MIRA
INFORM REPORT
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Report Date : |
28.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
GALLOON TRADING SDN BHD |
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Registered Office : |
40B, Jalan Sultan Ismail, 50250 Kuala Lumpur, Wilayah Persekutuan |
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Country : |
Malaysia |
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Financials (as on) : |
28.02.2007 |
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Date of Incorporation : |
11/02/1989 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Retail Sale of Leather and Rubber Products |
RATING &
COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
* Adopted
abbreviations : SC - Subject Company ( the company enquired
by you)
N/A - Not Applicable
EXECUTIVE SUMMARY
LOCAL NO : 178566-D
COMPANY NAME : GALLOON TRADING SDN BHD
FORMER NAME : N/A
INCORPORATION DATE : 11/02/1989
COMPANY STATUS : EXIST
LEGAL STATUS : PRIVATE LIMITED COMPANY
LISTED STATUS : NO
REGISTERED ADDRESS : 40B, JALAN SULTAN ISMAIL, 50250 KUALA
LUMPUR,
WILAYAH
PERSEKUTUAN, MALAYSIA.
BUSINESS ADDRESS : 6, JALAN MANAU, OFF JALAN KAMPUNG
ATTAP, 50460
KUALA
LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
TEL NO : 03 - 22742460/22744666
FAX NO : 03 - 22747292
CONTACT PERSON : SOO SUE SANG (DIRECTOR)
INDUSTRY CODE : 52324 51211
PRINCIPAL ACTIVITY : RETAIL SALE OF LEATHER AND RUBBER
PRODUCTS
AUTHORISED CAPITAL : MYR1,000,000.00 DIVIDED INTO ORDINARY
SHARE
1,000,000
OF MYR1.00 EACH.
ISSUED AND PAID UP CAPITAL : MYR1,000,000.00 DIVIDED INTO ORDINARY
SHARE
1,000,000
CASH OF MYR1.00 EACH.
SALES : MYR6,630,015 [2007]
NET WORTH : MYR1,164,503 [2007]
STAFF STRENGTH : 9
[2007]
BANKER (S) : MALAYAN BANKING BHD
LITIGATION : CLEAR
FINANCIAL CONDITION : POOR
PAYMENT : FAIR
MANAGEMENT CAPABILITY : AVERAGE
COMMERCIAL RISK : MODERATE
CURRENCY EXPOSURE : MODERATE
GENERAL REPUTATION : SATISFACTORY
INDUSTRY OUTLOOK : AVERAGE GROWTH
HISTORY / BACKGROUND
The SC is a private limited company and is allowed to have a minimum of
one and a maximum of forty-nine shareholders. As a private limited company, the
SC must have at least two directors. A private limited company is a separate
legal entity from its shareholders. As a separate legal entity, the SC is
capable of owning assets, entering into contracts, sue or be sued by other
companies. The liabilities of the shareholders are to the extent of the equity
they have taken up and the creditors cannot claim on shareholders' personal
assets even if the SC is insolvent. The SC is governed by the Companies Act,
1965 and the company must file its annual returns, together with its financial
statements with the Registrar of Companies.
The SC is principally engaged in the (as a / as an) retail sale of
leather and rubber products.
The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).
The SC is not qualified to be one of the Top Corporate Performers in the
Malaysia 1000 (M1000) publication, a directory jointly published by Companies
Commission of Malaysia (The Registrar Office), Minister of Domestic Trade and
Consumer Affairs and our publication arm, BASIS Publications House Sdn Bhd.
The major shareholder(s) of the SC are shown as follows :
Name Address IC/PP/Loc
No: Shareholding
MR. SOO SUE SANG + 35, JALAN AWAN, KUALA AMPANG, 68000 8024440 450,000
AMPANG,
SELANGOR, MALAYSIA. 460104-05-5063
IP CHUN WING TONY 35, JALAN AWAN, KUALA AMPANG, 68000 P613073892 449,999
AMPANG,
SELANGOR, MALAYSIA.
MS. SOO MEE TEEN 10, JALAN PELANGI, 68000 AMPANG, 730730-14-5194 100,000
SELANGOR,
MALAYSIA.
YEO SEEN MIN 22,
NEW INDUSTRIAL ROAD, 1953, 0556951 1
[DECEASED] SINGAPORE.
--------------------
1,000,000
===========
+ Also Director
DIRECTORS
DIRECTOR 1
Name of Subject : MR. SOO SUE SANG
Address : 35, JALAN AWAN, KUALA AMPANG, 68000
AMPANG, SELANGOR,
MALAYSIA.
IC / PP No. : 8024440
New IC No : 460104-05-5063
Date of Birth : 04/01/1946
Nationality : MALAYSIAN CHINESE
Date of Appointment : 11/02/1989
DIRECTOR 2
Name of Subject : MS. LAI KWAN HEE
Address : 35, JALAN AWAN, 68000 AMPANG,
SELANGOR, MALAYSIA.
IC / PP No. : 7986921
New IC No : 430910-10-5072
Date of Birth : 10/09/1943
Nationality : MALAYSIAN CHINESE
Date of Appointment : 12/04/2004
DIRECTOR 3
Name of Subject : MR. SOO KIM KEONG
Address : 3, BLOCK CEMPAKA DESA 288, 68000
AMPANG, SELANGOR, MALAYSIA.
IC / PP No. : A0605084
New IC No : 661130-10-5985
Date of Birth : 30/11/1966
Nationality : MALAYSIAN CHINESE
MANAGEMENT
1) Name of Subject : SOO
SUE SANG
Position : DIRECTOR
2) Name of Subject : LAI
KWAN HEE
Position : DIRECTOR
AUDITOR
Auditor : TAN & TAN ASSOCIATES
Auditors' Address : SUITE 516, KWANG TUNG BUILDING, 44
JALAN PUDU, 5TH FLOOR,
55100
KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
COMPANY SECRETARY
1) Company Secretary : MR.
CHAN HOCK KHOON
IC / PP No. : 4498740
New IC No. : 530715-10-5817
Address : 192, JALAN 5/49A, 46000 PETALING JAYA, SELANGOR,
MALAYSIA.
Date of Appointment : 11/02/1989
2) Company Secretary : MS.
LOW LAY CHIN
IC / PP No. : 5437352
New IC No. : 580929-10-5922
Address : 192, JALAN 5/49A, 46000 PETALING JAYA, SELANGOR, MALAYSIA.
Date of Appointment : 22/08/1990
BANKING
Banking relations are maintained principally with :
1) Banker Name : MALAYAN
BANKING BHD
The SC enjoys normal banking routine with above mentioned banker(s).
The SC has bank charges with above mentioned banker(s).
ENCUMBRANCE (S)
ENCUMBRANCE 1
Date of Creation : 17 Feb 2005
Description of Charge : N/A
Amount Secured : RM 3,500,000.00
Description of Property Affected : N/A
Name & Address of Chargee : MALAYAN BANKING BHD
Form 40 Dated
Registered and Numbered 5 In The
Register of Charges
ENCUMBRANCE 2
Date of Creation : 17 Feb 2005
Description of Charge : N/A
Amount Secured : RM 3,200,000.00
Description of Property Affected : N/A
Name & Address of Chargee : MALAYAN BANKING BHD
Form 40 Dated
Registered and Numbered 6 In The
Register of Charges
LEGAL CHECK AGAINST THE SC
* A check has been
conducted in our databank against the SC whether the subject has been involved
in
any litigation. Our databank consists of 99%
of the wound up companies in Malaysia back dated since
1900.
No legal action was found in our databank.
No winding up petition was found in our data bank
PAYMENT RECORD
SOURCES OF RAW MATERIALS :
Local : YES
Overseas : YES
The SC refused to provide any name of trade/service supplier and we are
unable to conduct any trade enquiry. However, from financial historical data we
conclude that :
OVERALL PAYMENT HABIT
Prompt [ ] Good [ ] Average [ ]
Fair [ X ] Poor [ ]
CLIENTELE
Local : YES Percentage : 100%
Domestic Markets : MALAYSIA.
Overseas : NO Percentage : 0
%
Credit Term : AS AGREED.
Payment Mode : CASH, CHEQUES.
Type of Customer : WALK IN CUSTOMERS, AGENTS.
OPERATIONS
Goods Traded : LEATHER AND RUBBER PRODUCTS
Competitor(s) : VIRTUAL COUCH INDUSTRIES SDN BHD
LEA
C & C SDN BHD
IXORA
CORPORATION SDN BHD
LEONG
YIK HING HIDE DISTRIBUTOR SDN BHD
BNA
DISTRIBUTION SDN BHD
Ownership of premises : OWNED
Total Number of Employees :
YEAR 2007 2006
GROUP N/A N/A
COMPANY 9 7
Branch : NO
RECENT DEVELOPMENT
We have checked with the Malaysian National News Agency's (BERNAMA) database, but no latest
development was noted in our investigation.
CURRENT INVESTIGATION
Latest fresh investigations carried out on the SC indicated that :
Telephone Number Provided By Client : N/A
Current Telephone Number : 03-22742460/22744666
Match : N/A
Address Provided By Client : NO 6 JALAN MANAU, OFF JALAN KAMPUNG
ATTAP, 60460,
KUALALUMPUR
MALAYSIA
Current Address : 6, JALAN MANAU, OFF JALAN KAMPUNG
ATTAP, 50460
KUALA
LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
Match : NO
Latest Financial Accounts : YES
Other Investigations
We conducted an interview with one of the SC's staff from Admin &
Accounts Division. She revealed some relevant information on the SC.
FINANCIAL COMMENTS
Profitability :
Turnover : Increased [ 2004-2007 ]
Profit / ( Loss ) before tax : Decreased [ 2004-2007 ]
Return on Shareholder Funds : Unfavourable [ 1.69% ]
Return on Net Assets : Acceptable [ 18.23% ]
The SC's turnover increased steadily as the demand for its products /
services increased due to the goodwill built up over the years. The dip in
profit could be due to the stiff market competition which reduced the SC's
profit margin. The unfavourable return on shareholders' funds and net assets
could indicate that the SC's management was inefficient in utilising its assets
to generate returns.
Working Capital Control :
Stocks Ratio : Unfavourable [ 103 Days ]
Debtors Ratio : Unfavourable [ 102 Days ]
Creditors Ratio : Favourable [ 24 Days ]
The SC could be incurring higher holding cost. As its capital was tied
up in stocks, it could face liquidity problems. The SC's debtors ratio was
high. The SC should tighten its credit control and improve its collection
period. The SC had a favourable creditors' ratio as evidenced by its favourable
collection days. The SC could be taking advantage of the cash discounts and
also wanting to maintain goodwill with its creditors.
Liquidity :
Liquid Ratio : Unfavourable [ 0.55 Times ]
Current Ratio : Unfavourable [ 1.08 Times ]
A low liquid ratio means that the SC may be facing working capital
deficiency. If the SC cannot obtain additional financing or injection of fresh
capital, it may face difficulties in meeting its short term obligations.
Solvency :
Interest Cover : Unfavourable [ 1.18 Times ]
Gearing Ratio : Unfavourable [ 1.80 Times ]
The SC's interest cover was low. If its profits fall or when interest
rate rises, it may not be able to meet
all its interest payment. The SC was highly geared, thus it had a high
financial risk. The SC was dependent on loans to finance its business needs. In
times of economic downturn and / or high interest rate, the SC will become less
profitable and competitive than other firms in the same industry, which are
lowly geared. This is because the SC has to service the interest and to repay
the loan, which will erode part of its profits. The profits will fluctuate
depending on the SC's turnover and the interest it needs to pay.
Overall Assessment :
Although the SC's turnover had increased, its profits had declined over
the same corresponding period. This could be due to the stiffer market
competition and / or higher operating costs which lowered the SC's profit
margin. Due to its weak liquidity position, the SC will be faced with problems
in meeting all its short term obligations if no short term loan is obtained or
additional capital injected into the SC. If there is a fall in the SC's profit
or any increase in interest rate, the SC may not be able to generate sufficient
cash-flow to service its interest. The SC's gearing level was high and its
going concern will be in doubt if there is no injection of additional
shareholders' funds in times of economic downturn and / or high interest rates.
Overall financial condition of the SC: POOR
COMMENTS
Incorporated in 1989, as a private limited company, the SC is
principally engaged in the retail sale of leather and rubber products. The SC sells
a wide range of products including leather belts, bags, hand bags, footwears,
durable rubber mats and etc. Its long presence in the industry shows that the
SC has been able to keep its business going despite the passing of 18 years of
highs and lows in the local economy. Moreover, a paid up capital of RM1 million
allows the SC to expand its business more comfortably.
Our investigation revealed that the SC concentrates solely on the
domestic market. Being highly dependent on one market segment, the SC is likely
to be exposed to high business risk compared to other export oriented
companies. However, having a stable customer base through its years of
establishment, the SC should have gained higher market share compared to other
players in the same industry. Presently, the management of the SC is assisted
by 9 employees in the operations. Its management capability is regarded as
average.
For the financial year 2007, the SC reported turnover and pre-tax profit
of RM6,630,015 and RM50,161 respectively. Return on shareholders' funds of the
SC is relatively low, indicating that the SC failed to generate an acceptable
amount of profit based on its shareholders' funds. As its current liabilities
exceed its current assets, the SC face working capital deficiency in meeting
its short term obligations. Being a
highly geared company, the SC's financial risk is high. Overall, the SC's
financial performance is poor. Given a networth of RM1.16 million, the SC
should be able to maintain its business in the near term.
We noted that the SC's supplies are from both the local and overseas
market. Being involved in import activities, the SC is exposed to foreign
exchange risk and higher operating cost.
Based on its financial historical data, the SC pattern of payment habit
is fair and there are no legal suit against the SC.
The spending spree is expected to continue in year 2007. With the
promising outlook of the industry, the SC should be able to further enhance its
business. Nonetheless, the SC's poor financial condition indicating that it
faces keen competition in the market.
In view of the above and based on our assessment, we only recommend
credit be granted to the SC with close monitoring.
THE FINANCIAL STATEMENTS WERE
PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.
PROFIT AND LOSS ACCOUNT
For
The Year Ended 28-February-2007
2007 2006
MYR MYR
TURNOVER 6,630,015 6,310,107
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PROFIT/(LOSS) FROM OPERATIONS 50,161 57,864
SHARE OF
PROFITS/(LOSSES) OF ASSOCIATED
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PROFIT/(LOSS)
BEFORE TAXATION 50,161 57,864
Taxation <30,519> <32,328>
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PROFIT/(LOSS)
AFTER TAXATION 19,642 25,536
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PROFIT/(LOSS)
BEFORE EXTRAORDINARY ITEMS 19,642 25,536
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PROFIT/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 19,642 25,536
RETAINED
PROFIT/(ACCUMULATED LOSS) BROUGHT
FORWARD
As previously
reported 144,861 119,325
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As restated 144,861 119,325
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PROFIT
AVAILABLE FOR APPROPRIATIONS 164,503 144,861
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RETAINED PROFIT/(ACCUMULATED
LOSS) CARRIED
FORWARD 164,503 144,861
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RETAINED BY: The Company 164,503 144,861
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164,503 144,861
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INTEREST
EXPENSE (as per notes to P&L)
Term loan 41,079 40,953
Bank
overdraft 89,968 67,961
Hire purchase 13,055 10,833
trade finance
interest 137,082 97,732
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281,184 217,479
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BALANCE SHEET
As
At 28-February-2007
2007 2006
MYR MYR
ASSETS
EMPLOYED:
FIXED ASSETS 1,528,099 1,650,040
LONG
TERM INVESTMENTS/OTHER ASSETS
Deferred
assets 6,537 3,926
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TOTAL LONG
TERM INVESTMENTS/OTHER ASSETS 6,537 3,926
INTANGIBLE
ASSETS
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------------------- -------------------
TOTAL LONG
TERM ASSETS 1,534,636 1,653,966
CURRENT
ASSETS
Stocks 1,878,830 1,758,650
Trade debtors 1,860,546 1,911,435
Other debtors,
deposits & prepayments 15,156 14,656
Items in
transit between head office & branches
Cash &
bank balances 31,420 8,667
tax
recoverable 68,563 60,807
------------------- -------------------
TOTAL CURRENT
ASSETS 3,854,515 3,754,215
CURRENT
LIABILITIES
Trade
creditors 435,299 480,659
Other
creditors & accruals 43,266 40,046
Hire purchase
& lease creditors 75,360 80,341
Bank
overdraft 1,226,981 969,748
Short term
borrowings/Term loans 138,540 86,621
Bill &
acceptances payable 1,651,901 1,745,495
------------------- -------------------
TOTAL CURRENT
LIABILITIES 3,571,347 3,402,910
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NET CURRENT
ASSETS/(LIABILITIES) 283,168 351,305
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TOTAL NET
ASSETS 1,817,804 2,005,271
=========== ===========
FINANCED
BY:
SHARE CAPITAL
Ordinary
share capital 1,000,000 1,000,000
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TOTAL SHARE
CAPITAL 1,000,000 1,000,000
RESERVES
Retained
profit/(Accumulated loss) carried
forward 164,503 144,861
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TOTAL
RESERVES 164,503 144,861
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SHAREHOLDERS'
FUNDS/EQUITY 1,164,503 1,144,861
LONG TERM
& DEFERRED LIABILITIES & PROVISIONS
Long term
loans 447,321 579,069
Hire purchase
creditors 205,980 281,341
------------------- -------------------
TOTAL LONG TERM & DEFERRED
LIABILITIES &
PROVISIONS 653,301 860,410
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1,817,804 2,005,271
=========== ===========
FINANCIAL RATIOS
As
At 28-February-2007
2007 2006
MYR MYR
TYPES OF
FUNDS
Cash 31,420 8,667
Net Liquid
Funds <1,334,101> <1,047,702>
Net Liquid
Assets <1,595,662> <1,407,345>
Net Current
Assets/(Liabilities) 283,168 351,305
Net Tangible
Assets 1,817,804 2,005,271
Net Monetary
Assets <2,248,963> <2,267,755>
BALANCE
SHEET ITEMS
Total
Borrowings 2,094,182 1,997,120
Total
Liabilities 4,224,648 4,263,320
Total Assets 5,389,151 5,408,181
Net Assets 1,817,804 2,005,271
Net Assets
Backing 1,164,503 1,144,861
Shareholders''
Funds 1,164,503 1,144,861
Total Share
Capital 1,000,000 1,000,000
Total
Reserves 164,503 144,861
LIQUIDITY
(Times)
Cash Ratio 0.01 0.00
Liquid Ratio 0.55 0.59
Current Ratio 1.08 1.10
WORKING
CAPITAL CONTROL (Days)
Stock Ratio 103 102
Debtors Ratio 102 111
Creditors
Ratio 24 28
SOLVENCY
RATIOS (Times)
Gearing Ratio 1.80 1.74
Liabilities
Ratio 3.63 3.72
Times
Interest Earned Ratio 1.18 1.27
PERFORMANCE
RATIO (%)
Operating
Profit Margin 0.76 0.92
Net Profit
Margin 0.30 0.40
Return On Net
Assets 18.23 13.73
Return On
Capital Employed 10.17 8.76
Return On
Shareholders'' Funds/Equity 1.69 2.23
Dividend Pay
Out Ratio (Times) 0 0
NOTES
TO ACCOUNTS
Contingent
Liabilities 0 0
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
|
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. |
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 |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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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%)