MIRA
INFORM REPORT
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Report Date : |
09.10.2007 |
IDENTIFICATION DETAILS
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Name : |
GUJARAT NARMADA VALLEY FERTILIZERS COMPANY LIMITED |
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Registered Office : |
P. O.
Narmadanagar, District Bharuch - 392 015, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
10.05.1976 |
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Com. Reg. No.: |
04-2903 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BRDG00702C |
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PAN No.: [Permanent
Account No.] |
AAACG8372Q |
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Legal Form : |
A Public limited liability company. The company's shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing and Selling of fertilizers viz. urea, ammonium nitro-phosphate and calcium ammonium nitrate, chemicals viz. ammonia, methanol, formic acid, acetic acid, nitric acids and ammonium nitrate melt and electronics viz. digital switching systems and printed circuit boards. |
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 62000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having satisfactory track records. Directors are experienced, respectable and qualified professionals. Their trade relations are reported as fair. General financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
P. O.
Narmadanagar, District Bharuch - 392 015, |
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Tel. No.: |
91-2642-247001/2/3/4/5/6/7/8/9 |
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Fax No.: |
91-2642-247084/247057 |
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E-Mail : |
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Website : |
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Factory : |
GNFC Infotower, 3rd Floor, Bodakdev Gandhinagar
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DIRECTORS
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Name : |
Mr. Balwant Singh |
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Designation : |
Managing Director |
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Date of Birth/Age : |
52 Years |
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Qualification : |
06.12.1951 |
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Experience : |
M. |
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Date of Appointment : |
31.10.2002 |
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Other Directorships |
1.
2.
The Fertilizer Association of 3.
4. Gujarat Chemical Port Terminal Company Limited 5. Narmada Chematur Petrochemicals Limited 6.
Gujarat 1. Gujarat State Fuel Management Company Limited |
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Name : |
Dr. Manjula Subramaniam |
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Designation : |
Director |
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Date of Birth/Age : |
55 Years |
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Qualification : |
18.09.1948 |
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Experience : |
M. Sc. (Physics), Doctorate in Commerce, Masters’ in
Public Administration at |
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Other Directorships |
1.
2.
3. Gujarat State Petroleum Corporation Limited 4. Gujarat State Energy Corporation Limited 5. Gujarat State Fuel Management Company Limited 6. Gujarat State Pertronet Limited 7. Gujarat State Electricity Corporation Limited 8. The Ahmedabad Electricity Company Limited 9. Gujarat Industries Power Company Limited 10. Gujarat Power Corporation Limited 11. Gujarat Energy Transmission Corporation Limited 12. Gujarat Alumina Bauxite Limited 13. Gujarat State Investments Limited |
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Name : |
Mrs. Sudha Anchalia |
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Designation : |
Director |
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Date of Birth/Age : |
54 Years |
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Qualification : |
M. A. (Economics) |
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Other Directorships |
1. Sardar Sarovar Narmada Nigam Limited 2. Infrastructure Finance Company Gujarat Limited 3. Gujarat Industrial Investment Corporation Limited 4. Gujarat State Investments Limited 5.
6.
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Name : |
Mr. A. K. Luke |
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Designation : |
Executive Director |
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Date of Birth/Age : |
55 Years |
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Qualification : |
B. Technical (Civil Engineering), IIT, Mumbai |
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Other Directorships |
1. GSFC Investment and Leasing Company Limited 2.
3.
The Fertilizer Association of 4. Indian Potash Limited 5. Gujarat Industries Power Company Limited 6.
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Name : |
Mr. R. C. Desai |
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Designation : |
Executive Director |
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Date of Birth/Age : |
57 years |
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Qualification : |
B.E. (Mech.) |
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Experience : |
35 years |
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Date of Appointment : |
16.01.1979 |
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Other Directorships |
GSFC, |
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Name : |
Mr. J. K. Shah |
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Designation : |
Executive Director |
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Date of Birth/Age : |
57 years |
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Qualification : |
B.E. (Elect.) |
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Experience : |
35 years |
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Date of Appointment : |
15.07.1978 |
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Other Directorships |
GSFC, |
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Name : |
Mrs. Manu Shroff |
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Designation : |
Executive Director |
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Date of Birth/Age : |
73 Years |
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Qualification : |
B. A. (Hons), B.Sc. (Eco), |
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Other Directorships |
1. Atul Limited 2. The Great Eastern Shipping Company Limited 3.
4. Nirma Limited 5. Gujarat State Electricity Corporation Limited 6. Gujarat Energy Transmission Corporation Limited
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Name : |
Mr. S G Mankad |
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Designation : |
Chairman |
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Name : |
Mr. Pankaj Kumar |
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Designation : |
Director (IAS) |
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Name : |
Mr. TT Ram Mohan |
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Designation : |
Director |
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Name : |
Mr. Ashok Shah |
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Designation : |
Director |
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Name : |
Mr. D C Anjaria |
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Designation : |
Director |
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Name : |
Mr. P N Vijay |
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Designation : |
Director |
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Name : |
Mr. T Natarajan |
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Designation : |
Joint Managing Director |
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Name : |
Mr. P. K. Laheri |
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Designation : |
Chairman |
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Name : |
Mr. N. R. Ranganathan |
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Designation : |
Director |
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Name : |
Mr. S. M. Jain |
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Designation : |
Director |
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Name : |
Mr. Rajneesh Aggarwal |
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Designation : |
Director |
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Name : |
Mr. R. P. Vyas |
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Designation : |
Director |
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Name : |
Mr. M. D. Vaghela |
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Designation : |
Director |
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Name : |
Mr. V. K. Khanna |
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Designation : |
Director |
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Name : |
Mr. B. P. Adesara |
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Designation : |
Director |
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Name : |
Mr. Mukesh Bagwat |
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Designation : |
Director |
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Name : |
Mr. J. J. Bhavsar |
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Designation : |
Director |
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Name : |
Mr. B. M. Bhayana |
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Designation : |
Director |
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Name : |
Mr. Buch J. C. |
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Designation : |
Director |
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Name : |
Mr. N. A. Buch |
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Designation : |
Director |
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Name : |
Mr. D. P. Dalal |
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Designation : |
Director |
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Name : |
Mr. K. M. Daniel |
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Designation : |
Director |
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Name : |
Mr. R. H. Dave |
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Designation : |
Director |
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Name : |
Mr. M. T. Desai |
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Designation : |
Director |
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Name : |
Mr. M. Devaranjan |
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Designation : |
Director |
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Name : |
Mr. B. C. Goswami |
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Designation : |
Director |
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Name : |
Mr. D. D. Kher |
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Designation : |
Director |
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Name : |
Mr. P. B. Nanavati |
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Designation : |
Director |
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Name : |
Mr. D. S. Taunk |
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Designation : |
Director |
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Name : |
Mr. R P Vyas |
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Designation : |
Director |
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Name : |
Mr. K A Shah |
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Designation : |
Director (On
Deputation with NCPL) |
KEY EXECUTIVES
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Name : |
Mr. R. B. Panchal |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Category Code |
Category of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A) |
Shareholding of
Promoter and Promoter group |
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(a) |
Bodies Corporate |
64001975 |
41.35 |
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Total (A) |
64001975 |
41.35 |
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(B) |
Public
Shareholding |
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(1) |
Institutions |
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(a) |
Mutual Funds/ UTI |
11205601 |
7.25 |
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(b) |
Financial Institutions / Banks |
23284429 |
15.05 |
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(c) |
Foreign Institutional Investors |
4398734 |
2.84 |
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Sub-Total (B)
(1) |
38888764 |
25.14 |
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(2) |
Non-Institutions |
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(a) |
Bodies Corporate |
5155469 |
3.60 |
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(b) |
Individuals |
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i. Individual shareholders holding nominal share capital up to Rs. 1
lakh |
24462962 |
25.42 |
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ii. Individual shareholders holding nominal share capital in excess of
Rs. 1 lakh |
6029428 |
4.05 |
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(c) |
Any other – Trust |
299797 |
0.19 |
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i. C M Pool Account |
386012 |
0.25 |
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Sub-Total (B)
(2) |
36333668 |
33.51 |
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BUSINESS DETAILS
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Line of Business : |
Manufacturing and Selling of fertilizers viz. urea, ammonium nitro-phosphate and calcium ammonium nitrate, chemicals viz. ammonia, methanol, formic acid, acetic acid, nitric acids and ammonium nitrate melt and electronics viz. digital switching systems and printed circuit boards. |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Ammonia |
MT |
445500 |
445500 |
472305 |
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Urea |
MT |
594000 |
636000 |
626192 |
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Ammonium Nitro Phosphate |
MT |
142500 |
142500 |
199006 |
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Calcium Ammonium Nitrate |
MT |
142500 |
142500 |
144021 |
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Methanol |
MT |
146900 |
180600 |
230140 |
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Formic Acid |
MT |
10000 |
10000 |
15355 |
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Acetic Acid |
MT |
150000 |
100000 |
132665 |
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Concentrated Nitric Acid |
MT |
66000 |
66000 |
69272 |
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Aniline |
MT |
35000 |
20000 |
40277 |
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Touene Di-isocyanate |
MT |
14000 |
10000 |
15943 |
GENERAL INFORMATION
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No. of Employees : |
2717 |
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Bankers : |
v
Union Bank of v
Bank of v Vijaya Bank |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
C. C. Chokshi and Company Chartered Accountants |
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Associates/Subsidiaries : |
v Gujarat State Fertilizers Corporation Limited v
v Gujarat State Investments Limited v
v Gujarat Chemical Port Terminal Company Limited v Gujarat Narmada Finance & Investment Company Limited Subsidiaries: v Narmada Chematur Petrochemicals Limited v ING Satcom Limited |
CAPITAL STRUCTURE
Authorized Capital:
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No. of Shares |
Type |
Value |
Amount |
|
250000000 |
Equity shares |
Rs. 10 each |
Rs. 2500.000 millions |
Issued Capital:
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No. of Shares |
Type |
Value |
Amount |
|
148565000 |
Equity shares |
Rs. 10 each |
Rs. 1485.650 millions |
Subscribed & Paid-up Capital:
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No. of Shares |
Type |
Value |
Amount |
|
155437483 |
Equity shares |
Rs. 10 each |
Rs. 1554.374 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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1] Share Capital |
1554.374 |
1464.762 |
1464.800 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
14151.860 |
10308.080 |
8070.700 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
15706.234 |
11772.842 |
9535.500 |
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LOAN FUNDS |
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1] Secured Loans |
3485.348 |
2676.136 |
4803.400 |
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2] Unsecured Loans |
30.500 |
47.517 |
187.500 |
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TOTAL BORROWING |
3515.848 |
2723.653 |
4990.900 |
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DEFERRED TAX LIABILITIES |
2319.749 |
1800.551 |
0.0000 |
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TOTAL |
21541.831 |
16297.046 |
14526.400 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
11063.268 |
8510.961 |
8730.200 |
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Capital work-in-progress |
287.504 |
486.282 |
666.800 |
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INVESTMENT |
1485.027 |
2182.027 |
2180.500 |
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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 |
3884.652
|
2709.935
|
2607.500
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Sundry Debtors |
6052.755
|
4301.240
|
2895.900
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Cash & Bank Balances |
1304.791
|
550.195
|
721.700
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Other Current Assets |
14.148
|
0.000
|
0.000
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Loans & Advances |
2846.560
|
1266.368
|
5317.700
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Total
Current Assets |
14102.906
|
8827.738
|
11542.800
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
4424.509
|
2629.587
|
4406.000
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Provisions |
972.365
|
1090.256
|
4212.100
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Total
Current Liabilities |
5396.874
|
3719.843
|
8618.100
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Net Current Assets |
8706.032
|
5107.895
|
2924.700
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MISCELLANEOUS EXPENSES |
0.000 |
9.881 |
24.200 |
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TOTAL |
21541.831 |
16297.046 |
14526.400 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
27452.604 |
21579.659 |
18653.301 |
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Other Income |
293.339 |
748.413 |
0.000 |
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Total Income |
27745.943 |
22328.072 |
18653.301 |
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Profit/(Loss) Before Tax |
4893.868 |
4465.690 |
3304.245 |
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Provision for Taxation |
1629.203 |
1518.460 |
1064.044 |
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Profit/(Loss) After Tax |
3264.665 |
2947.230 |
2240.201 |
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Export Value |
309.218 |
0.540 |
69.785 |
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Import Value |
2368.215 |
890.603 |
725.049 |
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Expenditures : |
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Raw Material Consumed |
10611.890 |
7729.737 |
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Purchase of Goods for |
4021.252 |
2466.773 |
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Manufacturing Expenses |
4284.600 |
3884.924 |
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(Increase)/ Decrease in stock of Finished
Goods and Stock in Process |
(507.709) |
(34.226) |
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Selling Expenses |
969.206 |
834.041 |
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Other Marketing and Administration Expenses |
557.256 |
400.810 |
15349.056 |
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Personnel Expenses |
1688.269 |
1330.502 |
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Interest (net) |
126.366 |
362.400 |
|
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Depreciation / Amortization |
1095.702 |
885.943 |
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Prior Period Adjustments |
0.000 |
(0.606) |
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Managerial Remuneration |
0.387 |
0.000 |
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Auditor/s Remuneration |
4.856 |
1.831 |
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Provision for Doubtful Debts |
0.000 |
0.253 |
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Total Expenditure |
22852.075 |
17862.382 |
15349.056 |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
|
|
30.06.2007 (1st
Quarter) |
|
Sales Turnover |
|
|
5736.400 |
|
Other Income |
|
|
52.400 |
|
Total Income |
|
|
5788.800 |
|
Total Expenditure |
|
|
4330.000 |
|
Operating Profit |
|
|
1458.800 |
|
Interest |
|
|
25.900 |
|
Gross Profit |
|
|
1432.900 |
|
Depreciation |
|
|
270.800 |
|
Tax |
|
|
433.900 |
|
Reported PAT |
|
|
757.900 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
|
0.23
|
0.36 |
0.61 |
|
Long Term Debt Equity Ratio |
|
0.15
|
0.09 |
0.25 |
|
Current Ratio |
|
1.37
|
1.02 |
0.94 |
|
TURNOVER RATIOS |
|
|
|
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|
Fixed Assets |
|
1.81
|
1.09 |
0.94 |
|
Inventory |
|
8.99
|
8.60 |
8.88 |
|
Debtors |
|
5.71
|
6.34 |
8.19 |
|
Interest Cover Ratio |
|
39.72
|
13.04 |
12.19 |
|
Operating Profit Margin |
(%) |
20.69
|
25.16 |
23.18 |
|
Profit Before Interest and Tax Margin |
(%) |
16.98
|
21.20 |
18.60 |
|
Cash Profit Margin |
(%) |
14.75
|
16.88 |
16.15 |
|
Adjusted Net Profit Margin |
(%) |
11.04
|
12.92 |
11.57 |
|
Return on Capital Employed |
(%) |
29.79
|
33.40 |
25.62 |
|
Return on Net Worth |
(%) |
23.76
|
27.66 |
25.59 |
LOCAL AGENCY FURTHER INFORMATION
History
Incorporated in May'76,
Gujarat Narmada Valley Fertilisers Company (GNFC) is a joint-sector company
jointly promoted by the
In Jul.'92, GNFC came out with a rights issue to meet normal capital
expenditure, augment long-term working capital requirements and revamp
ammonia/urea plants at a project cost of Rs 2340.000 Millions GNFC has the world's largest single-stream,
fuel-oil-based ammonia and urea plants. It tied up with
In 1985, it implemented a 20,000-tpa methanol project. It commissioned a 50-MW
captive power project in two phases, the first in 1987 and the second in 1989.
In 1991, it established a 1, 42,500-tpa nitro-phosphate plant and a calcium
ammonium nitrate plant.
During 1999-2000, the Company inaugurated Infotower at Ahmedabad. The Company
through Infotower has diversified into Information Technology. The Company has
signed MOU's with business partners having technical strength for strategic
alliances. The Projects include Telemedicine, Software Development, V-Sat
Services, Internet Service Provider (ISP) services, Internet Gateway,
Certification Authority etc.
The Company signed an agreement with B P Chemicals UK for revamping of the
Acetic Acid Plant. Subsequent to the capacity was enhanced from the existing
50,000 TPA to 1, 00,000 TPA. The company has decided to convert the Pneumatic
instrumentation system of the Ammonia plant into Digital Control System. During
2004-05 the company completed the capacity enhancement of Formic Acid plant by
revamping of the purification section utilizing spare columns and its reboiler
available from Acetic Acid Plant and further the company has successfully
revamped and commissioned a new parallel Methyl Format Section. This project
was completed at an investment cost of Rs 90.000 Millions.
Some of the projects of the company which are under implementation are Air
Separation Unit Revamping at an estimated cost of Rs.580.000 Millions and this
project is expected to be completed by July 2005. Hydrogen PSA Revamping by
increasing the production about 1200 NM3/Hr and this project was completed in
April 2005 and was commissioned on 15th May 2005. A New Methanol Synthesis Unit
is being setup utilizing the spare reactor available from Methanol-I plant
after Isothermal reactor revamping. The project is estimated at a cost of
Rs.300.000 Millions and expected to be completed by February 2006. A New
Ammonium Nitrate Melt filling station with a capacity of about 400MT per day is
being set up at a cost of Rs.110.000 Millions and this is expected to be
completed and commissioned by September 2005. The company has also decided to
shifts its existing filling stations of all industrial products at distant
locations from the plants at an estimated cost of Rs.250.000 Millions and this
is expected to be commissioned in January 2006.
The Company has planned to install a urea plant at a cost of Rs.150.000
Millions and this is expected to complete by 2005-06. The company has also
planned to increase the production of Methanol about 175 MT per day by capacity
enhancement of SGGU, Methanol reformer revamping and synthesis section
revamping and forming a new Methanol Distillation Unit and this project is
expected to be completed by 2007.
During October 2005 the company has decided to merge Narmada Chematur
Petrochemicals Limited, a wholly owned subsidiary of the company, with the
company. The Scheme of Merger is subject to approvals.
The Company has commissioned PKI Project during 2004-05 and the construction of
this project was completed by May 2004. It is a separate division named (n)
Solutions.
CHANGE IN PAID-UP
SHARE CAPITAL
As per the Scheme of Amalgamation of NCPL with the Company, the shareholders of
NCPL were entitled to receive one equity share of Rs.10/- each of the Company
for every three equity shares of Rs. 10/- each held in NCPL. Upon the sanction
of the scheme of amalgamation, the shares held by the Company in NCPL got
cancelled and no new shares have been issued against such shares. 89,42,569
equity shares of Rs.10/- each of the Company were issued and allotted to the
shareholders of the erstwhile NCPL on 31.3.2007 resulting into the increase in
the paid-up share capital of the Company from Rs. 1464.700 millions to
Rs.1554.200 millions, consisting of 15,54,18,783 equity shares of Rs.10/-
each.
PERFORMANCE
HIGHLIGHTS & FERTILIZER POLICY
'Management Discussion & Analysis' forming part of this Report deal
with the operational and marketing highlights as also the status of project
completed during the year, projects under execution and projects on anvil, in a
very comprehensive manner. The performance highlights, however, in brief are
mentioned hereunder:
The Company achieved satisfactory production levels during the year 2006-07 and
in the process established several new records of production including
continuous running of the plants. All the major plants of the Company except
the Urea plant performed at over 100% capacity utilization. Both Aniline and
TDI Plants of erstwhile NCPL performed well. The production of Aniline and TDI
was higher compared to last year.
During the year, the highest ever sales turnover was achieved with an increase
of 29.60% over the last year. This top line growth was backed by amalgamation of
NCPL with the Company, the higher volume of Chemical products, increase in the
selling prices of Chemical products, higher volume of trading as well as upward
revisions in the subsidies of Fertilizer products.
The Government of India (GOI) notified a New Pricing Scheme - III (NPS-III) for
Urea effective 1st October, 2006. This will remain in force till 31st March,
2010. Salient features of NPS-III as applicable to the Company are as
under:
The Company will be required to change-over the feed-stock of the existing
Ammonia / Urea Units from FO / LSHS to NG / LNG in three years' time.
* GOI will consider one time subsidy for such conversion, for which the
guide-lines will be formulated by Department of Fertilizers.
* Energy efficiency resulting from conversion of feed stock will be
allowed to be retained by the Company for a period of 5 years after the
conversion.
* Capacity utilization norm has been raised to 93% of the re-assessed
capacity.
* Effective 1st October, 2006, freight on movement of decontrolled Urea
will be paid on actual.
AMALGAMATION:
As mentioned hereinabove, Narmada Chematur Petrochemicals Ltd (NCPL), the
subsidiary of the Company has amalgamated with the Company. The said
amalgamation has become effective 15th February, 2007. The amalgamation of NCPL
with the Company will strengthen the Chemical Business of the Company
Additional
Investment and proposals being implemented for reduction of consumption of
energy and to improve productivity:
Following schemes are under advanced stage of implementation. This will
improve productivity of plants.
Ammonia plant:
* Ammonia converter series-50 revamp job is awarded to M/s
* Cooling tower pump impellers are planned to be replaced with high
efficiency impellers. Same are ordered.
* For forced draft fan of super heater, energy saving potential and
measures required are identified and new fan with higher efficiency is ordered.
Urea plant:
For Urea revamp with energy saving, job was awarded to technology supplier M/s.
Utility Plant:
Old raw water supply pumps at Zanor water works having low efficiency are being
replaced with new bowl assembly having higher efficiency to save power.
It is planned to replace old degasser blower for DM plant with low capacity new
blower to save power.
Methanol Synthesis Unit (MSU):
Methanol Synthesis Unit project is successfully commissioned in
July-2006.
SGGU Revamp Project:
SGGU Revamp Project is successfully executed during April-07
shut-down.
Methanol-II Synthesis Revamp:
Job is awarded to M/s.
Methanol-II Reformer Revamp:
Job is awarded to M/s. Toyo Engineering India for basic engineering,
detailed engineering & procurement activities are in progress.
Methanol Distillation Unit (MDU):
Detailed engineering by M/s. Lurgi for new distillation unit for Methanol is in
progress along with procurement activities.
TDI Plant
* In-house critical review of TDI revamp was done & scheme of the
revamp study is under implementation for improving productivity.
* Job is awarded for basic engineering to M/s. Plinke for yellow water
concentration unit in. TDI plant. Basic engineering is on the verge of
completion & detailed engineering is in progress.
Co-generation Power & Steam
Unit:
*
Company is setting up Co-generation Power & Steam Unit with a capacity of
about 33 MW of power and about 60 MT/Hr High pressure steam. One Captive Power
Plant and one boiler will be available as stand by. Project Management
Consultant has been appointed and engineering work is in progress.
Replacement of Reactor in Acetic Acid
Plant:
* Existing reactor of Acetic Acid plant is required to be replaced
due to corrosion. New Zirconium lined reactor having higher capacity of 1,
50,000 MTA has been ordered. Engineering Consultant has been appointed for
carrying out detailed engineering for reactor peripheral items and providing
other technical services for the reactor replacement job.
Ammonium Nitrophosphate Plant:
* Lamella separator is replaced with higher capacity. Also Calcium
Nitrate & Lime filter capacity increase scheme executed. These schemes have
helped to achieve higher productivity of Ammonium Nitrophosphate on a sustained
basis.
Exports:
The Company's strategy is to cater to the domestic market pre-dominantly and
resort to strategic export depending upon the market conditions. During
2006-07, the Company exported 3,307 MTs of Aniline, 780 MTs of TDI, 272 MTs of
OTD and 39 MTs of Formic Acid. In addition, the Company also exported 254 MTs
of CAN (27% N).
MANAGEMENT
DISCUSSION AND ANALYSIS
INDUSTRY STRUCTURE AND DEVELOPMENTS
The
Company is mainly engaged in the business of manufacturing and selling of
fertilisers and industrial chemicals along with trading in fertilisers and also
in the business of Information Technology services. The manufacturing
facilities of the Company are situated at Bharuch while IT Services, Infotower
and PKI are at Ahmedabad,
The year under review has posted the outstanding financial performance
with the highest ever Sales Turnover, Profit before Tax (PBT) and Profit after
Tax (PAT) together with several milestones achieved in the areas of production,
sales and dispatches. The Company's consistent performance has always endorsed
its vision. The continuous efforts of the Management for cost reduction in
various areas of operations and focus on consolidation have resulted in
positive gains to the Company. The Company achieved the highest ever sales
during the year at Rs.29566.700 millions as compared to that of Rs.2 281 330.000
millions during the previous year, an increase of 30% over the previous year.
The Company has also achieved the highest ever Net Profit during the year at
Rs.3264.700 millions as compared to that of Rs.2947.200 millions during the
previous year, an increase of 11% over the previous year.
BUSINESS SEGMENT
Business Overview
The Company manufactures and distributes fertilisers like Urea, Ammonium
Nitro-phosphate (ANP) and Calcium Ammonium Nitrate (CAN) and chemicals like
Ammonia, Weak Nitric Acid, Concentrated Nitric Acid, Methanol, Acetic Acid,
Formic Acid, Aniline, Toluene Di-Isocyanate (TDI) and various services in the
area of Information Technology, This year, the Company undertook trading in
fertilizers like DAR Muriate of Potash (MOP), Single Super Phosphate (SSP),
Urea and chemicals like Acetic Acid. In the total turnover, the share of
Company's fertiliser and chemical divisions was 48% and 51% respectively
including that of traded products.
Fertiliser
Business
The year 2006-07 was a good year for the Fertilizer Industry. Rainfall was good
and so was the demand of fertilisers. Sales were brisk. Most of the
manufacturers and importers did not find it very difficult to sell their
fertilisers. Partial decontrol of movement and sale of Urea initiated by the
Government of India during 2003-04, continued up to 30.09.2006. The Government
of India has notified New Pricing Scheme III (NPS III) for Urea which will be
effective from 1.10.2006 to 31.03.2010. NPS III envisages reimbursement of
primary freight on Urea on actual basis for equitable distribution of urea in
the Country, for regulated and deregulated quantity.
During the year, sale of 1.253 millions MT fertilisers was achieved which is
about 8 thousand MT higher as compared to last year.
Import of MOP was significantly increased to 1, 66,616 MT during the year from
last year's import of 1, 42,042 MT MOP. Quantity of MOP sold during the year
was at 1, 63,372 MT as compared to the sale of 1, 49,477 MT MOP last year.
Import of DAP also significantly increased to 1,36,543 MT from last year's
import of 57,938 MT. Quantity of Imported DAP sold during the year was 86,774
MT as compared to the sale of 57,712 MT last year. Trading of indigenously manufactured
SSP continued and 25,246 MT SSP was sold during the year. Total fertilisers
sold under trading activity were 0.275 million MT as compared to 0.227 million
MT during 2005-06. The turnover from trading of fertilisers during 2006-07 was
Rs.3240.000 millions as compared to Rs.2610.000 millions last year.
Government of
* Conversion from non-gas based units to NG/LNG
* Incentive for extra production
* Movement and distribution of fertilizers
* Policy in respect of high cost units
* Policy for import of Urea and Joint venture
The Company awaits more details and guidelines from Government of India
regarding policy on conversion of non-gas based unit to NG/LNG based units.
Based on computations from available details it seems that, as regards
the impact of policy initiatives and other measures as per policy, GNFC (the
Company) is likely to be impacted negatively, although marginally.
Industrial
Chemicals Business:
The Chemical business recorded a growth of 12.96% over the last year reaching a
turnover of Rs. 15213.500 millions. While the Company's products recorded a
marginal growth of 1%, erstwhile NCPL unit products recorded 36% growth.
Methanol recorded ever highest sale of 1, 53,215 MTs during the year.
Similarly Formic Acid recorded ever highest sale of 15,691 MTs. The sale
of TDI during the year was 16,641 MTs and Aniline 41,342 MTs and both were the
highest ever sales so far.
International Methanol prices shot up during the 2nd half of the financial year
raising the average Methanol price to US $ 393 from the previous year's average
of US $ 267 PMT. This unprecedented increase was due to supply shortages
created by unplanned shut down of two mega Methanol plants. Similarly, TDI
prices shot up during the 2nd half of the year from US $ 2,400 to US $ 3,400
PMT.
The growth in sales was supported by favourable prices of these products
inspite of Custom duties of all our products, being reduced by 5% and on
Methanol duty being reduced by 2,5%.
Information
Technology Business
IT Infrastructure
at GNFC Infotower
GNFC Infotower has been developed as a mini software technology park,
where software companies find all the infrastructure and networking ready to
suit their needs. The Infotower provides ambience and interiors at par with
international standards. The place is most suited for businesses like: IT
enabled services, BPO and
PKI Based
Commercial Certifying Authority Project
The Company has been licensed as a Certifying Authority by the Ministry
of Information Technology (IT), Government of India for issuing legally valid
Digital Certificates under the Indian cyber laws. Digital Certificates find
wide applications in providing security to electronic business (e-commerce) on
Internet. The potential applications are in Banking, Finance, Insurance, Supply
Chain Management, eGovernance, e-Commerce etc. The entire business is being
handled under a separate division named as (n) Code Solutions.
During the year, 57,224 digital certificates were sold as compared to
6,650 in the previous year 2005-06. The sales including services exceeded
Rs.160.000 millions for the year. The expectations for the current year appear
even better as the first two months have recorded strong growth over the
corresponding period in the previous year.
Services
There are some additional services being provided by this division, noteworthy
among which are (i) Data Center Services (ii) e-Procurement Services and (iii)
Managed IT services.
Currently there are three Data center projects for a total value of Rs. 90.000
millions under creation, the most noteworthy being for the ONGC, which was
completed in June 2007.
The Company is providing e-procurement (or electronic tendering) services to
the various departments and public sector units of Government of Gujarat. It
has been doing this activity for the last one year and has set up a portal
called www.nprocure.com. The traffic on the portal has increased tremendously
and in the year 2006-07, about 1,300 tenders were completed on this portal
generating revenue exceeding Rs.20.000 millions, a growth of more than 1000% '
In the coming couple of years, this business is likely to grow to a Rs.80.000
millions p.a.
In the current year, a major initiative is being undertaken to offer managed IT
services to the large enterprises and organizations. With the complexity of IT
infrastructure and the dependence of the organizations on it growing everyday,
the demand for such services is likely to increase many times in the coming
years and (n) Code has good expertise to provide such services.
OPERATIONS
Production and Capacity Utilization
During the financial year 2006-07, the Company has faced two major shut
down, one in April, 2006 in a planned way of 15 days and another in October,
2006 of 37 days which was a forced shut down due to a major breakdown in
Ammonia synthesis reactor. Inspite of odds, the Company achieved satisfactory
production levels.
On 15th February, 2007, the Company's erstwhile subsidiary viz. Narmada
Chematur Petrochemicals Limited (NCPL) was merged with its parent Company GNFC
with retrospective effect from 01-04-2005. Operations of all the units of NCPL
and GNFC were integrated and synchronized smoothly.
Operation
Highlights
The year 2006-07 has shown very good performance on production front.
During the year, 59 now milestones have been achieved in the areas of
operations towards daily, monthly and yearly productions and continuous running
of plants. Overall, total 78 new records were established during the
year.
Methanol Synthesis Unit was commissioned
on 16th July, 2006
Industrial Products filling stations were shifted to new distant location
as a special measure to improve safety.
The Operational highlights are summarized as under:
Urea
6, 26,192 MTs Urea was produced against the budgeted target of 6, 36,000
MTs during the year 2006-07. The Company has successfully dispatched 6, 36,000
MTs of Urea as per FICC allocation. The annual Urea production target was
missed by 9,808' MTs mainly due to unplanned shutdown of Ammonia plant during
October/November 2006.
Methanol-I/ Synthesis Gas Generation
Unit
Methanol production during the year was 64,143 MTs, Plant established a
new record of daily and yearly highest production and continuous run of 344
days,
Methanol-II
Methanol-II plant achieved 1, 47,099 MTs of production. Plant established
record of continuous run of PSA unit and daily highest crude methanol
processing. Plant supplied daily, monthly and yearly highest quantity of
hydrogen to NCPL Unit. Methanol-II plant was continuously run with the limitation
of high thrust value of turbine (GT-301) for Syn Gas compressor.
Formic Acid/Methyl Formate
Formic Acid Plant achieved 15,355 MTs of production and Methyl Formate
Plant achieved 19,242 MTs of production. Both Formic Acid and Methyl Formate
achieved highest ever daily and monthly production, cooling tower revamp was
carried out
Acetic Acid Plant:
Acetic Acid plant achieved its highest peaks of 447 MTs on 25-09-2006 in daily
production & of 13,800 MTs in August, 2006 in monthly production during the
year. Plant supplied monthly and yearly highest Carbon Monoxide to NCPL
Unit.
Nitrophosphate Group of Plants:
Weak Nitric Acid Plant (WNA):
WNA plant achieved yearly production of 2, 95,476 MTs. Plant was operated for
48 days at more than 900 MTPD productions. Highest WNA production per campaign
length of 1OR01 catalyst achieved during period of 14th April, 2006 to 27th
October, 2006 (Production - 1, 66,246 MTs & Running hours - 4,585 hrs.).
Tail Gas analyzer installed to measure N20 for Clean Development Mechanism
project initiated by the Company.
Concentrated Nitric Acid Plants
(CNA):
CNA-(I&II) plants achieved yearly production of 69,272 MTs. CNA-I plant was
operated at more than 100% load for 267 days as new record. Both CNA-I and CNA-II
plants established record of fastest 50000 MTs production in 555 days and 501
days respectively.
Aniline Plant:
Aniline plant achieved highest ever daily production of 132.359 MTs on 3rd
June, 2006, highest ever monthly production of 3,875 MTs in May, 2006 and
highest ever yearly production of 40,277 MTs with capacity utilization of 201%
during the year.
TDI Plant:
TDI plant achieved highest ever daily production of 65.5 MTs on 4th October,
2006, highest ever monthly production of 1,675.5 MTs in September, 2006 and
highest ever yearly production of 15,943 MTs with capacity utilization of 159%
during the year.
OPPORTUNITIES
& THREATS:
The merger of erstwhile subsidiary of the Company viz. Narmada Chematur
Petrochemicals Limited (NCPL) with the Company has brought in benefits of
synergy. There is now a combined base of higher profitability and assets.
There are opportunities for future growth with greater choices and
larger pool of combined resources.
Company has initiated actions for evaluating substantial expansion of Toluene
Di-isocyanate (TDI) capacity.
To avail the benefit of Government policy for Feedstock Conversion,
Company has initiated actions for moving in the direction of converting feedstock
of Ammonia plant from LSHS to natural gas. The policy with respect to
conversion of LSHS based plant is under review and is likely to be finalized
shortly & the Company awaits the same for proceeding further in this
direction.
More than 50% of Country's requirement of Methanol is met through import.
Company is expanding the capacity of the Methanol plant by revamping,
which will help the Company in maintaining its leadership position in the
Country and to cater to the growing demand.
In the recent budget, import duty has been reduced from 1st March, 2007 to 7.5%
for capital goods. This will slightly reduce investment cost for on going as
well as new projects.
Company's fertilisers enjoy a very good brand image. This will help to
consolidate the markets in the, Primary Marketing Zone in the partial decontrol
scenario at present and total decontrol in the future.
With an increase in the irrigation facilities due to Sardar Sarovar,
there is likely to be an increase in demand of fertilizers in
Government of
The Company is also planning to trade in about 0.150 millions MTs of Imported
MOP, 0.100 million MTs of Imported DAP and 50,000 MTs of SSP in addition to
1.000 million MTs of Imported Urea as mentioned above. This will increase the
turnover of the Company.
With the availability of major raw materials in-house, Company is better placed
to expand the capacities of Acetic Acid.
The Company has entered into rate contracts for supplies of most of the
critical raw-materials like oil, gas, rock-phosphate, coal etc. which are
essential to the continuous production. Continuous operation of plants is the
core strength of the Company and is the basis of its financial success.
In order to ensure continuity of production, Company has entered into
contract for its feed stock with M/s. Indian Oil Corporation with an
appropriate price variation formula on import parity level. Long term contracts
are also finalized for other important raw materials like Rock Phosphate, Coal
and Gas etc.
With the better cash generation year after year and with easy liquidity
position, the Company took advantage by prepaying high cost loans to its
lenders, and thereby reducing the interest cost to the Company and improving
the capacity to raise fresh funds for projects.
Improved infrastructure for import/export, easy availability of petrochemicals
raw materials like natural gas, pragmatic government policies etc. are the
major positive factors which could encourage the new investments and improve
the risk taking capacity of entrepreneurs.
The Company is a market leader in Methanol, Acetic Acid, Formic Acid, Aniline
and TDI in
Removing the bottlenecks for capacity utilization of existing assets at their
full potential at minimum cost is a pre-requisite of growth.
Improvement in productivity coupled with optimizing resources and
technical innovations is a continuous process due to highly qualified and
experienced manpower.
With availability of extensive marketing network throughout the Country,
trading in fertilizers and chemicals can be increased further depending upon
opportunities and the Company proposes to look forward for such
opportunities.
OUTLOOK
Company is continuously looking for growth avenues. In the last few
years, Company adopted the strategy of expanding the capacities of various
plants by revamping/ debottlenecking. This has resulted into optimum
utilization of assets with minimum investment. Now Company has initiated
actions for expanding the capacities of various products by setting up new
large capacity plants.
Company has maintained its market leadership in the Country in chemicals like
Methanol, Formic Acid, Acetic Acid, Aniline and TDI and the Company is one of
the companies better placed to expand the capacity in an economical way.
Company's performance has improved in last 2-3 years and further strengthened
by merging of its subsidiary Company NCPL in the year 2006-07. However, it is
pertinent to note that most of the profits/cash flow generation arises from
value.
ROAD MAP FOR THE
NEXT DECADE:
The
Management of the Company has initiated the process of developing road map for
growth over next decade and benchmarking.
The Company is also actively pursuing on new initiatives being undertaken by
various departments of the Company to ultimately make the business processes
more competitive, profitable and growth oriented. The intention is also to
benchmark various processes and practices of the Company to be broadly in line
with and in conformity with international successful benchmarking
practices.
The Company is proposing to chart a new course for growth and development.
For this purpose, Consultant has been appointed to advise the Company on
the new business opportunities, bench-marking of international practices and
improvement in profits and growth of the Company. The Company is undertaking
initiatives for improvement in human resources, better utilization of plants'
capacities, efficient and productive operations, new large capacity plants and
on removing the gaps and improving the overall effectiveness of the Company as
an important player.
Total risk management exercise has also been undertaken to highlight the
potential areas and attend to them.
Similarly, with the help of Consultant on HR front, Company has started
initiatives for gearing up the organization to achieve the business growth
planned for the coming years.
FINANCIAL PERFORMANCE OF THE COMPANY
Due to amalgamation of Narmada Chematur Petrochemicals Limited with the Company
on 15-02-2007, with effect from 01-04-2005, the figures for the year 2006-07
include the figures for the NCPL Unit also and are therefore, to that extent
not comparable.
Sales Turnover
The Company has achieved the highest ever sales turnover of Rs. 29566.700
millions. This represents an increase of 30% over the previous year.
The sales turn over of Urea increased to Rs. 7317.700 millions in the current
year from Rs. 7115.700 millions in the previous year. .
The sale of ANP was higher at Rs. 2486.900 millions in the current year as
compared to Rs. 2403.700 millions (increased by Rs 83.200 millions) in the
previous year on account of higher realization. Sales turnover of CAN
substantially decreased by Rs. 128.900 millions to Rs.1114.700 millions in the
current year from Rs. 1243.600 millions in the previous year.
The total sales turnover from Fertilizer Trading Activity in 2006-07 is higher
at Rs. 3243.400 millions as compared to Rs. 2613.700 millions in the previous
year. The higher trading turnover is mainly due to increase in trading in
Imported MOP and Imported DAP.
The sales of own Industrial products of the Company was higher by Rs.5881.800
millions as compared to previous year. The sale of Methanol increased to
Rs.3805.200 millions (Previous year: Rs. 2412.600 millions). The sale of AN
Melt during the year was Rs. 335.800 millions against Rs. 113.200 millions in
the previous year. The sale of Acetic Acid has decreased by Rs. 1103.100
millions.
NEW PROJECTS
PROJECT COMPLETED
DURING 2006-07
New Methanol Synthesis Unit
New Methanol Synthesis Unit has been set up utilizing the spare reactor
available from Methanol-I plant after Isothermal reactor revamp. Methanol
capacity has increased by about 30,600 MT per annum.
Complete engineering is carried out in-house.
The production of Methanol commenced from 16th July, 2006. The project
is completed with the expenditure of Rs.272.800 millions against the estimated
cost of Rs.392.800 millions.
PROJECTS UNDER EXECUTION
Methanol-II Plant Revamp
Following revamp schemes for increasing the Methanol production by about
175 MT per day at an estimated investment of about Rs. 1390.000 millions are
under progress
1. SGGU Capacity Enhancement
2. Methanol-II Reformer Section Revamp
3. Methanol-II Synthesis Section Revamp
4. New Methanol Distillation Unit
SGGU Capacity Enhancement scheme has been completed during May/June, 2007
shutdown.
Work has been awarded to various engineering consultants for Basic and Detailed
engineering, supply of critical items etc. for the balance schemes. Project
execution activities are under progress. All the schemes are expected to be
completed, in a phased manner, by April, 2008.
Urea Plant revamps
To reduce the energy consumption, Pre-MP Decomposer and Urea Pre-Concentrator
are being installed in Urea plant. The energy saving will be about 0.1 Million
Kcal/MT Urea. The estimated cost of the project is Rs.220.000 millions.
Project implementation activities are in full swing and the project is expected
to be completed by April, 2008.
PROJECTS UNDER ACTIVE
CONSIDERATION:
Ammonia plant feedstock conversion from LSHS to Natural Gas
In order to reduce subsidy amount and to encourage usage of cheaper and more
efficient feedstock/fuel, Government of India, in 2004, announced policy
guidelines for conversion of fuel oil based Ammonia plants into NO / R-LNG
based plants. Such conversion of feedstock from fuel oil to NG/LNG would
deliver substantial benefits to Government of India as well as to the
Company.
Accordingly, Company has initiated actions for conversion of feedstock of
Ammonia plant from LSHS to NO/LNG.
Global enquiry was floated for implementation of feedstock conversion project
on Lump Sum Turn Key (LSTK) basis and proposals have been received from
renowned Technology Suppliers/ Engineering Contractors and same are being
evaluated.
As per the policy guidelines announced on 8th March 2007 effective from 1st
October, 2006, units like GNFC, using fuel oil/LSHS as feed stock shall have to
convert their plant and process within a period of 3 years.
The project is capital intensive in nature and hence, Government is
formulating guidelines to provide additional incentives to make the conversion
project a viable proposition.
Decision for the conversion will be taken based on the final policy guidelines
of the Government and techno-economic viability of the project.
SUBSIDIARY
COMPANIES
During the fiscal 2006-07, the Hon'ble High Court of Gujarat sanctioned the
Scheme of Amalgamation of Narmada Chematur Petrochemicals Ltd.(NCPL), the
subsidiary of the Company with the Company. Consequently, NCPL has amalgamated
with the Company effective 15.2.2007. In terms of the Scheme of Amalgamation,
the said amalgamation is operative from 1.4.2005. The amalgamation was effected
to bring in efficiencies through Synergies of Operation, Marketing, etc. The
mergers will inter-alia help strengthening the Chemical Business of the
Company.
The Company issued and allotted equity shares to the shareholders of erstwhile
NCPL in the approved exchange ratio, which resulted into increase in the
paid-up capital of the Company to Rs. 1554.200 millions. Consequent upon the
amalgamation, NCPL has been dissolved and hence ceased to be a subsidiary of
the Company.
The Company has during the year divested its shareholding in its wholly owned
subsidiary Company - ING Satcom Ltd. As such, ING Satcom Ltd. has also ceased
to be the subsidiary of the Company.
The Company did not have any subsidiary Company as at the close of the
financial year.
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. 39.55 |
|
|
1 |
Rs. 80.44 |
|
Euro |
1 |
Rs. 55.49 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
1 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--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 |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
81 |
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. |
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 |
|