MIRA
INFORM REPORT
|
Report Date : |
02.11.2007 |
IDENTIFICATION
DETAILS
|
Name : |
HAVELLS INDIA
LIMITED |
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Registered Office : |
1/7, Ram Kishore Road, Civil Lines, Delhi-110 054 |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
08.08.1983 |
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Com. Reg. No.: |
55-16304 |
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CIN No.: [Company
Identification No.] |
L00000DL1983PLC016304 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DELH00196A |
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Legal Form : |
Public Limited
Liability Company. The company’s shares are listed on the stock exchanges. |
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Line of Business : |
Manufacturer of
Electrical Products |
RATING &
COMMENTS
|
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 10000000 |
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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 fine track. The Company is doing well and
expected to grow even faster due to recent strong advertisement campaign on
media. It’s financial position is quite good. Payments are correct and as per
commitments. The company can
be considered good for any normal business dealings at usual trade terms and
conditions. It can be
regarded as a promising business partner in a medium to long-run. |
LOCATIONS
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Registered Office : |
1/7, Ram Kishore Road, Civil Lines, Delhi-110 054, India |
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Tel. No.: |
91-11-23935237 / 23944469-72 |
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Fax No.: |
91-11-23921500 |
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E-Mail : |
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Website : |
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Corporate Office / Centre For Research & Innovation (CRI) : |
E-1, Sector-59, Noida-201 307, Uttar Pradesh, India |
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Tel. No.: |
91-120-2247777 |
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Fax No.: |
91-120 - 2583904 / 2588182 / 2477666 |
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E-Mail : |
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Factory : |
Domestic Switchgear
Division - Road No. 9, Samepur Badli, Delhi 110 041 - Distt. Solan, Baddi, Himachal Pradesh Industrial Switchgear
Division - 14/3, Mathura Road, Faridabad 121 002 Cable Division - A/461-462, Matsya Industrial Area, Alwar,
Rajasthan - SP-215, Matsya Industrial Area, Alwar, Rajasthan CFLs Division - 14/3, Mathura Road, Faridabad 121 002 - Plot No.2A, Sector -10, Sidcul, BHEL Industrial Estate, Haridwar,
Uttranchal Fan Division - Plot No.2A, Sector -10, Sidcul, BHEL
Industrial Estate, Haridwar, Uttranchal Bath Fittings -
G-470 / 471, RIICO Industrial Area, Bhiwadi, Rajasthan. Meter Division - 6, Tilak Nagar Industrial Area, New Delhi
110 058 100% Export Oriented Unit (EOU) - Distt. Solan, Baddi,
Himachal Pradesh Centre for Research & Innovation (CRI) - E-1, Sector 59, Noida 201
307 |
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Representative Offices : |
Bareilly, Bhopal, Bilaspur, Bakaro, Goa, Gorakhpur, Gwalior, Hubli,
Jabalpur, Jalgaon, Jodhpur, Kakinada, Kathmandu, Kota, Kottayam, Kozhikode, Lucknow,
Ludhiana, Madurai, Mangalore, Meerut, Nasik, Patna, Raipur, Rishikesh, Salem,
Siliguri, Surat, Trichy, Thiruvananthapuram, Udaipur, Vishakapatnam |
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Branches : |
NORTH : Chandigarh Dehradun Delhi Haryana Jaipur EAST : Bhubaneshwar Guwahati Kolkata Ranchi WEST : Ahmedabad Indore Mumbai Nagpur Pune Raipur SOUTH : Bangalore Chennai Coimbatore Hyderabad Kochi |
DIRECTORS
|
Name : |
Mr. Qimat Rat Gupta |
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Designation : |
Chairman & Managing Director |
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Date of Birth/Age : |
24.01.1937 |
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Qualification : |
B.A. |
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Experience : |
47 Years |
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Date of Appointment : |
08.08.1983 |
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Other Directorship : |
v Havell's India
Limited v TTL Limited v QRG Enterprises
Limited v Standard
Electricals Limited v Havell's Financial
Services Limited |
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Name : |
Mr. Anil Gupta |
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Designation : |
Director |
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Date of Birth/Age : |
20.04.1969 |
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Qualification : |
B.A. (Economics) MBA (Marketing and Finance) from Wake Forest
University, North Calorina, USA. |
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Other Directorship : |
v Havell's India
Limited v TTL Limited v QRG Enterprises
Limited v Havell's
Switchgears Private Limited v Standard
Electricals Limited v Havell's
Financial v Services Limited
v Havell's (UK)
Limited |
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Name : |
Mr. Surjit Gupta |
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Designation : |
Director |
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Date of Birth/Age : |
13.01.1942 |
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Qualification : |
F. Sc. from Punjab University Diploma in Mechanical Engineering from
State Board of Technical Education, Punjab |
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Other Directorship : |
v Havell's India
Limited v TTL Limited v QRG Enterprises
Limited v Havell's
Switchgears Private Limited v Havell's
Financial Services Limited |
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Name : |
Mr. Rajesh Gupta |
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Designation : |
Director (Finance) |
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Date of Birth/Age : |
17.06.1957 |
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Qualification : |
Qualified Chartered Accountant (F.C.A) |
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Experience : |
25 Years |
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Date of Appointment : |
01.12.1980 |
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Other Directorship : |
v Havell's India
Limited v Anekant
Consulting Private Limited |
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Name : |
Mr. Avinash P. Gandhi |
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Designation : |
Director |
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Date of Birth/Age : |
01.10.1938 |
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Qualification : |
B. E. (Mechanical) |
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Name : |
Mr. Richard Owen Pyvis |
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Designation : |
Director |
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Date of Birth/Age : |
04.02.1954 |
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Name : |
Ms. Sabine Geyer |
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Designation : |
Director |
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Date of Birth/Age : |
27.05.1960 |
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Qualification : |
Bachelor of
Arts, International Business Dipl- Betriebswirt (equiv. M.A.) |
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Name : |
Ms. Josephine Price |
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Designation : |
Alternate Director |
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Name : |
Mr. N Balasubramanian |
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Designation : |
Director |
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Name : |
Dr. Abid Hussain |
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Designation : |
Director |
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Date of Birth/Age : |
26.12.1926 |
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Qualification : |
M.A. |
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Other Directorship : |
v Havell's India
Limited v Hyderabad
Flextech Limited v Morgan Stanley Asset
Management (I) Limited v Nagarjuna Oil
Corp. Limited v GVK Industries
Limited v GVK Taj Hotels
& Resorts Limited v Zodiac Clothing
Company Limited v Wockhardt
Limited v Shree Qement
Limited |
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Name : |
Mr. S.B. Mathur |
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Designation : |
Director |
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Date of Birth/Age : |
11.10.1944 |
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Qualification : |
Chartered Accountant |
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Date of Appointment : |
v Havell's India
Limited v The National
Stock Exchange of India Limited v EID Parry (I)
Limited v Grasim
Industries Limited v IL&FS
Limited v Munich Re India Services
Private Limited v National
Collateral Management Services Limited v ITC Limited v UTI Bank Limited v Indian Railway
Catering's Tourism Corporation Limited v UTI Technology
Services Limited v UTI
Infrastructure & Services Limited |
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Name : |
Maj. Gen. D.N. Khurana |
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Designation : |
Director |
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Date of Birth/Age : |
15.05.1935 |
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Qualification : |
M. Sc. B. (Tech) |
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Other Directorship : |
v Havell's India
Limited v Cadila
Pharmaceuticals Limited |
KEY EXECUTIVES
|
Name : |
Ms. Ritu Mehrotra |
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Designation : |
Company Secretary |
SHAREHOLDING
PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Shareholding of Promoter and Promoter Group |
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Indian Promoters |
36187426 |
67.31 % |
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Public
Share Holding |
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Institutions |
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Mutual Funds/ UTI |
2116246 |
3.94 % |
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Financial Institutions / Banks |
11290 |
0.02 % |
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Foreign Institutional Investors |
8041571 |
14.96 % |
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Non-institutions |
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Bodies Corporate |
2277540 |
4.24 % |
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Individuals holding nominal share capital < = Rs. 0.100 Millions |
4685708 |
8.72 % |
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Individuals holding nominal share capital > Rs. 0.100 Millions |
438625 |
0.81 % |
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TOTAL
|
53758406 |
100.00 % |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of
Electrical Products |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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Domestic Switch
gear |
Nos |
39,600,000 |
21,466,738 |
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Industrial
Switchgear |
Nos |
2,600,000 |
2,517,679 |
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EWA |
Nos |
20,000,000 |
15,331,635 |
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Meters |
Nos |
840,000 |
145,522 |
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Cable &
Wires |
Km. |
700,000 |
331,650 |
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Electrical
Consumer Durables |
Nos. |
32,400,000 |
16,520,641 |
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Bath Fittings |
Nos |
750,000 |
560,903 |
GENERAL
INFORMATION
|
Bankers : |
Canara Bank Janpath, New Delhi-110 001 Corporation Bank K.G. Marg, New Delhi-110 001 State Bank of India IFB, 1, Tolstoy Marg, New Delhi-110 001 IDBI Bank
Limited K.G., New Delhi-1 10 001 Standard Chartered Bank Metro Main, New Delhi-1 10 001 Union Bank of India IFB, New Delhi-1 10 001 Yes Bank Limited Nyay Marg, Chanakya Puri, New Delhi - 110021 |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
V.P. Bansal &
Company Chartered
Accountants |
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Address : |
B-1, Sector – 2, Noida |
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Subsidiary Company : |
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Associates : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
80,000,000 |
Equity Shares |
Rs. 5/- each |
Rs. 400.000 Millions |
Issued Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
53,758,406 |
Equity Shares |
Rs. 5/- each |
Rs. 268.790
Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS
FUNDS |
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|
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1] Share Capital |
268.790 |
134.396 |
57.956 |
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2] Share
Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves &
Surplus |
2355.560 |
1625.665 |
808.200 |
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4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
2624.350 |
1760.061 |
866.156 |
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LOAN FUNDS |
|
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|
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1] Secured Loans |
560.560 |
1085.424 |
1420.860 |
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2] Unsecured
Loans |
0.000 |
13.031 |
321.360 |
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TOTAL BORROWING
|
560.560 |
1098.455 |
1742.220 |
|
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DEFERRED TAX
LIABILITIES |
118.320 |
95.338 |
74.145 |
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TOTAL
|
3303.230 |
2953.854 |
2682.521 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
2129.900 |
1464.318 |
881.968 |
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Capital work-in-progress
|
292.620 |
67.660 |
41.338 |
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INVESTMENT
|
34.660 |
31.658 |
31.658 |
|
DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS &
ADVANCES
|
|
|
|
|
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Inventories
|
2395.030
|
1906.179
|
1060.753 |
|
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Sundry Debtors
|
309.550
|
1281.669
|
1636.225 |
|
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Cash & Bank Balances
|
331.690
|
83.330
|
81.800 |
|
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Other Current Assets
|
37.610
|
86.422
|
14.951 |
|
|
Loans & Advances
|
587.700
|
358.292
|
244.969 |
Total Current Assets
|
3661.580
|
3715.892
|
3038.698 |
|
Less :
CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
2499.430
|
2112.878
|
1182.199 |
|
|
Provisions
|
317.500
|
213.270
|
129.049 |
Total Current Liabilities
|
2816.930
|
2326.148
|
1311.248 |
|
Net Current Assets
|
844.650
|
1389.744
|
1727.450 |
|
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MISCELLANEOUS EXPENSES
|
1.400 |
0.474 |
0.107 |
|
|
|
|
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|
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TOTAL
|
3303.230 |
2953.854 |
2682.521 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
15472.190 |
11151.364 |
6658.840 |
|
|
Other Income |
54.230 |
35.487 |
28.927 |
|
|
Total Income |
15526.420 |
11186.851 |
6687.767 |
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|
|
|
|
Profit/(Loss) Before Tax |
1205.410 |
784.860 |
432.270 |
|
|
Provision for Taxation |
183.880 |
152.788 |
127.006 |
|
|
Profit/(Loss) After Tax |
1021.530 |
632.072 |
305.264 |
|
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Earnings in Foreign Currency : |
|
|
|
|
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Export Earnings |
956.910 |
728.081 |
484.136 |
|
|
Merchant Trade Sales |
3.510 |
0.000 |
0.000 |
|
Total Earnings |
960.420 |
728.081 |
484.136 |
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Imports : |
|
|
|
|
|
|
Raw materials
and components |
1109.780 |
912.431 |
222.341 |
|
|
Machinery |
93.470 |
59.294 |
45.222 |
|
|
Spare parts |
0.690 |
1.084 |
1.425 |
|
|
R&D |
0.090 |
0.489 |
0.000 |
|
Total Imports |
1204.030 |
973.298 |
268.988 |
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Expenditures : |
|
|
|
|
|
|
Materials cost |
9560.310 |
5821.343 |
3327.462 |
|
|
Excise duty |
0.000 |
1114.491 |
834.222 |
|
|
Manufacturing expenses |
1294.760 |
1052.309 |
647.668 |
|
|
Office and
administration expenses |
753.290 |
603.026 |
388.249 |
|
|
Selling and
distribution expenses |
2389.290 |
1578.126 |
887.126 |
|
|
Financial
expenses |
209.370 |
226.048 |
165.192 |
|
|
Managerial remuneration |
16.190 |
6.196 |
5.379 |
|
|
Miscellaneous
expenditure written off |
0.380 |
0.231 |
0.041 |
|
|
Wealth tax |
0.000 |
0.221 |
0.160 |
|
|
Depreciation |
97.420 |
0.000 |
0.000 |
|
Total Expenditure |
14321.010 |
10401.991 |
6255.499 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1ST
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
4741.000
|
4981.000
|
|
Other Income |
|
24.000
|
24.000
|
|
Total Income |
|
4765.000
|
5005.000
|
|
Total Expediture |
|
4329.000
|
4531.000
|
|
Operating Profit |
|
436.000
|
474.000
|
|
Interest |
|
36.000
|
51.000
|
|
Gross Profit |
|
400.000
|
423.000
|
|
Depreciation |
|
30.000
|
29.000
|
|
Tax |
|
49.000
|
41.000
|
|
Reported PAT |
|
316.000
|
358.000
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
0.38 |
1.09 |
1.89 |
|
Long Term Debt Equity Ratio |
0.23 |
0.52 |
0.96 |
|
Current Ratio |
1.22 |
1.27 |
1.39 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
8.12 |
8.12 |
8.34 |
|
Inventory |
7.80 |
7.47 |
8.20 |
|
Debtors |
21.09 |
7.60 |
4.81 |
|
Interest Cover Ratio |
6.75 |
4.47 |
3.62 |
|
Operating Profit Margin (%) |
9.01 |
9.70 |
9.59 |
|
Profit Before Interest and Tax Margin (%) |
8.43 |
9.12 |
8.98 |
|
Cash Profit Margin (%) |
6.67 |
6.28 |
5.20 |
|
Adjusted Net Profit Margin (%) |
6.09 |
5.70 |
4.59 |
|
Return on Capital Employed (%) |
46.90 |
37.05 |
28.32 |
|
Return on Net Worth (%) |
46.70 |
48.32 |
41.82 |
LOCAL AGENCY
FURTHER INFORMATION
Fixed
Assets
-
Industrial Land
-
Factory buildings
-
Office premises
-
Plant and machinery
-
Dies and Tools
-
Generators
-
Furniture and fixtures
-
Electric fans and installations
-
Water supply installations
-
Weighing scale
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EDP Equipments
-
Office equipments
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Air conditioners
-
Vehicles
-
R & D Block
History
Promoted by Qimat Rai Gupta and S K Gupta, Havell's India was
incorporated as Havell's Private Limited in Aug.'83 and converted into a public
limited company in Mar.'92. It started by producing miniature circuit-breakers
and distribution boards in 1984. It entered into a technical collaboration with
Christian Geyer, Germany, to manufacture miniature circuit-breakers in India.
In 1991, it was amalgamated with Elymer Havell's Private Limited which had
facilities to manufacture HRC fuses. Havell's is the largest manufacturer of
Indian electrical products like building circuit protection equipment,
Industrial Switchgears, Cables & Wires, Energy Meters, Fans, CFLs, Lighting
Fixtures etc in India.
In 1991-92, the company made additions to its facilities to manufacture plastic
distribution boards (PDBs) and earth-leakage circuit-breakers (ELCBs). To
manufacture ELCBs, the company entered into another technical collaboration
with Schiele Industriwerke, Germany. To part-finance the project for PDBs and
ELCBs, it went public in Oct.'93 at a premium of Rs 15.
In 1996 the company has entered into the manufacture of low tension power
cables, it acquired an existing cable manufacturing plant in Alwar, Rajasthan,
belonging to a sick unit from Rajasthan State Industrial Development &
Investment Corporation (RIICO).
During 1998-99, the company has tied up with Deutsche Zahler Gesselchaft (DZG)
germany in its sister concern TTL Limited, for manufacturing single and three
phase Ferraris Meters for the indian and export markets and the same are to be
exported back to germany.
In Apr.'2000, the company acquired 60% stake in Standard Electricals Limitedand
in Nov. 2000, it acquired a 60% equity stake in Duke Arnics Electronics Limited
During Sep'04, the company has incorporated a Wholly owned subsidiary in the
United Kingdom in the name of Havell's UK Limited
During 2004-05 the company has enhanced its installed capacity of Domestic
Switchgears, Industrial Switchgears, Cable & Wires and Electrical Consumer
Durables by 12650000 Nos, 222000 Nos, 7500 Kms and 2000000 Nos respectively.
With this expansion the total installed capacity of Domestic Switchgears,
Industrial Switchgears, Cable & Wires and Electrical Consumer Durables has
increased to 27300000 Nos, 1335000 Nos, 465000 Kms and 13200000 Nos
respectively.
In January 2004 the company has sub-divided its equity share face value from
Rs.10/- per share to Rs.5/- per share. During August 2005 the company has
issued bonus equity shares to its shareholders in the ratio of 1:1.
The company has set up a new 50000 Square meter manufacturing facility for
MCB's and other switchgear products in green environ at Baddi, Distt Solan,
Himachal Pradesh. The company has also set up India's first plant for
manufacturing FPLs(36W CFL) which commenced its operations in February 2005.
Further the company is setting up a plant at Hardwar in the state of
Uttaranchal. The plant is going to be the largest intergrated plant for
manufacturing ceiling fans in India which shall commence its operation by June
2005.
The company has launched a complete range of indoor and outdoor lighting
fixtures under the brand name 'Havell's''. Further the company has also
launched the complete range of ceiling and table, pedestal and wall fans.
Performance
of the Company:
The Company had another good year 2006-07 with a reasonable performance.
The
turnover of the Company has increased by more than 50% from Rs.11,151.37
million in the last Financial Year to Rs.16,810.58 million in current financial
year. This year, the Company has crossed the Net Profit figure of Rs.1000
million. The Net Profit of the Company has increased by more than 60% from
Rs.632 million in previous year to Rs.1022 million in Current Year.
Dividend:
The Directors of the Company are pleased to recommend a final dividend @50% for
the year 2006-07 i.e. Rs.2.50 per equity share on fully paid up equity shares
of Rs.5/- each. The proposed dividend, if approved at the ensuing Annual
General Meeting, would result in appropriation of Rs.157.24 million (including
Corporate Dividend Tax of Rs. 22.84 million) out of the profits. The Company
has made transfer of Rs.110 million to the General Reserve. The total
appropriation of dividend of Rs.157.24 million gives 15.39% payout on net
profit of the Company. The Register of member and share transfer books shall
remain closed from Friday, 22nd June, 2007 to Friday, 29th June, 2007, both
days inclusive, for the purpose of Annual General Meeting and payment of
dividend.
Corporate Review:
The
Company operates in three main business segments viz. Switchgear, Cables &
Wires and Electrical Consumer Durables.
Switchgear Segment:
Havell's
India Limited has established itself as a major player in Industrial Switchgear
segment in India with a very comprehensive range including ACBs, MCCBs, Fuse
Switches, Fuses, Changeover Switches, Contactors, Starters, etc. The Company
has been upgrading its range by adding new products and new features in the
existing products. Havells is setting up a second plant for industrial
switchgear at Baddi in addition to its existing plant in Faridabad. It will be
absolutely world class and highly automated employing all latest manufacturing
techniques.
Havells is already the market leader for Domestic Switchgear products in India
with world class plants at Baddi & Badli. The Company is expanding capacity
and upgrading the facilities with a regular investment in manufacturing. The
Company has launched various innovatinve products in this segment during the
year with higher rating MCBs, RCCBs, RCBOs, new distribution boards, etc.
The Company
is a leading player in the Electrical Wiring Accessories with premium
positioning of brand 'Crabtree'. In order to cater to a much larger mass of the
market the Company has decided to introduce Havells branded Wiring Accessories
in the current year. This move is expected to add substantial volume this year.
The Company has entered the intelligent product segment by launching a Digital
Dimming and Energy Management System called 'Crabtree - Aura'. The system
empowers a user to bring all the surrounding artificial lighting under his
control in a modern way through remote/ digital equipment. Be it commercial
applications like bars, hotels, auditoriums, etc. or domestic areas like
living- cum-dining rooms, master bedrooms, Crabtree AURA can meet the most varied
lighting application and transform it at a click of a button making their lives
more productive, more comfortable and vastly energy efficient.
100% Export Oriented Unit:
The
Company has set up a 100% Export Oriented Unit (EOU) at Baddi for Switchgear
products with a total installed capacity of 12 million MCBs per annum. The
Company has invested an amount of approx Rs.80 million in Plant & Machinery
for this Unit. The Commercial production at this unit was commenced in
November, 2006. Being an EOU, this unit will get the benefits of excise and
custom duties exemptions. Further the sales tax paid at the time of purchases
is also reimbursable to the unit fom NSEZ Noida.
During
the year under review, Switchgear Division has registered a turnover of Rs.4289
million from the previous year Rs.3299 million posting the growth of 30%.
Cable & Wire Segment:
The
Company's cable and wire division has registered a sales growth of 67%.
This
division is scaling up to new heights on YOY basis as turnover of it has
increased to Rs.7780 million from the previous year figure of Rs. 4655
million.
The
Company is renowned for its superior quality for the complete range of high and
low voltage PVC and XLPE cables, FR/FRLS wires, Co-Axial TV and Telephone
Cables.
During
the year the division enhanced its production capacity by installing high
technology machinery and by adding floor space to its production area.
The
division through its CCV Lines has successfully started manufacturing 66KV high
voltage cables.
Electrical Consumer Durables
Segment:
The
Company has maintained its growth momentum in the segment by posting a sales
figure of Rs.4086 million as compared to Rs. 2745 million in the previous year,
i.e. growth of around 49% The Company has fully utilized the opportunities
thrown by the booming construction sector in India. The Company is performing
exceedingly well in all the three categories in this segment, i.e. CFLs,
Lighting Fixtures and Fans.
CFLs:
Burgeoning electricity bills, increased awareness amongst the consumers,
promotional schemes, environment protection movements, lackluster variety and
performance of local and Chinese brands has set the stage for Indians to shift
to Branded energy saving Compact Fluorescent Lamps (CFLs). Havells is already
one of the largest manufacturers of Compact Fluorescent Lamps (CFLs) in India
with installed capacity of 2.2 millions CFLs per month at two state of art
manufacturing plants at Faridabad and Haridwar.
The
worldwide demand for CFLs is about to explode as the world is waking up to the
global warming issues and many countries are contemplating a defined time
period for phasing out GLS lamps and banning them which will result in demand
shifting in favour of more energy efficient products like LEDs and CFLs. The
Company has made a comprehensive plan of expanding its manufacturing facility
multifold in a new location at Neemrana to create a possibility to grab the
opportunity that will be generated in terms of CFL demand worldwide which shall
be catered through Havells and Sylvania's marketing and distribution network
all across the globe.
Light Fixtures:
Havells
entered the business of lighting fixtures 3 years back and has established a
strong market presence in the category with the turnover increasing at the pace
of almost 100% for the past two years. The focus has been to provide complete
lighting solutions with primary emphasis on energy efficient systems for the
required ambience or lighting application with aesthetically designed fixtures.
With access to technology available with Sylvania the Company shall be
launching many innovative products in the Indian market in the near future.
Fans:
Havells has captured a high premium position in the fan segment, by providing
the market with innovative designs, premium finishes and energy efficient
performance. The Company is expanding at the rate of 60% plus in fans every
year. The fully integrated state of art manufacturing plant set up last year at
Haridwar, is being further augmented to expand capacity to cater to the fast
growth of Havells market.
New Projects:
The
Company has successfully demonstrated in past its capability to achieve fast
success in all its new projects. They have always expanded in fields that are
synergistic to their current business and where they can leverage their
strengths in marketing, distribution, and customer relations. The Company has
decided to enter two new product segments, Power Capacitors and Electric
Motors, for which the plants and the marketing infrastructure are already being
set up.
Power Capacitors:
The
Company has set up a new plant at Noida for Power Capacitors with an initial
investment of Rs.80 million in plant and machinery. The land and building were
already available with the Company and were idle for past couple of years. The
Plant has an initial installed capacity of 600000 KVAR per month, and has
commenced commercial production in February, 2007. They expect to achieve good
market position in this product segment in quick time using the leverage of
their existing market strength for industrial switchgears.
Electric Motors:
Havells
has decided to enter the fast growing Electric Motors business for which a
completely integrated plant is being set up at a greenfield site at Neemrana,
Rajasthan. Once the project is completely implemented by end of the current
financial year, the Company shall have the capacity to manufacture 15,000
motors in combination of various sizes from frame 56 to 315, or 0.25 HP to 500 HP
which comprise the complete range of LT three phase motors. The capex plan for
the full project is Rs.600 million and initial production for the smaller sizes
motors is expected in the third quarter of this year.
The customers and market expects Havells to introduce the latest technology and
high quality for any new product it launches. For this the Company entered into
technical collaboration with a leading European manufacturer of Electric
Motors, Lafert S.P.A., Italy. Havells shall be manufacturing only high energy
efficient motors in line with its philosophy of doing its bit to bring energy
consciousness to the world.
Acquisition of SLI Sylvania
business:
During
the year under review, the Company has taken a leap of faith, demonstrating its
commitment to growth and an ambition to expand its footprint globally, by
deciding to acquire SLI Sylavania business worldwide. The Company approved the
acquisition of SLI Sylvania business by approving the acquisition of 100%
shares of three companies; i) SLI Lighting Products, Inc.; ii) SLI Europe BV;
and iii) Lighthouse Investment Holdings Limited through its subsidiaries based
in Isle of Man, Malta and Netherlands. This is the largest foreign acquisition
by an Indian Company in the electrical industry. The Transaction is completed
in last week of April, 2007.
SLI-Sylvania
headquartered in Frankfurt, is a leading world player in the field of lighting
with a very comprehensive range of lamps and fixtures.
SLI
Sylvania clocked a turnover of $594 million in the calendar year 2006.
The
Company goes to the market with brand Sylavania in Europe, Latin America, Asia
and Africa and SLI in USA, Canada and Mexico. The Company also owns other
renowned brands Concord marlin, Luminance, Claude and Linolite.
The Company has 10 manufacturing plants in UK, Belgium, Netherland, Germany,
France, Tunisia, Brazil, Colombia and Costa Rica. The total employee strength
for the Company is around 4000.
The
acquisition gives Havells a huge global presence with a proper organizational presence
in over 40 countries. There are huge synergistic benefits of bringing the two
companies together. It gives an access to Havells to over 10,000 distributor
spread in Latin America, Europe, Africa and Asia which can be used to launch
Havells products like switchgear, etc. in these markets. There are huge
potential synergies in manufacturing and sourcing of lighting products for the
two companies. There is a huge potential in joining the R&D activities as
well.
SLI
Sylvania has been acquired with a total consideration of Euro 227.50 million.
The acquisition is funded by a non-recourse debt of Euro 120 million based on
SLI Sylvania's balance sheet and recourse funding of Euro 80 million. The
remaining amount is balanced by taking over other long term liabilities like
pensions, etc.
Bonus Shares:
At the
Annual General Meeting of the Company held on 27th June, 2006 members of the
Company approved the allotment of Bonus Shares in the ratio of 1:1, i.e. one
fully paid up Bonus Share for every one equity share of Rs.5/- each.
Consequently, on nd 22 July, 2006, the Company allotted 26879203 equity shares
of Rs.5/- each to all the shareholders, whose names appeared on the register of
members as on 21st July, 2006. After the Bonus Shares allotment, the paid up
capital of the Company increased to Rs.268.79 million.
Increase in Authorised Share
Capital:
Pursuant
to the resolution passed by the members of the Company at the Annual General
Meeting of the Company held on 27th June, 2006 resulting from the issue and
allotment of Bonus Shares, the Company increased its Authroised Share Capital
from Rs.150 million to Rs.300 million.
Subsequently
the same is increased to Rs.400 million at the extra ordinary general meeting
held on January 20, 2007.
Corporate Governance:
The
Company believes that great companies are built on the foundation of good
governance practices. Corporate Governance is all about the effective
management of relationships among constituents of the system-shareholders,
management, employees, customers, vendors, regulatory and the community at
large. The Company strongly believes that this relationship can be strengthened
through corporate fairness, transparency and accountability.
The
Company places prime importance on reliable financial information, integrity,
transparency, empowerment and compliance with the law in letter and
spirit.
They
take pride in informing you that the Company has implemented the revised clause
49 of listing agreement. The Company takes proactive approach and revisits its governance
and practices from time to time to meet the business and regulatory needs.
Therefore, the Company has appointed professional firm, Ernst & Young for
the Risk Management, Internal Control part to advise on a proper implementation
of risk management practices in the Company. This is expected to be completed
by end of first quarter of the current year.
Compliance
with clause 49 for the year 2006-07 has been given in the Corporate Governance
report, which is attached and forms part of this report. The Auditors'
certificate on compliance with Corporate Governance norms is also attached
thereto.
MANAGEMENT DISCUSSION AND
ANALYSIS
Statements
in the Management Discussion and Analysis Report describing the Company's objectives,
projections, estimates, expectations may be considered to be 'forward-looking
statements' within the meaning of applicable laws and regulations. Actual
results could differ materially from those expressed or implied. Important
factors that could make a difference to the Company's operations include
economic conditions affecting demand/supply and price conditions in the
domestic and overseas markets in which the Company operates, changes in the
Government regulations, tax laws, other statutes and other incidental factors.
The Company assumes no responsibility to publicly amend, modify or revise any
forward looking statements on the basis of any subsequent development,
information or events.
Industry Overview:
The
impressive growth of the industrial sector, propelled by robust growth in
manufacturing has continued unabated during the current year so far.
Year-on-year
industrial growth of 10.6 percent in the first nine months of 2006-07 was the
highest recorded since 1995-96. In seven of the eight months of the year
2006-07, the year-on-year growth of the manufacturing sector was in
double-digits.
In the
year until November, the year-on-year growth of the overall Index of Industrial
Production (IIP), which measures the absolute level and percentage growth of
industrial production as well as its three subsectors, viz. mining, electricity
and manufacturing, in April-November 2006 was higher than that in comparable
period of the previous year.
The
micro and small enterprises (MSEs) constitute an important segment of the
Indian economy. The process of economic liberalization and market reforms,
while exposing the Indian MSEs to increasing levels of domestic and global
competition, has also opened up attractive possibilities of access to larger
markets and of stronger and deeper linkages of MSEs with larger enterprises.
Improved manufacturing techniques and management processes can be sourced and
adopted with greater ease.
Spurred
by high growth rates of over 200/o in 65 segments, India's manufacturing sector
has clocked a growth of 13% in the first nine months of the 2006-07
(April-December 2006). The sectors which have recorded excellent growth during
the period April, December 2006 over the April-December 2005 are electrical
equipment & machinery (25%), electric motors-rotative (24%), circuit
breakers (29%) switchgears (37%), power transformer (220/0) distribution
transformers (26%), power cables (41%), hydro electric power (24%),
construction equipment (22%), energy meters (15%).
India has recently emerged as an' important manufacturing hub for a number of
industrial products and is poised for major expansion in some manufacturing
segments as revealed in the recent trends. The growth in manufacturing has
exceeded 12% during April- September 2006.
Manufacturing
industry and consumer durables industry in particular has paid increasing
attention to concentrate on high-end and superior technology products which
have paid rich dividends.
The
increasing demand for sophisticated lifestyle products from a steadily growing
middle income group in the country has encouraged production of superior better
quality products pertaining to home appliances, precision instruments, a host
of engineering items, Automobiles, auto component, steel products, FMCG
products etc.
With strong demand over the past few years Indian companies are enhancing their
global services delivery capabilities through a combination of greenfield
initiatives, cross-border mergers & acquisitions, partnerships and
alliances with local players. This is enabling them to execute end-to-end
delivery of new services.
The
robust growth of manufacturing sector is set to fuel the growth as the Company
serves this a slew of products. However, their growth is further consolidated
by constructive developments in the power sector, the construction and real
estate and outsourcing in manufacturing.
Corporate Review:
The
Company showed excellent results and make its maiden foreign acquisition during
the year. The details of the performance are provided later in the
report.
Notwithstanding
the intense competitive pressure, the Company maintained its leadership
position in most of its business domestically and strengthened its presence in
select international markets. During the year, the Company had to cope with
increasing customer expectations, global competition and the pressure on
margins. The Company had to address the challenges of talent augmentation
resource optimization and value creation.
Outlook:
As the country enters into the first year of the Eleventh Plan, the sustained
growth of the industrial sector is crucially dependent on removing the
infrastructural impediments, especially, in the power sector.
Capacity
additions through investment is critical for accelerating growth in industry.
The investment scenario looks quite optimistic, particularly with rising
domestic savings rates and FDI inflows. Sustained economic growth, fiscal
consolidation and an enabling policy environment will continue to provide
incentive to capacity addition in industry and sustaining its high
growth.
The
Commonwealth Games, will be held in the year 2010 in Delhi and, around one
million foreign tourists are expected to visit India. The Government has framed
a master plan for Delhi for its modernization with better infrastructure
facilities. This will result in growth of aviation, hotel, real estate,
industries. This will definitely results into business generation for the
Company for its each segment.
The
government has rightly emphasized the need to address India's huge
infrastructure needs. Shortages of electricity and clean water are widespread,
while inadequate roads, ports, and airports are increasingly constraining the
booming economy. Given the limited ability of India's public sector to increase
spending, a successful approach will require an expansion of public private
partnerships. Progress has already been achieved in some areas, notably in the
development of model concession agreements for roads (which have attracted
significant private participation) and the recent awarding of private contracts
to modernize Delhi and Mumbai airports. Further progress will depend on
advances in creating a regulatory environment across all sectors that is
conducive to private participation.
Financial Management:
Management of funds is considered very important and vital to the Company's
Growth. The financial system takes care of the management of the funds.
Senior
management reviews the requirement of funds periodically.
Operational
and Finance Team monitors the manufacturing operations and implementations of
the projects and ensures that budgetary provisions are strictly adhered
to.
The
Company's Financial Management has held it in good stead over the years and has
given it the unbeatable reputation of being the profitable Electrical
manufacturing company in the Country for its size of operation.
The Company had initiated moves in its right earnest for repaying and swapping
the high interest borrowings with low interest rate funds.
Currently
the total borrowings of Rs.561 million comprising term loans of Rs.406 million
and working capital and other loan of Rs.155 million.
Website
Details Attached:
Overview:
Havell's has emerged as an independent medium sized company with uncompromising
ethical standards and a definite global perspective. It has defined conventions
and has evolved its very own remarkable structure -one that puts decision maker
in close contact with customers and quickly adapts to the rapid changes in technology.
It began as a trading concern in 1958 and today is a major
manufacturer and supplier of the widest range of low voltage electrical
equipment catering to the needs of domestic and industrial market.
Havell's is now perceived as a single source for all the low
voltage electrical requirements. Most of its products have certification from
independent testing authorities, and it is a matter of pride that the company
is widely perceived as a quality manufacturer with a reputed brand image. Hence
its customers place an unconditional trust in them.
Manufacturing
Plants:
Badli Plant
Site : In North Delhi, 15km
from ISBT or In North Delhi 40 km from corporate office Noida.
Products : Miniature circuit Breakers(MCB), Residual Current
Circuit Breakers(RCCB), Distribution Boards(DB) and High Rupturing Capacity
Fuses(HRC)
Collaboration : Geyer
AG, Germany for MCB Schiele Industriewerke, Germany for RCCB
Faridabad Plant
Site : South of Delhi , 3 kms
From Delhi Border
Products : Contactors, Relays, CFL and Motor Starters (Controlgear)
Collaboration : Schiele
Industriewerke, Germany
Tilak Nagar Plant
Site : In West Delhi, 20 km from ISBT or In West Delhi,
45km from corporate office Noida.
Products : Three Phase energy meters(Meters)
Alwar Plant
Site : In Rajasthan, 160 km From Delhi
Products : PVC/XLPE, low tension underground cables,
telephone and co-axial cables, control cables, domestic wires
Noida Plant
Site : In East of Delhi, 5km from corporate office
Noida.
Products : Havell's fans and MCB.
News:
QRG Enterprises, QRG is Havell's in its new
reincarnation. With a new vision. New purpose. New dynamism.
QRG Enterprises,
India's leading multi-product electrical engineering organization has been
offering the Industries, the benefits of expertise and experience of over three
decades in the field of Electrical Products and Accessories.
New Products
- Havells after taking over Polestar,
launches absolutely new range of Luminaries and CFP Chloro Flouroscent
Lamps.
- Havells brings to India household fans
that are extremely beautiful and saves energy.
- Crabtree launches the Stylish
& Fashionable range of Modular Switches (Piccadilly) and Bath fitting
(Frattini).
QRG Enterprises entered
into a joint venture with F'lli Frattini of Italy, to lanuch bath fittings and
accessories in India under name of Crabtree Frattini.
Press Release
Havells
To Acquire US$ 594mn SLI Sylvania lighting business
In
what will be the largest acquisition by an Indian electrical products company,
Havells Netherlands BV, a Netherlands incorporated subsidiary of Havells, signed
an agreement with SLI Holdings Inc., to acquire SLI Sylvania’s lighting
business¹ at an aggregate purchase price of US$300mn.
The
acquisition is expected to be financed with non-recourse debt facilities of
US$160mn and recourse facilities of US$105mn by way of loans/equity through
Havells subsidiaries (“Recourse Borrowers”) guaranteed by Havell's India.
Deutsche Bank Group is the financial advisor to Havells on the transaction.
Barclays Capital and State Bank of India are the lead arrangers for the
financing.
Key
Highlights:
- US$300mn all-cash acquisition: Largest ever acquisition by an Indian
Electrical company
- Sylvania is one of the Largest Lighting Companies globally
- The combined turnover of the two entities of nearly US$ 1 Billion
- Post acquisition nearly two-third of Havells consolidated revenues
to come from international markets
- SLI Sylvania’s 10 manufacturing plants located across Europe, Latin
America and Africa comes under Havells ambit.
- Havells gets access to a strong brand & distribution network
with over 10,000 distributors/ dealers spread across the globe.
- Some of the
leading professional and consumer lighting brands like Sylvania, Concord:
marlin, Lumiance, Marlin, Claude and Linolite-Sylvania comes under Havells
fold.
Speaking on the occasion, Mr.
Qimat Rai Gupta- CMD, Havells said “Sylvania’s acquisition is a first step
towards attaining leading position in the global lighting industry with a
strong presence in the developed markets of Europe and high growth Latin American
markets. This acquisition will provide them a platform with strong brands and
established distribution channels on which Havells can build on. Further, the
management team responsible for SLI Sylvania’s turnaround will continue to
remain with the business and grow the combined organization”
Paul Griswold, CEO of SLI Sylvania added “The management team is extremely
excited about the Transaction and believes that SLI Sylvania is well-poised to
effectively exploit the opportunities ahead with significant synergies to be
realized by the combined organization”
Sanjay Agarwal, Managing Director and
Head, Global Corporate Finance, India for Deutsche Bank mentioned that “This
transformational transaction leapfrogs Havells into the global league with the
sheer scale and breadth of Global footprint acquired and demonstrates the
strong execution capabilities of the management team”
SLI Sylvania, which is headquartered in Frankfurt is a leading global designer
and provider of the lighting systems for lamps and fixtures. Sylvania is one of
the most globally recognized brand for over a century in the electrical
industry. SLI Sylvania has 10 manufacturing plants located across Europe, Latin
America and Africa with an employee strength of more than 4000. As per the annual
accounts for the year ended Dec 31, 2006, SLI Sylvania generated revenues of
US$594mn and a normalized EBIDTA² of US$ 41.2mn.
This landmark acquisition provides Havells with the opportunity not only to
expand its product portfolio in the European, Latin American and other
developed markets of the west but also to launch Sylvania in India.
SLI Sylvania is the principal company behind many of the world's best known
professional and consumer lighting brands - including Sylvania, Concord:marlin,
Lumiance, Marlin, Claude and Linolite-Sylvania. It has been marketing fixtures,
lamps and other lighting products to variety of customers including architects,
designers, electrical distributors, select retailers, including OEM and other
lighting
About Havell's India
Starting off as an electrical trading company in 1958, Havell's India Limited
today is an emerging leader and an end-to-end solution provider in the Power
Distribution Equipment industry. The company catering to the needs of domestic
and industrial market has seven manufacturing units in India.
Havells reach stretches across 43 branch offices, over 2000 authorized dealers
and thousands of approved retail outlets. The company has an enviable
clientele, not only in the domestic market, but also in international markets
like UK, Malaysia, Singapore, Bangladesh, Sri Lanka, Dubai, Africa, Iran and
Iraq. The company is currently exporting to over 50 countries globally.
Havells is acknowledged as a manufacturer & supplier of the widest range of
quality low voltage electrical equipment. With a number of strategic alliances
in place, Havells is the only company that has shown phenomenal growth rate
with the help of various joint ventures, acquisitions, mergers and takeovers.
Company’s income for the the nine months period ended December 2006 was at Rs.
11097.700 Millions With a Profit After Tax of Rs.727 Millions.
Inaugurates new world class manufacturing facility at Noida
Havell’s
India Limited , one of the fastest growing electrical and power distribution
equipment company in the country, today inaugurated its Capacitor Plant in Noida.
After the successful launch of Fans and CFLs two years back, the company has
now forayed into Capacitors segment. The new facility has an
installed capacity of 6,00,000 KVaR per month.
Initially,
the company plans to manufacture power factor improvement capacitors like
Normal Duty, Heavy Duty Extended Life and Super Heavy Duty Long Life Capacitors
and Agricultural Capacitors. In the second phase i.e September 07’ onwards the
company will roll out AC Capacitors and Harmonic filters.
Speaking
on the occasion of the inauguration, Mr Anil Gupta, JMD, Havell’s India said,
“The capacitor plant is keeping in line with our strategy of following both
organic and inorganic growth route. We have invested close to Rs 150 Millions
in the plant and have imported state of the art machinery from the best
manufacturers in Switzerland which gives us an edge as it would be one-of-it's
kind manufacturing facility in India. “
“We
are aiming a leadership position in the low voltage capacitor market in the
next two-three years”, he further added.
Havell's Capacitors come with triple safety protection i.e. a triple sheild
with energy disconnecter in the event of any fault. The product would be available
in the market from the end of February through its strong existing network of
1800 authorized dealers and 26000 retailers ensuring a strong nationwide reach
and easy availability for consumers.
While
Havell's switchgear products have offered consumers realms of electrical
safety, cables and wires ensure uninterrupted power supply, Havell's Capacitors
are designed to improve the power factor. These Low Voltage Capacitors improve
“Active Power” and reduce “Reactive Power” that helps in saving energy.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
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.39.37 |
|
UK Pound |
1 |
Rs.81.82 |
|
Euro |
1 |
Rs.56.83 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
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 |
|