MIRA
INFORM REPORT
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Report Date : |
21.06.2007 |
IDENTIFICATION DETAILS
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Name : |
BANNARI AMMAN
SUGARS LIMITED |
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Registered Office : |
252, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
01-12-1983 |
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Com. Reg. No.: |
18-1358 |
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CIN No.: [Company
Identification No.] |
L15421T21983PLC001358 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CMBB03043F |
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PAN No.: [Permanent
Account No.] |
AAACB8933G |
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Legal Form : |
Public limited
liability company. The company’s
shares are listed on the stock exchange |
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Line of Business : |
Manufacturer of
Sugar, Molasses, Granite Blocks,
Polished Granite Slabs, Polished Granite Tiles, Monuments, Rectified Spirit,
Denatured Spirit, Denatured Spirit, Netural Spirit, Fusel Oil and Bio
Compost. |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 11000000 |
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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 company having fine track. It is faring well. Financial position is
good. Payments are usually correct and as per commitments. Trade relations
are fair. The company can
be considered good for any normal business dealings. It can be
regarded as a promising business partner in a medium to long run |
LOCATIONS
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Registered
Office : |
252, |
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Tel. No.: |
91-422-2450045/2451515/2302277 |
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Fax No.: |
91-422-2431199/2305599 |
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E-Mail : |
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Website : |
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Factory 1 : |
Ř Sugar Unit,
Co-Generation & Granite Processing Alathukombai, Erode
District, Tamilnadu Ř Distillery Sinnapuliyur,
Erode District, Tamilnadu Ř Bio-Compost Modur, Erode
District, Tamilnadu Ř Wind Mills Radhapuram,
Irukkandurai And Karunkulam
Villages Radhapuram Taluk Tirunelveli
District Ř Sugar Unit,
Co-Generation, Distillery & Bio-Compost Alaganchi, Mysore
District, Karnataka |
DIRECTORS
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Name : |
Mr. V Venkata Reddy |
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Designation : |
Vice Chairman |
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Name : |
Mr. B Saravanan |
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Designation : |
Joint Managing
Director |
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Age : |
32 years |
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Qualification
: |
Commerce
Graduate |
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Experience : |
5th
July 2000 |
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Name : |
Mr. N Solairajan |
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Designation : |
Executive
President |
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Name : |
Mr. P Dharmalingam |
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Designation : |
Executive
President (Unit I) |
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Name : |
Mr. R Murugesan |
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Designation : |
Vice President |
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Name : |
Mr. V L Rajagopal |
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Designation : |
Vice President
(Unit I) |
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Name : |
Mr. A Ramaswamy |
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Designation : |
Vice President
(Distillery Division) |
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Name : |
Mr. K Sundaramoorthi |
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Designation : |
Vice President
(Distillery Unit) |
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Name : |
Mr. R Ramgopal |
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Designation : |
Assistant Vice
President (Unit II) |
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Name : |
Mr. C Palaniswamy |
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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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Shareholding of Promoter and Promoter Group |
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Indian |
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Individuals/ Hindu Undivided Family |
1540370 |
16.15 |
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Central Government/ State Government(s) |
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Bodies Corporate |
2916587 |
30.57 |
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Public shareholding |
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Institutions |
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Mutual Funds/ UTI |
288027 |
3.02 |
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Financial Institutions / Banks |
19950 |
0.21 |
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Foreign Institutional Investors |
20969 |
0.22 |
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Non-institutions |
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Bodies Corporate |
1190932 |
12.48 |
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Individuals |
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Individuals -i. Individual shareholders holding nominal
share capital up to Rs 0.100 Millions |
1683685 |
17.65 |
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ii. Individual shareholders holding nominal share capital
in excess of Rs. 0.100 Millions |
1867525 |
19.58 |
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Clearing Member |
11655 |
-- |
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Total |
9539700 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of
Sugar, Molasses, Granite Blocks,
Polished Granite Slabs, Polished Granite Tiles, Monuments, Rectified Spirit,
Denatured Spirit, Denatured Spirit, Netural Spirit, Fusel Oil and Bio
Compost. |
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Products : |
Item Code
No. Product Description 17019902
White Crestal Sugar 22072000
Industrial Alcohol 68022301
Granite Block and Slabs |
PRODUCTION STATUS
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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Tamilnadu – Sugar
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Tones Per day |
NA |
4000 |
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Karnataka– Sugar |
Tones Per day |
NA |
5000 |
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Granite Slabs |
Sq.
Mtr Per annum |
50000 |
50000 |
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Granite Tiles |
Sq. Mtr Per annum |
95000 |
10000 |
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Monuments |
Sq. Mtr Per annum |
2500 |
2500 |
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Tamilnadu
–Industrial Alcohol |
Millions Ltrs. Per annum |
24 |
16.33 |
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Karnataka -
Industrial Alcohol |
Kilo Ltrs. Per day |
60 |
60 |
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Tamilnadu - Power
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MW Per Hour |
NA |
20 |
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Karnataka- Power |
MW Per Hour |
NA |
16 and 20 |
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Tamilnadu - Power
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NA |
8750 KWH |
GENERAL INFORMATION
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No. of Employees : |
2200 |
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Bankers : |
Ř
Punjab National Bank Ř
Bank of Ř
Canara Bank Ř
The Federal Bank Limited Ř
The Karur Vysya Bank Limited Ř
Union Bank of Ř
Indian Overseas Bank Ř
State Bank of Travancore Ř
State Bank of Ř
The Lakshmi Vilas Bank Limited |
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Facilities : |
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Banking Relations
: |
Good |
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Auditors : |
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Name : |
Ř
M/s P N Raghavendra Rao & Company Chartered
Accountants Ř Internal Auditors M/S Srivatsan
& Gita Chartered
Accountants Ř Cost Auditor Mr. M Nagarajan Cost Accountant |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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10,000,000 |
Equity Shares
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Rs. 10/- Each
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Rs.100.000 millions
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|
100,000 |
Redeemable Shares |
Rs. 100/- each |
Rs.10.000 millions |
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Total |
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Rs. 110.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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9,539,700 |
Equity shares |
Rs. 10/- each |
Rs. 95.397 millions |
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS
FUNDS |
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1] Share Capital |
95.397 |
95.397 |
95.397 |
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3] Reserves &
Surplus |
2715.861 |
2007.014 |
1619.233 |
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NETWORTH
|
2811.258 |
2102.411 |
1714.630 |
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LOAN FUNDS |
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1] Secured Loans |
1624.906 |
2620.869 |
2636.700 |
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2] Unsecured
Loans |
466.252 |
472.409 |
397.700 |
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TOTAL
BORROWING
|
2091.158 |
3093.278 |
3034.400 |
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DEFERRED TAX
LIABILITIES |
518.922 |
501.030 |
423.630 |
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TOTAL
|
5421.338 |
5696.719 |
5172.660 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
3133.198 |
3311.549 |
2736.999 |
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Capital work-in-progress
|
143.177 |
100.949 |
49.748 |
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INVESTMENT
|
34.311 |
34.043 |
33.821 |
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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
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1991.112
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2315.092
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2607.416 |
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Sundry Debtors
|
651.515
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535.728
|
750.158 |
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Cash & Bank Balances
|
158.832
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29.524
|
23.309 |
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Other Current Assets
|
23.119
|
87.820
|
58.968 |
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Loans & Advances
|
443.179
|
221.091
|
192.585 |
Total Current Assets
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3267.757
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3189.255
|
3632.436 |
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Less : CURRENT LIABILITIES & PROVISIONS
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Current Liabilities and Provisions
|
1157.105
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939.077
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1280.344 |
Total Current Liabilities
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1157.105
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939.077
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1280.344 |
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Net
Current Assets
|
2110.652
|
2250.178
|
2352.092 |
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TOTAL
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5421.338 |
5696.719 |
5172.660 |
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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 |
6140.142 |
4695.926 |
5527.679 |
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Other Income |
28.381 |
62.123 |
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Total Income |
6168.523 |
4758.049 |
5527.679 |
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Profit/(Loss) Before Tax |
957.166 |
562.621 |
459.333 |
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Provision for Taxation |
187.417 |
126.557 |
72.358 |
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Profit/(Loss) After Tax |
769.749 |
436.064 |
386.975 |
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Earnings in Foreign Currency : |
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Total Earnings |
250.967 |
319.723 |
293.144 |
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Imports : |
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Stores & Spares |
30.331 |
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Capital Goods |
18.232 |
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Total Imports |
48.563 |
67.553 |
NA |
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Expenditures : |
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Raw Materials
Purchased |
2396.008 |
1865.402 |
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Manufacturing
and Other Expenses |
2131.684 |
1753.288 |
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Excise Duty |
143.405 |
145.192 |
5068.346 |
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Interest |
109.560 |
111.536 |
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Depreciation |
430.700 |
320.010 |
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Total Expenditure |
5211.357 |
4195.428 |
5068.346 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2006 |
30.09.2006 |
31.12.2006 |
|
Type |
1st
Qtr |
2nd
Qtr |
3rd
Qtr |
|
Sales
Turnover |
1666.000 |
2149.000 |
2166.000 |
|
Other
Income |
2.900 |
3.800 |
3.200 |
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Total
Income |
1668.900 |
2152.800 |
2169.200 |
|
Total
Expenditure |
1286.900 |
1637.400 |
1712.800 |
|
Operating
Profit |
382.000 |
515.400 |
456.400 |
|
Interest |
22.700 |
9.000 |
5.900 |
|
Gross
Profit |
359.300 |
506.400 |
450.500 |
|
Depreciation |
87.600 |
93.700 |
93.500 |
|
Tax |
74.800 |
98.900 |
77.600 |
|
Reported
PAT |
204.700 |
324.700 |
283.600 |
Notes
200606
Quarter 1 –
Expenditure Includes (Increase)/Decrease in stock in Trade
Rs 38.284 million Consumption of Raw Material Rs 562.480 million Trade goods
purchased Rs 135.020 million Power & Fuel Rs 302.194 million Staff Cost Rs
46.815 million Other expenditure Rs 202.092 million Tax Includes Provision for
Taxation Rs 74.868 million Deferred Tax Rs (7.833) million 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 12
Complaints disposed off during the quarter 12 Complaints unresolved at the end
of the quarter Nil 1. The above results have been taken on record by the Board
of Directors at their meeting held on July 27, 2006. 2. The Statutory auditors
of the company have carried out a Limited review of unaudited financial results
for the three months ended June 30, 2006.
200609
Quarter 2 –
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 5 Complaints disposed off during the
quarter 5 Complaints unresolved at the end of the quarter Nil 1.The above
results have been taken on record by the Board of Directors at their meeting
held on October 27, 2006. 2.The Statutory Auditors of the Company have carried
out a Limited Review of Unaudited Financial Results for the three months ended
September 30, 2006. 3.The expansion of daily cane crusing capacity of the sugar
factory in Karnaka from 5000 tonnes to 7500 tonnes was completed in July 2006.
200612
Quarter 3 –
Expenditure Includes (Increase)/Decrease in stock in Trade
Rs 34.482 million Consumption of Raw Material Rs 1036.20 million Power &
Fuel Rs 389.218 million Staff Cost Rs 48.893 million Other expenditure Rs
203.985 million Tax Includes Provision for Taxation Rs 77.616 million Deferred
Tax Rs (4.208) million 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 taken on record by the Board of Directors at their meeting held on
January 29, 2007. 2. The Statutory auditors of the company have carried out a
Limited review of Unaudited financial results for the three months ended
December 31, 2006.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
1.06 |
1.61 |
1.81 |
|
Long Term Debt-Equity Ratio |
0.73 |
0.81 |
0.81 |
|
Current Ratio |
1.37 |
1.11 |
1.07 |
|
TURNOVER RATIOS |
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Fixed Assets |
1.31 |
1.14 |
1.34 |
|
Inventory |
3.00 |
2.04 |
2.09 |
|
Debtors |
10.90 |
7.83 |
9.29 |
|
Interest Cover Ratio |
9.16 |
5.59 |
4.10 |
|
Operating Profit Margin(%) |
23.26 |
19.98 |
17.98 |
|
Profit Before Interest And Tax Margin(%) |
16.61 |
13.62 |
12.44 |
|
Cash Profit Margin(%) |
18.55 |
15.03 |
12.32 |
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Adjusted Net Profit Margin(%) |
11.90 |
8.67 |
6.78 |
|
Return On Capital Employed(%) |
21.28 |
13.78 |
13.80 |
|
Return On Net Worth(%) |
31.33 |
22.85 |
21.12 |
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.804.00/- |
|
Low |
Rs.804.00/- |
LOCAL AGENCY FURTHER INFORMATION
Fixed Assets :
Ř
Land-Free hold
Ř
Land-Lease hold
Ř
Buildings
Ř
Plant and Machinery
Ř
Furniture, Fixtures,
Ř
Office and Canteen
Ř
Equipments
Ř
Live Stock
Ř
Motor Vehicles
History
Bannari Amman Sugars Limited (BASL) was incorporated in
December 1983. The company was promoted by S V Balasubramanian and K S
Thirumalaiswamy to manufacture sugar in
BASL came out with a public issue in Sep' 1985, to set up a sugar plant in
Alathukombai in Tamil Nadu. This plant was commissioned with initial capacity
of 1250 tonnes of cane crush per day. It manufactures sugar using the
conventional double sulphitation process. The company's success in its first
venture, led the company to make a next step towards its way. In 1992 the
company had set up a sugar mill with a daily cane crushing capacity of 2500 TCD
in Alaganchi village,
The company diversified its activity in several segments. As a first step, it
started to manufacture Citric Acid in 1987 with annual capacity of 5,400
tonnes. Subsequently it diversified into the lucrative field of granite exports
by setting up a 100% EOU in Nov' 1990, at Alathukombai to produce 50,000 sq mtr
of polished granite slabs and 60,000 sq mtr of granite tiles per annum. It has
acquired and taken on lease several quarries in Tamil Nadu, Karnataka, Andhra
Pradesh and Rajasthan.
In 1995, M/s Coimbatore Alcohol and Chemicals Limited (CACL) amalgamated with
BASL. The company allotted 20,00,000 equity shares of Rs. 10/- each at a
premium of Rs. 80/- per share to the shareholders of CACL as per the scheme of
amalgamation.
The company made its next diversification for Co-generation of power in the
year 2000. It has set up a co-generation power plant with an installed capacity
of 16 MW in the sugar factory in Karnataka. The company has also set up a 20 MW
co-generation plant at Alathukombai in Aug' 2002 and an additional 20 MW
co-generation plant at Alaganchi in Mar' 2004. Total capacity of co-generation
power plant stands at 56 MW.
During 2004-05, the company has diversified into windmill operation and
commissioned 7 wind turbine generator at Radhapuram in the state of Tamil Nadu.
The windmill has started its operation.
During 2005-06, the company proposes to increase the installed capacity of the
sugar unit in Karnataka from 5000 TCD to 7500 TCD.
During the year under review, in Tamilnadu sugar factory
6.86 lakh tonnes of sugarcane was crushed as against the estimated cane crush
of 6 lakh tonnes. In Karnataka sugar factory 10.33 lakh tonnes of sugarcane was
crushed as against estimated cane crush of 12 lakh tonnes of sugarcane. Free
sugar prices continued to remain favourable throughout the year.
Co-generation of Power
The co-generation plant in Tamilnadu had generated 163.26 million units of
power and exported 125.11 million units to the Tamilnadu Government Grid. In
Karnataka sugar factory, the 16 MW co-generation plant had generated 89.58
million units of power and 20 MW co-generation plant had generated 66.70
million units of power and exported 76.04 million units and 32.39 million units
respectively to Karnataka Government Grid.
Distillery Division
The distillery unit in Sinnapuliyur, Erode District in the State of
The distillery in Karnataka Sugar Factory worked for 143 days and produced
11.15 lakh B.Ltrs of Rectified Spirit and 37.98 lakh B.Ltrs of Neutral
Spirit.
Granite Division
88,574 square metres of Granite slabs, 8,655 square metres of tiles and 2651
square metres of monuments were produced. The demand and supply of the products
remained steady throughout the year.
Wind Mill
Wind mills had generated 15.03 million units of power and exported the same to
the TNEB grid.
Prospects for the Current year 2006 - 2007
During the current financial year, the installed capacity of the sugar unit in
Karnataka will be increased from 5,000 TCD to 7500 TCD. It is estimated to
crush 10 lakh tonnes of sugarcane in the sugar factory in Tamilnadu and 18 lakh
tonnes of sugarcane in the sugar factory in Karnataka. It is estimated to
produce 150 lakh B.Ltrs of spirit in distillery unit in Tamilnadu and 64.35
B.Ltrs of spirit in distillery unit in Karnataka.
The sugar prices are expected to remain favourable. Increased export of granite
products is expected.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDUSTRY STRUCTURE AND DEVELOPMENTS
World Sugar Production during 2005 - 06 is estimated at 147.8 million tonnes,
which is slightly an increase from 2004 - 05 production, but about 1.56 lakh
tonnes, short of projected world sugar consumption. The growth in production
will be from the record harvest in
In
There is an overall improvement in sugar sector in
OPPORTUNITIES
The consumption of sugar, power, ethanol and industrial alcohol are expected to
continuously increase. As an integrated sugar complex, the Company is expanding
the installed cane crushing capacity at Karnataka unit from 5000 TCD to 7500
TCD which would further improve the production of industrial alcohol and power
generation. The cane availability is quite encouraging due to favourable
monsoon.
RISKS & CONCERNS
1. Sugar industry is subject to various uncertainties and adversities including
shortage of rainfall, amendments in Government policies and regulations,
changes in Statutory Minimum Cane Price etc.,
CONTINGENT
LIABILITIES
a) The company has
preferred a Writ appeal before the Division Bench of the Hon'ble High Court,
Madras challenging the order pronounced in Writ Petition No.4030/2002 dated 28
- 02 - 2006 in connection with increase in rate of water charges and the method
of computation of water charges pursuant to the G.O. No.474 dated 1 3 - 1 1 -
2001 for the water drawn for industrial purposes. The approximate amount under
dispute is Rs. 47.639 Millions.
b) Sugar Unit - 1
at Sathyamangalam was permitted to sell 100% of the Sugar production as Free Sugar
for a period of 8 years from 1985 - 86 Sugar Season. Chief Director (Sugar),
Directorate of Sugar, Department of Food, New Delhi, has restricted the
entitlement of Free sale Sugar Incentive to 2,75,000 quintals production per
season by a subsequent notification. A writ petition has been filed in the
Madras High Court Challenging the restriction imposed and interim injunction
has been obtained. By virtue of injunction order the entire production was sold
as Free Sugar. The approximate unprovided quantum under dispute is Rs. 68.335
Millions.
c) Sugar Unit - 1
at Sathyamangalam was allowed to sell 100% of the Sugar production as Free
Sugar for 8 years
from 1985 - 86
Sugar Season and pay excise duty on incentive sugar as applicable to levy sugar
and to retain the
difference in
excise duty between levy and free sale sugar. In respect of incentive sugar
sold by Unit-1 from 20-09-1991 to 31 - 01 -1994, the Central Excise Department
has issued showcause noticesto the Company to showcause why the difference of
Rs. 33/- per quintal being the difference between duty on levy sugar and free
sugar should not be demanded from the Company. The Company has filed Writ
Petitions in Madras High Court and obtained and interim injunction against the
show cause notices. The excise duty in dispute is Rs. 14.999 Millions.
d) The Entry Tax
of Rs. 1 5.728 Millions on Inter-state
purchase of rough blocks is disputed.
e) 38000 MTs of
Raw Sugar has been imported under Advance Licensing Scheme with an obligation
to export 36190.48 MTs of sugar within a period of 24 months from the date of
issue of license. Out of the above obligations the company has exported 7380.48
MTs upto the year ended 31 - 03 - 2006. In case the company does not fulfill
its above export obligation within the stipulated period, Rs. 8462.75 per tonne
has to be paid as duty.
f) The company has
received a demand for payment of excise duty for Rs. 14.843 Millions on the
machineries purchased for co-generation plant which have been cleared by the
manufacturers based on the certificates alleged to have been forged by an
Official in the Ministry of Finance. The company has remitted the amount under
protest. The company opted for obtaining a valid certificate for which steps
have been taken through a writ petition filled in Hon'ble High Court of Madras.
g) The company has
been asked to pay Electricity Tax of 1.0 paise per unit with effect from 16th
June, 2003 for the electricity consumed from own captive power generators which
has been disputed by filling a Writ Petition before the Hon'bje High Court of
Madras. The approximate quantum under dispute is Rs. 6.226 Millions (.
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.40.75 |
|
|
1 |
Rs.81.17 |
|
Euro |
1 |
Rs.54.59 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
|
72 |
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 |
|