MIRA INFORM
REPORT
|
Report
Date : |
19.06.2007 |
IDENTIFICATION DETAILS
|
Name : |
K G DENIM
LIMITED |
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Registered
Office : |
Then Thirumalai, |
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Country
: |
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Financials
(as on) : |
31.03.2006 |
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Date
of Incorporation : |
25th June 1992 |
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Com.
Reg. No.: |
18-3798 |
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CIN
No.: [Company
Identification No.] |
L17115TZ1992PLC003798 |
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TAN
No.: [Tax
Deduction & Collection Account No.] |
CMBK03032B |
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Legal
Form : |
It is a public limited liability company. The company’s shares are listed on the
Stock Exchanges. |
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Line
of Business : |
The company is engaged in manufacturing and
marketing of denim fabrics of different size, shades, weaves, blends and
weights. |
RATING & COMMENTS
|
MIRA’s
Rating : |
Ba |
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet
normal commitments. |
Satisfactory |
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Maximum
Credit Limit : |
USD 2737500 |
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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 an established company having satisfactory
track. Directors are reported as experienced, respectable and resourceful
industrialist. Their trade relations are fair. Payments are correct and as
per commitments. The company can be considered normal for business dealings
at usual trade terms and conditions. |
LOCATIONS
|
Registered
Office : |
Then Thirumalai, |
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E-Mail
: |
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Website
: |
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Factory
1 : |
Jadayam Palayam, Via Sirumugai, Taluka
Mettupalayam, |
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Tel.
No.: |
91-42545-2331 - 34 |
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Fax
No.: |
91-42545-2335 |
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E-Mail
: |
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Website
: |
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Branches
: |
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Tel.
No.: |
91-422-212931 / 212932 |
DIRECTORS
|
Name : |
Mr. Jack O’ Neill |
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Designation
: |
Directors |
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|
Name : |
Shri S R Rajasekaran |
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Designation
: |
Directors |
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|
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|
Name : |
Mr. G V S Desikan |
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Designation
: |
Directors |
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|
Name : |
Mr. K N V Ramani |
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Designation
: |
Directors |
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|
Name : |
Mr. V Jagadisan |
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Designation
: |
Directors |
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|
Name : |
Mrs. T Anandhi |
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Designation
: |
Directors |
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|
Name : |
Mr. A Velusamy |
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Designation
: |
Directors |
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Name : |
Mr. |
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Designation
: |
Directors |
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|
Name : |
Mr. K G
Baalakrishnan |
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Designation
: |
Executive Chairman |
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Date
of Birth/Age : |
65 years |
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Qualification
: |
B. Com B. L. |
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Experience
: |
41 Years |
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Date
of Appointment : |
3rd November, 2003 |
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|
|
|
Name : |
Mr. B Sriramulu |
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Designation
: |
Managing Directors |
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Date
of Birth/Age : |
38 years |
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Qualification
: |
BE ( |
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Experience
: |
16 Years |
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Date
of Appointment : |
3rd November, 2003 |
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|
|
|
Name : |
Mr B Srihari |
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Designation
: |
Managing Directors |
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Date
of Birth/Age : |
36 Years |
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Qualification
: |
BE (Chem. Tech), MS (Chem. Tech) |
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Experience
: |
14 Years |
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Date
of Appointment : |
3rd November, 2003 |
|
Name : |
Mr. M. J. Vijayaraaghavan |
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Designation
: |
Director |
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|
Name : |
Mr. Surinder Chhibber |
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Designation
: |
Director |
KEY
EXECUTIVES
|
Name : |
Mr. S.
Muthuswamy |
|
Designation
: |
Company
Secretary |
BUSINESS DETAILS
|
Line
of Business : |
The company is engaged in manufacturing and
marketing of denim fabrics of different size, shades, weaves, blends and
weights. |
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Products
: |
|
PRODUCTION STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
|
|
|
197 Looms |
197 Looms |
|
|
Cloth |
mtrs |
-- |
-- |
1,99,32,352 |
|
Waste |
kgs |
-- |
-- |
24,59,201 |
|
Garments |
nos. |
-- |
-- |
7,20,548 |
GENERAL INFORMATION
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No. of
Employees : |
250 |
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Bankers
: |
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Facilities : |
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Banking Relations : |
Satisfactory |
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Auditors
: |
M/s Gopalaiyer and Subramanian Chartered Accountants |
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|
|
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Associates/Subsidiaries
: |
|
CAPITAL STRUCTURE
Authorised
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
31,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 310.000 millions |
|
10,00,000 |
10% cumulative redeemable preference |
Rs. 100/- each |
Rs. 100.000 millions |
Issued
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
20,135,750 |
Equity Shares |
Rs. 10/- each |
Rs. 201.358 millions |
|
1,000,000 |
10% Cumulative Redeemable Preference
Shares |
Rs. 100/- each |
Rs. 100.000 millions |
|
|
Total |
|
Rs. 301.358
millions |
Subscribed & Paid-up Capital
|
No. of
Shares |
Type |
Value |
Amount |
|
20098350 |
Equity Shares |
Rs. 10/- each |
Rs. 200.984 millions |
|
Less: |
Allotment Money in Arrears |
|
|
|
Add: |
Forfeited Shares |
|
Rs. 0.112 Millions |
|
1,000,000 |
16% Cumulative Redeemable Preference Shares |
Rs. 100/- each |
Rs. 100.000 millions |
|
|
Total |
|
Rs. 301.096 Millions |
FINANCIAL
DATA
[all
figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
30.06.2004 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share
Capital |
301.096 |
301.096 |
301.081 |
|
|
2] Share
Application Money |
0.000 |
0.000 |
0.000 |
|
|
3]
Reserves & Surplus |
383.279 |
226.027 |
182.085 |
|
|
4]
(Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
NETWORTH
|
684.375 |
527.123 |
483.166 |
|
|
LOAN
FUNDS |
|
|
|
|
|
1]
Secured Loans |
1155.589 |
519.387 |
560.194 |
|
|
2]
Unsecured Loans |
47.771 |
42.964 |
38.598 |
|
TOTAL
BORROWING
|
1203.360 |
562.351 |
598.792 |
|
|
DEFERRED
TAX LIABILITIES |
192.716 |
174.829 |
186.169 |
|
|
|
|
|
|
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TOTAL
|
2080.451 |
1264.303 |
1268.127 |
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APPLICATION OF FUNDS
|
|
|
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|
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|
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FIXED ASSETS [Net Block]
|
1215.481 |
831.006 |
780.518 |
|
Capital work-in-progress
|
151.816 |
10.860 |
1.196 |
|
|
|
|
|
|
|
INVESTMENT
|
33.668 |
2.705 |
2.705 |
|
DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
727.117
|
629.469 |
613.245 |
|
|
Sundry Debtors
|
197.746
|
190.254 |
170.604 |
|
|
Cash & Bank Balances
|
80.939
|
81.378 |
61.190 |
|
|
Other Current Assets
|
37.221
|
4.773 |
6.053 |
|
|
Loans & Advances
|
177.836
|
73.610 |
62.836 |
Total Current Assets
|
1220.836
|
979.484 |
913.928 |
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
465.993
|
514.780 |
345.968 |
|
|
Provisions
|
75.357
|
45.277 |
85.983 |
Total Current Liabilities
|
679.486
|
560.057 |
431.951 |
|
Net
Current Assets
|
541.350
|
419.427 |
481.977 |
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
0.000 |
0.305 |
1.731 |
|
|
|
|
|
|
|
TOTAL
|
2080.451 |
1264.303 |
1268.127 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
Sales Turnover |
2301.579 |
1923.572 |
2196.429 |
|
|
Other Income |
20.258 |
13.845 |
0.000 |
|
|
Total
Income |
2321.837 |
1937.417 |
2196.429 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
240.964 |
76.941 |
268.396 |
|
|
Provision for Taxation |
0.000 |
24.466 |
163.836 |
|
|
Profit/(Loss) After Tax |
240.964 |
52.475 |
104.560 |
|
|
|
|
|
|
|
|
Earnings
in Foreign Currency : |
|
|
|
|
|
|
Export of goods on direct export |
815.753 |
929.276 |
739.836 |
|
Total
Earnings |
815.753 |
929.276 |
739.836 |
|
|
|
|
|
|
|
|
Imports
: |
|
|
|
|
|
|
Raw Materials |
63.738 |
220.418 |
|
|
|
Stores & Spares |
16.594 |
20.258 |
|
|
|
Capital Goods |
420.561 |
41.655 |
266.266 |
|
|
Chemicals |
61.409 |
53.405 |
|
|
Total
Imports |
562.302 |
335.736 |
|
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Material cost |
1072.499 |
1005.478 |
|
|
|
Manufacturing Expenses |
311.587 |
185.228 |
|
|
|
Other operating Expenses |
521.773 |
545.276 |
|
|
|
Raw Material Consumed |
0.000 |
0.000 |
|
|
|
Purchases made for re-sale |
0.000 |
0.000 |
|
|
|
Consumption of stores and spares parts |
0.000 |
0.000 |
|
|
|
Increase/(Decrease) in Finished Goods |
0.000 |
0.000 |
|
|
|
Salaries, Wages, Bonus, etc. |
0.000 |
0.000 |
445.256 |
|
|
Managerial Remuneration |
0.000 |
0.000 |
|
|
|
Payment to Auditors |
0.000 |
0.000 |
|
|
|
Interest |
0.000 |
0.000 |
|
|
|
Insurance Expenses |
0.000 |
0.000 |
|
|
|
Power & Fuel |
0.000 |
0.000 |
|
|
|
Depreciation & Amortization |
0.000 |
0.000 |
|
|
|
Other Expenditure |
0.000 |
0.000 |
|
|
Total
Expenditure |
1905.859 |
1735.980 |
|
|
QUARTERLY
RESULTS
|
PARTICULARS |
30.06.2006 (Rs. In
Millions) |
30.09.2006 (Rs. In
Millions) |
31.12.2006 (Rs. In
Millions) |
|
Type |
1st Qtr |
2nd Qtr |
3rd Qtr |
|
Sales Turnover |
491.500 |
567.500 |
536.300 |
|
Other Income |
8.200 |
9.800 |
6.600 |
|
Total Income |
499.700 |
577.300 |
542.900 |
|
Total Expenditure |
441.200 |
506.000 |
467.700 |
|
Operating Profit |
58.500 |
71.300 |
75.200 |
|
Interest |
24.100 |
28.600 |
34.200 |
|
Gross Profit |
34.400 |
42.700 |
41.000 |
|
Depreciation |
27.900 |
35.100 |
35.100 |
|
Tax |
0.400 |
00.500 |
5.100 |
|
Reported PAT |
6.100 |
7.100 |
4.400 |
200606 Quarter 1 --------------- Notes
Expenditure Includes (Increase)/Decrease in stock Rs 9.70 million Consumption
of Raw Materials Rs 271.30 million Stores & Chemicals Rs 52.90 million
Employee Cost Rs 20.90 million Manufacturing Expenses Rs 44.90 million Selling
& Administrative Expenses Rs 39.10 million Tax Indicates Provision for
Fringe Benefit Tax Status of Investor Complaints for the quarter ended June 30,
2006 Complaints Pending at the beginning of the quarter Nil Complaints Received
during the quarter 36 Complaints disposed off during the quarter 36 Complaints
unresolved at the end of the quarter Nil 1. The Limited Review of above
unaudited financial results as required under clause 41 of listing agreement
has been carried out by Statutory Auditors. 2. The above results were reviewed
by the Audit Committee and taken on record by the Board of Directors at their
meeting held on July 31, 2006.
200609 Quarter 2 --------------- Notes
Expenditure Includes (Increase)/Decrease in stock Rs (55.90)million Consumption
of Raw Materials Rs 348.70 million Stores & Chemicals Rs 84.70 million
Employee Cost Rs 23.20 million Manufacturing Expenses Rs 52.00 million Selling
& Administrative Expenses Rs 51.80 million Tax Indicates Provision for
Fringe Benefit Tax Status of Investor Complaints for the quarter ended
September 30, 2006 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter 33 Complaints disposed off during the
quarter 33 Complaints unresolved at the end of the quarter Nil 1. The Limited
Review of above unaudited financial results as required under clause 41 of
listing agreement has been carried out by Statutory Auditors. 2. The above
results were reviewed by the Audit Committee and taken on record by the Board
of Directors at their meeting held on November 07, 2006.
200512 Quarter 3 --------------- Notes EPS is
Basic & Diluted Status of Investor Complaints for the quarter ended
December 31, 2005 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter 35 Complaints disposed off during the
quarter 35 Complaints unresolved at the end of the quarter Nil 1. The above
results were taken on record by the Board at its Meeting held on January 29,
2006 & reviewed by the Statutory Auditors. 2. The Company has acquired
entire holdings in Trigger Apparels Ltd and also set up KG Denim (USA) Inc in
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
1.46 |
1.15 |
1.44 |
|
Long Term Debt-Equity Ratio |
0.90 |
0.57 |
0.84 |
|
Current Ratio |
1.03 |
0.98 |
1.12 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.38 |
2.05 |
1.81 |
|
Inventory |
3.19 |
4.26 |
3.84 |
|
Debtors |
11.15 |
14.67 |
11.40 |
|
Interest Cover Ratio |
3.50 |
2.13 |
3.22 |
|
Operating Profit Margin(%) |
19.33 |
9.99 |
19.58 |
|
Profit Before Interest And Tax Margin(%) |
15.75 |
7.32 |
16.57 |
|
Cash Profit Margin(%) |
10.86 |
5.32 |
7.84 |
|
Adjusted Net Profit Margin(%) |
7.27 |
2.64 |
4.82 |
|
Return On Capital Employed(%) |
22.88 |
17.85 |
30.60 |
|
Return On Net Worth(%) |
31.10 |
14.78 |
3.83 |
STOCK PRICES
|
Face Value |
Rs.10/- |
|
High |
Rs17.24/- |
|
Low |
Rs.16.50/- |
LOCAL AGENCY FURTHER
INFORMATION
FIXED ASSETS
- Land
- Buildings
- Machinery
- Electric Machinery
- Office Equipments
- Furniture & Fittings
- Motor Vehicles
REVIEW
OF OPERATIONS
During
the 12 months ended 31.3.2006, the Company achieved production of 19.700
millions meters of fabrics against the previous years (9 months) production of
16.600 millions meters. The sales for the 12 months of 2005-06 was Rs.2163.700
millions as against sales of Rs. 1984.500 millions during the previous year.
The domestic sales was 51% of the total turnover as compared with 40% for the
previous year.
PROSPECTS
FOR THE NEXT YEAR
With the
commencement of commercial operation of the expansion project the turnover is
expected to increase significantly in the current year. At present, the Indian
denim industry is adversely affected by surplus capacity and demand is expected
to pick up slowly. However, the company's expansion in apparel fabrics and
madeups will help its prospects in the long run. The apparel division is also
concentrating on exports which has high demand potential. The company's new
subsidiary Trigger Apparels Limited will focus on the domestic marketing.
FINANCE
With a
view to conserve resources and to meet the obligation of the company arising on
the projects implemented and based on letters of consent received from the
preference shareholders the Board of directors resolved to defer declaration of
preference dividend for the year 2005 - 2006. The Directors acknowledge with
gratitude, the valuable assistance and support extended by their Bankers for
term loans and working capital ie., Indian Bank, State Bank of
NOTES ON ACCOUNTS
2.1 CONTINGENT LIABILITY
|
|
2005-06 |
2004-05 |
|
|
(Rs.
in millions) |
(Rs.
in millions) |
|
Bills
discounted with banks |
151.272 |
159.733 |
|
Arrears of dividend on preference
shares |
10.000 |
Nil |
|
Contracts remaining to be executed
in Capital Account |
152.836 |
15.983 |
|
Disputed Taxes and Duties |
13.337 |
36.686 |
2.2 (i) The Cumulative Redeemable
Preference Shares are redeemable at par. However, the Company has sought further time from the holders for
reschedulement of the instalments. The Cumulative Redeemable Preference Shares
carry dividend rate of 10 % from 1.7.2003.
(ii) BANK BORROWINGS
a. Term loans from Indian Bank and Bank of India are
secured by a first pari passu charge on all plant and machineries and other
movable fixed assets through Deed of Hypothecation and a pari passu first
charge on all immovable properties through equitable mortgage created with
Indian Bank. Term loans from Allahabad Bank, Dena Bank and State Bank of India
are secured by a first pari passu charge on existing plant and machineries and
other movable fixed assets through Deed of Hypothecation and a pari passu first
charge on 53.6025 acres of land at Jadayampalayam village, Mettupalayam Taluk,
Coimbatore District, Tamil Nadu and 2155.62 sq. meters of land at Amdha
Village, Dharampur Taluk, Valsad District, Gujarat State through equitable
mortgage created with Indian Bank. Term loans from State Bank of Hyderabad and
State Bank of Indore are secured by a first pari passu on plant and machineries
and other movable fixed assets acquired for the Expansion cum Diversification
Scheme through Deed of Hypothecation and a pari passu first charge on 17.5672
acres of land at Karamadai Village, Mettupalayam Taluk, Coimbatore District,
Tamil Nadu through equitable mortgage created with Indian Bank. Term loan from
Indian Overseas Bank is secured by a first pari passu charge on all plant and
machineries and other movable fixed assets through Deed of Hypothecation.
Indian Bank is holding the original title deeds on its own behalf and on behalf
of other Banks. The term loans are also guaranteed by Shri KG Baalakrishnan.
b. Working capital loans from Indian Bank Consortium
(Indian Bank, Bank of India, Allahabad Bank and
State
Bank of
second
pari passu charge on all the immovable properties arid plant and machineries.
These are also
guaranteed
by Shri KG Baalakrishnan.
|
|
2005-06 |
2004-05 |
|
|
(Rs.
in millions) |
(Rs.
in millions) |
|
c)
Personal guarantees given by Promoter Shri KG Baalakrishnan for loans
obtained by the Company |
2458.100 |
1230.443 |
|
d) Future
hire purchase charges on vehicle hire purchase loans d) |
4.818 |
6.256 |
As Per Website
Details:
The
company was incorporated in the year 1992. From the conception to the
commissioning stage it took a record time of only 18 months to complete the
project.The plant is located at Jadayampalayam Village, near Mettupalayam at
the foot hills of the Nilgris and incorporates the state of the Art of
Technology with latest machineries imported from M/S. Hacoba, Monforts &
Sucker + Muller of Germany and Picanol of Belgium.
An
Effluent Treatment Plant is also installed as a part of the project to ensure
conformity to the effluent standards expected. Trail production started on the
12th of September of 1993 and the commercial production started soon after on
18th January 1994.
KG,
an acronym for the founder of the group, Sri K Govindasamy Naidu, is a brand /
Trademark, well known in the textile circles of our country. KG group is based
at
The group also has considerable presence in other activities such
as Engineering, Arts, Information system etc., the group is one of the largest
manufacturers of OE yarn in the country and it is but natural that the group
decided to capitalize its core strength by integrating forward and establishing
a Denim unit.
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. 40.76 |
|
|
1 |
Rs. 80.67 |
|
Euro |
1 |
Rs. 54.58 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
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 |
|
45 |
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 |