MIRA
INFORM REPORT
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Report Date : |
8th
February, 2007 |
IDENTIFICATION
DETAILS
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Name : |
F.C.
SERVICES SDN BHD |
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Registered Office : |
22-1, Jalan Tanjung Sd 13/2, Bandar Sri Damansara, 52200 Kuala Lumpur, Malaysia. |
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Country : |
Malaysia |
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Financials (as on) : |
31.12.2005 |
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Date of Incorporation : |
04.08.1982 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Trading
of Agricultural Products |
RATING & COMMENTS
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MIRA’s Rating : |
C |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |
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Status : |
Moderate |
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Payment Behaviour : |
Usually
Correct |
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Litigation : |
Clear |
EXECUTIVE SUMMARY
COMPANY NAME : F.C. SERVICES SDN BHD
FORMER NAME : N/A
INCORPORATION DATE : 04/08/1982
COMPANY STATUS : EXIST
LEGAL STATUS : PRIVATE LIMITED COMPANY
LISTED STATUS : NO
REGISTERED ADDRESS : 22-1, JALAN TANJUNG SD 13/2, BANDAR SRI DAMANSARA,
52200 KUALA LUMPUR, MALAYSIA.
BUSINESS ADDRESS : 22-1 JLN TG SD 13/2, BDR SRI D''SARA, 52200 KUALA LUMPUR,
WILAYAH PERSEKUTUAN, MALAYSIA.
TEL NO : 03 - 62802917
FAX NO : 03 - 62772711
CONTACT PERSON : ERIC CHOO (EXECUTIVE DIRECTOR)
INDUSTRY CODE : 51491
PRINCIPAL ACTIVITY : DISTRIBUTION OF AGRICULTURAL PRODUCTS
AUTHORISED CAPITAL : MYR500,000.00 DIVIDED INTO
ORDINARY SHARE 500,000 OF MYR1.00 EACH.
ISSUED & PAID UP CAPITAL : MYR216,567.00 DIVIDED INTO
ORDINARY SHARE 46,567 CASH AND 170,000 OTHERWISE OF
MYR1.00 EACH.
SALES : MYR1,686,533 [2005]
NET WORTH : MYR241,049 [2005]
STAFF STRENGTH : 10 [2007]
BANKER (S) : MALAYAN BANKING BHD
LITIGATION : CLEAR
FINANCIAL CONDITION : POOR
PAYMENT : AVERAGE
MANAGEMENT CAPABILITY : AVERAGE
COMMERCIAL RISK : HIGH
CURRENCY EXPOSURE : HIGH
GENERAL REPUTATION : SATISFACTORY
INDUSTRY OUTLOOK : AVERAGE GROWTH
CREDIT RATING : C (please refer to appendix)
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) distribution of agricultural 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 :
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Name |
Address |
IC/PP/Loc No: |
Shareholding |
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TAN CHOO ANN LOCK + |
39,
JALAN SS 22/27A, DAMANSARA JAYA, 47400 PETALING JAYA, SELANGOR, MALAYSIA. |
0056341 461003-01-5139 |
82,500 |
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KOH KENG MENG + |
39,
JALAN SS 22/27A, DAMANSARA JAYA, 47400 PETALING JAYA, SELANGOR, MALAYSIA. |
7510017 470622-71-5112 |
64,218 |
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CHOO CHINN HEE + |
39,
JALAN SS 22/27A, DAMANSARA JAYA, 47400 PETALING JAYA, SELANGOR, MALAYSIA. |
A2080202 720321-14-5485 |
39,849 |
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MS. CHOO CHINN CHING |
39,
JALAN SS 22/27A, DAMANSARA JAYA, 47400 PETALING JAYA, SELANGOR, MALAYSIA. |
761102-10-5134 |
20,000 |
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MR. CHOO CHINN GUAN |
39,
JALAN SS 22/27A, DAMANSARA JAYA, 47400 PETALING JAYA, SELANGOR, MALAYSIA. |
A3869068 |
10,000 |
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216567 |
Also Director
DIRECTORS
DIRECTOR 1
Name of Subject : MR. FRANCIS TAN CHOO ANN LOCK
Address : 39, JALAN SS 22/27A, DAMANSARA JAYA, 47400 PETALING JAYA,
SELANGOR, MALAYSIA.
IC / PP No : 0056341
New IC No : 461003-01-5139
Date of Birth : 03/10/1946
Nationality : MALAYSIAN CHINESE
DIRECTOR 2
Name of Subject : MR. KOH KENG MENG @ LUO SOH BENG
Address : 39, JALAN SS22/27A, DAMANSARA JAYA, 47400 PETALING JAYA,
SELANGOR, MALAYSIA.
IC / PP No : 7510017
New IC No : 470622-71-5112
Date of Birth : 22/06/1947
Nationality : MALAYSIAN CHINESE
DIRECTOR 3
Name of Subject : MR. ERIC CHOO CHINN HEE
Address : 39, JALAN SS 22/27A, DAMANSARA JAYA, 47400 PETALING JAYA,
SELANGOR, MALAYSIA.
IC / PP No : A2080202
New IC No : 720321-14-5485
Date of Birth : 21/03/1972
Nationality : MALAYSIAN CHINESE
MANAGEMENT
1) Name of Subject : ERIC CHOO
Position : EXECUTIVE DIRECTOR
AUDITOR
Auditor : BDO TAN AZLAN
Auditors' Address : MENARA UNI ASIA, 1008 JALAN SULTAN ISMAIL, 12TH FLOOR, 50250
KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
COMPANY SECRETARY
1) Company Secretary : MS. LIM HOOI MOOI
IC / PP No. : 5584641
New IC No. : 590814-10-6262
Address : 28, JALAN 20/7, 46300 PETALING JAYA, SELANGOR, MALAYSIA.
2) Company Secretary : MS. NG BEE LIAN
IC / PP No. : 5780702
New IC No. : 591125-08-5042
Address : 7, JALAN SS 2/12, 47300 PETALING JAYA, SELANGOR, MALAYSIA.
3) Company Secretary : MR. TAN ENK PURN
IC / PP No. : A1329733
New IC No. : 690719-10-5681
Address : 8B-1-1, ENAU COURT, LORONG ENAU, 55000 KUALA LUMPUR,
WILAYAH PERSEKUTUAN, MALAYSIA.
BANKING
Banking relations are maintained principally with :
1) Banker Name : MALAYAN BANKING BHD
The SC enjoys normal banking routine with above mentioned banker(s).
No adverse record was found during our investigation.
ENCUMBRANCE (S)
No encumbrance was found in our databank at the time of investigation.
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 : NO Percentage : 0 %
Overseas : YES Percentage : 100%
Import Countries : EUROPE , CHINA , INDIA.
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 [ X ]
Fair [ ] Poor [ ]
CLIENTELE
Local : YES Percentage : 100%
Domestic Markets : MALAYSIA.
Overseas : NO Percentage : 0 %
Credit Term : 30 - 60 DAYS.
Payment Mode : CHEQUES , CASH.
Type of Customer : DEALERS .
OPERATIONS
Goods Traded : AGRICULTURAL PRODUCTS
Competitor(s) : BAYER CROPSCIENCE (MALAYSIA) SDN BHD
ZEENEX (MALAYSIA) SDN BHD
REJANG GREEN AGRICULTURE SUPPLIES SDN BHD
FERTITRADE (M) SDN BHD
HONONG ENTERPRISE SDN BHD
Ownership of premises : LEASED/RENTED
Total Number of Employees :
YEAR 2007 2006 2005
GROUP 10 5 4
COMPANY 10 4 4
Branch : NO
Other Information :
The SC is principally engaged in the (as a
/ as an) distribution of agricultural products.
The SC
sells a variety of fertilizers and agricultural products.
The
fertilizers are used for all kinds of plantations such as palm oil, rubber,
fruits, vegetables and others.
The SC
also repacks some of the fertilizers according to the quantity required by its
customers.
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 :
03-62802917
Match :
N/A
Address Provided By Client : 22-1 JALAN TANJUNG SD13/2, BANDAR SRI
DAMANSARA, 52200 KUALA LUMPUR.
Current Address : 22-1 JLN TG SD 13/2, BDR SRI D''SARA, 52200
KUALA LUMPUR, WILAYAH PERSEKUTUAN,
MALAYSIA.
Match : YES
Latest Financial Accounts : YES
Other Investigations
On 5th February 2007 we contacted Ms Sharon from the SC and she provided some information on the
SC.
FINANCIAL COMMENTS
Profitability :
Turnover : Decreased [ 38.38% ]
Profit / ( Loss ) before tax : Decreased [ 356.74% ]
Return on Shareholder Funds : Unfavourable [ < 87.36% > ]
Return on Net Assets : Unfavourable [ < 68.51% > ]
The shrinking turnover could be the result of more entrants into the market which eroded the SC's market share. The SC incurred losses during the year due to the inefficient control of its operating costs.
The SC's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.
Working
Capital Control :
Stocks Ratio : Unfavourable [ 111 Days ]
Debtors Ratio : Unfavourable [ 77 Days ]
Creditors Ratio : Unfavourable [ 76 Days ]
The SC could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The high debtors' ratio could indicate that the SC was weak in its credit control. However, the SC could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. The unfavourable creditors' ratio could be due to the SC taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the SC and its suppliers and the SC may inadvertently have to pay more for its future supplies.
Liquidity
:
Liquid Ratio : Unfavourable [ 0.50 Times ]
Current Ratio : Unfavourable [ 0.99 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 [ < 16.57 Times > ]
Gearing Ratio : Unfavourable [ 1.60 Times ]
The SC incurred losses in the year. It did not generate sufficient income to service its interest. If the situation does not improve, the SC may be vulnerable to default in servicing the interest. 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 :
The SC's losses could be attributed to the lower turnover which in turn could be the result of unfavourable market conditions.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.The SC's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans.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
Established in 1982, as a private limited company the group is principally engaged as a distributor of agricultural products. Having been in the industry for more than two decades should have enabled the group to gain a market share and established rapport with its clients. At present the paid up capital of the group is RM216,567.
Based on our Investigation we revealed that the group's main income are generated via local market. Being highly dependent on one market segment limits the group's business expansion opportunities and places the group at high business risk. Currently the workforce of the group is 10 and the management of the group is headed by executive director by Eric Choo. Overall the management capability of the group can be regarded as average.
During the financial under review, turnover of the group dropped by 38.38% to RM1,686,533. The group recorded pre-tax losses of RM228,017 for the year. Based on the unfavorable profit the group generated unfavorable return on shareholder's fund indicating that the group did not generate an acceptable amount of profits based on its existing shareholders' funds. Due to its weak liquidity position, the group 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 group. Moreover the group posted a high gearing ratio indicating that the financial risk of the group is high. Overall the financial standing of the group is POOR.
Being import oriented, all the group's supplies are imported from Europe, China and India. As such, it is likely to be exposed to currency fluctuation risk and high operating costs which in turn may impair its profitability.
Based on our historical financial data, the group's payment is average. The group is clear of litigation.
The industry remains robust with continuing strong global demand for its products. With this promising outlook of industry, the group should be able to further enhance its business. As a small sized entity, the group faces stiff competition over other well established players.
In view of the above and based on our assessment we recommend credit be granted to the group with guarantee.
THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.
CONSOLIDATED PROFIT AND LOSS
ACCOUNT
For The Year Ended 31-December-2005
2005 2004
MYR MYR
TURNOVER 1,686,533 2,737,110
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PROFIT/(LOSS)
FROM OPERATIONS <228,017> 88,814
SHARE OF PROFITS/(LOSSES) OF ASSOCIATED
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PROFIT/(LOSS)
BEFORE TAXATION <228,017> 88,814
Taxation 17,446 <36,041>
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PROFIT/(LOSS)
AFTER TAXATION <210,571> 52,773
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PROFIT/(LOSS)
BEFORE EXTRAORDINARY ITEMS <210,571> 52,773
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PROFIT/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS <210,571> 52,773
RETAINED PROFIT/(ACCUMULATED LOSS) BROUGHT
FORWARD
As
previously reported 235,053 182,280
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As
restated 235,053 182,280
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PROFIT
AVAILABLE FOR APPROPRIATIONS 24,482 235,053
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RETAINED PROFIT/(ACCUMULATED LOSS) CARRIED
FORWARD 24,482 235,053
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RETAINED
BY: The Company 24,482 235,053
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24,482 235,053
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INTEREST
EXPENSE (as per notes to P&L)
Hire
purchase 4,797 4,723
Other
interest expenses 8,180 11,384
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12,977 16,107
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CONSOLIDATED BALANCE SHEET
As At 31-December-2005
2005 2004
MYR MYR
ASSETS EMPLOYED:
FIXED
ASSETS 248,481 196,492
LONG
TERM INVESTMENTS/OTHER ASSETS
Investments 65,000 65,000
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TOTAL LONG
TERM INVESTMENTS/OTHER ASSETS 65,000 65,000
INTANGIBLE
ASSETS
Goodwill
on consolidation 12,581 12,581
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TOTAL
INTANGIBLE ASSETS 12,581 12,581
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TOTAL
LONG TERM ASSETS 326,062 274,073
CURRENT
ASSETS
Stocks 510,631 250,461
Trade
debtors 353,702 233,681
Other
debtors, deposits & prepayments 4,830 1,240
Short
term deposits 68,400 -
Items in transit between head office &
branches
Cash
& bank balances 40,843 208,175
Tax
recoverable 59,150 36,101
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TOTAL
CURRENT ASSETS 1,037,556 729,658
CURRENT
LIABILITIES
Trade
creditors 349,881 144,820
Other
creditors & accruals 153,181 147,174
Hire
purchase & lease creditors 30,271 23,702
Other
borrowings 296,906 -
Amounts
owing to director 219,498 210,478
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TOTAL
CURRENT LIABILITIES 1,049,737 526,174
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NET
CURRENT ASSETS/(LIABILITIES) <12,181> 203,484
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TOTAL
NET ASSETS 313,881 477,557
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FINANCED
BY:
SHARE
CAPITAL
Ordinary
share capital 216,567 200,000
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TOTAL
SHARE CAPITAL 216,567 200,000
RESERVES
Retained profit/(Accumulated loss) carried
forward 24,482 235,053
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TOTAL
RESERVES 24,482 235,053
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SHAREHOLDERS'
FUNDS/EQUITY 241,049 435,053
LONG
TERM & DEFERRED LIABILITIES & PROVISIONS
Hire
purchase creditors 59,318 19,226
Deferred
taxation 13,514 23,278
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TOTAL LONG TERM & DEFERRED LIABILITIES
&
PROVISIONS 72,832 42,504
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313,881 477,557
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CONSOLIDATED FINANCIAL RATIOS
As At 31-December-2005
2005 2004
MYR MYR
TYPES OF FUNDS
Cash 109,243 208,175
Net
Liquid Funds 109,243 208,175
Net
Liquid Assets <522,812> <46,977>
Net
Current Assets/(Liabilities) <12,181> 203,484
Net
Tangible Assets 301,300 464,976
Net
Monetary Assets <595,644> <89,481>
BALANCE
SHEET ITEMS
Total
Borrowings 386,495 42,928
Total
Liabilities 1,122,569 568,678
Total
Assets 1,363,618 1,003,731
Net
Assets 313,881 477,557
Net
Assets Backing 241,049 435,053
Shareholders''
Funds 241,049 435,053
Total
Share Capital 216,567 200,000
Total
Reserves 24,482 235,053
LIQUIDITY
(Times)
Cash
Ratio 0.10 0.40
Liquid
Ratio 0.50 0.91
Current
Ratio 0.99 1.39
WORKING
CAPITAL CONTROL (Days)
Stock
Ratio 111 33
Debtors
Ratio 77 31
Creditors
Ratio 76 19
SOLVENCY
RATIOS (Times)
Gearing
Ratio 1.60 0.10
Liabilities
Ratio 4.66 1.31
Times
Interest Earned Ratio <16.57> 6.51
PERFORMANCE
RATIO (%)
Operating
Profit Margin <13.52> 3.24
Net
Profit Margin <12.49> 1.93
Return
On Net Assets <68.51> 21.97
Return
On Capital Employed <64.85> 21.47
Return
On Shareholders'' Funds/Equity <87.36> 12.13
Dividend
Pay Out Ratio (Times) 0 0
NOTES
TO ACCOUNTS
Contingent
Liabilities 0 0
RATING EXPLANATIONS
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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 |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory
capability for payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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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/normal. |
Small |
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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 |
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<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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