MIRA INFORM REPORT
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Report Date : |
15.01.2007 |
IDENTIFICATION DETAILS
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Name : |
RICO
AUTO INDUSTRIES LIMITED |
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Registered Office : |
69 K.M. Stone, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
08.03.1983 |
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Com. Reg. No.: |
05-23187 |
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CIN No.: [Company Identification No.] |
L34300HR1983PLC023187 |
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TAN No.: [Tax Deduction & Collection Account No.] |
RTKR01725D |
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Legal Form : |
A
public limited liability company. The
company's shares are listed on the Stock Exchanges |
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Line of Business : |
Manufacturing of auto
components for two-wheelers rear and front wheel hubs, clutches, brake
systems, engine housings, crank housings, etc. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 8750000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject
is a well – established company having satisfactory track. Trade relations
are fair. Payments are correct and as per commitments. The
company can be considered good for any normal business dealings at usual
trade terms and conditions. |
LOCATIONS
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Registered Office : |
69 K.M. Stone, |
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Tel. No.: |
91-1283-42411-42417 (7
Lines) |
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Fax No.: |
91-1283-42418 |
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E-Mail : |
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Website : |
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Head/Corporate &
Factory Office : |
38
K.M. Stone, |
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Tel. No.: |
91-124-6372911
/ 6373212 |
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Fax No.: |
91-124-6372913
/ 3359 |
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E-Mail : |
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Factory 1 : |
69 K.M. Stone, |
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Tel. No.: |
91-1283-42411-42417
(7 Lines) |
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Fax No.: |
91-1283-42418 |
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E-Mail : |
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agroils
division |
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DIRECTORS
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Name : |
Mr.
Chandra Mohan |
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Designation : |
Chairman |
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Name : |
Mr.
Anup Singh |
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Designation : |
Director |
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Name : |
Mr.
Prof. V K Bhalla |
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Designation : |
Director |
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Name : |
Mr.
Kanwal Monga |
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Designation : |
Director |
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Name : |
Mr.
Amarjit Chopra |
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Designation : |
Director |
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Name : |
Mr.
John T Sheffler |
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Designation : |
Director |
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Name : |
Mr.
Dr. Ashok Seth |
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Designation : |
Director
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Name : |
Mr.
Rakesh Kapur |
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Designation : |
Director |
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Name : |
Mr.
B M Jhamb |
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Designation : |
Company
Secretary |
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Name : |
Mr.
Arun Kapur |
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Designation : |
Joint
Managing Director |
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Date of Birth/Age : |
51
Years |
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Qualification : |
B.A. |
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Experience : |
29
Years |
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Date of Appointment : |
01st
May, 1985 |
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Last Employment |
St
Manager Rico Industries, |
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Name : |
Mr.
Arvind Kapur |
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Designation : |
Managing Director |
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Date of Birth/Age : |
54 Years |
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Qualification : |
B.sc President,
Management Program from |
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Experience : |
35 Years |
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Date of Appointment : |
16th
December, 1984 |
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Last Employment |
Partner Rico
Industries, |
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Audit
Committee |
Mr.
Anup Singh Chairman Mr.
Prof. V K Bhalla Mr.
Amarjit Chopra |
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Shareholders' Grievance
Committee |
Mr.
Anup Singh Chairman Mr.
Prof. V K Bhalla Mr.
Amarjit Chopra Mr.
Rakesh Kapur |
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Designation : |
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Remuneration
Committee |
Mr.
Anup Singh Chairman Mr.
Kanwal Monga Mr.
Amarjit Chopra |
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Date of Birth/Age : |
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Senior
Executives |
Mr.
O P Aggarwal Mr.
R S Kundi Mr.
N K Sethi Mr.
G S Bisht Mr.
R M Sabbarwal Mr.
Rajiv Bajaj Mr.
Dr. S Chithambaram Mr.
Arvind Sharma Mr.
S K Jain Mr.
K G Ahuja Mr.
Surendra Singh Mr.
Vivek Hazari Mr.
Anuj Singhal Ms
Shikha Kapur Mr.
Rajiv Miglani Mr.
Rakesh Nagpal |
KEY
EXECUTIVES
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Name : |
Mr.
B.M. Jhamb |
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Designation : |
Company
Secretary |
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Address : |
Rico
Auto Industries Limited, 38KM, Stone, |
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Tel. No.: |
91-124-2824221/
2824000 |
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Fax No.: |
91-124-2824200 |
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E-Mail : |
MAJOR SHAREHOLDERS
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Names of Shareholders |
No. of Shares |
Percentage of Holding |
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Promoters |
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Indian Promoters |
54767130 |
44.68 |
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Non Promoter’s Holding |
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Mutual Funds and UTI |
10544934 |
8.60 |
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Banks, Financial
Institutions, Insurance Companies |
8350 |
0.01 |
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Fils |
27032889 |
22.05 |
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Others |
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Private Corporate Bodies |
3924852 |
3.20 |
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Indian Public |
19418052 |
15.84 |
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NRIs/OCBs |
1473793 |
1.20 |
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Total |
122585000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of auto
components for two-wheelers rear and front wheel hubs, clutches, brake
systems, engine housings, crank housings, etc. |
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Products : |
v Automotive Parts v Components
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PRODUCTION STATUS
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Particulars |
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Licensed Capacity |
Installed Capacity |
Actual Production |
Auto division
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Auto Parts |
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13437763 nos. |
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Generator Parts |
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47632 nos. |
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Dies & Moulds |
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230 nos. |
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Others |
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68188 nos. |
Agro division
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Solvent Extraction |
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150000 Tpa |
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Refined Vegetable Oil |
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15000 Tpa |
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Soyabean |
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500 Tpd |
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Mustard Cake |
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400 Tpd |
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Refined Oil |
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50 Tpd |
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Solvent Oil - Soyabean Mustard |
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848.870 MT -- |
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Deoiled Cake – Soyabean Mustard |
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27948.367 MT 1938.855 MT |
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Refined Oil - Soyabean |
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5208.53 MT |
GENERAL INFORMATION
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Suppliers : |
v
Hero Honda
Motors Limited, v
v
v
v
FCC Company
Limited, v
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Customers : |
v
General Motors,
v
v
v
v
Matsusaka
Engineering Company Limited, v
Maruti Udyog
Limited, v
Shriram Honda
Power Equipments Limited, v
Hero Honda
Motors Limited, v
Kinetic Honda
Motors Limited, v
Amtek Auto
Limited, v
GE Motors
Limited, v
Aaress Auto
Private Limited v
Bansal
Precision Screws Private Limited v
Global Machine
and Tool Company v
JMK Soni
Exports Private Limited v
Nipman
Fasteners Industries Private Limited v
Onasis Auto
Products Private Limited v
Pagan Paints
& Chemical Private Limited v
Sidhartha Tools
Private Limited v
SPL Engineers
Private Limited v
Weldo
Technology Private Limited |
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No. of Employees : |
1800 |
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Bankers : |
v
State Bank of v
ICICI Bank Limited v
Standard Chartered Bank v
Citibank N.A. v
IDBI Bank Limited v
UTI Bank Limited v
HDFC Bank Limited v
HSBC Bank Limited v
Deutsche Bank AG v DBS
Bank Limited |
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Facilities : |
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Banking Relations : |
Good |
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Auditors : |
Gupta
Vigg & Company Chartered
Accountants, |
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Associates/Subsidiaries
: |
v
Rico Daewoo
Precision Industries Limited v
FCC Rico
Limited v
Inapex Limited v
Rico Castings
Limited, v
Rico Auto
Industries Inc. v
Rico Auto
Industries ( Subsidiaries: v
Rico Softtech
Limited v Rico Auto Industries Inc., |
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v
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Joint Venture : |
FCC
Rico Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
25,00,00,000 |
Equity
Shares |
Rs. 1/- Each |
Rs. 250.000 Millions |
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5000000 |
Redeemable Preference
Shares |
Rs. 10 each |
Rs. 50.000 millions |
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Total |
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Rs. 300.000 Millions |
Issued, Subscribed
& Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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122585000 |
Equity
Shares |
Rs. 1/- Each |
Rs. 122.600 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
122.600 |
107.170 |
107.170 |
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2] Warrants |
21.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
2085.000 |
862.805 |
682.157 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
2228.600 |
969.975 |
789.327 |
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LOAN FUNDS |
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1] Secured Loans |
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1171.316 |
653.734 |
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2] Unsecured Loans |
|
273.382 |
82.048 |
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TOTAL
BORROWING
|
1360.200 |
1444.698 |
735.782 |
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DEFERRED TAX LIABILITIES |
277.500 |
237.639 |
160.138 |
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TOTAL
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3886.300 |
2652.312 |
1685.247 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
3048.300 |
2307.551 |
1328.904 |
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Capital work-in-progress
|
268.100 |
54.702 |
236.572 |
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INVESTMENT
|
42.400 |
42.442 |
100.717 |
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DEFERREX TAX ASSETS
|
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES
|
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Inventories
|
424.600
|
252.648 |
151.079 |
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Sundry Debtors
|
801.000
|
899.854 |
649.038 |
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Cash & Bank Balances
|
19.000
|
12.023 |
10.443 |
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Other Current Assets
|
0.000
|
0.000 |
0.000 |
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Loans & Advances
|
329.100
|
202.295 |
219.055 |
Total Current Assets
|
1573.700
|
1366.820 |
1029.615 |
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Less : CURRENT LIABILITIES & PROVISIONS
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Current Liabilities
|
|
999.297 |
902.948 |
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Provisions
|
|
122.201 |
115.418 |
Total Current Liabilities
|
1087.000
|
1121.498 |
1018.366 |
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Net Current
Assets
|
486.700
|
245.322 |
11.249 |
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MISCELLANEOUS EXPENSES
|
20.800 |
2.295 |
7.805 |
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TOTAL
|
3866.300 |
2652.312 |
1685.247 |
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PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other income]
|
7726.800 |
6936.724 |
5980.937 |
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|
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Profit/(Loss) Before Tax
|
486.900 |
496.296 |
462.007 |
Provision for Taxation
|
157.800 |
143.960 |
163.814 |
Profit/(Loss) After Tax
|
329.100 |
352.336 |
298.193 |
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Export Value
|
859.200 |
332.568 |
144.404 |
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Import Value
|
700.100 |
835.998 |
485.809 |
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Total Expenditure
|
6908.000 |
6198.558 |
5371.256 |
QUARTERLY
RESULTS
|
PARTICULARS |
|
30.06.2006 |
30.09.2006 |
|
Sales Turnover |
|
187.31 |
186.02 |
|
Other Income |
|
1.07 |
7.45 |
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Total Income |
|
188.38 |
193.47 |
|
Total Expenditure |
|
165.47 |
168.07 |
|
Operating Profit |
|
22.91 |
25.40 |
|
Interest |
|
2.60 |
3.69 |
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Gross Profit |
|
20.31 |
21.71 |
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Depreciation |
|
9.49 |
9.96 |
|
Tax |
|
4.17 |
-0.84 |
|
Reported PAT |
|
6.99 |
9.75 |
200606 Quarter 1
Net
Sales Includes Domestic Sales Rs.1605.00 million Export Sales Rs.268.10 million
Expenditure Includes (Increase) / Decrease in Stock in Trade Rs.(20.60) million
Consumption of Raw Materials Rs.1230.90 million Staff Cost Rs.142.60 million
Other Expenditure Rs.299.20 million Tax Includes Provision for Fringe Benefit
Tax Rs 1.30 million Current Tax Rs.40.40 million Deferred Tax (Liability/Asset)
Rs.(3.40)million Extraordinary Items Indicates Forex Derivatives Loss EPS is
Basic Status of Investor Complaints for the quarter ended June 30, 2006
Complaints Pending at the beginning of the quarter 05 Complaints Received
during the quarter 07 Complaints disposed off during the quarter 11 Complaints
unresolved at the end of the quarter 01 1. The above Unaudited result and
Consolidated Financial Results were reviewed by the Audit Committee and
thereafter were approved and taken on record by the Board of Directors in their
meeting held on July 27, 2006. 2. As per provisions of AS-17, the revenue /
profit generated by BPM Division is less than 10% of the total revenue profit
of the Company, therefore it is non-reportable segment.
200609 Quarter 2
Net
Sales Includes Domestic Rs.1579.50 million Export Rs.280.70 million Expenditure
Includes (Increase)/Decrease in stock in Trade Rs.(20.90) million Consumption
of Raw Material Rs.1202.00 million Staff Cost Rs.152.90 million Other
expenditure Rs.339.30 million Tax Includes Provision for Fringe Benefit Tax Rs.1.90
million Current Tax Rs.(10.30)million Deferred Tax Rs.28.40 million
Extraordinary Items Indicates Forex Derivatives Loss EPS is Basic Status of
Investor Complaints for the quarter ended September 30, 2006 Complaints Pending
at the beginning of the quarter 01 Complaints Received during the quarter 05
Complaints disposed off during the quarter 05 Complaints unresolved at the end
of the quarter 01 1. The above Unaudited result and Consolidated Financial
Results were reviewed by the Audit Committee and thereafter were approved and
taken on record by the Board of Directors in their meeting held on October 31,
2006. 2. The Limited Review as required under clause 41 of the listing
agreement has been completed by the statutory auditors. The Limited Review for
the quarter ended September 30, 2006 does not have any impact on the above
results. 3. As per provisions of AS-17, the revenue / profit generated by BPM
Division is less than 10% of the total revenue profit of the Company, therefore
it is non-reportable segment.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt Equity Ratio |
0.88 |
1.24 |
1.03 |
|
Long Term Debt Equity Ratio |
0.61 |
0.82 |
0.51 |
|
Current Ratio |
0.82 |
0.73 |
0.69 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.99 |
2.54 |
3.15 |
|
Inventory |
22.53 |
34.08 |
41.24 |
|
Debtors |
8.97 |
8.88 |
11.17 |
|
Interest Cover Ratio |
7.28 |
8.94 |
10.49 |
|
Operating Profit Margin (%) |
11.75 |
11.64 |
11.05 |
|
Profit Before Interest and
Tax Margin (%) |
7.40 |
8.12 |
8.57 |
|
Cash Profit Margin (%) |
8.87 |
8.64 |
7.49 |
|
Adjusted Net Profit Margin
(%) |
4.52 |
5.12 |
5.01 |
|
Return on Capital Employed
(%) |
18.94 |
28.43 |
36.48 |
|
Return on Net Worth (%) |
21.70 |
40.05 |
42.91 |
STOCK PRICES
|
Face
Value |
Rs.10/- |
|
High |
Rs.92.00/- |
|
Low |
Rs.89.50/- |
LOCAL AGENCY FURTHER INFORMATION
History:
Rico Auto Industries (RAI), incorporated in Mar.1983, was converted into a public limited company in Apr.1985. RAI manufactures auto components for two-wheelers rear and front wheel hubs, clutches, brake systems, engine housings, crank housings, etc. It has also diversified into the production of gears and oil pumps for Maruti and gear shift drums for two-wheelers and installed pressure die casting machines to manufacture diesel generating sets, engine frames and housings.
RAI came out with a public issue of equity shares and NCDs with warrants and
had financed the same for manufacturing and machining facilities for graded/spheroidal
graphite machines, iron castings with automatic disamatic mould line with CNC
machining facilities, and an installed capacity of 12,000 tpa for such castings
in 1993.
The subsidiaries of RAI are Rico Auto Industries (UK) Ltd and Rico Auto
Industries Inc.,
RAI is moving towards QS 9000 accreditation. Company has entered into JV
agreement with Daewoo Precision Industries (DPL),
The company has proposed to form an independent project to manufacture Dies
& Moulds under name of Rico Dies & Moulds Private Limited, the proposal
has twin objective of becoming self-dependent for quality dies and moulds and
to reduce the development time for new components.
Rico Agroils Limited (RAL) was merged with the company from Jan.1999. In
1999-2000, production capacities both at Dharuhera and Gurgaon plants were
expanded by investment of Rs. 280 millions.
The Company plans to amalgamate Rico Softech Limited, a wholly owned subsidiary
of RAL with itself on approval of Shareholders, creditors and other statutory
authorities. The company has merged Rico Softech Limited a wholly owned
subsidiary with itself with effect from 1st April 2004. Further it is also
decided to sell its Agro Division at Bundi Rajasthan on Jan 14, 2004. The
company has also disposed off its Agro unit at
Further the company has sold its 605000 equity shares of Hankook Motors Limited
which were entirely written off during the 2004-05 and received a full consideration
amount of Rs.0.060 millions.
During 2004-05 the company has planned to set up two new plants one each at
The company’s fixed assets include Land, Land (Leasehold),
Buildings, Furniture and Fixtures, Plant and Machinery, Office equipment and
Vehicles.
FINANCIAL RESULTS
The
turnover of their Company grew by 11 % from Rs.6936.7 millions in the previous
year to Rs.7726.8 millions in the year under report. Their Company has earned a
Profit before Interest, Depreciation and Tax (PBIDT) of Rs.896.3 millions which
represents an increase of 10% over the previous year's PBIDT of Rs.815.6 millions.
OUTLOOK
FOR CURRENT YEAR
The
Un-audited Financial Results for the quarter ended 30.06.2006, already announced,
shows a turnover of Rs.2143.7 millions and PBIDT of Rs.231.7 millions for the
first quarter of the current year against a turnover of Rs.1879.4 millions and
PBIDT of Rs.217.1 millions of the corresponding quarter of the previous year,
recorded an improvement both in turnover and PBIDT by 14% and 6% respectively. Their
Directors are confident of improving the margin during the remaining part of
the year.
RESERVES
The
reserves of their Company after proposed appropriations shall stand at Rs.2085
millions (including Rs.1017.4 millions received as premium on the allotment of
preferential shares) as against Rs.862.8 millions in the previous year.
EXPORT
The
export turnover of their Company during the period under review was Rs.889.7 millions
recording a growth of 106%. The export turnover includes sale to Wholly Owned
Subsidiaries amounting to Rs.392.1 millions as against Rs.224.3 millions in the
previous year. During the quarter ended 30th June, 2006 of current year export turnover
was Rs.268.1 millions as against Rs.193.9 millions in the corresponding quarter
of the previous year. Further details as regards efforts of their Company on
this front have been dealt with in the Management Discussion and Analysis
section of this report.
DIVIDEND
Their
Directors have recommended a Dividend @ 100% i.e. Rupee 1/- per Equity Share of
Rupee l/- each for the financial year 2005-06, amounting to Rs.139.8 millions
including dividend tax of Rs.17.2 millions on the enhanced equity share capital
of Rs.122.6 millions as against a dividend of same percentage i.e. Rs.1/- per
Equity Share of Rs.1/- each aggregating to Rs.122.2 millions including dividend
tax of Rs.15 millions in the previous year on the equity share capital of Rs.107.2
millions.
Website Details :
RICO’s
BPM division enables companies to generate value for their customers and
employees through the application of its customer & employee care services.
Its solutions offer a high-tech, human-touch approach that couples highly
skilled customer service representatives with advanced information management
technologies & superior business processes.
Business Process Management
RICO’s
Engineering Services division focuses on CAD,
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.44.32 |
|
|
1 |
Rs.86.11 |
|
Euro |
1 |
Rs.57.38 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
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 |
|
46 |
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 |