MIRA INFORM REPORT

 

 

Report Date :

12.06.2007

 

IDENTIFICATION DETAILS

 

Name :

ARO GRANITE INDUTRIES LIMITED

 

 

Registered Office :

S-16 2nd Floor, Green Park Extension, New Delhi - 110016, New Delhi

 

 

Country :

India

 

 

Financials (as on) :

31.03.2006

 

 

Date of Incorporation :

03.05.1988

 

 

Com. Reg. No.:

55-31510

 

 

CIN No.:

[Company Identification No.]

U74899DL1988PLC031510

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

CHEA11854D

 

 

Legal Form :

Public Limited Liability Company. Company’s shares are listed on the stock exchanges.

 

 

Line of Business :

The company is engaged in manufacturing of Granite Tiles and Granite Slabs

 

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 2225000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments.

 

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

 

LOCATIONS

 

Registered Office :

S-16 2nd Floor, Green Park Extension, New Delhi - 110016, New Delhi

Tel. No.:

91-11-46082325

Fax No.:

91-11-26520983

E-Mail :

arotile@giasbg01.vsnl.net.in

Website :

http://www.arotile.com

 

 

Head Office :

BB-13, Greater Kailash Enclave – II, New Delhi – 110048, India

Tel. No.:

91-11-2621 8660 / 2644 3025 / 2644 3026

Fax No.:

91-11-2621 8661

 

 

Administration Office and Unit 1 :

103, SIPCOT Industrial Complex, Hosur – 635126, Tamil Nadu, India

Tel. No.:

91-4344-276860/2 / 278460

Fax No.:

91-4344-276460

 

 

Unit 2 :

Koneripalli Village, VIA - Shoolagiri, Taluk - Hosur, District – Krishnagiri - 635117, Tamil Nadu, India

Tel. No.:

91-4344-252384

 

DIRECTORS

 

Name :

Mr Sunil K Arora

Designation :

Managing Director

 

 

Name :

Mr Dinesh Chandra Kothari

Designation :

Director

 

 

Name :

Mr Amit Khanna

Designation :

Director

 

 

Name :

Mr Kasturi Lal Arora

Designation :

Director

 

 

Name :

Mr Sundareshwara G Sastry

Designation :

Director

 

 

Name :

Mrs Sujata Arora

Designation :

Director

 

 

 

KEY EXECUTIVES

 

Name :

Mr Sabyasachi Panigrahi

Designation :

Company Secretary

 

 

 

BUSINESS DETAILS

 

Line of Business :

The company is engaged in manufacturing of Granite Tiles and Granite Slabs

 

 

Products :

Item Code No.

Product Description

680223

Granite Tiles

 

 

Exports to :

Subject exports its entire production to United States of America, Singapore, Canada, Japan and Germany.

 

 

Imports from :

Subject imports its requirements of diamond tools and spares from Italy, Japan and Germany.

 

 

 

PRODUCTION STATUS

 

Particulars

Unit

Licensed Capacity

Installed Capacity

Actual Production

UNIT-1 Granite Tiles

Square Meter

2006 - 180000

2005 - 180000

2006 - 180000

2005 - 180000

2006 - 165369

2005 – 175345

 

 

 

 

 

UNIT-2 Granite Slabs

Square Meter

2006 - 295000

2005 - 295000

2006 - 295000

2005 - 295000

2006 - 239036

2005 – 199973

 

GENERAL INFORMATION

 

No. of Employees :

2000

 

 

Bankers :

Bank of Baroda

ICICI Bank Limited

 

 

Facilities :

SECURED LOANS

31.03.2006

31.03.2005

 

Rs in Millions

a) Term Loan from the ICICI Bank Limited

(Secured by way of First charge on land, building, plant & machinery, spares, tools, accessories and other moveables of Unit II both present and future)

22.500

40.500

 

 

 

b) -BOBCCA/c

4.705

25.797

- Packing Credit

36.288

13.121

 

 

 

c) Foreign Bills Discounted from Bank

(Secured by way of first charge on land, building, plant & machinery, spares, tools, accessories and other moveables of Unit I both present and future. Also Secured by hypothecation of Stock, Pledge of Government

Securities, ECGC, and Book Debts of both the Units of the Company. Second Charge on fixed assets of the Unit-ll and also secured by personal guarantees of

Promoters/Directors Mr. Sunil K Arora & Mr. Prem Arora)

 

183.577

144.848

 

 

 

d) Sales Tax Term Loan

(Charge on assets of the Company

pertaining to Unit - I)

 

2.284

2.092

 

249.355

226.359

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

Alok Mittal and Associates

Chartered Accountants

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

1,10,20,000

Equity Shares

Rs 10/- each

Rs 110.200 Millions

40,000

10% Convertible Cumulative Preference Shares

Rs 100/- each

Rs 4.000 Millions

 

Total

 

Rs 114.200 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

70,20,000

Equity Shares

Rs 10/- each

Rs 70.200 Millions

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2006

31.03.2005

31.03.2004

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

70.200

70.200

46.800

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

485.800

418.400

338.600

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

556.000

488.600

385.400

LOAN FUNDS

 

 

 

1] Secured Loans

249.400

226.400

135.800

2] Unsecured Loans

0.000

0.000

0.000

TOTAL BORROWING

249.400

226.400

135.800

DEFERRED TAX LIABILITIES

0.000

0.000

0.000

 

 

 

 

TOTAL

805.400

715.000

521.200

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

345.000

365.500

235.600

Capital work-in-progress

42.000

30.300

4.700

 

 

 

 

INVESTMENT

0.200

0.000

0.000

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

Inventories
201.100

185.700

139.100

Sundry Debtors
262.800

227.100

184.500

Cash & Bank Balances
4.000

3.800

19.200

Other Current Assets
0.000

0.000

0.000

Loans & Advances
64.200

46.500

32.400

Total Current Assets
532.100

463.100

375.200

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

Current Liabilities
104.300

134.600

79.900

Provisions
12.200

11.900

15.000

Total Current Liabilities
116.500

146.500

94.900

Net Current Assets
415.600

316.600

280.300

 

 

 

 

MISCELLANEOUS EXPENSES

2.600

2.600

0.600

 

 

 

 

TOTAL

805.400

715.000

521.200

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2006

31.03.2005

31.03.2004

Sales Turnover [including other income]

814.000

747.500

621.600

 

 

 

 

Profit/(Loss) Before Tax

84.300

129.600

99.400

Provision for Taxation

4.900

14.500

12.300

Profit/(Loss) After Tax

79.400

115.100

87.100

 

 

 

 

Export Value

755.647

724.099

NA

 

 

 

 

Import Value

168.991

198.228

NA

 

 

 

 

 

QUARTERLY / SUMMARISED RESULTS

 

PARTICULARS

 

30.06.2006

1st Qtr

30.09.2006

2nd Qtr

31.12.2006

3rd Qtr

 Sales Turnover

 252.4

 283.2

 253.9

 Other Income

 1.7

 2.8

 0.00

 Total Income

 254.1

 286.0

 253.9

 Total Expenditure

 196.3

 227.4

 203.6

 Interest

 8.6

 7.6

 7.0

 Gross Profit

 4.92

 51.0

 43.3

 Depreciation

 5.9

 5.9

 6.0

 Tax

 1.7

 1.4

 1.4

 Reported PAT

 41.6

 43.7

 35.9

 

 

200606 Quarter 1 --------------- Notes Expenditure Includes (Increase)/Decrease in stock in Trade Rs 0.212 million Consumption of Raw Materials Rs 150.532 million Staff Cost Rs 10.310 million Other expenditure Rs 35.238 million Provision for Tax includes Current year Rs 1.200 million Fringe Benefit Tax Rs 0.500 million EPS is Basic & Diluted Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. The above results have been reviewed by the Audit Committee and approved by the Board at their respective meetings held on July 10, 2006. 2. Adjustments required in the Provisions for Taxation in view of the Accounting Standard (AS)-22, Accounting for Taxation on Income issued by the Institute of Chartered Accountants of India, will be made at the year end. 3. Segmental Reporting in line with the Accounting Standard (AS)17, Segmental Reporting issued by the Institute of Chartered Accountants of India is not given as the Company is in granite tiles & slabs business segment and does not have more than one reportable segment.

 

200609 Quarter 2 --------------- Notes Expenditure Includes (Increase)/Decrease in stock in Trade Rs (8.457)million Consumption of Raw Materials Rs 164.058 million Staff Cost Rs 15.804 million Other expenditure Rs 55.945 million Provision for Tax includes Current year Rs 1.000 million Fringe Benefit Tax Rs 0.400 million EPS is Basic & Diluted Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 01 Complaints disposed off during the quarter 01 Complaints unresolved at the end of the quarter Nil 1. The Unaudited results have been reviewed by the Audit Committee and approved by the Board at their respective meetings held on October 14, 2006. 2. Adjustments required in the Provisions for Taxation in view of the Accounting Standard (AS)-22, Accounting for Taxation on Income issued by the Institute of Chartered Accountants of India, will be made at the year end. 3. Segmental Reporting in line with the Accounting Standard (AS)17, Segmental Reporting issued by the Institute of Chartered Accountants of India is not given as the Company is in granite tiles & slabs business segment and does not have more than one reportable segments.

 

200612 Quarter 3 --------------- Notes Expenditure Includes (Increase)/Decrease in stock in Trade Rs (9.641)million Consumption of Raw Materials Rs 157.897 million Staff Cost Rs 14.047 million Other expenditure Rs 39.555 million Provision for Tax includes Current year Rs 1.200 million Fringe Benefit Tax Rs 0.175 million EPS is Basic & Diluted Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 03 Complaints disposed off during the quarter 03 Complaints unresolved at the end of the quarter Nil 1. The Unaudited results have been reviewed by the Audit Committee & approved by the Board at their respective meetings held on January 12, 2007. 2. Adjustments required in the Provisions for Taxation in view of the Accounting Standard (AS)-22, 'Accounting for Taxation on Income' issued by the Institute of Chartered Accountants of India, will be made at the year end. 3. 'Segmental Reporting' in line with the Accounting Standard (AS)17, 'Segmental Reporting' issued by the Institute of Chartered Accountants of India is not given as the Company is in granite tiles & slabs business segment and does not have more than one reportable segments.

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2006

31.03.2005

31.03.2004

Debt-Equity Ratio

 

0.46

0.41

0.42

Long Term Debt-Equity Ratio

 

0.06

0.12

0.21

Current Ratio

 

1.48

1.67

2.04

TURNOVER RATIOS

 
 

 

 

Fixed Assets

 

1.64

1.83

1.89

Inventory

 

4.04

4.54

4.74

Debtors

 

3.19

3.59

3.68

Interest Cover Ratio

 

4.56

7.20

6.81

Operating Profit Margin(%)

 

16.81

22.86

21.92

Profit Before Interest And Tax Margin(%)

 

13.81

20.39

19.05

Cash Profit Margin(%)

 

13.15

18.06

17.11

Adjusted Net Profit Margin(%)

 

10.15

15.59

14.25

Return On Capital Employed(%)

 

14.26

24.41

23.74

Return On Net Worth(%)

 

15.20

26.34

25.19

 

STOCK PRICES

 

Face Value

Rs. 10/- each

High

Rs. 109.85

Low

Rs. 102.85

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Corporate Preview 

 

 

In conformity with its dedication to excellence, Aro Granite Industries Limited has installed the most sophisticated environment friendly granite processing machinery line from Italy.

 

Complimenting its state-of-the-art equipment, is the ingrained obsession for quality, which has got AGRO GRANITE INDUSTRIES LIMITED the ISO 9000 certification from RWTUV, Germany for Quality Management Systems.

 

Promoted by two technocrat industrialists Mr. Sunil K. Arora and Mr. Prem Arora, AGRO GRANITE INDUSTRIES LIMITED, started its operations in the year 1991 with the manufacture of Polished / Flamed Granite Tiles with an installed capacity of 1,80,000 Sq. Mtrs.


This 100% Export Oriented Unit is ideally located at Hosur, which is just 35 Kms. away from Bangalore - the Granite Hub of India. The strategic & geographical location of the plant ensures close proximity and direct access to quarries in South India which are known for the finest and widest range of Granites.

In its quest for perfection, AGRO GRANITE INDUSTRIES LIMITED ensured that all the key personnel manning the processing machines are technically qualified and fully trained to operate the state-of-the-art machinery. A strict 100% inspection system is adopted at all stages of manufacturing process.

Over the years AGRO GRANITE INDUSTRIES LIMITED has earned a high degree of credibility with its broad clientele base as the most reliable and consistent supplier of premium Indian Granites.


The customer network of AGRO GRANITE INDUSTRIES LIMITED spans the globe and is currently meeting the granite needs of USA, Canada, Europe, Japan, Far East and South Pacific Countries.


Total Customer Satisfaction is the driving force at Aro Granites. Quality commitments and strict adherence to delivery schedules is the essence of its success and its growth.


Continuous in-house training programmes in various disciplines like TPM, 7 QC Tools, Quality of Life, Positive Mental Attitude, etc, help in achieving the organizational growth in the right direction.

The Unit II of AGRO GRANITE INDUSTRIES LIMITED manufacturing GRANITE SLABS is equipped with a processing line from some of the world's leading manufacturers making it, one of the finest slab manufacturing plants comparable to the best in the world and has an installed capacity og 1,68,000 Sq. Mtrs. The slab plant is ideally located near Hosur, just 55 kms, away from Bangalore.

 

Granite Tiles 

 

The Tiles Unit of AGRO GRANITE INDUSTRIES LIMITED has an installed capacity of 1,80,000 Sq. mtrs and is equipped with a processing line from some of the world's leading manufacturers. A strict 100% inspection system is adopted during all stages of manufacturing process.



AGRO GRANITE INDUSTRIES LIMITED also offers Granite Tiles to customer's specific requirement.
 

Infrastructure

 

Production Process 

·         2 Numbers with 45 Blades in each Machine

·         2 Numbers with 32 Blades in each Machine

·         4 Diamond Roller

A.      Flaming

B.      Polishing

·         16 Head Machine with 6 Abrasives in each head

·         17 Head Machine with 6 Abrasives in each head

 

About Granite 

 

 

Natural Stone Geology:

 

Granite, coarse- or medium-grained intrusive igneous rock that is rich in quartz and feldspar; it is the most common plutonic rock of the Earth's crust, formed by the cooling of magma .

 

Because of its use as paving block and as a building stone, the quarrying of granite was, at one time, a major industrial activity. Except for tombstones, however, for which there is a continuing demand, the present production of granite is geared to the fluctuating market for curbing in highway construction and veneer used in the facing of large industrial and commercial buildings.


Granite may occur in dikes or sills (tabular bodies injected in fissures and inserted between other rocks), but more characteristically it forms irregular masses of extremely variable size, ranging from less than eight kilometres (five miles) in maximum dimension to larger masses (batholiths) that are often hundreds or thousands of square kilometres in area.

 

 

WORKING RESULTS

 

Total Revenue increased to Rs. 789.949 Millions from Rs. 749.135 Millions in the previous year - a growth of 5.45%. Since the current year's margins were under pressure, the profitability come down from Rs. 115.162 Millions to Rs. 79.372 Millions. The main reason for the reduction in profitability is due to shortage of Rough Blocks during the year 2005 as four new major units were set up for processing and also a main supplier of Rough Blocks had put up own processing unit. Hence there was a big gap between the production capacity and the availability of Raw material. Although the Company had sufficient orders on hand, the demand could not be 'met due to non-availability of good quality Rough Blocks. This situation led the Company to defer the Expansion Plan and cancel the rights issue.

 

The Company had now organized the Rough Blocks by identifying new colours from new quarries, importing Rough Blocks from Saudi Arabia, Norway & Finland. The Company has also increased the market share in domestic sales, for which Rough Blocks are available.

 

EXPANSION

 

Last two quarters have seen a turnaround in demand both domestically and globally. Company has orders in hand for overthree months at any point in time and the supply of Rough Blocks, the principal Raw material, is now fully tied up. The Company is considering to expand its capacity of both Slabs and Tiling plant to meet growing international demand. The Company proposes to finance the expansion by fresh borrowings and internal accruals.

 

AWARDS AND RECOGNITIONS

 

The Board is pleased to inform that during the year, the Company for the fifth4 time has received Special Export Award from CAPEXIL for the year 2004-05. Also, Company is now going in for the implementation of ISO 14000 Environment Management System.

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

 

GRANITE INDUSTRY- STRUCTURE & DEVELOPMENTS

 

India is one of the world's largest producers of natural stones. Granite is increasingly being preferred over other stones due to its resistance to wear and tear as well as weathering which makes granite ever-lasting stone. The market potential is abundant and there are excellent prospects for the Indian Granite Industry to get its due share in the world market. The professional and realistic approach towards solving the practical problems and careful planning of facilities by the Industry and Government can make India the leading exporter of the world market. The Industry shall have challenging years ahead but the potential for growth is beyond any reasonable doubt.

 

OUTLOOK

 

Over the past few years, demand for Indian Granite, both in the domestic and foreign markets, has spurted. An analysis of data of the past few years reveals that India has invariably maintained the status as one of the world's leading exporters of Granite. Indian Granite has been accepted and is rated highly in the international market for its distinguished quality and increasing emphasis is being laid on the export of value added products.

 

The market is also observing a shift of the manufacturing facilities from Europe to places where the raw material and labor is available at cheaper rates. On this count, India, China and Brazil score over others.

 

OPPORTUNITIES & THREATS FOR THE INDIAN GRANITE INDUSTRY

The factors contributing to the robust growth of the industry are as follows:

 

Improvement in off-take by USA due to robust housing sector and growing demand for natural products in construction in USA.

 

Exports account for over 95% of Indian Granite Sales. However, there is increase in demand in domestic market on account of emergence of multiplexes and large shopping malls and boom in housing sector. Also most airport projects in recent years have used Granite as the flooring material.

 

Spurt in demand from China arising out of construction activity for Beijing Olympics (2008).

 

The Italian processing industry used to source rough granite blocks from India, process and ship them to USA. However, with the Euro coming into picture, the ultimate buyers now prefer to source directly and this has given fillip to the granite processing industry in India.

 

The Government has recently taken several significant steps to boost granite exports. These includes declaring granite as a thrust sector for promoting exports, (b) setting up of a separate panel on granite and stone products under the Chemical and Allied Products Export Promotion Council.

 

With the Government support, the Indian Granite Industry is going to become the hub for sourcing the world requirements. The major competitor is China. However, China specializes mainly in black granites.

 

The major threat areas include non-availability of good quality Rough Blocks in requisite quantity for the Indian Processors, use of old technology at the quarry sites, stiff competition for Rough Blocks as well as finished products from countries like China and Italy. Also the quality of roads / transportation system and frequent port congestions are affecting the deliveries.

 

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

 

Though the total Revenue increased by 5.45%, there is a reduction in profitability due to shortage of Rough Blocks during the year 2005 as four new major units were set up for processing and also a main supplier of Rough Blocks had put up own processing unit. Hence there was a big gap between the production capacity and the availability of Raw material. Although the Company had sufficient orders on hand, the demand could not be met due to non-availability of good quality Rough Blocks.

 

Fixed Assets

 

CMT REPORT [Corruption, Money laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.44.16

UK Pound

1

Rs.86.00

Euro

1

Rs.57.56

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

6

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

8

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

5

--RESERVES

1~10

6

--CREDIT LINES

1~10

6

--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

 

53

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)                  Ownership background (20%)                         Payment record (10%)

Credit history (10%)                            Market trend (10%)                                             Operational size (10%)

 

 

RATING EXPLANATIONS

 

 

RATING

STATUS

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions