24.04 |
19.90 |
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Cash
Profit Margin (%) |
21.83 |
22.78 |
17.81 |
|
Adjusted
Net Profit Margin (%) |
18.91 |
20.12 |
15.44 |
|
Return
on Capital Employed (%) |
28.28 |
34.75 |
28.93 |
|
Return
on Net Worth (%) |
25.69 |
34.55 |
25.70 |
STOCK PRICES
|
Face Value |
Rs.10.00 |
|
High |
Rs.236.50 |
|
Low |
Rs.232.55 |
LOCAL AGENCY FURTHER INFORMATION
One of the largest drugs manufactures, Cipla manufactures and markets
bulk drugs and formulations. It is now ranked second in
Cipla has a very wide product range which includes antibiotics, anti-bacterial,
anti-asthmatics, anti-inflammatory anthelminites, anti-cancer and
cardiovasculars. In domestic formulation market, antibiotics are the mainstay,
which contributes around 50% of the company's revenue. Some of the leading
brands are Ciplox (Ciprofloxacin), Novamox (Amoxycilin) and Norflox (Norfloxacin).
Cipla also has in its product portfolio Zidovir (zidovudine, anti-AIDS drug).
Cipla was one of the first among the Indian pharmaceutical companies to
introduce ampicillin and norfloxacin.
The company is constantly maintained its lead in introducing new drug
formulation. The company has very strong research and developement facilities
which have been bearing fruits. Its ability to quickly duplicate a new drug
introduced elsewhere and introduce it in the Indian market has played a
significant role in building a basket of formulation brands. Being one of the
earliest entrants into the market with a new drug, generally, enables a company
achieve higher realizations. In addition to being among the early entrants, one
aspect which has given an edge to Cipla's strategy is the ability to market
products at a significantly lower price.
Cipla has developed the world's first budesonide-based, chlorofluorocarbons
(CFC) - free anti-asthma inhaler, 'Budecort CFC-free'. Budesonide, which falls
in the preventive class of anti-asthmatic drugs, is essentially a steroid and
preferred due to its safety profile. The company has invested over Rs 20
Millions in developing CFC-free asthma products over a period of 12 month. The
product is largely being targeted at the international markets, which are
CFC-sensitive and is awaiting for registration in the European markets. The
fruits of the new product will be obtained in the coming years, since the
company expects to increase its exports through this product.
In Dec 2000, the company cut the price of its anti-AIDS drug Nevimune
(scientific name: nevirapine) by 34% to Rs 650 for a strip of ten tablets. The
price was earlier Rs 985. Cipla has slashed the price of the drug thrice
reducing it from the launch price of Rs 1,350 for a strip of ten to the current
price. The company attributes this to improvements in technology that has
enabled it to cut costs and pass on the savings to consumers.
Cipla is the only manufacturer of nevirapine from the basic stage in
Among the large pharma companies, Cipla was considered as the fastest growing
company with a pre-eminent position in anti-asthma and its foray into
high-growth areas like anti-cancer and anti-AIDS. However, current performance
is not in line with this perception.
The company is a leader in the anti-bacterial and anti-asthmatic segments in FY
2000. Cipla became the first player outside the
The market for such metered dose inhalers in the
After growing smartly in the domestic market, the company is now focussing on
export markets. Cipla has tied up with
Cipla has also tied up with the US-based Zenith Goldline and United Research
Labs for marketing Flutamide (an oncology drug) and Felodipine (a
cardiovascular drug) in the
Recently, in July 2001, the company has affected another round of price cuts of
its anti-AIDS drug segment. This is the fourth price cut in AIDS segment during
the last nine months (last one was in May 2001). The company has cut prices of
its triple drug regimen by as much as 39%. The three-drug combination of
lamivudine, stavudine and nevirapine, which has the potential to reduce the HIV
virus in the body to very low levels, will now cost the patient Rs 2,130 per
month down from Rs 3,495 per month.
Cipla has a very good product pipeline for years to come. The only threat for
the company is that the government is going to introduce the product patents
post 2005. But even if it is introduced, the company expects that it is only
going to be affected after 2012 or 2015. Because, till then, the company has
very good product pipeline. But as per company reports, if government is
pragmatic in framing new patent laws, then Cipla will obviously progress much
faster.
The company is one of the three Indian pharma companies who will jointly market
the anti-anthrax drug, Ciprofloxacin, in
HISTORY:
Subject was incorporated on 17.08.1935 at Mumbai in
Mr. Khwaja Abdul Hamied, set up in 1935 the Chemical, Industrial and
Pharmaceutical Laboratories which came to be popularly known as Cipla. He gave the company all his patent and
proprietory formulas for several drugs and medicines.
On 17.08.1935, the subject was registered as a public limited liability
with an authorised capital of Rs. 0.600 millions. Subject was officially opened on 22.09.1937
when the first products were ready for the market. 04.07.1939 was a red letter day for the
company when the Father of the Nation, Mahatma Gandhi, honoured the factory
with a visit. On 31.10.1939, the books
showed an all-time high loss of Rs. 67935.
That was the last time for the company ever recorded a deficit.
In 1942, Dr. Hamied's blueprint for a technical industrial research was
accepted by the government and led to a birth of a Council of Scientific and
Industrial Research (CSIR), which is today the apex research body in the
country.
In 1944, the company bought the premises at Bombay Central and decided
to put up a first class modern pharmaceutical works and laboratory. It was also decided to acquire land and
buildings at Vikhroli. With severe
import restrictions hampering production, the company decided to commence
manufacturing the basic chemicals required for pharmaceuticals.
In 1946, the company's product for hypertension, Serpinoid was exported
to the American Roland Corporation to the tune of Rs. 0.800 million. Five years later the company entered into an
agreement with a Swiss firm for manufacturing foromycene.
In 1960, Dr. Yusuf Hamied, the founder's son joined the company as an
officer incharge of research and development.
In 1961, the Vikhroli factory started manufacturing diosgenin. The company set up an agricultural research
division in
The company was awarded the CHEMEXCIL Second Award for 1978-79 in
recognition of the company's role in the international market as also the high
ratio of exports to local sales.
The CHEMEXCIL First Award followed this in 1981-82. The company bagged the Sir P. C. Ray Award
for the development of indigenous technology in the face of stiff
competition. In the same year 1981-82,
the company developed two anticancer drugs, vinlbastine and vincristine from
the common garden plant vinca rosea.
Commercial production commenced in the company's fourth factory at
Patalganga in November, 1983. In 1985,
the US FDA approved the company's bulk drug manufacturing facilities for the
first time. In 1988, the company won the
National Award for successful commercialisation of publicly funded R &
D. The company pioneered the manufacture
of the antiretroviral drug, zidovudine, in technological collaboration with
Indian Institute of Chemical Technology in 1993.
In 1994, the company's fifth factory began commercial production at
Kurkumbh,
In 1998, the company launched lamivudine, drug of retroviral combination
therapy.
In December 2000, the company cut the price of its anti-AIDS drug Nevimune
(scientific name : nevirapine) by 34% to Rs 650 for a strip of ten tablets. The
price was earlier Rs 985. Cipla has slashed the price of the drug thrice
reducing it from the launch price of Rs 1,350 for a strip of ten to the current
price. The company attributes this to improvements in technology that has
enabled it to cut costs and pass on the savings to consumers.
Subject is the only manufacturer of nevirapine from
the basic stage in
Among the large pharma companies, the company was considered as the fastest
growing company with a pre-eminent position in anti-asthma and its foray into
high-growth areas like anti-cancer and anti-AIDS. However, current performance
is not in line with this perception.
The company is a leader in the anti-bacterial and anti-asthmatic segments in FY
2000. The company became the first player outside the
The market for such metered dose inhalers in the
After growing smartly in the domestic market, the company is now
focussing on export markets. The company has tied up with
The company has also tied up with the US-based Zenith Goldline and United
Research Labs for marketing Flutamide (an oncology drug) and Felodipine (a
cardiovascular drug) in the
Recently, in July 2001, the company has affected another round of price cuts of
its anti-AIDS drug segment. This is the forth price cut in AIDS segment during
the last nine months (last one was in May 2001). The company has cut prices its
triple drug regimen by as much as 39%. The three-drug combination of
lamivudine, stavudine and nevirapine, which was the potential to reduce the HIV
virus in the body to very low levels, will now cost the patient Rs. 0.002
millions per month down from Rs. 0.003 per month.
It has a very good product pipeline for years to come. The only threat for the
company is that the government is going to introduce the product patents post
2005. But even if it is introduced, the company expects that it is only going
to be affected after 2012 or 2015. Because, till then, the company has very
good product pipeline. But as per company reports, if government is pragmatic
in framing new patent laws, then it will obviously progress much faster.
The company is one of the three Indian pharma companies who will jointly market
the anti-anthrax drug, Ciprofloxacin, in
Khwaja Abdul Hamied, the founder of company, was born on 31.10.1898. The
fire of nationalism was kindled in him when he was 15 as he witnessed a wanton
act of colonial highhandedness. The fire was to blaze within him right through
his life.
In college, he found Chemistry fascinating. He set sail for Europe in
1924 and got admission in
In October 1927, during the long voyage from Europe to
Cipla is born
In 1935, he set up The Chemical, Industrial & Pharmaceutical Laboratories,
which came to be popularly known as Cipla. He gave the company all his patent
and proprietary formulas for several drugs and medicines, without charging any
royalty. On 17.08.1935, Cipla was registered as a public limited company with
an authorised capital of Rs 0.600 million.
The search for suitable premises ended at 289,
The company was officially opened on 22.09.1937 when the first products
were ready for the market. The Sunday Standard wrote: "The birth of Cipla
which was launched into the world by Dr K A Hamied will be a red letter day in
the annals of Bombay Industries. The first city in
04.07.1939 was a red-letter day for company, when the Father of the
Nation, Mahatma Gandhi, honoured the factory with a visit. He was
"delighted to visit this Indian enterprise", he noted later. From the
time of the company came to the aid of the nation gasping for essential
medicines during the Second World War, the company has been among the leaders
in the pharmaceutical industry in
On 31.10.1939, the books showed an alltime high loss of Rs 67,935. That
was the last time the company ever recorded a deficit.
In 1942, Dr Hamied's blueprint for a technical industrial research
institute was accepted by the government and led to the birth of the Council of
Scientific and Industrial Research (CSIR), which is today the apex research
body in the country.
In 1944, the company bought the premises at Bombay Central and decided
to put up a "first class modern pharmaceutical works and laboratory."
It was also decided to acquire land and buildings at Vikhroli. With severe
import restrictions hampering production, the company decided to commence
manufacturing the basic chemicals required for pharmaceuticals.
In 1946, Cipla's product for hypertension, Serpinoid, was exported to the American Roland Corporation,
to the tune of Rs 0.800 Millions. Five years later, the company entered into an
agreement with a Swiss firm for manufacturing foromycene.
Dr Yusuf Hamied, the founder's son, returned with a doctorate in
chemistry from
In 1961, the Vikhroli factory started manufacturing diosgenin. This
heralded the manufacture of several steroids and hormones derived from
diosgenin.
Milestones
1935
Dr. K. A. Hamied sets up "The Chemical, Industrial and
Pharmaceutical Laboratories Limted." in a rented bungalow, at Bombay
Central.
1941
As the Second World War cuts off drug supplies, the company starts
producing fine chemicals, dedicating all its facilities for the war effort.
1952
Sets up first research division for attaining self-sufficiency in
technological development.
1960
Starts operations at second plant at Vikhroli, Mumbai, producing fine
chemicals with special emphasis on natural products.
1968
The company manufactures ampicillin for the first time in the country.
1972
Starts Agricultural Research Division at
1976
The company launches medicinal aerosols for asthma.
1980
Wins Chemexcil Award for Excellence for exports.
1982
Fourth factory begins operations at Patalganga,
1984
Develops anti-cancer drugs, vinblastine and vincristine in collaboration
with the National Chemical Laboratory, Pune. Wins Sir P C Ray Award for
developing inhouse technology for indigenous manufacture of a number of basic
drugs.
1985
1988
The company wins National Award for Successful Commercialization of
Publicly Funded R&D.
1991
Lauches etoposide, a breakthrough in cancer chemotherapy, in association
with Indian
The company pioneers the manufacture of the antiretroviral drug, zidovudine,
in technological collaboration with Indian Institute of Chemical Technology,
1994
The company’s fifth factory begins commercial production at Kurkumbh,
1997
Launches transparent Rotahaler, the world's first such dry powder inhaler
device now patented by Cipla in
1998
Launches lamivudine, becoming one of the few companies in the world to
offer all three component drugs of retroviral combination therapy (zidovudine
and stavudine already launched).
1999
Launches Nevirapine, antiretroviral drug, used to prevent the
transmission of AIDS from mother to child.
2000
The company became the first company, outside the
2002
Four state-of-the-art manufacturing facilities set up in
2003
Launches TIOVA (Tiotropium bromide), a novel inhaled, long-acting anticholinergic bronchodilator that is employed as a once-daily maintenance treatment for patients with chronic obstructive pulmonary disease (COPD).
Commissioned second phase of manufacturing operations at
2005
Set-up state-of-the-art facility for
manufacture of formulations at Baddi, Himachal Pradesh.
BUSINESS
Subject is engaged in manufacturing of Chemicals, Tablets and Capsules,
Liquids, Creams, Aerosols, Injections, Sterile Solution and Agrochemicals and
Formulations.
It is also manufacturing and marketing of Bulk Drugs and Formulations.
It is now ranked second in
Generic Names of Principal Products/Services of Company are
|
Product
Description |
Item Code No. |
|
CIPROFLOXACIN |
300420.33 |
|
AMOXYCILLIN |
300410.30 |
|
AMLODIPINE |
300490.72 |
The company’s
products are approved by:-
Food and Drug Administration
(FDA),
Medicines Control
Agency (MCA),
Therapeutic Goods
Administration (TGA),
Medicines Control
Council (MCC),
National
Pharmaceutical
Inspection Convention (PIC),
World Health
Organization (WHO)
Subject is one of the largest drug manufactures. It
manufactures and markets bulk drugs and formulations. It is now ranked second
in
The company has a very wide product range which includes antibiotics,
anti-bacterials, anti-asthmatics, anti-inflammatory anthelminites, anti-cancer
and cardiovasculars. In domestic formulation market, antibiotics are the
mainstay, which contributes around 50% of the company's revenue. Some of the
leading brands are Ciplox (Ciprofloxacin), Novamox (Amoxycilin) and Norflox
(Norfloxacin). The company is also has in its product portfolio Zidovir
(zidovudine, anti-AIDS drug). The company was one of the first among the Indian
pharmaceutical companies to introduce ampicillin and norfloxacin.
The company is constantly maintained its lead in introducing new drug
formulation. The company has very strong research and development facilities
which, has been bearing fruits. Its ability to quickly duplicate a new drug
introduced elsewhere and introduce it in the Indian market has played a
significant role in building a basket of formulation brands. Being one of the
earliest entrants into the market with a new drug, generally, enables a company
achieve higher realizations. In addition to being among the early entrants, one
aspect which has given an edge to company’s strategy is the ability to market
products at a significantly lower price.
The company has developed the world's first budesonide-based,
chlorofluorocarbons (CFC) - free anti-asthma inhaler, 'Budecort CFC-free'.
Budesonide, which falls in the preventive class of anti-asthmatic drugs, is
essentially a steroid and preferred due to its safety profile. The company has
invested over Rs. 200 millions in developing CFC-free asthma products over a
period of 12 month. The product is largely being targeted at the international
markets, which are CFC-sensitive and is awaiting for registration in the
European markets. The fruits of the new product will be obtained in the coming
years, since the company expects to increase its exports through this
product.
The Company has introduced formulations and APIs during the year. Some
of these advanced drugs have been manufactured for the first time
Adesera (Adefovir
Tablets) for Chronic Hepatitis B virus Infection Adults
Dorzox
(Dorzolamide Eye Drops) for Glaucoma
Dytor (Torsemide
Tablets and Injection) - A new loop diuretic
Ginette 35
(Cyproterone Acetate and Tablets) For Acne and Hirsutism
Rizact
(Rizatriptan Tablets) for Acute Migraine
Valcivir
(Valaciclovir Tablets) new for Herpes
Number of dosage forms and APIs manufactured the Company's various
facilities continue to enjoy the regulatory including the US FDA, MHRA
The Company commissioned the second phase of manufacturing operations
The Company has also acquired land at Baddi in Himacha Pradesh, where
work has started on a new formulations plant.
The Cipla Chest Research Foundation Pune initiated number of important
and academic research studies in medical in its very first year. The foundation
also conducted training programmes for the medical profession.
The company has maintained high safety standards in its plants. The
preservation of environment has remained a priority. The British Safety Council
Awarded the “Five Star Ratin” to the Kurkumbh plant and also presented the
coveted “Sword of Honour” to the Patalganga plant.
It exports its products to
It is one of the leading exporters of bulk drugs and formulations and
its products are registered in over 140 countries.
The leap in exports was a result of the company’s constant efforts to
tap new markets and introduce new products.
MANAGEMENT
REVIEW: 2006 - 07
Industry Structure and Development
The Indian pharmaceutical industry grew at the rate of 14.30 per cent,
according to ORG-IMS figures, as compared to 11 per cent in the previous year.
Over the last few years, exports have been growing consistently at an average
rate of 25 per cent. Today, pharmaceutical products from leading Indian
companies are accepted the world over as safe, affordable and effective and are
playing a significant role in meeting the healthcare needs of millions. Several
companies in the pharmaceutical sector sought to increase their market share
and relied on the consolidations and mergers route in order to do so.
In this era of global expansion,
Performance Review
The Company's turnover was Rs. 3533 crore with a growth of 17 per cent over the
previous year. The net profits for the year grew by nearly 10 per cent over the
previous year. The Company's profit at Rs. 668 crore was 18 per cent of its
income from operations. This percentage was slightly lower than the previous
year mainly on account of higher material costs and a change in product mix.
Exports accounted for over 50 per cent of the overall sales and exports
exceeded Rs.1750 crore. Cipla exports to 180 countries across all the
continents - the
Cipla's continued success in its overseas business has been largely due to its
strategy in forming strategic alliances with partners all over the globe who
assist with the registration process and help market Cipla products
internationally. In the
Awards
Cipla received many awards during 2006 for its excellent performance in
various spheres. These included:
* The Scrip Best Company in an Emerging Market Award.
* The Dun & Bradstreet - American Express Corporate Award for the best
company in the pharmaceutical sector.
* The Pharma Excellence Award for Sustained Growth.
* DHL and CNBC-TV18 International Trade Award for Outstanding Exporter of the
Year (Pharmaceuticals, Healthcare
and Life Sciences category).
Products
The Company launched many novel drugs and formulations during the year.
Significant among these were:
* Ciclohale (ciclesonide inhaler and rotacaps) - Latest steroid inhaler
for asthma prophylaxis
* SimplyOne (ciclesonide and formoterol inhaler and rotacaps) - Novel
combination therapy for asthma
prophylaxis
* Calcinase (calcitonin-salmon nasal spray) - Safe and convenient treatment
for osteoporosis
* Neosurf (bovine lipid extract surfactant suspension) - Rescue
treatment for neonatal respiratory distress
syndrome
* Varipres (terlipressin injection) - Hormone analogue to prevent
variceal bleeding
* Viraday (efavirenz, emtricitabine and tenofovir disoproxil fumarate
tablets) - Single-dose triple drug combination
for HIV/AIDS
* Maximune (saquinavir tablets) - new protease inhibitor for HIV/AIDS
* Dytor Plus (torsemide and spironolactone tablets) - Potassium-sparing
diuretic
* Gatiquin- P (gatifloxacin and prednisolone acetate eye drops) - New
combination therapy for eye inflammation
* Androfil (testosterone transdermal gel) - For testosterone
deficiency in men
* Elcepan (levodopa, carbidopa and entacapone tablets) - Novel
combination therapy for epilepsy
* Estaspray (estrogen transdermal spray) - Estrogen replacement therapy
for menopausal women
* Tobamist (tobramycin respules) - Inhaled antibiotic for lung
infections
* Virenza (zanamivir capsules) - Inhaled antiviral for treatment of
influenza A and B
Development of innovative drug delivery systems for new and existing active
drug substances continued to be an integral part of the Company's growth
strategy. Work on new medical devices, mainly in the area of respiratory
medicine, progressed rapidly, as did its inhaled insulin project. The Company
has developed a unique transdermal delivery system. It has already launched a
spray patch for testosterone and another for estradiol. Other new developments
include a novel dry powder inhaler device and a unique single-action
single-dose inhaler device.
Cipla has entered into a research agreement with Avestha Gengraine Technologies
Private Limited,
INFRASTRUCTURE
Manufacturing Facilities
During the year under review, the Company commenced commercial
manufacture at its new Patalganga export oriented unit (EOU), set up with an
investment exceeding Rs. 170 crore. New projects are underway at
Regulatory Approvals
Several dosage forms and APIs manufactured in various plants of the Company continue
to enjoy the approval of most major international regulatory agencies. These
agencies include the US FDA, MHRA (UK), PIC (Germany), MCC (South Africa), TGA
(Australia), Department of Health (Canada), ANVISA (Brazil), SIDC (Slovak
Republic), the Danish Medical Agency and the WHO.
Safety and Environment Care
Various health, safety and environment awareness programmes were organized for
neighboring villages, school children and police personnel at Baddi,
Patalganga, Kurkumbh and
As always, the Company maintained high standards of occupational health,
safety and environment friendly practices at all units. During the year,
Cipla's Kurkumbh unit was awarded the "Sword of Honour" for the
second time, by the British Safety Council,
In addition, its Kurkumbh and
The Company has modern, well-designed effluent treatment plants at its
factories. The "zero discharge" treated water is used for maintaining
its green belt.
Internal
Control Systems
The Company's internal control procedures are tailored to match the
organization’s pace of growth and increasing complexity of operations. These
ensure compliance with various policies, practices and statutes. Cipla's
internal audit team carries out extensive audits throughout the year, across
all functional areas, and submits its reports to the Audit Committee of the
Board of Directors.
Human Resources
Particulars of employees required to be furnished under Section 217(2A) of the
Companies Act, 1956 forms part of this report. Any shareholder interested in
obtaining a copy may write to the Company Secretary at the Registered Office of
the Company.
THREATS, RISKS, CONCERNS
Patents
Two years after the implementation of the new patent laws, the government is
yet to address important issues like ever-greening of patents and compulsory
licensing. Unless the government takes some decisive steps, these can have
serious adverse effects on the functioning and future of the Indian
pharmaceutical industry.
Data Exclusivity
The policy of data exclusivity remains a significant area of concern for the
Indian pharmaceutical industry. There is a need to safeguard against any
attempt by vested interests to extend the monopoly of certain big companies and
to delay the launch of generic versions even after their expiry of related
patents.
Lower Realization with Rising
Costs
While the Company has taken adequate foreign exchange cover against its
exports, the steady appreciation of the rupee against all major currencies is
bound to have an adverse impact on realizations. Moreover,
Drug
Pricing
The government's drug pricing policy has a direct bearing on the health of the
domestic pharmaceutical industry. We understand that the policy is being looked
into by a Group of Ministers (GOM) and we hope that, instead of arbitrary drug
control measures, the GOM would let free and fair competition determine drug
prices. This will enable all Indians to have access to affordable healthcare.
OPPORTUNITIES
Domestic Markets
In the domestic arena, Cipla continued to maintain its leadership position.
Again, the focus was not only on consolidating its existing brands but also on
introducing new products and dosage forms. The Company will aim to increase its
penetration and coverage for increasing its market share further.
International Markets
International business is a major thrust area for future growth. Cipla's
strategic plans include partnerships and agency arrangements which will
optimize the opportunities in the international arena. Presently, in the
The Company has undertaken a rapid expansion of facilities for the manufacture
of APIs and formulation dosage forms. Cipla is in the process of setting up SEZ
projects for the manufacture of formulations in
COMMUNITY CARE
Over the years, Cipla has initiated several programmes to fulfill its corporate
social responsibility (CSR). Cipla has provided affordable medicines for HIV /
AIDS, malaria, second-line TB and other diseases. The Company's anti-AIDS drugs
are sold in more than 102 countries, as per data collected by World Health
Organization (WHO) and the Clinton Foundation. One out of every three HIV
patients in the world receiving treatment is on an anti-AIDS drug manufactured
by Cipla.
Cipla has one of the largest portfolios of anti-malarial drugs and
supplies more than 20 million anti-malarial treatments worldwide. Cipla has
also partnered with Schistosomiasis Control Initiative (a public health
programme by the Imperial College of London) for the control of the second most
prevalent tropical disease in
In keeping with the Company's continuous endeavour towards the treatment of
neglected diseases (usually diseases of the Third World), Cipla has been
working with Drugs For Neglected Diseases Initiative (DNDi), a Geneva-based
research organisation and Medecins Sans Frontieres (MSF), an independent
humanitarian medical aid agency, to develop new drugs for malaria and
leishmaniasis (kala azar).
Cipla has also joined hands with the Clinton Foundation to support its
worldwide paediatric HIV / AIDS initiative. This programme covers more than
45,000 infected children. The Company has provided subsidised drugs, estimated
to be worth USD 3 million.
As of date, the Cipla Foundation's Palliative Care and Training Centre in Pune
have provided comfort and solace to more than 5200 patients. Cipla also
provides medicines to treat over a million poor, aged patients in slums and
villages. For this work, Helpage
In addition, the Company continued to support the promotion of education and
community welfare, both directly and through its charitable trusts.
CORPORATE
MATTERS
Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956 it is confirmed
that the Directors have:
i. followed applicable accounting standards in the preparation of the annual
accounts;
ii. selected such accounting policies and applied them consistently and made
judgements and estimates that are reasonable and prudent so as to give a true
and fair view of the state of affairs of the Company at the end of the
financial year ended 31st March 2007 and of the profit or loss of the Company
for that period;
iii. taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 1956
for safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities; and
iv. Prepared the annual accounts on a going concern basis.
Subsidiary
Company
The Company has set up a wholly owned subsidiary 'Cipla FZE'
in October 2006 at Jebel Ali Free Zone, Dubai, U.A.E.
As per the exemption order no.47 / 148 / 2007-CL-III dated 16th April 2007,
passed by the Central Government under Section 212(8) of the Companies Act,
1956, the financial statements of the subsidiary company have not been
attached. However, a statement under Section 212(3), which also contains other
information in terms of the exemption order, is attached.
The subsidiary company did not commence commercial operations by the end of the
Company's financial year. Also, the financial state of affairs of the
subsidiary company as on 31st March 2007 is not material in the overall context.
Therefore, consolidated financial statements for the period have not been drawn
up and presented separately.
Fixed
Assets
v Land
v Buildings and
Flats
v Plant and
Machinery
v Furniture and
Fixtures
v Vehicles
Press
Release
Cipla edges
Ranbaxy in
KHOMBA SINGH
According to ORG figures, for the year ended May 2007, Cipla is the market
leader with 5.05% market share closely followed by Ranbaxy Laboratories at
5.04%. Glaxo SmithKline (GSK) is at the third position with 5%. For the month
of May alone, Cipla's marketshare was 5.05% against Ranbaxy Laboratories 4.82%.
Incidentally, on a monthly basis, Cipla has been the market leader for the last
three months.
Cipla, Ranbaxy and GSK have been the top contenders for the top slot for some
years now. Ranbaxy has been the dominant player, leading the market since July
last year.
GSK briefly took the top position earlier this year but Ranbaxy regained the
No.1 position in March for the 12-month period, only to be replaced by Cipla in
May.
Cipla, however, downplayed its new position. “The ORG figures are taken from a small sample and give a broad indication of the industry trend,” company joint MD Amar Lulla told ET.
ORG figures are based on the sales data of around 15,00 chemist stores across
the country. When contacted, a Ranbaxy Laboratories spokesperson said, “We are
confident of being No 1.”
In terms of revenue, the marginal difference of 0.1% in market share means that
Cipla's revenue from domestic market is about Rs 2 crore more than Ranbaxy
Laboratories in retail sales. The market share ranking is, however, different
from the revenue ranking of pharma companies. That's because overseas revenue
constitutes a large portion of the overall revenue of the big pharma companies.
In revenue terms, Dr Reddy's Laboratories is the largest pharma company
followed by Ranbaxy.
While Cipla, Ranbaxy and GSK have been jokeying for the top position in the domestic
retail market for the past few years, a domestic acquisition by any one of them
would give that company an unassailable lead. Ranbaxy has been eyeing an
acquisition in the domestic market for a while now.
ORG figures do not include the Rs 7,000 crore hospital sales, and therefore the
market share in retail sales may differ from the overall market share.
According to ORG figures, Mankind Pharma is the fastest growing pharma company
in the top 50. As a matter of fact, while the market shares of majors such as
Cipla, Ranbaxy Laboratories and GSK have either remained stable or have
marginally gone down from around 5% over the past few years, small and mid size
pharma companies have made a significant presence in the market. Mankind with
2% market share (ranked 15%) and Elder and Emcure Pharma with one percent each
have made it to the top 30.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.40.67 |
|
|
1 |
Rs.81.12 |
|
Euro |
1 |
Rs.55.60 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--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 |
|
80 |
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 |
|