MIRA
INFORM REPORT
|
Report Date : |
25.09.2007 |
IDENTIFICATION DETAILS
|
Name : |
ARVIND MILLS
LIMITED |
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Registered
Office : |
Railwaypura Post, |
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Country: |
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Financials (as
on): |
31.03.2007 |
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Date of
Incorporation : |
01.06.1931 |
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Com. Reg. No.: |
04-93 |
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CIN No.: [Company
Identification No.] |
L17119GJ1931PLC000093 |
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TAN No.: [Tax Deduction & Collection Account No.] |
AHMT00462A |
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Legal Form : |
It is a Public
Limited Liability Company. The
company’s shares are listed on the Stock Exchanges. |
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Line of
Business : |
Manufacturers
Marketers of Cloth (including fents, rags, etc.), Yarn, Waste, EPABX Lines
Garments]. |
RATING & COMMENTS
|
MIRA’s Rating
: |
Ba |
RATING |
STATUS |
PROPOSED
CREDIT LINE |
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|
41-55 |
Ba |
Overall operation is considered normal. Capable
to meet normal commitments. |
Satisfactory |
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Maximum Credit
Limit : |
USD 60000000 |
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Status : |
Satisfactory |
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Payment
Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is the
flagship company of the Lalbhai Group manufacturing marketing cloth, Grey Knitted
Fabrics Yarn. Directors are
respectable renowned industrialists. Trade relations are fair. Payments are
correct as per commitments. The company can
be considered normal for business
dealings at usual trade terms conditions. |
LOCATIONS
|
Registered
Office : |
Railwaypura Post, |
|
Tel. No.: |
91-79-22121408 /
22203030 / 22200206 |
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Fax No.: |
91-79-22124314 /
22120267/ 22371396 / 22372342 / 22379184 / 22201608 |
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E-Mail : |
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Website : |
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Corporate
Office : |
Railwaypura Post, |
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Tel. No.: |
91-79-22203030 |
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Fax No.: |
91-79-22201270 |
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Factory : |
v
Santej,
Taluka Kalol, District Mehsana - 382 721, v
Tel. No. 91-79-2212 1408/2377 002 Fax No. 91-79-2212 4314/2212 0267/2237 1396/2237 2342/2237 9184 v
Khatrej,
Taluka Kalol, District Mehsana - 382 721, v
Khokhra,
Memdabad, Ahmedabad - 380 008, v
Gut
No. 172, v
55, |
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Branch Office
: |
MUMBAI Neptune House, 2nd Floor, Opp. Bandra Talkies, 8 Community Centre, Saket,
KOLKATA 100,
Arvind Worldwide (USA) Inc., 130, Sri Lanka Liason Office C/o Sidko Limited.
Asoka Spintex Premises, |
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Other Division
: |
Khakhi
Division Knits Division
Ankur Textiles Arvind
Brands Limited Du Parc Trinity 8th Floor, 17, Tel: 91-80-22973131 Denim Tel: 91-79-22203030 |
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Garment Export
Division : |
10th Floor, Du Parc Trinity, |
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Tel No.: |
91-80-251123900/5 |
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Fax No.: |
91-80-251123909 |
International
Offices DIRECTORS
|
Name: |
Mr. Arvind N. Lalbhai |
|
Designation: |
Chairman |
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Age: |
84 Years |
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Qualification: |
Science Graduate |
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Date of
Joining: |
March, 1974 |
|
Other
Directorship: |
Ř Arvind Products
Limited – Chairman Ř Atul Limited –
Chairman Ř Birla VXL
Limited – Director Ř JK Industries
Limited – Director Ř Lokprakashan
Limited – Director |
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Name: |
Mr. Sanjay S. Lalbhai
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Designation: |
Managing Director |
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Age: |
51 Years |
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Qualification: |
Science Graduate, Master’s Degree in Business Management |
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Date of
Joining: |
March, 1977 |
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Other
Directorship: |
Ř Arvind Clothing
Limited – Director Ř Arvind Fashions
Limited – Director Ř Arvind Brands
Limited – Director Ř Arvind Products
Limited – Director Ř Amtrex Hitachi
Appliances Limited – Chairman Ř Anagram
Wellington Asset Management Company Limited – Director Ř Anagram Housing
Finance Limited – Director Ř H. K. Finechem
Limited – Director Ř Amol Dicalit
Limited – Director Ř Gujarat
Infrastructure Limited – Director Ř Mahindra
Gujarat Tractor Limited - Chairman |
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Name: |
Mr. Jayesh K. Shah
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Designation: |
Director Chief Financial Officer |
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Age: |
44 years |
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Qualification: |
Commerce Graduate Chartered Accountant |
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Date of
Joining: |
01.07.1993 |
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Name: |
Mr. Jaithirth Rao
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Designation: |
Director |
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Age: |
52 years |
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Qualification: |
Masters Degree form the |
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Name : |
Mr. Deepak M Satwalekar |
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Designation : |
Director |
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Name : |
Mr. V. K. Pandit |
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Designation : |
Nominated by IDBI |
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Name : |
Mr. K M Jaya Rao |
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Designation : |
Nominee by ICICI Bank Limited |
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Name : |
Mr. Sudhir Mehta |
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Designation : |
Director |
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Name : |
Mr. Tarun Sheth |
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Designation : |
Director |
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Name : |
Mr. S. R. Rao |
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Designation : |
Nominee by Export Import Bank of |
KEY EXECUTIVES
|
Name : |
Mr. R V Bhimani |
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Designation : |
Company Secretary |
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Address : |
Secretarial Department, |
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Tel. No.: |
91-79-22203030/ 22200206 |
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Fax No. : |
91-79-22201608 |
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Email : |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31st March, 2007
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Shareholding of Promoter Promoter Group |
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|
|
Individuals: |
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Mr. Arvind N. Laibhai |
73912 |
0.04 |
|
Mr. Sanjay S. Lalbhai |
152 |
0.00 |
|
Mr. Samveg A. Lalbhai |
103295 |
0.05 |
|
Mr. Shrenik K. Lalbhai |
8073 |
0.00 |
|
Relatives of above Individuals |
90614 |
0.04 |
|
Major Bodies
Corporate Trusts: |
|
|
|
Aura Securities Private Limited |
51015274 |
24.37 |
|
AML Employees Welfare Trust |
10027624 |
4.79 |
|
Agrimore Limited |
636000 |
0.30 |
|
Amazon Investments Limited |
1830358 |
0.87 |
|
Acropolis Investments Limited |
325000 |
0.16 |
|
Altair Investment Limited |
52406 |
0.03 |
|
Aeon Investment Limited |
1126200 |
0.54 |
|
Anshuman Holdings Private Limited |
400000 |
0.19 |
|
Anubhav Investments Limited |
303000 |
0.14 |
|
Avishkar Finance Trade Limited |
0.000 |
0.00 |
|
Atul Limited |
4127471 |
1.97 |
|
Anukul Investment Limited |
173608 |
0.08 |
|
Ameer Trading, Corporation Limited |
0.000 |
0.00 |
|
Jeet Holdings Private Limited |
0.000 |
0.00 |
|
Adore Investment Limited |
130995 |
0.06 |
|
Amardeep Holdings Private Limited |
94250 |
0.05 |
|
Ajax Investment Limited |
38333 |
0.02 |
|
Anagram Securities Limited |
300000 |
0.14 |
|
Anagram Stockbroking Limited |
125000 |
0.06 |
|
Enagram Online Limited |
0.000 |
0.00 |
|
Sanjay Family Trust |
100 |
0.00 |
|
AML Management Employees Welfare Trust |
0.000 |
0.00 |
|
Total Promoter
Group holding |
70981665 |
33.90 |
|
Non Promoter
holding |
|
|
|
Mutual Funds DTI |
9024720 |
4.31 |
|
Banks, Financial Institutions, Insurance Companies |
21366001 |
10.21 |
|
Foreign Institutional Investors, NRIs/OCBs.F.B. |
40695366 |
19.43 |
|
GDR |
749692 |
0.36 |
|
Private Corporate Bodies |
12555309 |
6.00 |
|
Indian Public |
54004788 |
25.79 |
|
Total Non-Promoter
holding |
138395876 |
66.10 |
|
Total |
208536749 |
100.00 |
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Shareholding
of Promoter Promoter Group |
|
|
Indian
|
|
|
|
Individuals / Hindu Undivided Family |
276146 |
0.13 |
|
Central Government/ State Government(s) |
-- |
-- |
|
Bodies Corporate |
70705519 |
33.77 |
|
Financial Institutions/Banks |
-- |
-- |
|
Any Other
(specify) |
-- |
-- |
|
Sub - Total (A)(1) |
70981665 |
33.90 |
|
Foreign |
|
|
|
Individuals (Non-Resident Induviduals/ Foreign Individuals) |
-- |
-- |
|
Bodies Corporate |
-- |
-- |
|
Institutions |
-- |
-- |
|
Any Other (specify) |
-- |
-- |
|
Sub - Total (A)(2) |
-- |
-- |
|
Total Shareholding of Promoter Promoter Group
(A)=A(1)+(2) |
70981665 |
33.90 |
|
Public shareholding |
|
|
|
Institutions |
|
|
|
Mutual Funds / UTI |
9024720 |
4.31 |
|
Financial Institutions/Banks |
1875930 |
0.90 |
|
Central Government/ State Government(s) |
-- |
-- |
|
Venture Capital Funds |
-- |
-- |
|
Insurance Companies |
19490071 |
9.31 |
|
Foreign Institutional Investors |
38801071 |
18.53 |
|
Foreign Venture Capital Investors |
-- |
-- |
|
Any Other(specify)Foreign Banks/IFCW |
1213 |
-- |
|
Sub - Total (B)(1) |
69193005 |
33.05 |
|
Non-Institutions |
|
|
|
Bodies Corporate |
12555309 |
6.00 |
|
Individuals - |
|
|
|
Individual shareholders holding nominal share capital up to Rs.0.100
million. |
48617577 |
23.22 |
|
Individual shareholders holding nominal share capital in excess of Rs.
0.100 million. |
5387211 |
2.57 |
|
Any Other (specify) NRIs/OCBs |
1893082 |
0.90 |
|
Sub - Total (B)(2) |
68453179 |
32.69 |
|
Total Public Shareholding (B) = (B)(1) + (B)(2) |
137646184 |
65.74 |
|
Total (A) + (B) |
208627849 |
99.64 |
|
Shares held by Custodians against which Depository Receipts have been
issued. |
749692 |
0.36 |
|
GRTOTAL (A)+(B)+(C) |
209377541 |
100.00 |
BUSINESS DETAILS
|
Line of
Business : |
Manufacturers
Marketers of Cloth (including fents, rags, etc.), Yarn, Waste, EPABX Lines
Garments]. |
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Products : |
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PRODUCTION STATUS
|
Particulars |
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|
Unit |
Actual
Production (Quantity
in crores) |
|
Cloth |
|
|
Meters |
10.78 |
|
Cloth |
|
|
Kgs. |
0.15 |
|
Yarn |
|
|
Kgs. |
0.43 |
|
EPBAX |
|
|
Lines |
0.01 |
|
Garments |
|
|
Nos. |
1.34 |
|
Yarn @ |
|
|
Kgs. |
0.16 |
|
Grey @ |
|
|
Meters |
0.06 |
|
Grey @ |
|
|
Kgs. |
0.01 |
|
Particulars |
|
|
|
Installed
Capacity |
|
Spindles |
|
|
|
106776 |
|
Rotors |
|
|
|
7824 |
|
Stitching Machines |
|
|
|
678 |
|
Knitting Machines |
|
|
|
105 |
|
Looms |
|
|
|
1040 |
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EPBAX / RAX System Lines |
|
|
|
200000 |
|
Garments (Pcs.) |
|
|
|
8620000 |
GENERAL INFORMATION
|
No. of
Employees : |
Around 6000 |
|
|
|
|
Bankers : |
v
State
Bank of Saurashtra, Ahmedabad, v
State
Bank of v
Bank
of v
UCO
Bank, Ahmedabad, v
State
Bank of v
Credit
v
Deutsche
Bank, Ahmedabad, v
HDFC
Bank, Ahmedabad, v
The
Bank of v
Standard
Chartered Grindlays Bank, Ahmedabad, v
Bank
of v
ICICI
Bank Limited, Ahmedabad, v
Calyon
Bank v
Export
Import Bank of v
Axis
Bank v
ABN
Amro Bank NV |
|
|
|
|
Banking Relations : |
Satisfactory |
|
|
|
|
Auditors : |
Sorab S. Engineer
Company Chartered
Accountants |
|
Address : |
381, |
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|
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|
Associates : |
v
Anup
Engineering Limited Engaged in manufacturing of equipments for
chemical, petrochemical, pharmaceutical,
fertilizer, dairy allied industries. v
Lalbhai
Realty Limited Engaged in real estate
business v
Amtrex
Appliances Limited Engaged in manufacturing of room air conditioner. It has technical collaboration with v
Arvind
Intex Limited v
Anagram
Finance Limited v
Arvind
Polycot Limited v
Atul
Products Limited v
Amtrex
Appliances Limited v
Lalbhai
Exports Limited |
|
|
|
|
Subsidiaries : |
+
Asman
Investments Limited +
Arvind
Products Limited +
Arvind
Brands Limited +
Arvind
Clothing Limited +
Arvind
Fashions Limited +
Asman
Investments Limited +
Lifestyle
Fabrics Limited +
Omnitalk
Wireless Solutions Limited +
Syntel
Telecom Limited +
Arvind
Worldwide Inc. +
Arvind
Worldwide (M) Inc., +
Arvind
Overseas (M) Limited, +
Big Mill
Lauffenmuhle +
Arvind
Spinning Limited |
|
|
|
|
Joint Ventures
: |
1. Arya Omnitalk Wireless Solutions Limited 2. Arvind Murjani Brands Private Limited 3. VF Arvind Branda Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
230000000 |
Equity Shares |
Rs. 10/- each |
Rs. 2300.000 millions |
|
9000000 |
Preference Shares
|
Rs.100/- each |
Rs.
900.000 millions |
|
|
Total |
|
Rs. 3200.000 millions |
As on 31.03.2007
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
209380000 |
Equity Shares |
Rs. 10/- each |
Rs. 2093.800 millions |
|
4620000 |
Preference Shares |
Rs. 100/- each |
Rs. 462.000 millions |
|
|
Total |
|
Rs. 2555.800 millions |
As on 31.03.2006
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
265480000 |
Equity Shares |
Rs. 10/- |
Rs. 2654.800millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share Capital |
2555.800 |
2654.800 |
2614.000 |
|
|
2] Reserves &
Surplus |
11314.500 |
12664.700 |
10197.500 |
|
NETWORTH
|
13870.300 |
15319.500 |
12811.500 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
17670.700 |
16883.800 |
14912.300 |
|
|
2] Unsecured
Loans |
1615.700 |
1529.900 |
1911.900 |
|
TOTAL BORROWING
|
19286.400 |
18413.700 |
16824.200 |
|
|
DEFERRED TAX LIABILITIES |
128.200 |
0.000 |
0.000 |
|
Non Convertible Debentures
|
56.700 |
0.000 |
0.000 |
|
|
|
|
|
|
|
TOTAL
|
33341.600 |
33733.200 |
29635.700 |
|
|
|
|
|
|
|
APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
20448.900 |
13096.000 |
13816.900 |
|
Capital work-in-progress
|
714.500 |
795.900 |
1030.700 |
|
|
|
|
|
|
|
INVESTMENT
|
480.500 |
3481.000 |
1530.200 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
6450.100
|
4792.600
|
5111.500
|
|
|
Sundry Debtors
|
2048.500
|
3682.800
|
3191.100
|
|
|
Cash & Bank Balances
|
223.100
|
95.900
|
128.700
|
|
|
Other Current Assets
|
549.500
|
0.000
|
0.000
|
|
|
Loans & Advances
|
6959.800
|
12286.400
|
7585.000
|
Total Current Assets
|
16231.000
|
20857.700
|
16016.300
|
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
4089.900
|
4046.500
|
2434.700
|
|
|
Provisions
|
443.400
|
450.900
|
323.700
|
Total Current Liabilities
|
4533.300
|
4497.400
|
2758.400
|
|
Net Current Assets
|
11697.700
|
16360.300
|
13257.900
|
|
|
|
|
|
|
|
TOTAL
|
33341.600 |
33733.200 |
29635.700 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Sales Turnover |
18449.100 |
15886.900 |
17397.900 |
|
Other Income |
162.500 |
119.800 |
0.000 |
|
Total Income |
18611.600 |
16006.700 |
17397.900 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
277.100 |
1363.800 |
1293.000 |
Provision for Taxation
|
24.400 |
92.200 |
19.500 |
Profit/(Loss) After Tax
|
252.700 |
1271.600 |
1273.500 |
|
|
|
|
|
Total Expenditure
|
18334.500 |
14642.900 |
16104.900 |
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2007 |
|
Type
|
|
|
1st Quarter |
|
Sales Turnover |
|
|
5103.300 |
|
Other Income |
|
|
134.300 |
|
Total Income |
|
|
5237.600 |
|
Total Expenditure |
|
|
4382.000 |
|
Operating Profit |
|
|
855.600 |
|
Interest |
|
|
438.100 |
|
Gross Profit |
|
|
417.500 |
|
Depreciation |
|
|
354.500 |
|
Tax |
|
|
4.800 |
|
Reported PAT |
|
|
58.200 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
1.30 |
1.25 |
1.23 |
|
Long Term Debt Equity Ratio |
0.48 |
0.84 |
0.86 |
|
Current Ratio |
1.13 |
1.94 |
1.95 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
0.88 |
0.75 |
0.82 |
|
Inventory |
3.28 |
3.28 |
3.82 |
|
Debtors |
6.44 |
4.72 |
6.14 |
|
Interest Cover Ratio |
1.18 |
2.02 |
2.08 |
|
Operating Profit Margin (%) |
17.42 |
26.18 |
23.38 |
|
Profit Before Interest Tax Margin (%) |
9.65 |
16.63 |
14.62 |
|
Cash Profit Margin (%) |
9.14 |
17.39 |
16.24 |
|
Adjusted Net Profit Margin (%) |
1.37 |
7.83 |
7.48 |
|
Return on Capital Employed (%) |
5.34 |
8.52 |
9.05 |
|
Return on Net Worth (%) |
1.81 |
9.17 |
10.59 |
LOCAL AGENCY FURTHER INFORMATION
The company was
incorporated on 1st June, 1931 at Ahmedabad in
Subject is the
flagship company of Lalbhai Group, which was incorporated to manufacture cotton
textiles.
Subject for long
has been one of the leading cotton manufacturing companies in the country
producing conventional suiting fabrics, shirting fabrics sarees had moved into
denim manufacturing in 1980's.
Subject has a wide
product range, which includes Suitings, Shirtings, Sarees Dress Materials has
diversified into Denim manufacture is the 5th largest denim manufacturer
in the world.
Subject has tie-ups
with H I Lee Cluett International,
The denim project
went on stream in 1991.
Subject's recent
tie-ups include its technical marketing alliance with F M Hammerie
Von-Ogensever Waltungs,
During 1985 the
company diversified into electronics by setting up a plant to manufacture
electronic telephone exchanges (EPABX). It also entered into marketing
pharmaceutical products B&W colour television sets under the name
Pyramid. Rohit Mills, a sick textile
unit was merged with the company with effect from 1st November, 1996
renamed Asoka Cotsyn division. The
company now proposes to merge Arvind Intex, a subsidiary company engaged in
cotton spinning activities, in which it holds a stake of 49.89%.
The company had
also ventured into production of video magnetic tape of VHS Standards in
1988. In this regard, the company had
signed an agreement with Victor Company of
The company has
taken over the management of Nagri Mills Company Limited proposed to modernize
the existing capacity.
The green field
textile project at village Santej with a capacity of processing 34 million
meters per annum had commenced commercial production with effect from 1st
April, 1999. It also started operating two captive Co-generation Power plants
after test runs in the 2nd 3rd quarter of 1998-99.
The company
commissioned its' shirtings facility at Santej during the first quarter of 2000
the Knits facility was commissioned in the third quarter of 2000.
The company was
also planning a rights issue sale of non-core assets if lenders agree to the
restructuring proposal prepared by KSA Techno Pak, an Indo-US consultant
Jardine Fleming, now Chase Jardine Fleming.
It intends to raise
Rs. 1000 millions through the rights issue Rs. 750 millions through sale of
assets, mostly real estate. The money would be used to buy back debt. The
restructuring proposal is strictly subject to the lenders agreeing to sell back
a minimum of Rs. 5500 millions debt the company would raise new debt to
part-finance the buyback.
HISTORY
Arvind Mills (AML). the flagship company of Lalbhai Group
was incorporated in 1931 to manufacture cotton textiles. AML, for long has been
one of the leading cotton manufacturing company in the country producing
conventional suiting fabrics, shirting fabrics, sarees has moved into denim
manufacturing in 1980's is currently the largest denim manufacturer in the
world.
The company with both international local brands is one of the leading player
in the domestic ready to wear garment industry. The company has the rights to
market international brands such as Arrow, Lee, Flying Machine etc in
Subject's recent tie-ups include its technical marketing alliance with F M
Hammerie Von-Ogensver Waltungs,
The company has taken over the management of Nagri Mills Co. Limited. The
company has merged Rohit Mills, a sick textile unit with it effective from Nov
1, 1996. renamed Rohit mills as Asoka Cotsyn. The green field textile project
at village Santej with a capacity of processing 34 million meters per annum has
commenced commercial production with effect from 1st April, 1999. It also
started operating two captive Co-generation Power plants after test runs in the
2nd 3rd quarter of 1998-99.
The Company commissioned its Shirtings facility at Santej during the first
quarter of 2000 the Knits facility was commissioned in the third quarter of
2000. The company intends to raise Rs 1000 million through the rights issue Rs
750 million through sale of assets, mostly real estate. The money would be used
to buy back debt. The restructuring proposal is strictly subject to the lenders
agreeing to sell back a minimum of Rs 5500 million debt the company would raise new debt to
part-finance the buyback.
It has acquired a sick cotton mill Ankur Textiles. Arvind Overseas (Mauritius)
Limited, a subsidiary of subject is setting up a 2.1 Million pieces p. a
garment manufacturing plant which is expected to be commissioned during
2003-04. Subject has set up a new 100% subsidiary 'Arvind Spinning Limited' to
manufacture yarn in
In 2004-05 the company has wound-up the business of Arvind Overseas (
The company has set up a
During 2004-05 the company has enhanced its installed capacity of Spindles,
Rotors, Stitching Machines, Knitting Machines Garments by 11696 Nos, 264 Nos,
144 Nos, 1 Nos 1000000 Pcs. With this expansion the total installed capacity of
Spindles, Rotors, Stitching Machines, Knitting Machines Garments has increased
to 107040 Nos, 7824 Nos, 485 Nos, 63 Nos 2000000 Pcs.
OPERATIONS
Directors are pleased to inform you that the company has been successfully able to steer through financial year 2006-07, which was a very challenging period. The company operated at lower utilization levels compared to previous financial year the impact is visible in the operating profits of the company.
The operations of Arvind Brands Limited its subsidiaries were merged with the
Company with effect from 1st April, 2006 hence the figures of current year are
not strictly comparable with the previous financial year.
Sales operating income at Rs.18449.100 millions were up by 16% compared to Rs.15886.900 millions in the previous financial year, a growth of 16%. This was mainly due to addition of turnover of Arvind Brands. Operating profit of the company was Rs. 3050.800 millions compared to Rs.4148.300 millions in the previous financial year, a drop of 26%. This was mainly due to addition of Arvind Brands operations which have so far not been profitable as well as sharp drop in denim volume realisations. There was one time extraordinary profit due to sale of business to VF Arvind Brands Private Limited amounting to Rs.1001.200 millions a write-off of CENVAT balance amounting to Rs.58.300 millions resulting in net profit of Rs.942.900 millions. The Key developments of the year under review are summarized below:
* Merger of Arvind Brands Limited its subsidiaries with the Company with effect
from 1st April, 2006;
* Wholesale branded apparel business of erstwhile Arvind Fashions Limited has
been sold to VF Arvind Brands
Private Limited with effect from 31st August, 2006 for a total consideration of Rs.1816.500 millions, after making
necessary provisions for claims other contingent liabilities, the company made one time profit of
Rs.1001.200 millions;
* With the denim manufacturing capacity in
market are under severe pressure;
* The cotton cost for the second consecutive year remained low the company has also benefited from the low
cost inventory it had accumulated.
The company has registered a Net Profit after Extra-ordinary Items of Rs.1195.600 millions compared to Rs.1271.600 millions in the previous financial year, a drop of 6%.
A detailed analysis of the financial results is given in the Management Discussion Analysis Report which forms part of this report.
FINANCE
During the year, Company has repaid the installments of Term Loans
amounting to Rs. 1420 millions falling
during the current year. The Company has also made fresh borrowings of
Rs. 2360 millions for funding capital expenditure other requirements. Long Term
Debt including lease of the Company stands to Rs. 12690 millions as on 31st
March 2007.
SUBSIDIARIES
A detailed discussion on subsidiary companies their performance during
the year is contained in the Management Discussion Analysis Report which forms
part of this Report.
Pursuant to Accounting Standard AS-21 issued by the Institute of Chartered
Accountants of India the Company has prepared Consolidated Financial Statements
of the Company its subsidiaries are included in the Annual Report.
In view of the closure of business disposal of the business undertaking, the
accounts of Arvind Overseas (
CORPORATE GOVERNANCE
The Company is committed to the tenets of good Corporate Governance has
taken adequate steps to ensure that the requirements of Corporate Governance as
laid down in Clause 49 of the Listing Agreement are complied with.
A separate report on Corporate Governance a Management Discussion Analysis Report
are being published as a part of the Annual Report of the Company.
The Auditors of the Company have certified that conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement are complied
by the Company their Certificate is annexed to the Report on Corporate
Governance.
FINANCIAL PERFORMANCE
REVIEW
The analysis comparison of the financials shall bring forth the positives in
growth in denim volumes in the first half of the year sudden drop in
realizations in the second half of the year, a detailed analysis follows:
Sales & Operating Income
The Revenue numbers show a decline of 4% over the last year primarily due to
lower volume of denim off take significant drop in prices during second half of
the current year. In spite of the decline in both volume realization, the Denim
constituted 60% of the total where as shirting garments contributed 19% 12%
respectively. The shirting knits business continue to be stable. With the 4
Million pieces jeans manufacturing capacity in
The 19% drop in raw material cost as compared to last year was both on account
of lower volume of denim as well an impact of low cost of cotton through the
year.
Business Review
Developments
Denim
For the time being, denim continues to be the mainstay of Company.
Company pioneered the denim market in
The stated strategy of Company is to defocus from the domestic mass market
focus on mid premium brands in the
The cotton cost for the first half of the next financial year will be low
because of inventory purchased in the previous cotton season. The new cotton
season is expected to open higher than the current inventory holding levels
margins could be impacted in the second half. There are no other supply side
factors that are significantly impacting the margins.
The outlook on denim in the near term continues to be negative. Positive impact
from the European team's efforts will be reflected only in the third quarter of
2007-2008. The new
Branded Apparel Retail
The branded apparel business of Company consists of:
* Its own brands of Excalibur, Flying Machine,
* The substantially long period license brof Arrow
* 50% interest in Arvind Murjani Brands Private Limited that holds the perpetual license for apparel
accessories of Tommy
Hilfiger brin
* Megamart, once the channel for disposing of surplus, which has been successfully repositioned. Continued
thrust towards selling private labels through this channel has resulted in the turnover reaching Rs.1000 millions
in the current financial year.
During the current year, the comparable revenues excluding figure of VF license
brhas grown by 18% age. Company currently has 122 EBO's across various brands
is planning to take number to 193 in the financial year 2007-2008. The Megamart
channel has currently 55 company owned franchisee stores. This will be
increased to 100 stores in the next two years.
Company's future strategy in the branded apparel business is to build a strong
portfolio of brands, both owned and
licensed. This will span multiple channels price points, with each
brappropriating sharp differentiated consumer propositions. 'Arrow' will be the
lead brin the Premium segment with the positioning of best-in class style for
the premium consumer. Excalibur will address the young executives' need for
dressing solutions. Flying Machine is being positioned on the platform of
'Youth Expression' with the vision to grow it into an iconic youth brand.
Company's share in the mass segment will be further increased by offering private label solutions to Hypermarkets.
On the retail front, Company wishes to focus primarily on branded apparel
retail. The strategy is to reposition Megamart as a place to 'shop smart feel
smart'. It will offer not just big brands at discount, but even greater value
through private brands that leverage Arvind's 'fabric to fashion' expertise.
The Megamart consumer experience will be quite superior to other discount formats.
As part of this strategy, there is an aggressive expansion plan to open large
format Megamarts in the top 15 cities. These stores will be 50,000 sq ft + as
compared to the current size of 5000 sq ft. Rapid expansion of current format
Megamarts to Tier 2 Tier 3 towns has been initiated from April, 2007.
Garment Operations
The garment business now contributes to 15% of the Company's turnover. The
turnover has increased by 17% compared to the previous financial year's figure.
The growth is on account of both, better productivity in shirt operations the
addition of jeans garment operations.
The current financial year saw significant strides being made in jeans
manufacturing operations. The jeans plant capacity was doubled to 8 million
pieces during the current financial year. The order book for jeans is full the
Company is exploring organic inorganic avenues to expthe business.
The knits operation was stable during the year has benefited from better fabric
productivity. The year also saw initiation of dialogue with one of the largest
sportswear brin the world for a long term growth strategy. The Company hopes to
do larger volumes of business with this customer in 2007-2008. If the
relationship fructifies in the direction envisaged, the knits operations could
witness substantial growth.
Shirt operations are operating at optimum capacity utilization productivity has
increased significantly. The Company is looking at methods to increase the
capacity through third party tie ups or joint ventures.
Shirting
The shirting business continues to be stable. The business has suffered
few temporary reverses due to the sluggish post-festival retail season. The
Company is focused on offering only value added mid premium products in the
shirting sphere. It has made significant investments to move towards this goal.
This includes a state-of-the art printing facility that will allow it to enter
the women's top wear segment. The Company is also creating a dedicated ammonia
finishing plant through third party investment. A first of its kind in
The outlook for shirting is stable. The Company is of the opinion that
thecurrent selling prices are sustainable near term realizations are not likely
to witness any significant downturn.
Telecom
The telecom division of Company comprises of two operations a) manufacturing
and marketing of EPABX machines under
the brSYNTEL b) providing Public Mobile Radio Trunking Services (PMRTS) in
certain service areas under the brOMNITALK. Arvind has license to operate PMRTS
in 9 cities.
An agreement with Arya group which also has license for PMRTS in another 9
cities had created a 50:50 joint venture company Arya Omnitalk Wireless
Solutions Private Limited, which manages the PMRTS business of both Arya group
as well as Arvind's. Due to restrictions by DoT policy the license the licenses
were held by the respective companies not transferred.
With the liberalized policy guidelines, it is possible to transfer the licenses. Hence company is proposing to demerge the PMRTS assets into a 100% subsidiary subsequently combine the license of both the group in one entity.
SUBSIDIARIES
Arvind Products Limited
The Company returned its first full year of significant profitability. The
performance of the Company improved primarily on back of significant turnaround
in the Khakis business of the Company. The Company earned a net profit of Rs.70
millions in the current financial year compared to a loss of Rs. 70 millions in
the previous year. The operating profit of the Company rose by 26% to Rs.610
millions compared to Rs. 480 millions in the previous financial year. The
Company is expected to return similar performance in 2007-08.
OUTLOOK
The Company maintains a cautious outlook on its near term revenue earnings. Its
efforts are focused towards rapidly growing the downstream business of garment
packages, branded apparel retail. The impact of these efforts will be visible
in the medium to long term. Substantial investments have been made in resources
people to create an effective front end for fabric operations as well as
develop the ability to deliver differentiated products. These initiatives are
likely to yield results in the second half of the financial year 2007-2008. The
caution on outlook is also influenced by an expected cost push on account of
cotton prices, energy cost revenue impact on account of rupee
appreciation.
OVERVIEW
2006-2007 has been a challenging year for Company. It has made significant
progress towards its stated goal of becoming a truly integrated organization
that spans textile to retail. However, there have been temporary set backs
caused by a slowdown in the denim products group.
Company has launched various initiatives set in motion structural
organizational changes that will help it address immediate issues as well as
speed it on its way to long-term goals. These cover product mix, customer
structure, marketing design infrastructure, brpositioning production base.
OPERATING ENVIRONMENT
Company operates across multiple products businesses in diverse markets
environments. These include the Indian retail market for its brands, the Indian
intermediary market for fabrics the global market for the fabrics apparel
business. While its performance in most of these markets is satisfactory, the
Indian intermediary market for the denim products group is suffering from a
supply glut.
Indian Intermediary Market
The estimated demin the domestic market is growing at an impressive rate of over
25%1. However, supply far exceeds this demand, leading to tremendous pressure
on prices volume. The denim production capacity in
This is estimated to have increased to about 550 million metres per annum by the end of 2006-20071. This increase will initially focus on the domestic intermediary market before the necessary expertise is created to service the demanding export-oriented business.
The situation is compounded by the fact that the
Company's shirting product group is also facing a challenge in the domestic
intermediary market. Fabric retail is under tremendous pressure as markets
rapidly shift towards ready-to-wear clothing. The proliferation of large-format
retail stores is further contributing to the slowdown in demfor fabric.
Export Market
WTO estimates for 2004 put world exports of textile clothing at 566
billion, more than 6% of total world exports. The clothing sector takes thelion's
share with 322 billion .The export market for various product groups continues
to be stable offers opportunities for the business to grow.
The import of cotton apparel into the
The primary objective for Indian apparel manufacturers is to
replace the space being vacated by
The total textile apparel import into the European Union (EU) for 2006 has
grown by an estimated 3% by value over 2005, while volume has dropped by an
estimated 8%. This indicates an increase in prices. Imports from
For the time being, denim continues to be the mainstay of
Company, both in terms of revenue earning. The international denim market is
estimated to be about 6 billion square metres.. While most of the production is
based out of Asia, the main consuming markets are the
In the near future, the revenue earnings composition of Company is set to shift
in favour of the retail apparel businesses.
Business logic dictates that where apparel manufacturing is viable, the fabric
business will follow. With the apparel manufacturing base decisively shifting
to
Indian Retail Market
The Indian retail market is the most promising of all market spaces Company
operates in. It is present through the branded apparel business as well as
through sale of fabric to apparel manufacturers. It also supplies, on a small
scale, ready-to-wear garments for store labels to large format retail stores.
Recent research has decisively indicated tremendous growth in the organized
retail sector in
The growth in organized retail in
RESULT REVIEW
Revenue of Company, for the year ended 31st March, 2007, was Rs.18450
millions. This represents an increase of 16% over the revenue of Rs.15890
millions for the previous financial year.6 The operating profit for the year
ended 31st March, 2007 stood at Rs. 3210 millions as against Rs.4270 millions
in the previous financial year, representing a drop of 25%. There is an
extraordinary profit on account of sale of stake in VF Arvind Brands Private
Limited after providing for few non-recurring expenses the net amount is Rs.
940 millions. The profit after tax extra ordinary items stood at Rs.1200
millions compared to Rs.1270 millions in the previous financial year,
representing a drop of 6%.
Sales Operating Income
Business revenue from the textile apparel business are lower compared to
previous year primarily due to lower denim volumes a sharp reduction in
realization. Revenues from all other product groups have remained stable or
moved upwards. Further, with the merger of the branded apparel business with
Company, sales to Arvind Brands are now treated as internal sales knocked
off.
The revenue of Arvind Brands for the year ended 31st March, 2007 was at Rs.3470
millions. The previous financial year figures include sales from VF licensed
brands. If such sales were excluded from both the years, revenue growth would
be 18%.
The Evolution
1930 was a year the world suffered a traumatic depression. Companies across the
globe began closing down. In
Subjectstarted with a share capital of Rs 2,525,000 ($55,000) in the year 1931.
With the aim of manufacturing the high-end superfine fabrics Arvind invested in
very sophisticated technology. With 52,560 ring spindles, 2552 doubling
spindles 1122 looms it was one of the few companies in those days to start
along with spinning weaving facilities in addition to full-fledged facilities
for dyeing, bleaching, finishing mercerizing. The sales in the year 1934, three
years after establishment were Rs 4.576 million s profits were Rs 0.282 million
s. Steadily producing high quality fabrics, year after year, Arvind took its
place amongst the foremost textile units in the country.
In the mid 1980’s the textile industry faced another major crisis. With the
power loom churning out vast quantities of inexpensive fabric, many large
composite mills lost their markets, were on the verge of closure. Yet that
period saw Arvind at its highest level of profitability. There could be no
better time, concluded the Management, for a rethink on strategy. The Arvind
management coined a new word for it new strategy – Renovision. It simply meant
a new way of looking at issues, of seeing more than the obvious that became the
corporate philosophy. The national focus paved way for international focus
Arvind’s markets shifted from domestic to global, a market that expected
accepted only quality goods. An in-depth analysis of the world textile market
proved an eye opener. People the world over were shifting from synthetic to
natural fabrics. Cottons were the largest growing segments. But where
conventional wisdom pointed to popular priced segments, Renovision pointed to
high quality premium niches. Thus in 1987-88 Arvind entered the export market
for two sections. Denim for leisure fashion wear. high quality fabric for
cotton shirtings trousers. By 1991 Arvind reached 1600 million meters of Denim
per year it was the third largest producer of denim in the world.
In 1997 Arvind set up a state-of-the-art shirting, gabardine knits facility,
the largest of its kind in
Year 2005 is a watershed year for textiles. With the mulitifiber agreement
getting phased out the disbanding of quotas, international textile trade is
poised for a quantum leap. In the domestic market too, the rationalizing of the
cenvat chain the growth of the organized retail industry is likely to make
textiles apparel see an explosive growth.
Arvind has carved out an aggressive strategy to verticalize its current
operations by setting up world-scale garmenting facilities offering a one-stop
shop service, of offering garment packages, to its international domestic
customers.
With the Indian economy poised for rapid growth, Arvind brands with its
international licenses of Lee, Wrangler, Arrow Tommy Hilfiger its own domestic
brands of Flying Machine,
The company with
both international local brands is one of the leading players in the domestic
ready-to-wear garment industry. It has
the rights to market international brands such as Arrow, Lee, Flying Machine,
etc. in
It tied up with H I Lee for Lee brin Denim Jeans with Cluett
International,
The company is in
trade terms with the following:
v
Atul
Enterprises
v
Albaj
Engineering Corporation
v
B.
Trikamlal and Company
v
Climax
Marketing Private Limited
v
Fourwent
Engineering Company
v
Geekay
Corporation
v
Chamunda
Fabrication
v
Chipko
Bonding Systems
v
Siddhi
Polymers Private Limited
v
Archem
Industries
v
Arjyot Chemicals
Private Limited
v
Synergy
Chlorinations Private Limited
v
Bhagat
Engineering Works
v
Bhavik
Industries
v
Shree
Laxmi Engineering
v
Gemini
Polyplast Industries
v
Sun
Industries
v
Khodiyar
Industries
v
R-Tex
Enterprise
As Per Web Details
Profile
The
Subjectwas set up with the pioneering effort of the Lalbhai brothers in 1931.
With the best of technology business acumen, Arvind has become a true Indian
multinational, having chosen to invest strategically, where demhas been high
quality required has been superlative. Today, The Subject is the flagship
company of Rs.20 billion (US$ 500 million) Lalbhai Group.
Subjecthas set the pace for changing global customer demands for textiles has
focused its attention on select core products. Such a focus has enabled the company
to play a dominant role in the global textile arena. With its presence across
the textile value chain, the company endeavors to be a one-stop shop for
leading garment brands.
Forevision Technology has brought Arvind to be one of the top three producers
of Denim in the world, on its way becoming the Global Textile Conglomerate.
Arvind is already making its presence felt in Shirting’s, Knits Khakhis fabrics
apart from being all set to create ripples in the ready to wear Garments world over.
The company's fixed
assets of important value include lfreehold leasehold, buildings, machinery,
machinery given on lease, motor vehicles office machinery dead stock.
Press
Releases
Arvind
Mills net at Rs 360 million
Bureau
AHMEDABAD:
Textile major Subject has reported a net profit of Rs 360 million on a turnover of Rs 414 million for the third quarter of the current year.
The sales have risen 19 per cent during the October-December quarter of 2004-05
as compared with Rs 3490 million in the
same period last year. The net profit has jumped from Rs 190 million in the last financial year to Rs 360
million this year, a company press
release said here on Thursday.
Arvind Mills to
relocate
Their Corporate Bureau
13 August 2004
Mumbai: Arvind
Mills is planning to shift its existing denim garments manufacturing facilities
from
The company,
through its subsidiary companies, has eight million meters of denim
manufacturing facility two million pieces of jeans plant at
The company would
augment its denim manufacturing capacity to 105 million meters in the country
after the plant is shifted, the release said.
The company is also
setting up a 2.1 million jeans plant at
Arvind Mills to
set up new mills
Pradeep Rane
4 May 2004
As part of its
efforts to take advantage of dismantling of quota regime from January 2005,
textile major Subject is planning to set up new plants in
The plan includes
capacity addition in jeans, khakis an expansion of its knitted garments factory
at Ahmedabad. Arivind is taking several initiatives to capture the enormous
upside expected out of WTO opportunities post 2005.
To raise its
garments capacity to 14.4 million pieces by end of FY 2005, the company is plannig
to set up new facilities - a 2.1 million pieces jeans factory, a 1.5 million
pieces khakis factory in
"Clearly, AML
is on track with its several initiatives targeted at capturing the enormous
upside expected out of the dismantling of the quota regime effective
Jan-2005," says a leading securities research firm.
Also the textile reconstruction fund
notified by the central government would offer AML an opportunity to further
reduce interest costs. The scheme would help the company to reduce its
effective interest rate for textile companies to 8-9 per cent in order to
enhance its competitive edge. AML has an opportunity to get Rs6 billion of its
existing borrowings refinanced under this scheme, leading to an annual saving
of Rs180 million to 240 million per annum.
The company is also
trying to reduce its power costs as it is seeking to shift to natural gas from
high cost naphtha for its captive power plants. The company has recently
entered into a 3-year agreement with one of the natural gas suppliers. Supplies
are expected to commence in Q2FY05, would yield substantial savings in fuel
costs. It is estimated that annual savings on this count to be between Rs300m
400m.
The company has
reported 11 per cent YoY decline in sales to Rs3.48bn 34 per cent drop in
net profits to Rs152m in financial year '04. In terms of positive contributors
— interest charges declined 39 per cent YoY forex gains of an estimated between
Rs160 Rs180mn were booked during the quarter.
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
reasonable 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 governance. These factors often have
been predictive 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 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
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.87 |
|
|
1 |
Rs.80.11 |
|
Euro |
1 |
Rs.56.19 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
55 |
This score serves as a reference to assess SC’s credit risk
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 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 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
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 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 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 |
|