MIRA
INFORM REPORT
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Report Date : |
02.06.2007 |
IDENTIFICATION DETAILS
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Name : |
SOBHA DEVELOPERS LIMITED |
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Registered Office : |
E-106, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
07.08.1995 |
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Com. Reg. No.: |
18475 |
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CIN No.: [Company
Identification No.] |
U85110KA1995PLC018475 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRS03591A |
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PAN No.: [Permanent
Account No.] |
AABCS7723E |
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Legal Form : |
Public Limited Liability Company. Company’s Shares are listed on Stock
Exchange. |
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Line of Business : |
To buy, contract and develop commercial, residential and office
properties. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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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Maximum Credit Limit : |
USD 5400000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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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
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Registered Office : |
E-106, |
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Tel. No.: |
91-80-25597260, 25594139 |
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Fax No.: |
91-80-25594138 |
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E-Mail : |
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Website : |
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Corporate Office : |
# 4, Neeladri Plaza, Raja Ram Mohan Roy Road, Richmond
Road Circle, Bangalore - 560 025, Karnataka, India |
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Tel. No.: |
91-80-2210 4561 / 2 / 3 / 4 / 5 / 6 |
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Marketing Office: |
# 368, 7th Cross,
Wilson Garden, |
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Tel. No.: |
91-80-22295936 / 7 / 8 & 22242172 |
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Mobile No. : |
91-9880178000, 9880003333, 9880005555, 9845307978, 9900113142 |
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Fax No.: |
91-80-22120852 |
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E-Mail : |
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Projects & Trade Division : |
#211/9A, 1st Main, 2nd Cross, Sanjeevappa
Layout, Nagavarapalya, C.V.Raman Nagar, Bangalore - 560 093, Karnataka, India |
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Tel. No.: |
91-80-2524 4841 / 42 / 74 / 76 / 77 |
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Fax No.: |
91-80-2534 0307 |
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E-Mail : |
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Website : |
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Sobha
Renaissance Information Technologies : |
SRIT House, #113/1B, |
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Tel. No.: |
91-80-51951999 |
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Fax No.: |
91-80-51523300 |
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E-Mail : |
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Pune
Office : |
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Tel. No.: |
91-20-2613 6177, 2613 7292 |
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Chennai
Office : |
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Tel. No.: |
91-4114-309385 |
DIRECTORS
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Name : |
Mr. P.N.C. Menon |
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Designation : |
Chairman |
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Name : |
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Designation : |
Vice Chairman |
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Name : |
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Designation : |
Managing Director |
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Name : |
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Designation : |
Director |
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Name : |
Mr. Anup Shah |
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Designation : |
Independent Director |
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Name : |
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Designation : |
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Name : |
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Designation : |
Independent Director |
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Name : |
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Designation : |
Independent Director |
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Name : |
Mr. R V S Rao |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. K Suresh |
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Designation : |
Company Secretary |
BUSINESS DETAILS
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Line of Business : |
To buy, contract and develop commercial, residential and office
properties. |
GENERAL INFORMATION
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No. of Employees : |
2125 |
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Bankers : |
Not Available |
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Facilities : |
-- |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Chartered Accountants |
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Associates/Subsidiaries : |
Sobha
Interiors Division Plot
# 9, Bommasandra, Jigini Link Road,
Industrial Area, Bommasandra, Bangalore, Karnataka, India.
Sobha
Glazing & Metal Division Plot
# 10, Bommasandra, Jigini Link Road, Industrial Area Bommasandra, Bangalore,
Karnataka, India. Indeset
Group of Companies
P.O Sobha Projects & Trade Division Sobha Renaissance Information Technology |
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Gulf
International Construction & Interiors Company W.L.L.CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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90000000 |
Equity Shares |
Rs. 10/- each |
Rs. 900.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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29869000 |
Equity Shares |
Rs. 10/- each |
Rs. 298.690
Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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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 |
298.700 |
298.700 |
211.400 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1069.600 |
356.800 |
82.700 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1368.300 |
655.500 |
294.100 |
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LOAN FUNDS |
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1] Secured Loans |
4208.100 |
2209.000 |
534.100 |
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2] Unsecured Loans |
23.000 |
23.600 |
23.600 |
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TOTAL BORROWING |
4231.100 |
2232.600 |
557.700 |
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DEFERRED TAX LIABILITIES |
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TOTAL |
5599.400 |
2888.100 |
851.800 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
999.200 |
431.300 |
189.500 |
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Capital work-in-progress |
21.100 |
122.900 |
0.000 |
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INVESTMENT |
27.000 |
0.200 |
190.200 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
2544.000
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1905.400 |
771.400 |
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Sundry Debtors |
803.000
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364.000 |
317.600 |
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Cash & Bank Balances |
449.700
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65.800 |
109.400 |
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Other Current Assets |
0.000
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0.000 |
0.000 |
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Loans & Advances |
5182.800
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2237.900 |
1148.800 |
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Total
Current Assets |
8979.500
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4573.100 |
2347.200 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
4033.000
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2021.300 |
1784.800 |
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Provisions |
394.400
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218.100 |
90.300 |
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Total
Current Liabilities |
4427.400
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2239.400 |
1875.100 |
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Net Current Assets |
4552.100
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2333.700 |
472.100 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
5599.400 |
2888.100 |
851.800 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Sales Turnover |
5966.200 |
4530.600 |
1950.900 |
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Other Income |
956.800 |
1381.000 |
95.000 |
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Total Income |
6923.000 |
5911.600 |
2045.900 |
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Profit/(Loss) Before Tax |
1067.000 |
484.900 |
165.200 |
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Provision for Taxation |
182.200 |
138.400 |
76.400 |
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Profit/(Loss) After Tax |
884.800 |
346.500 |
88.800 |
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Expenditures : |
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Power
& Fuel Cost |
17.700
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14.200
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00.000
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Other
Manufacturing Expenses |
4403.300
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4668.800
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1480.100
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Employee
Cost |
230.400
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210.400
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00.000
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Selling
and Administration Expenses |
630.800
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205.600
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326.300
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Miscellaneous
Expenses |
226.200
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155.500
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00.100
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Interest
& Financial Charges |
219.400
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109.400
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47.500
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Depreciation
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128.200
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62.800
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26.700
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Total Expenditure |
5856.000 |
5426.700 |
1880.700 |
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SUMMARISED RESULTS
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PARTICULARS |
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31.03.2007 (Full year) |
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Sales
Turnover |
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11865.000 |
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Other
Income |
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29.000 |
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Total
Income |
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11894.000 |
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Total
Expenditure |
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9303.000 |
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Operating
Profit |
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2591.000 |
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Interest |
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481.000 |
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Gross
Profit |
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2110.000 |
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Depreciation |
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244.000 |
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Tax |
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251.000 |
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Reported
PAT |
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1615.000 |
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Dividend
(%) |
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550.000 |
KEY RATIOS
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Debt-Equity
Ratio |
3.19 |
2.94 |
1.46 |
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Long
Term Debt-Equity Ratio |
2.38 |
2.25 |
1.46 |
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Current
Ratio |
1.63 |
1.45 |
1.31 |
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TURNOVER
RATIOS |
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Fixed
Assets |
6.60 |
11.14 |
9.54 |
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Inventory |
2.68 |
3.39 |
2.35 |
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Debtors |
10.22 |
13.29 |
5.62 |
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Interest
Cover Ratio |
5.86 |
5.43 |
4.48 |
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Operating
Profit Margin(%) |
23.71 |
14.50 |
12.27 |
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Profit
Before Interest And Tax Margin(%) |
21.56 |
13.12 |
10.90 |
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Cash
Profit Margin(%) |
16.98 |
9.03 |
5.92 |
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Adjusted
Net Profit Margin(%) |
14.83 |
7.65 |
4.55 |
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Return
On Capital Employed(%) |
30.31 |
31.78 |
29.64 |
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Return
On Net Worth(%) |
95.04 |
80.37 |
30.47 |
STOCK PRICES
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Face Value |
Rs.10.00/- |
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High |
Rs.924.00 |
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Low |
Rs.905.00 |
LOCAL AGENCY FURTHER INFORMATION
AS PER WEBSITE
Profile
Subject was incorporated in
With establishing subject, Mr Menon pioneered in
Today, they believe that the Sobha brand is well accepted as the industry
benchmark for world class building techniques and quality standards, and also enjoys
an ever widening reputation for reliability, dependability and honesty.
Their scale of operations has expanded and their revenues reached Rs 6284.36
million in fiscal 2006. Their profit after tax was Rs.884.86 million in fiscal
2006. As of 2006, they have constructed 4 million sq. ft of area.
Strengths – their reasons for success:
A sustained quality edge – international quality is their
lifeline and the entire organization commits itself to it.
Backward Integration – self reliant in numerous important
and critical skills and products necessary for construction. Thus enabling
control on quality, time and cost.
Transparency at all stages - Undeviating business ethics and
adherence to all Govt. norms.
Excellent customer services – The customer is foremost in
subject’s mind. While it excels in building magnificent structures, it never
forgets that, in the process, it is also building relationships.
Functioning as a one-stop solution provider, Subject offers
its skills and state of the art technology right from the conception to
completion of a project. Besides this, their in-house CRM team ensures that
customer support is just a phone call away. They also benefit from their
in-house operations like interiors, metal glazing, the design studio, the
concrete block-making factory and the construction academy.
Their fine understanding of the needs and preferences of
their clients has left them with an ever-growing list of satisfied customers.
Apart from their residential projects, they have also established relationship
for contractual projects with global corporates such as Infosys Technologies,
Timkin, Taj Hotels, MICO and HP, among others.
Subject is committed to the guiding principles of quality,
timely delivery, fair price and integrity. Apart from being the first ISO 9001
(1994 series) company in its category in
Quality
Commitments
The Sobha Group believes in developing and constructing
aesthetically designed, economically viable residential and commercial
complexes of international quality. They believe their buildings should reflect
engineering excellence with a view to providing complete customer satisfaction.
The quality of their products/services should result in complete value for
clients, as well as foster continuous demand for their products.
Apart from being the first ISO 9001 (1994 series) company in its category in
The in-house R&D Department helps the Sobha Group benchmark itself against
world standards in project conception, execution and delivery. This helps to
focus single-mindedly on innovations in construction and to adapt and integrate
them into work processes. Hence total value to the customer is assured at every
stage of the construction.
The Sobha Group is highly regarded for its transparency, fair play, integrity
and honesty. Every Sobhaite is pledged to working towards redefining quality
for all its stakeholders. As a team, they believe that Subject epitomizes
'Passion at Work'.
Backward
integration
Backward integration is what drives the organization’s
turnkey projects. In a turnkey scenario, they bring the expertise of all their
Divisions to focus on every aspect of the project. In simple words, everything
from precision engineering to aesthetic design, from quality metal glazing to
high-class interiors is done inhouse. This allows for stringent focus on
quality control - which in turn gives their customers a fine combination of
precision and aesthetics. The Infosys centers in
Future
Plans
The Sobha Group, with revenues of Rs. 6284.36 million in
fiscal 2006, is today, a unique success story that is still growing. They
anticipate building a presence in varied industries including Hotels &
Resorts, Hypermarkets, Home Stores, and Building Materials. They have also
ventured into retail development with the launch of
The Sobha Global Mall.
The Sobha Global Mall is promoted as the “Shoppertainment” destination of
In the area of Real Estate, the company has plans to be present in over 12
cities across
More heartening is the fact that, even in the face of such enormous expansion
and change, focus on international quality will remain constant and a tenet
that all Sobhaites will continue to abide by.
FINANCIAL RESULTS
AND OPERATIONS:
Current year's operational result reflects Company achieving greater heights in
terms of volume and sales figures. The Turnover has grown from Rs.4651.86
million to Rs.6284.34 million, which is an increase of 35% over the previous
year. Profit before Tax increased from Rs.485.03 million to Rs.1067.24 million,
an increase of 120% over the previous year.
The company has successfully completed many Real Estate projects viz.,
Malachite I, II, III, which are one of the finest Row. Houses
Several new projects have been launched during the year, viz., Sobha Aster,
Sobha Iris, Sobha Lotus, Sobha Mangolia, Sobha Jasmine, Sobha Primrose, Sobha
Dahlia, Sobha Datsy, Sobha Carnation, Sobha Daffodil and Sobha Mayflower.
It is no surplus, that their real estate wing has been able to sell over 2300
apartments in last financial year, which clearly establishes a leading march
over their competitors in the same space. Apart from this, the Company was able
to achieve a turnover of Rs.2050 million on Contractual works of their leading
Corporate Clients.
They expect that with new project launches made in 2005-06, will give a boost
to the larger turnover in the year 2006-07.
The board takes pleasure in announcing that the company's capability in
delivery has increased and have been able to deliver over 3.9 million square
feet construction during the year 2005-06. They take pride that they have been
using the most modern tools, techniques & technologies available in the
International Arena and their engineers are well versed in their usage. They
are well trained in Civil Engineering and project management skills, through
regular in-house training and from agencies to further shorten delivery
schedules without comprising on quality in construction.
They are gearing themselves as they progress, to accepting newer challenges and
having their capabilities extended to deliver over 8 million square feet in the
ensuing year by scaling up their operation.
During the year under review, they have successfully completed many projects
for their prestigious client at
They have commenced the work at
They have commenced the production in the block making Unit located at
Bommansandra Industrial Estate,
This sophisticated and automated unit with no manual handling procedures has
given flawless and absolutely perfect blocks with highest parameters,
reaffirming subject's quality standards and is now become a lofty goals & a
role model for other block making unit manufacturers who supply to other
construction companies.
In addition, they have set up a sophisticated Lab and R&D unit for testing
quality of raw material used in the manufacture of Blocks. The lab is also
equipped to test the finished block's quality as per international standards.
The company has achieved one more successful backward integration, with its
drive for perfection and newer accomplishments.
They have placed order for a sophisticated Kerb plant from
MANAGEMENT DISCUSSION AND
ANALYSIS:
Market:
The year 2005-06 has witnessed continued buoyancy in Real Estate market, more
specifically reflected in line with over all growth of Indian Economy. Since
Real Estate/Housing Sector is now open to FDI Investment opportunities, and
active interest shown by overseas real estate financing companies in the India
Growth model, they see this will trigger further growth in Real Estate activity
all over the country.
With the Company's high standards in quality and timely delivery without
compromising on basic principles of transparency and families, it has grown to
be dominant player in
They have recently witnessed a spurt in interest rates in Housing Sector in the
last few months. However, they observe that the interest rates are affordable
and the company does feel that this should not affect the long term perspective
of the industry.
The market scenario is very encouraging in costs like
They believe that the trends of growth in Real Estate, is sustainable due to
buoyancy shown in all sector of the economy.
Quality:
The quality in Construction is the lifeline of the company and imparted by the
company in aspects of the product and service. The company's continued
commitment to excellence, and its efforts to continually deliver quality in all
its projects, has led to being as leaders in its business. The company has
ensured that it adopts cutting edge construction technology in all its
activities.
At all its Project sites, the company has full-fledged state-of-the-art
equipment, mostly imported from
All engineers and site supervisors are regularly imparted training in the newer
methodology and also in the use of latest tools and techniques in construction
methods.
Significant Capital expenditure is being incurred by the company to ensure
deployment of latest available technology in the areas of shuttering,
framework, plumbing and water proofing technologies. The emphasis is always on
aesthetics, functionality, durability and quality of construction in all
activities.
Plans:
The Company launched 11 new projects in
The Company's Real Estate Development is predominantly in
Company is looking at various options of growth and plans to enter into the
area of Mall/Retail business for which it has identified 17 acres of land in
The company has continuously launched many new projects to meet the
requirements of various market segments in mind. Some of the apartments are
priced at a launch price of Rs.3.4 million. The Company also plans the land
requirement in such a way that it has adequate rolling stock of land to meet
the market and development leads.
The Board has initiated several steps to meet this ambitious growth targets by putting
technology and people in place. During the year, staff strength has grow more
than 100% from the previous year, and current strength has crossed over 2500
employees. Board is very proud of employee's significant contribution &
sincerely thanks them for the success of the company.
Reorganization:
With effect from 3rd April 2006 the company proposes to take over running
business of Sobha Interiors Private Limited and Sobha Space Private Limited.
This has been done with view to consolidate backward integration process of the
company's all business activities and improvement in value proposition of stake
holders. The Board has approved this reorganization and as such all business
activities of these entities will be a part of the company.
Initial Public Offer:
To fund the future requirements of land procurement expenses, construction
expenses of various projects, and to have more visibility in the market, the
company plans for IPO in the year to come. The Company has identified the Book Running
Lead Managers to handle the issue. Management expects that, the shares of the
company will be listed during the year 2006-07 in
Press Release :
Sobha’s Q3 profit
surges 49%, revenue up by 77%
Sobha's Q3 net profit at Rs. 456 millions on a turnover of Rs 2986
millions
Sobha's nine-month profit surges 85% to Rs
996 millions, revenue up 92 % to Rs 8306 millions
Riding on strong growth across all segments, Sobha Developers Limited
recorded a 49% growth in net profit during the third quarter of the 2006-07
financial year. Its net profit for the third quarter stood at Rs 456 millions,
up from Rs 306 millions in the same period last year. Its turnover for the
quarter also marked a 77% increase to Rs 2986 millions from Rs 1689 millions in
the corresponding quarter of the previous fiscal.
For the nine month period ending Dec 31, 2006 , Sobha Developers net
profit surged 85% to Rs 996 millions from Rs 539 millions compared to 2005-2006
financial year. The turnover, during the same period, registered a growth of
92% to Rs 8306 millions from Rs 4316 millions a year earlier.
Mr. J C Sharma, Managing Director, Sobha Developers Limited said, “The
key driver of growth for us has been the robust demand in the construction
space, both from residential as well contractual segments. The last quarter saw
the launch of 4 new residential projects, and in contractual space they have
added Dell International, BF Utilities Limited and Gold Star Plus to their
growing portfolio of clients across the country.”
He further added, ‘Sobha is amongst the very few players in the real
estate space to have demonstrated exceptional execution capabilities in the
last 9 months, which is also reflected in its financial performance and going
forward this would be the key differentiator”.
Way forward
Sobha also has 8 projects in pipeline aggregating to approximately 9.5
million sq. ft. to be launched in Trichur, Pune and
About Sobha
Sobha is a recognised leader in real-estate development business,
delivering international quality products of superior finish and services through
benchmarked practices & unique backward integration model.
The company was incorporated in the 1994 under the chairmanship of Mr.
PNC Menon. Apart from being the first ISO 9001 (1994 series) company in its
category in
Sobha with its unique business model that is backward integrated, has
been at forefront adopting the world-class building techniques and quality
standards, and now enjoys an ever-widening reputation for reliability,
dependability and honesty. Armed with the expertise in residential and
contractual projects, Sobha plans to diversify its presences across the Country
entering into different segments such as integrated townships, plot
development, malls and multiplexes.
Subject got listed at BSE and NSE on
December 20, 2006 with a record premium of 78.63%.
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.40.66 |
|
|
1 |
Rs.81.70 |
|
Euro |
1 |
Rs.55.05 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
59 |
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 |
|