MIRA INFORM REPORT
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Report Date : |
24.07.2007 |
IDENTIFICATION DETAILS
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Name : |
TREND ELECTRONICS LIMITED |
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Formerly Known As : |
VIDEOCON COMMUNICATIONS LIMITED [CTV] |
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Registered Office : |
20 Km. Stone, |
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Country : |
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Financials (as on) : |
30.09.2006 |
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Date of Incorporation : |
16.06.1989 |
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Com. Reg. No.: |
52233 |
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CIN No.: [Company Identification No.] |
U99999MH1989PTC052233 |
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TAN No.: [Tax Deduction & Collection Account No.] |
NSKV01128B |
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Legal Form : |
A public limited liability company. Company’s shares are listed on the
Stock Exchange. |
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Line of Business : |
Manufacturer of VCRs, VCPs and video tape deck mechanisms
(VTDM). |
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 3100000 |
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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 / Factory : |
20 Km. Stone, |
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Tel. No.: |
91-2431-251505 |
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E-Mail : |
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Website : |
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Corporate Office : |
Gut No. 350, Bhalgaon, |
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Tel. No.: |
91-240-2644507 |
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Fax No.: |
91-240-2644505 |
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E-Mail : |
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Website : |
DIRECTORS
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Name : |
Mr. Venugopal N. Dhoot |
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Designation : |
Director |
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Name : |
Mr. Pradeepkumar N. Dhoot |
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Designation : |
Director |
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Name : |
Mr. S. Padmanabhan |
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Designation : |
Director |
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Name : |
Mr. Rajesh Rathi |
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Designation : |
Director |
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Name : |
Mr. S. S. Nabar |
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Designation : |
Director |
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Name : |
Mr. B. K. Chopra |
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Designation : |
Director |
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Name : |
Mr. V. D. Dharm |
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Designation : |
Director |
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Name : |
Mr. S. K. Bhandari |
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Designation : |
Nominee of IFCI Limited |
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Name : |
Mr. A. K. Godika |
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Designation : |
Nominee of IFCI Limited |
KEY EXECUTIVES
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Name : |
Mr. Mandar S. Nargund |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding
of Promoter and Promoter Group |
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(1) Indian |
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Individuals /
Hindu Undivided Family |
150 |
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Bodies Corporate |
1804030 |
24.05 % |
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(2) Foreign |
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Bodies Corporate |
1875000 |
25.00 % |
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(B) Public
Shareholding |
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(1) Institutions |
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Mutual Funds
/UTI |
2600 |
0.03 % |
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Financial
Institutions / Banks |
1625 |
0.02 % |
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(2)
Non-Institutions |
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Bodies Corporate |
164838 |
2.2 % |
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Individuals |
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Individual shareholders
holding nominal share capital up to Rs. 0.100
Million |
2217547 |
29.57 % |
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Individual
shareholders holding nominal share capital in excess of Rs. 0.100 Million |
1434210 |
19.12 % |
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Total (A +B) |
7500000 |
100.00 % |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of
VCRs, VCPs and video tape deck mechanisms (VTDM). |
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Products : |
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GENERAL INFORMATION
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Bankers : |
State Bank of Central Bank of Punjab National Bank Ing Vysya Bank Limited Indian Bank |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Khandelwal Jain & Company Chartered Accountants 12-B, Baldota Bhavan, 117, Maharshi Karve Road, Opp. Churchgate
Railway Station, Mumbai - 400 020 Kadam & Company Chartered Accountants |
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Associates/Subsidiaries : |
Videocon VCR Securities Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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10,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 100.000 Millions |
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5,000,000 |
Redeemable Preference Shares |
Rs. 100/- each |
Rs. 500.000 Millions |
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Total |
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Rs. 600.000
Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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7,500,000 |
Equity Shares |
Rs. 10/- each |
Rs. 75.000
Millions |
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
30.09.2006 |
30.09.2005 |
30.09.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
75.000 |
75.000 |
525.000 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
722.643 |
702.077 |
565.600 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
797.643 |
777.077 |
1090.600 |
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LOAN FUNDS |
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1] Secured Loans |
920.710 |
1055.464 |
1146.100 |
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2] Unsecured Loans |
1526.578 |
1008.756 |
949.000 |
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TOTAL BORROWING |
2447.288 |
2064.220 |
2095.100 |
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DEFERRED TAX LIABILITIES |
122.432 |
116.148 |
0.000 |
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TOTAL |
3367.363 |
2957.445 |
3185.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1484.846 |
882.362 |
941.500 |
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Capital work-in-progress |
0.000 |
0.000 |
0.200 |
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INVESTMENT |
95.234 |
73.279 |
67.600 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
1315.876
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1127.969 |
1153.600 |
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Sundry Debtors |
1337.259
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1427.539 |
1588.500 |
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Cash & Bank Balances |
62.906
|
138.899 |
92.900 |
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Other Current Assets |
3.456
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5.372 |
0.000 |
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Loans & Advances |
79.620
|
71.031 |
114.800 |
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Total
Current Assets |
2799.117
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2770.810 |
2949.800 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
986.063
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747.571 |
752.200 |
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Provisions |
25.771
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21.435 |
21.200 |
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Total
Current Liabilities |
1011.834
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769.006 |
773.400 |
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Net Current Assets |
1787.283
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2001.408 |
2176.400 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
3367.363 |
2957.445 |
3185.700 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
30.09.2006 |
30.09.2005 |
30.09.2004 |
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Sales Turnover |
7742.538 |
7404.946 |
7322.400 |
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Other Income |
25.918 |
16.035 |
53.100 |
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Total Income |
7768.456 |
7420.981 |
7375.500 |
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Profit/(Loss) Before Tax |
37.410 |
168.010 |
182.200 |
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Provision for Taxation |
13.077 |
35.791 |
44.500 |
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Profit/(Loss) After Tax |
24.333 |
132.219 |
137.700 |
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Imports : |
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Raw Materials |
393.032 |
878.638 |
NA |
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Capital Goods |
13.030 |
13.130 |
NA |
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Total Imports |
406.062 |
891.768 |
NA |
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Expenditures : |
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Cost of Goods
Consumed/Sold |
7126.157 |
6803.710 |
7134.600
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Salaries, Wages
& Employees' Benefits |
89.361 |
77.059 |
89.300
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Manufacturing
and Other Expenses |
177.510 |
120.476 |
46.300
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Interest &
Finance Charges |
165.884 |
148.099 |
178.300
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Depreciation |
115.277 |
103.628 |
115.300
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Excise
Duty |
0.000 |
0.000 |
407.100
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Power
& Fuel Cost |
0.000 |
0.000 |
06.400
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Selling
and Administration Expenses |
0.000 |
0.000 |
95.300
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Miscellaneous
Expenses |
0.000 |
0.000 |
74.000
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Total Expenditure |
7674.189 |
7252.972 |
8146.600 |
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QUARTERLY RESULTS
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PARTICULARS |
|
31.12.2006 |
31.03.2007 |
|
Type |
|
1st
Qtr |
2nd
Qtr |
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Sales
Turnover |
|
2047.600 |
2092.800 |
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Other
Income |
|
4.200 |
4.400 |
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Total
Income |
|
2051.800 |
2097.200 |
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Total
Expenditure |
|
1972.400 |
1999.1 |
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Operating
Profit |
|
79.400 |
98.100 |
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Interest |
|
34.800 |
48.900 |
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Gross
Profit |
|
44.600 |
49.200 |
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Depreciation |
|
25.700 |
37.600 |
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Tax |
|
4.000 |
3.500 |
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Reported
PAT |
|
14.900 |
8.100 |
Notes :
200612
Quarter 1 –
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 15 Complaints disposed off during the quarter 15
Complaints unresolved at the end of the quarter Nil 1. The above results have
been reviewed by the Audit Committee and taken on record by the Board of
Directors at its meeting held on January 31, 2007 and the results for the
quarter ended December 31, 2006 have been subjected to a ''Limited Review'' by
the Auditors of the Company, as per the Listing Agreement with the Stock
Exchanges. 2. The provision for tax for the quarter and year ended includes
provision for deferred tax and fringe benefit tax. 3. The Company has only one
segment viz. ''Consumer electronics and components/parts thereof'' as per
Accounting Standard on Segment Reporting (AS-17) of ICAI. 4. The figures have
been regrouped wherever necessary.
200703
Quarter 2 –
Expenditure Includes (Increase) / Decrease in Stock in Trade
Rs (19.80) million Materials Consumption Rs 1841.40 million Personnel Cost Rs
23.50 million Other Expenditure Rs 154.00 million EPS is Basic & Diluted
Status of Investor Complaints for the quarter ended March 31, 2007 Complaints
Pending at the beginning of the quarter Nil Complaints Received during the
quarter 16 Complaints disposed off during the quarter 16 Complaints unresolved
at the end of the quarter Nil 1. The above results have been reviewed by the
Audit Committee and taken on record by the Board of Directors at its meeting
held on April 27, 2007 and the results for the quarter ended March 31, 2007
have been subjected to a 'Limited Review' by the auditors of the Company, as
per the listing agreement with the Stock Exchanges. 2. The Provision for Tax
for the quarter and year ended includes Provision for Current Tax, Deferred Tax
and Fringe Benefit Tax. 3. The Company has only one segment viz. 'Consumer
electronics and components/parts thereof' as per Accounting Standard on Segment
Reporting (AS)-17 of ICAI. 4. The figures have been regrouped, wherever
necessary.
KEY RATIOS
|
PARTICULARS |
30.09.2006 |
30.09.2005 |
30.09.2004 |
|
Debt-Equity
Ratio |
2.87 |
2.23 |
1.99 |
|
Long
Term Debt-Equity Ratio |
2.16 |
1.59 |
1.46 |
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Current
Ratio |
1.78 |
2.01 |
2.13 |
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TURNOVER
RATIOS |
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Fixed
Assets |
3.79 |
4.24 |
4.06 |
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Inventory |
6.67 |
6.93 |
6.74 |
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Debtors |
5.90 |
5.24 |
4.84 |
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Interest
Cover Ratio |
1.21 |
1.98 |
1.93 |
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Operating
Profit Margin(%) |
4.06 |
5.60 |
6.69 |
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Profit
Before Interest And Tax Margin(%) |
2.65 |
4.29 |
5.17 |
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Cash
Profit Margin(%) |
1.71 |
2.98 |
3.39 |
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Adjusted
Net Profit Margin(%) |
0.30 |
1.67 |
1.88 |
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Return
On Capital Employed(%) |
7.09 |
11.27 |
12.49 |
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Return
On Net Worth(%) |
3.09 |
18.65 |
24.32 |
STOCK PRICES
|
Face Value |
Rs.10/- |
|
High |
Rs.56.55/- |
|
Low |
Rs.54.40/- |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Incorporated in Jun.'89, Videocon Communications, formerly
known as Videocon VCR (VVL), a part of the Videocon group, manufactures VCRs,
VCPs and video tape deck mechanisms (VTDM).
VCL has a technical-cum-financial agreement with Toshiba, which provides the
entire know-how for manufacturing video cassette recorders, video cassette
players including tape deck mechanisms, and also trains VVL's employees in the
manufacturing process. Toshiba has taken a 25% equity stake in VVL.
The company came out with a public issue in Jan.'90 to part-finance its project
to manufacture VCRs, VCPs and VTDMs. The company has a subsidiary -- Videocon
VCR Securities.
The Company has been taking various steps to reduce consumption of electrical
energy by improved housekeeping, monitoring the use of solar lighting and
indoor shop lighting. Company is taking continuous efforts towards development
of new technology to launch various products with added features and at reduced
prices.
The Net sales for the financial year ended 2006 amounted to
Rs. 7742.500 Millions as against Rs. 7404.900 Millions for the previous
financial year. The Profit after tax amounted to Rs. 24.300 Millions as against
Rs. 132.200 Millions for the previous financial year.
Segment-wise performance:
The Company is primarily engaged in manufacturing of Electrical and Electronic
Appliances and there is no other reportable segment as defined in Accounting
Standard 17 on 'Segment Reporting'.
Gross Sales increased from Rs. 7906.30 million in 2005 to Rs. 8149.62 million
in 2006.
Outlook:
- The Company proposes to expand product portfolio.
- The consumer electronic sector is undergoing a major transformation, the Company
is planning to tap the same.
- The product manufactured by the Company are low value products, hence,
margins are under pressure. The Company proposes to diversify the product base
to improve the performance.
Risks and concerns:
- The markets for consumer electronics products and household appliances are
highly competitive and the Company has experienced pressure on its prices and
margins.
- The emergence of organized retail is another looming threat for the industry,
with store brands being launched.
- Continuous technological changes and shift in consumer preference to high-end
consumer electronics products.
Internal Control Systems and their adequacy:
The company has an internal control system commensurate with its size and nature
of business which provides for:
- Accurate recording and custody of assets
- Compliance with applicable statutes, policies procedures, listing
requirements; management guidelines and circulars.
- Transactions being accurately recorded, cross verified and promptly
reported
- Efficient use and safeguarding of resources,
- Adherece to applicable accounting standards and policies
- Information technology system which include controls for facilitating the
above.
Internal checks and controls are exercised by strictly adhering to the various
procedures laid at the time of delegation of Authorities and other Procedures.
The delegation clearly indicates the powers along with the monetary limits,
wherever necessary, that can be exercised at various levels by the Managers in
the Company.
Financial Performance with respect to operational performance:
The performance of the Company on stand alone basis is as under:
Fixed Assets:
The grass block of company as on 30th September, 2006 was Rs. 2662.30 million.
The net block as on that date was Rs 1484.85 million, during the year. there
were additions to gross block of fixed assets to the extent of Rs. 774.22
million.
Sales:
During the year under consideration, the company achieved a turnover of Rs.
8149.62 million; against Rs. 7906.30 million during the previous year ended on
30th September, 2005, thereby recorded an increase of 3.08% as compared to
previous year.
Other Income:
Other income for the period was Rs. 25.92 million as against Rs.16.03 million
during the previous year ended on 30th September, 2005, representing an
increase of 61.70 % as compared to previous year. The increase is mainly ors
account of increase in Dividend Income and profit on sale of fixed assets. Other
income comprises of Investment income, dividend income, interest income, profit
on sale of fixed assets and miscellaneous income.
Expenditure:
Cost of Goods Consumed
Cost of Goods Consumed stood at Rs. 7126.16 million as against Rs. 6803.71
million during the previous year, representing an increase of 4.74% as compared
to previous year ended on 30th September, 2005. The increase is on account of
increase in turnover of the company.
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the financial year Foreign Exchange earnings amounted to Rs. Nil and
Foreign Exchange outgo was Rs. 415.200 Millions as against Rs. Nil and Rs.
897.300 Millions, respectively for the previous year.
Notes
of Account
|
Contingent
Liabilities not provided for in respect of |
Rs. In Millions |
|
a. Letters of Credit issued by the Bank |
56.064 |
|
b. Custom Duty Demand under dispute |
3.306 |
|
c. Excise Duty Demand under dispute |
4.902 |
|
d. Service Tax Demand under dispute |
5.498 |
|
e. Sales Tax Demand [ Amount paid under protest |
3.342 |
As per
the accounting policy followed by the company, the quoted investments are
valued at cost or market value whichever is lower i.e. they have been marked to
market and the decline in the value of investment other than the temporary, is
provided for. Accordingly, during the year. There is net write back of Rs.
2.729 Millions (Previous year Rs. 7.645 Millions) towards the diminution in
value of Investments recognised in earlier years.
The
Company has reviewed the fixed assets for Impairment and has, identified some
of the machinery and equipments, no more useful in the production process.
Consequently, an amount of Rs. 56.857 Millions has been assessed as impairment
loss and has been recognized in the Profit and Loss Account. The related
deferred tax, credit of Rs. 19.138 Millions has been included in the Provision
for deferred tax in the Profit and Loss Account.
The
Company has made a provision of Rs. 6.330 Millions towards Income Tax (Previous
year Rs. 14.121 Millions), after taking into consideration, the benefits
admissible under the provisions of the Income Tax Act, 1961 and the same is, in
the opinion of the Management, adequate.
The
Company is primarily engaged in manufacturing of Electrical & Electronic
Appliances and there is no other reportable segment as defined in Accounting
Standard 1 7 on "Segment Reporting".
AS PER
WEBSITE
Vision
Videocon’s mission: a reflection of continuity
and change
Videocon’s mission expression has been crafted
to envelope both extant and emerging realities:
“To delight and deliver beyond expectation through ingenious
strategy, intrepid entrepreneurship, improved technology, innovative products,
insightful marketing and inspired thinking about the future.”
A breakdown of the statement above reveals a ‘means and end’
approach, where the end is articulated at the beginning with the means linked
to it.
“To delight and deliver beyond expectation…”:
the end
This segment not only underlines the importance of the ultimate
goal - customer satisfaction (‘delight’) and ultimate target - the customer,
but also of intermediate processes and principals, which have contributed to
building a robust, dependable Videocon value chain (‘deliver’). As a result of
its focus on developing loyal customers and reliable associates, Videocon is
able to exceed expectations.
“…through
ingenious strategy…”: the means
In the cutthroat world of today, it is only by taking recourse to advance
planning and strategy that a business can hope to survive. Although textbook
strategy has its uses, reproducing it in verbatim for the real world would be
foolish because of the absence of textbook conditions. Thus, there is a need
for a bounded rationality, a spontaneity and improvisation that is flexible
enough for scenarios both imaginable and unimaginable. Videocon’s ingenious
manoeuvres are actually flexi-strategy that abstracts from shifting ground
conditions and decides game-plans, or sometimes changes the rules of the game.
“…intrepid entrepreneurship…”: the means
An enterprise with the odds stacked against it makes great
business sense. This is because higher the obstacles, lower the number of
players likely to be active in that field - thus, fetching extraordinary
returns. The only requirement is a bold and confident attitude willing to brave
the odds. Videocon’s foray into oil and gas is a bold and intrepid endeavour
that arises from immense faith on the surefooted competence of the company’s
in-house managerial talent.
“…improved technology…”: the means
Technology is no more a premium input; it has become the bare
minimum in recent years. Rapid advances have only fuelled this phenomenon.
Videocon is extremely vigilant in shunting out dated technology and replacing
it with the best-in-class offers of the times.
“…innovative products…”: the means
Product development, innovation and customisation are the tools
Videocon uses to stay ahead of the competition. This is because a continuous
stream of innovative products excites the market and enhances brand recall. A
strategy that Videocon banks on a lot, especially on the domestic front.
“…insightful marketing…”: the means
The market share battle scene has long shifted from technology and
processes to the psyche of the customer. This means that those with deeper
insights into the elusive mind of the buyer are likely to dominate. Videocon is
reinforcing marketing strengths to read better the pulse of the market and help
create products that map perfectly into customer preferences.
“…inspired thinking about the future.”: the
means
The future is unpredictable, but not doing anything about it is
fraught with grave risk. Videocon extrapolates future trends on the basis of
current changes in technology and preferences as well as sheer gut feel.
Fine-tuned business instincts are worth their weight in gold, lots of it. The
company has perfected its practice almost into an art form with some calculated
gambles like oil and gas proving to be absolute money-spinners.
Values
Shri Nandlal Madhavlal Dhoot, the founder of the Videocon Group, completed his
education in Ahmednagar and Pune. He was a successful sugarcane and cotton
cultivator. As a next logical step to vertical integration, he boldly took upon
an entrepreneurial venture by importing machinery from
The die was cast. Over the years, Nandlalji's path-breaking attitude found
expression in a myriad ways, earning him the well-deserved reputation of the
pioneer of industrial activity in Marathwada
In early 80's Nandlalji initiated his three sons - Venugopal, Rajkumar and Pradeep
into business. Through a technical tie up with Toshiba Corporation of
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.40.30 |
|
|
1 |
Rs.82.97 |
|
Euro |
1 |
Rs.55.64 |
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 |
9 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
7 |
|
--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 |
|
58 |
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 |
|