MIRA INFORM
REPORT
|
Report
Date : |
24.08.2007 |
IDENTIFICATION DETAILS
|
Name : |
K G DENIM
LIMITED |
|
|
|
|
Registered
Office : |
Then Thirumalai, |
|
|
|
|
Country
: |
|
|
|
|
|
Financials
(as on) : |
31.03.2007 |
|
|
|
|
Date
of Incorporation : |
25.06.1992 |
|
|
|
|
Com.
Reg. No.: |
18-3798 |
|
|
|
|
CIN
No.: [Company
Identification No.] |
L17115TZ1992PLC003798 |
|
|
|
|
TAN
No.: [Tax
Deduction & Collection Account No.] |
CMBK03032B |
|
|
|
|
Legal Form
: |
It is a public limited liability company. The company’s shares are listed on the
Stock Exchanges. |
|
|
|
|
Line
of Business : |
The company is engaged in manufacturing and
marketing of denim fabrics of different size, shades, weaves, blends and weights. |
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
2737500 |
|
|
|
|
Status
: |
Satisfactory
|
|
|
|
|
Payment
Behaviour : |
Usually
Correct |
|
|
|
|
Litigation
: |
Clear |
|
|
|
|
Comments
: |
Subject is an established company having satisfactory track.
Directors are reported as experienced, respectable and resourceful
industrialist. Their trade relations are fair. Payments are correct and as
per commitments. The company can be considered normal for business dealings
at usual trade terms and conditions. |
LOCATIONS
|
Registered
Office : |
Then Thirumalai, |
|
E-Mail
: |
|
|
Website
: |
|
|
|
|
|
Factory
1 : |
Jadayam Palayam, Via Sirumugai, Taluka
Mettupalayam, |
|
Tel.
No.: |
91-42545-2331 - 34 |
|
Fax
No.: |
91-42545-2335 |
|
E-Mail
: |
|
|
Website
: |
|
|
|
|
|
Branches
: |
|
|
Tel.
No.: |
91-422-212931 / 212932 |
DIRECTORS
|
Name : |
Mr. Jack O’ Neill |
|
Designation
: |
Directors |
|
|
|
|
Name : |
Shri S R Rajasekaran |
|
Designation
: |
Directors |
|
|
|
|
Name : |
Mr. G V S Desikan |
|
Designation
: |
Directors |
|
|
|
|
Name : |
Mr. K N V Ramani |
|
Designation
: |
Directors |
|
|
|
|
Name : |
Mr. V Jagadisan |
|
Designation
: |
Directors |
|
|
|
|
Name : |
Mrs. T Anandhi |
|
Designation
: |
Directors |
|
|
|
|
Name : |
Mr. A Velusamy |
|
Designation
: |
Directors |
|
|
|
|
Name : |
Mr. |
|
Designation
: |
Directors |
|
|
|
|
Name : |
Mr. B Sriramulu |
|
Designation
: |
Managing Directors |
|
Date
of Birth/Age : |
38 years |
|
Qualification
: |
BE ( |
|
Experience
: |
16 Years |
|
Date
of Appointment : |
03.11.2003 |
|
|
|
|
Name : |
Mr B Srihari |
|
Designation
: |
Managing Directors |
|
Date
of Birth/Age : |
36 Years |
|
Qualification
: |
BE (Chem. Tech), MS (Chem. Tech) |
|
Experience
: |
14 Years |
|
Date
of Appointment : |
03.11.2003 |
|
|
|
|
Name : |
Mr. M. J. Vijayaraaghavan |
|
Designation
: |
Director |
|
|
|
|
Name : |
Mr. Surinder Chhibber |
|
Designation
: |
Director |
KEY
EXECUTIVES
|
Name : |
Mr. S.
Muthuswamy |
|
Designation
: |
Company
Secretary |
|
|
|
|
Name : |
Mr. K G
Baalakrishnan |
|
Designation
: |
Executive Chairman |
|
Date
of Birth/Age : |
65 years |
|
Qualification
: |
B. Com B. L. |
|
Experience
: |
41 Years |
|
Date
of Appointment : |
03.11.2003 |
BUSINESS
DETAILS
|
Line
of Business : |
The company is engaged in manufacturing and marketing
of denim fabrics of different size, shades, weaves, blends and weights. |
||||||||
|
|
|
||||||||
|
Products
: |
|
PRODUCTION STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
|
Looms |
|
NA |
185 Looms |
197 Looms |
|
Stenters |
|
NA |
3 Nos |
3 Nos |
GENERAL
INFORMATION
|
|
|
||||||||||||||||||||||
|
No. of
Employees : |
250 |
||||||||||||||||||||||
|
|
|
||||||||||||||||||||||
|
Bankers
: |
|
||||||||||||||||||||||
|
|
|
||||||||||||||||||||||
|
Facilities : |
|
|
Banking Relations : |
Satisfactory |
|
|
|
|
Auditors
: |
|
|
Name: |
Gopalaiyer and Subramanian Chartered Accountants |
|
Address: |
|
|
|
|
|
Associates/Subsidiaries
: |
|
CAPITAL
STRUCTURE
Authorised
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
31,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 310.000 millions |
|
10,00,000 |
10% cumulative redeemable preference |
Rs. 100/- each |
Rs. 100.000 millions |
Issued
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
20,135,750 |
Equity Shares |
Rs. 10/- each |
Rs. 201.358 millions |
|
1,000,000 |
10% Cumulative Redeemable Preference
Shares |
Rs. 100/- each |
Rs. 100.000 millions |
|
|
Total |
|
Rs. 301.358
millions |
Subscribed & Paid-up Capital
|
No. of
Shares |
Type |
Value |
Amount |
|
20098350 |
Equity Shares |
Rs. 10/- each |
Rs. 200.984 millions |
|
Add: |
Forfeited Shares |
|
Rs. 0.112 Millions |
|
1,000,000 |
16% Cumulative Redeemable Preference Shares |
Rs. 100/- each |
Rs. 100.000 millions |
|
|
Total |
|
Rs. 301.096 Millions |
FINANCIAL
DATA
[all
figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share
Capital |
301.096 |
301.096 |
301.096 |
|
|
2] Share
Application Money |
0.000 |
0.000 |
0.000 |
|
|
3]
Reserves & Surplus |
314.121 |
383.279 |
226.027 |
|
|
4]
(Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
615.217 |
684.375 |
527.123 |
|
|
LOAN
FUNDS |
|
|
|
|
|
1]
Secured Loans |
1240.935 |
1155.589 |
519.387 |
|
|
2]
Unsecured Loans |
12.095 |
47.771 |
42.964 |
|
|
TOTAL BORROWING |
1253.03 |
1203.36 |
562.351 |
|
|
DEFERRED
TAX LIABILITIES |
174.103 |
192.716 |
174.829 |
|
|
|
|
|
|
|
|
TOTAL |
2042.350 |
2080.451 |
1264.303 |
|
|
|
|
|
|
|
|
APPLICATION
OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED
ASSETS [Net Block] |
1354.950 |
1215.481 |
831.006 |
|
|
Capital
work-in-progress |
38.053 |
151.816 |
10.860 |
|
|
|
|
|
|
|
|
INVESTMENT |
33.669 |
33.668 |
2.705 |
|
|
DEFERREX
TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT
ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
694.488
|
727.117 |
629.469 |
|
|
Sundry
Debtors |
242.001
|
197.746 |
190.254 |
|
|
Cash
& Bank Balances |
63.928
|
80.939 |
81.378 |
|
|
Income
Receivable |
23.742
|
37.221 |
4.773 |
|
|
Loans
& Advances |
89.424
|
177.813 |
73.610 |
|
Total Current Assets |
1113.583
|
1220.836 |
979.484 |
|
|
Less : CURRENT LIABILITIES &
PROVISIONS |
|
|
|
|
|
|
Current
Liabilities |
481.808
|
465.993 |
514.780 |
|
|
Provisions |
16.097
|
75.357 |
45.277 |
|
Total Current
Liabilities |
497.905
|
541.35 |
560.057 |
|
|
Net Current Assets |
615.678
|
679.486 |
419.427 |
|
|
|
|
|
|
|
|
MISCELLANEOUS
EXPENSES |
0.000 |
0.000 |
0.305 |
|
|
|
|
|
|
|
|
TOTAL |
2042.350 |
2080.451 |
1264.303 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales
Turnover |
2089.987 |
2163.718 |
1923.572 |
|
|
Other Income |
114.834 |
158.119 |
13.845 |
|
|
Total
Income |
2204.821 |
2321.837 |
1937.417 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
(69.158) |
157.252 |
76.941 |
|
|
Provision for Taxation |
0.000 |
0.000 |
24.466 |
|
|
Profit/(Loss) After Tax |
(69.158) |
157.252 |
52.475 |
|
|
|
|
|
|
|
|
Earnings
in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
872.836 |
815.753 |
929.276 |
|
Total
Earnings |
872.836 |
815.753 |
929.276 |
|
|
|
|
|
|
|
|
Imports
: |
|
|
|
|
|
|
Raw Materials |
196.905 |
63.738 |
220.418 |
|
|
Chemicals |
56.041 |
61.409 |
53.405 |
|
|
Stores & Spares |
20.825 |
16.594 |
20.258 |
|
|
Capital Goods |
72.515 |
420.561 |
41.655 |
|
Total
Imports |
346.287 |
562.302 |
335.736 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Material cost |
1259.579 |
1072.499 |
1005.478 |
|
|
Manufacturing cost |
316.246 |
311.587 |
185.228 |
|
|
Other
Operating Expenditure |
441.912 |
521.773 |
545.276 |
|
Total
Expenditure |
2017.737 |
1905.859 |
1735.980 |
|
QUARTERLY
RESULTS
|
PARTICULARS |
|
|
30.06.2007 |
|
Type |
|
|
1st Qtr |
|
Sales Turnover |
|
|
520.900 |
|
Other Income |
|
|
19.100 |
|
Total Income |
|
|
540.000 |
|
Total Expenditure |
|
|
496.400 |
|
Operating Profit |
|
|
43.600 |
|
Interest |
|
|
33.400 |
|
Gross Profit |
|
|
10.200 |
|
Depreciation |
|
|
34.500 |
|
Tax |
|
|
0.300 |
|
Reported PAT |
|
|
(24.600) |
200706 Quarter 1 --------------- Notes Expenditure
Includes (Increase)/Decrease in stock Rs (6.70) million Consumption of Raw
Materials Rs 314.60 million Stores & Chemicals Rs 74.60 million Employee
Cost Rs 23.50 million Manufacturing Expenses Rs 51.70 million Selling &
Administrative Expenses Rs 38.60 million Tax Indicates Provision for Fringe
Benefit Tax Rs 0.30 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 18 Complaints disposed off during the quarter 18
Complaints unresolved at the end of the quarter Nil 1. The limited review of
above unaudited financial results as required under clause 41 of Listing
agreement has been carried out by Statutory Auditors. 2. The above results were
reviewed by the Audit Committee and taken on record by the Board of Directors
at their meeting held on July 28, 2007.
KEY
RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
1.89 |
1.46 |
1.15 |
|
Long Term Debt-Equity Ratio |
1.31 |
0.90 |
0.57 |
|
Current Ratio |
1.08 |
1.03 |
0.98 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.09 |
1.38 |
2.05 |
|
Inventory |
2.94 |
3.19 |
4.26 |
|
Debtors |
9.50 |
11.15 |
14.67 |
|
Interest Cover Ratio |
0.44 |
3.50 |
2.13 |
|
Operating Profit Margin(%) |
8.85 |
19.33 |
9.99 |
|
Profit Before Interest And Tax Margin(%) |
3.18 |
15.74 |
7.32 |
|
Cash Profit Margin(%) |
2.35 |
10.86 |
5.32 |
|
Adjusted Net Profit Margin(%) |
(3.31) |
7.27 |
2.64 |
|
Return On Capital Employed(%) |
3.54 |
22.88 |
17.85 |
|
Return On Net Worth(%) |
(12.59) |
31.10 |
14.78 |
STOCK PRICES
|
Face Value |
Rs.10/- |
|
High |
Rs(0.01)/- |
|
Low |
Rs.(0.01)/- |
LOCAL
AGENCY FURTHER INFORMATION
BIODATA
Incorporated as a public limited company in Jun.'92, K G Denim
Subject was promoted by K G Naidu and Kannapiran Mills to set up a unit to
manufacture denim fabric with an installed capacity of 10.5 mln mtr pa at
Jadayam palayam in Tamilnadu. Commercial production started in Jan.'94. It
produces denim fabric of different sizes, shades, weaves, blends and weights.
The colours include indigo blue, sulphur black, light blue, green, violet,
orange, yellow and purple. Subject exports are to the EU, the
During 1995-96, the company has also ambitious plans to market garments and has
launched brand building campaign.
In 1996-97, the company has set up a 100% EOU and increased the capacity upto
19 million meters per annum. This expansion budget amounted to Rs. 420.0
millions and company has till now spent Rs. 272.9 millions. The project has
been successfully commissioned on 16th May 1997.
ISO 14001 Certification from KPMG Quality, Registrar -
REVIEW OF OPERATIONS
During the year ended 31.3.2007, the Company achieved an
overall production of 202 lakh metiers of fabrics against the previous years
production of 199 lakh meters. The sales for the year ended 31.03.2007 was
Rs.2089.8 millions as against sales of Rs.2163.7 millions during the
previous year. The domestic sales volume and prices for denim however, fell by
25 % alongwith rise in input costs. The company also curtailed the denim
production during the year to prevent accumulation of stocks. The denim
industry in
INDUSTRY STRUCTURE
& DEVELOPMENT
The demand for denim in domestic and international markets is
expected to improve in the current year. The prices in the domestic market may
be under pressure on account of surplus capacity piling of stocks. Export
prices may be adversely by exchange fluctuation. The processed fabrics volume
and performance is expected to better in the current year. Apparel exports will
be maintained at last year levels.
SEGMENT WISE
PERFORMANCE
The segment wise results are presented in item 2.17 of the
Notes on Accounts. The fabric division has recorded a marginal fall in overall
sales. However, the profitability has improved on account of lower cotton cost
and better sales realisation. Loss in apparel was on account of reduction of
excess inventory at lower prices.
PERFORMANCE OF THE
COMPANY
The Company's profitability has declined during the year on
account of curtailment of denim production, rise in input costs and losses in
the new project undertaken during the year.
PROSPECTS
FOR THE NEXT YEAR
With the
commencement of commercial operation of the expansion project the turnover is
expected to increase significantly in the current year. At present, the Indian
denim industry is adversely affected by surplus capacity and demand is expected
to pick up slowly. However, the company's expansion in apparel fabrics and
made-up will help its prospects in the long run. The apparel division is also
concentrating on exports which has high demand potential. The company's new
subsidiary Trigger Apparels Limited will focus on the domestic marketing.
FINANCE
With a
view to conserve resources and to meet the obligation of the company arising on
the projects implemented and based on letters of consent received from the
preference shareholders the Board of directors resolved to defer declaration of
preference dividend for the year 2005 - 2006. The Directors acknowledge with
gratitude, the valuable assistance and support extended by their Bankers for
term loans and working capital ie., Indian Bank, State Bank of
NOTES ON ACCOUNTS
2.1 CONTINGENT LIABILITY
|
|
2006-07 |
2005-06 |
|
|
(Rs.
in millions) |
(Rs.
in millions) |
|
Bills
discounted with banks |
118.772 |
151.272 |
|
Arrears of dividend on preference
shares |
20.000 |
10.000 |
|
Contracts remaining to be executed
in Capital Account |
2.493 |
152.836 |
|
Disputed Taxes and Duties |
23.385 |
13.337 |
|
Guarantees given to Bank for loan
to subsidiary |
35.000 |
Nil
|
2.2 (i) The Cumulative Redeemable Preference Shares are redeemable at par.
The shares were already due for redemption when the promoters took transfer of
the shares on 15.02.2003 under buy back undertaking with ICICI. It is proposed
to redeem the Preference Shares by the issue of equity shares and the necessary
resolution for the purpose is being placed for consideration before the Annual
General
Meeting.
(ii) BANK BORROWINGS
a) Term Loans from Indian Bank, Bank of India and Indian
Overseas Bank are secured by a first pari passu charge on all plant and
machineries, including machineries and other movable fixed assets acquired for
the Expansion cum Diversification Scheme (ECDS), through Deed of Hypothecation
and a pari passu first charge on all immovable properties situated in 102.1897
acres of land at Jadayampalayam, Alangombu and Karamadai villages in
Mettupalayam Taluk, Coimbatore District, Tamil Nadu and 2155.62 sq. meters of
land at
b) Working capital facilities from Indian Bank Consortium
(Indian Bank, Bank of India, Allahabad Bank and State Bank of India) are
secured by a first pari passu charge on the whole of the current assets and second
pari passu charge on all the immovable properties and plant and machineries.
These are also guaranteed by Shri KG Baalakrishnan.
|
|
2006-07 |
2005-06 |
|
|
(Rs.
in millions) |
(Rs.
in millions) |
|
Personal
guarantees given by promoter Mr. K G
Balakrishnan for loans obtained by the company |
2049.000 |
2458.100 |
|
Future hire purchase charges on vehicle hire
purchase loans |
7.350 |
4.818 |
FIXED ASSETS
- Land
- Buildings
- Machinery
- Electric Machinery
- Office Equipments
- Furniture & Fittings
- Motor Vehicles
As Per Website
Details:
The
company was incorporated in the year 1992. From the conception to the
commissioning stage it took a record time of only 18 months to complete the project.The
plant is located at Jadayampalayam Village, near Mettupalayam at the foot hills
of the Nilgris and incorporates the state of the Art of Technology with latest
machineries imported from M/S. Hacoba, Monforts & Sucker + Muller of
Germany and Picanol of Belgium.
An
Effluent Treatment Plant is also installed as a part of the project to ensure
conformity to the effluent standards expected. Trail production started on the
12th of September of 1993 and the commercial production started soon after on 18th
January 1994.
Subject,
an acronym for the founder of the group, Sri K Govindasamy Naidu, is a brand /
Trademark, well known in the textile circles of their country. KG group is
based at
The group also has considerable presence in other activities such
as Engineering, Arts, Information system etc., the group is one of the largest
manufacturers of OE yarn in the country and it is but natural that the group
decided to capitalize its core strength by integrating forward and establishing
a Denim unit.
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. 41.12 |
|
|
1 |
Rs. 82.43 |
|
Euro |
1 |
Rs. 56.03 |
SCORE
& RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP
CAPITAL |
1~10 |
5 |
|
OPERATING
SCALE |
1~10 |
5 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS
SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
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
|
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 |