MIRA
INFORM REPORT
|
Report Date : |
25.09.2007 |
IDENTIFICATION DETAILS
|
Name : |
DISHMAN
PHARMACEUTICALS AND CHEMICALS LIMITED |
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Registered Office : |
Bhadra-Raj
Chambers, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
29.06.1983 |
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Com. Reg. No.: |
04-6329 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
AHMD00851E |
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PAN No.: [Permanent
Account No.] |
AAACD4161D/AAACD4164D |
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Legal Form : |
Public Limited
Liability Company. The company’s
shares are listed on the stock exchanges. |
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Line of Business : |
Manufacturers and
Exporters of Bulk Drugs, Organic Chemicals and Fine Chemicals. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 10000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established company having satisfactory track. Directors are reported as
experienced, respectable and having satisfactory means of their own. Their trade
relations are fair. Payments are usually correct and as per commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions with some caution. |
LOCATIONS
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Registered Office : |
Bhadra-Raj Chambers,
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Tel. No.: |
91-79-26445807 /
26443053 / 26560089/ 2642-0198 |
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Fax No.: |
91-79-26420198 |
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E-Mail : |
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Website : |
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Corporate Office : |
301-306, Samudra
Annexe, Off |
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Factory 1 : |
Plot No. 1216/20,
Phase IV, GIDC, Naroda – 382 415, |
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Tel. No.: |
91-79-2811633 /
2814234 |
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Factory 2 : |
Survey No. 47, Paiki
Sub Lot No. 1, Village Lodariya, Taluka Sanand, District Ahmedabad, |
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Factory 3: |
Swastika Cross Road, Navrangpura, Ahmedabad 380 009, |
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Tel. No.: |
91-79-26420198 |
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Branches : |
401, |
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Tel. No.: |
91-22-2859 2120 |
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Fax No.: |
91-22-2859 2226 |
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E-Mail : |
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Overseas
Office : |
Phone : 44
(0) 207 323 0608 Fax : 44
(0) 207 323 0609 E-mail : info@dishman-europe.com Web site :
http://www.dishman-europe.com Dishman USA, Inc. 550, Phone : 1
732 560 4300 Fax : 1
732 560 4343 E-mail : dishmanusa@dishmangroup.com Tel. +27 31 462 9101 Fax. +27 31 462 9106 E-mail. mark.reddy@dishmangroup.com |
DIRECTORS
|
Name : |
Shri Rajnikant T.
Vyas |
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Designation : |
Chairman &
Managing Director |
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Address : |
B/1-A, Rajhans
Society, Ellisbridge, Ahmedabad – 380 006, |
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Date of Birth
: |
09.07.1924 |
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Date of
Appointment : |
15th
February, 1988 |
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Age : |
80 Years |
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Qualification
: |
B. Com. |
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Experience : |
53 Years |
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Other
Directorship : |
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Name : |
Shri Janmejay R.
Vyas |
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Designation : |
Managing Director |
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Address : |
B/1-A, Rajhans
Society, Ellisbridge, Ahmedabad – 380 006, |
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Date of Birth
: |
29.04.1951 |
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Qualification
: |
B. Sc. (Tech.) |
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Experience : |
24 years |
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Name : |
Mrs. Deohooti J.
Vyas |
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Designation : |
Whole-time
Director |
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Address : |
B/1-A, Rajhans
Society, Ellisbridge, Ahmedabad – 380 006, |
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Age : |
53 years |
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Date of
Appointment : |
1st
December, 1997 |
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Qualification : |
A Bachelor Degree
in Science |
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Other
Directorship : |
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Name : |
Shri Yagneshkumar
B. Desai |
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Designation : |
Director |
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Age : |
64 years |
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Date of
Appointment : |
26th
November, 2003 |
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Qualification
: |
A bachelors
degree in Economics A fellow of the
Indian Institute of Bankers |
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Other
Directorship : |
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Name : |
Shri Sanjay S.
Majmudar |
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Designation : |
Director |
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Age : |
42 years |
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Date of
Appointment : |
14th
February, 2004 |
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Qualification
: |
CA, LLB, Company Secretary
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Other
Directorship : |
Aarvee Denims and
Exports Limited |
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Name : |
Shri Ashok C.
Gandhi |
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Designation : |
Director |
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Age : |
65 years |
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Date of
Appointment: |
30th
July, 2004 |
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Qualification
: |
B. Com, LLB |
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Other Directorship
: |
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Name : |
Shri Divyabhash
C. Anjaria |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Shri Deepak S.
Pandya |
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Designation : |
Company Secretary
And Compliance Officer |
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Name : |
Dr. S. P. Singh |
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Designation : |
President
(Research and Developments) |
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Date of
Birth/Age : |
59 Years |
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Qualification
: |
M. Sc. Ph. D. |
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Experience : |
36 Years |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
48970200 |
67.81 |
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Mutual Fund
& UTI |
10132593 |
14.03 |
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Bank, Financial
Institutions (Fl's), Insurance Companies |
1753 |
0.00 |
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Foreign
Institutional Investors (Fll's) |
6922329 |
9.59 |
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Private Bodies
Corporate |
1234948 |
1.71 |
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Indian Public |
2991 544 |
4.14 |
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Any other (i)
Non Resident Indian |
107801 |
0.15 |
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(ii) Overseas
Corporate Bodies |
1 847816 |
2.56 |
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(iii) Clearing
Member |
4092 |
0.01 |
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Total |
72213076 |
100.00 |
BUSINESS DETAILS
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Line of
Business : |
Manufacturers and
Exporters of Bulk Drugs, Organic Chemicals and Fine Chemicals. |
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Products : |
Products
Description ITC Code Bulk Drugs 292390.00 Fine Chemicals 292390.00 Phase Transfer Catalysts 294200.29 |
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Exports to : |
U.S.A, U .K., |
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Imports from : |
Europe, |
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Terms : |
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Selling : |
L/C terms |
PRODUCTION STATUS
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Particulars |
Unit |
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Actual
Production |
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Bulk Drugs and Intermediates |
MT |
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3143.95** |
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** Manufactured quantity, as mentioned above does not include
recovered solvent. |
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GENERAL INFORMATION
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Suppliers : |
Ø
Ablaze Glass Works Private Limited. Ø
Akshar Containers Ø
Amar Industries Ø
Anmol Safety Products (P) Limited Ø
Asha Wooden Box Ø
Chitra Machine Tools Ø
Deedy Chemicals Private Limited Ø
Dhruv Chem Industries Ø
Dwarkesh Chemicals Ø
Eskay Industries Ø
Explosionproff Electrical Cont Ø
Classic Chemicals Ø
Gayatri Engineering Works Ø
Goodluck Plastic Industries Ø
Insulation Associates Ø
Jay Ambe Fabricators |
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Customers : |
Ø
Bayer
AG Ø
DuPont Ø
Merck Ø
Solvay
Ø
DOW
Chemicals Ø
BASF Ø
Pfizer Ø
FCC Ø
Sanofi
Synthelabo Ø
Takeda Ø Schering Plough Ø
Ranbaxy
Laboratories Ø
Dr.
Reddy's Laboratories Ø
Rallies
India Limited Ø
Atul
Products Limited Ø Sun Pharma |
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No. of Employees : |
1000 |
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Bankers : |
Ø State Bank of Ø Bank of Ø Corporation Bank Ø
Bank of |
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Facilities : |
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Banking Relations
: |
Good |
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Auditors : |
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Name : |
Kunte &
Associates Chartered Accountants |
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Address : |
502, Aniket, |
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Associates : |
Bhadra-Raj Holdings Private Limited |
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Parent Company
: |
Bhadra-Raj Holding Private Limited |
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Joint Ventures
: |
Ø
CAD Middle East Pharmaceutical Industries Ø
Schutz Dishman Bio-tech Limited Ø
Dishman Japan Limited |
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Subsidiaries : |
Ø
Dishman USA Inc. Ø
Dishman Europe Limited Ø
Dishman International Trading! Shanghai) Company
Limited Ø
Dishman FZE Ø
Dishman Switzerland Limited Ø
Dishman Pharmaceuticals & Chemical( Ø
Dishman Pharma Solution Limited Ø
Dishman Infrastructure Limited Ø
Synprotec OCR Limited Ø
Dishman Holland B.V Ø
Dishman Africa (Proprietary) Limited Ø
Pharma Syn B.V Ø
Carbogen Amcis AG Ø
Innovative Ozone Service Inc |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
10,00,00,000 |
Equity Shares |
Rs.2/- each |
Rs. 200.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
7,22,13,076 |
Equity Shares |
Rs.2/- each |
Rs. 144.426
Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS
FUNDS |
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|
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1] Share Capital |
144.426 |
137.300 |
137.335 |
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3] Reserves &
Surplus |
2551.640 |
1578.100 |
1286.111 |
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NETWORTH
|
2696.066 |
1715.400 |
1423.446 |
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LOAN FUNDS |
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|
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1] Secured Loans |
1267.189 |
459.500 |
984.771 |
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2] Unsecured
Loans |
1717.263 |
2478.300 |
57.008 |
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TOTAL BORROWING
|
2984.452 |
2937.800 |
1041.779 |
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DEFERRED TAX
LIABILITIES |
106.086 |
0.000 |
1.074 |
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TOTAL
|
5786.604 |
4653.200 |
2466.299 |
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APPLICATION OF FUNDS
|
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FIXED ASSETS [Net Block]
|
2050.781 |
1509.800 |
1195.019 |
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Capital work-in-progress
|
491.035 |
373.100 |
128.527 |
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INVESTMENT
|
1312.922 |
120.400 |
56.101 |
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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
|
986.496
|
845.300
|
643.139
|
|
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Sundry Debtors
|
1207.204
|
774.400
|
638.769
|
|
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Cash & Bank Balances
|
765.820
|
1240.300
|
21.787
|
|
|
Loans & Advances
|
49.535
|
422.800
|
251.789
|
Total Current Assets
|
3009.055
|
3282.800
|
1555.484
|
|
Less :
CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
889.306
|
497.400
|
366.489
|
|
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Provisions
|
195.552
|
146.300
|
109.665
|
Total Current Liabilities
|
1084.858
|
643.700
|
476.154
|
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Net Current Assets
|
1924.197
|
2639.100
|
1079.330
|
|
|
|
|
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MISCELLANEOUS EXPENSES
|
7.669 |
10.800 |
7.322 |
|
|
|
|
|
|
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TOTAL
|
5786.604 |
4653.200 |
2466.299 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
2799.496 |
2156.838 |
|
|
|
Other Income |
140.968 |
42.146 |
1580.966 |
|
|
Increase in Stock |
190.833 |
152.246 |
|
|
|
Total Income |
3131.297 |
2351.23 |
1580.966 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
647.992 |
478.909 |
293.192 |
|
|
Provision for Taxation |
28.895 |
22.024 |
2.347 |
|
|
Profit/(Loss) After Tax |
619.097 |
456.885 |
295.539 |
|
|
|
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Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
1915.492 |
1431.577 |
1058.895 |
|
|
Other Earnings |
77.511 |
116.492 |
|
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Total Earnings |
1993.003 |
1548.069 |
1058.895 |
|
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Imports : |
|
|
|
|
|
|
Raw Materials |
628.050 |
459.018 |
406.290 |
|
|
Capital Goods |
68.176 |
75.555 |
|
|
Total Imports |
696.226 |
534.573 |
406.290 |
|
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Expenditures : |
|
|
|
|
|
|
Materials and
Manufacturing Expenses |
1899.807 |
1418.999 |
|
|
|
Employee
Emoluments |
215.258 |
170.933 |
|
|
|
Administrative,
Selling & Other Expenses |
191.649 |
145.403 |
1366.075 |
|
|
Interest and Finance
Charges |
34.185 |
31.190 |
|
|
|
Depreciation /
Amortisation |
142.573 |
105.963 |
|
|
|
Less :
Transferred From Revaluation Reserve |
[0.167] |
[0.167] |
|
|
Total Expenditure |
2483.305 |
1872.321 |
1366.075 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2007 |
|
Type |
|
|
1st Quarter |
|
Sales Turnover |
|
|
704.700 |
|
Other Income |
|
|
67.800 |
|
Total Income |
|
|
772.500 |
|
Total Expenditure |
|
|
542.000 |
|
Operating Profit |
|
|
230.500 |
|
Interest |
|
|
15.900 |
|
Gross Profit |
|
|
214.600 |
|
Depreciation |
|
|
41.200 |
|
Tax |
|
|
03.800 |
|
Reported PAT |
|
|
157.300 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
1.35 |
1.28 |
1.06 |
|
Long Term Debt-Equity Ratio |
1.10 |
0.97 |
0.59 |
|
Current Ratio |
2.09 |
2.32 |
1.38 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.26 |
1.29 |
1.18 |
|
Inventory |
3.09 |
2.94 |
2.85 |
|
Debtors |
2.86 |
3.10 |
3.08 |
|
Interest Cover Ratio |
12.23 |
7.58 |
4.03 |
|
Operating Profit Margin(%) |
29.94 |
30.03 |
29.20 |
|
Profit Before Interest And Tax Margin(%) |
24.91 |
25.20 |
24.26 |
|
Cash Profit Margin(%) |
26.88 |
25.70 |
23.32 |
|
Adjusted Net Profit Margin(%) |
21.86 |
20.87 |
18.38 |
|
Return On Capital Employed(%) |
13.73 |
15.62 |
18.85 |
|
Return On Net Worth(%) |
28.30 |
29.45 |
29.18 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Subject is a Gujarat-based pharmaceutical company that
focuses on contract manufacturing for MNC pharma companies. The company was
incorporated in the year 1983.
The company's business is organized under the two segments i.e Marketable
Molecules or MM Segment - QUATS and Specialiy Chemicals, Intermediates and APIs
& CRAM Segment - Contract Research and Contract Manufacturing. It produces
Quats phosponium and ammonium quatenary compounds (essentially a commodity
business), specialty chemicals, active pharmaceutical ingredients (API) and
intermediates.
Its facilities located at Bavla and Naroda. Further unit 6B of the facility,
currently used for the manufacture of an API for Solvay is built on the
principles set out in certain regulations of the US FDA.
The subsidiaries of the company are Dishman Europe Limited (Del.), Dishman
Cyprus Limited, Dishman USA Inc., Dishman Intr. Trading (Shangai) Co, Dishman
FZE, Dishman Africa (Prop) Limited, Pharma Syn B V (PS) and Dishman Holland
BV.
Amongst associate companies, Schutz Dishman Biotech, a 50:50 JV with Schutz
GmbH based in
The company acts as contract-manufacturing partner for
Further, the company has entered into a toll manufacturing contract with Solvay
since May'02 for toll production of another intermediate 7-DHC and this
agreement is valid upto Dec'07 and extendable annually thereafter. The contract
for API of EM is terminable after 2008 at the end of each year, after giving 36
months prior notice to Solvay, while Solvay can terminate the same by giving 12
months notice. The agreement also provides for sharing of savings in cost of
manufacture achieved by subject due to process improvements etc between Solvay
and subject at varying percentages ranging from 20 to 50% to subject,
While focussing on contract manufacturing, the company's skills in process optimisation
and improvement in Quats business, has opened it another avenue of great
potential - contract research. The company views contract research as a window
of opportunity to get more contract manufacturing assignments from MNCs.
To encompass the entire spectrum of pharma business, the company has now also
set its eyes on generic business in advanced markets. The company has already
filed six Drug Master Files (DMFs) with various foreign regulatory authorities.
It has started preparing DMFs for production of APIs / Intermediates of
generics that are likely to come out of patent in the next few years. Having
tasted success in contract manufacturing, the company is hopeful of locating
marketing partners in the regulated markets for the chosen future generic
products and to strengthen and expand long term relationship with global pharma
companies.
The company has lined up Rs 525 Millions of capital expenditure program, which
will be predominantly funded through the present issue. The company proposes to
invest the above sum over a three year period, ranging from Rs 36 Millions in
FY 2004, Rs 345.700 Millions in FY 2005 and balance in FY 2006. Of this, the
company will invest around Rs 180 Millions for API and intermediate plants for
augmenting its capacities. The GMP compliant API plant is likely to commence
commercial production by Oct'05 while the intermediate plant is likely to
commence by Aug'05. Further the company will invest Rs 95 Millions to set up a
dedicated R & D center at its Bavla facility, which is likely to commence
operations by Nov'03. The company will also invest 30 Millions towards
expansion of existing facilities and Rs 85 Millions towards expansion of common
utilities. The expansion of existing facilities is likely to be completed by
May'05 while that of common facilities is likely to be completed by
Apr'05.
During 2004-05 the company has executed various agreements with Arab Company
for Drug Industries and Medical Appliances (ACDIMA) for setting up a joint
venture project intially to manufacture 20 APIs in the Arab countries not only
for marketing but also for exporting them. ACDIMA has agreed inprincipal to
subject's request to hold 51% of the share capital of the joint venture project
by subject. Further the company has entered into an agreement with NU SCAAN
In April 2004 the company came out with an Initial Public Offer (IPO) of
3433500 equity shares of Rs.10/- each at a premium of Rs.165/- for cash
aggregating to Rs.600.86 million through 100% book building process. The object
of the issue is to setup API and Intermediate Manufacturing Plant to setup
dedicated Research and
In October 2005 the company sub-divided its equity share face value from
Rs.10/- per share and Rs.2/- per share. During December 2005 the company has
acquired a
BUSINESS
PERFORMANCE:
subject, as a global player, whose consolidated turnover, includes results of
all its wholly owned subsidiaries, proportionate share in the joint venture
(Schutz Dishman Biotech Limited) and associate (Bhadra- Raj Holdings Private
Limited) reported 109% rise in sales to Rs.5785.720 Millions for the financial
year 2006-07 compared to the previous year's sales of Rs.2774.398 Millions. It
is to be noted that consolidated results of the company include results of four
newly incorporated and acquired WOS viz. Dishman Infrastructure Limited,
Dishman Pharmaceuticals & Chemicals (
Consolidated Profit before tax & other adjustments of the Company stood at
Rs.959.671 Millions and profit after tax at 927.705 Millions for the financial
year 2006-07.
The Company has, on stand alone basis, also continued its growth story with 30%
rise in Net Sales to Rs.2799.496 Millions as compared to the previous financial
year's Net Sales of Rs.2156.838 Millions. The Company maintained its
predominant presence in the global market more particularly in CRAM segment
with around 74% of its sales in the financial year under review arising out of
exports. It has been able to create long lasting relationships with some of the
key global pharmaceutical majors including Indian companies. The Company enjoys
a strong position for most of its products in
The Company has reported an impressive 35% rise in profit before tax and other
adjustment to Rs.647.992 Millions for the financial year 2006-07 compared to
the previous year's profit before tax and other adjustment of Rs.478.909
Millions.
Also, the Company has posted an increase of 35% in the profit after tax, which
was Rs.619.097 Millions for the year 2006- 07 as against Rs.456.885 Millions
for the corresponding year 2005-06.
The Directors are hopeful for far better prospects in the current year i.e.
2007-08. The Company has an excellent track record in the international market
and this has helped in increase in Export Turnover to Rs.2072.212 Millions
during the year 2006-07 as against Rs.1638.515 Millions during the previous
financial year 2005-06, an increase of 26%.
The Company is a research driven Company engaged in the business of synthetic
chemistry research through which it has developed cost effective processes for
manufacture of various intermediates, APIs, QUATS and speciality chemicals ('MM
Segment'). The Company currently focuses on Contract Research and Contract
Manufacturing ('CRAMS Segment') and it has continued its efforts for the
development of business in the Contract Research and Contract Manufacturing of
Bulk Drugs and their Intermediates, as Earning Before Interest, Depreciation,
Tax and Amortization (EBIDTA) margins in CRAMS Segments, compared to MM Segments
are higher.
The Company maintained the satisfactory growth during the year under review in
both its segments. However, with acquisition of Carbogen Amcis AG. during the
year, the growth in CRAMS segment has accelerated and which is reflected in
181% rise to Rs. 4154.065 Millions during the financial year 2006-07, as
compared to the previous year's CRAMS sales of Rs.1477.154 Millions. MM Segment
supported with 26% growth to Rs.1631.655 Millions during the financial year
2006-07 against the previous year's MM segment sales of Rs.1297.243
Millions.
A detailed analysis of the financial results is given in the Management
Discussion and Analysis Report, which forms part of this Report.
RESEARCH AND DEVELOPMENT:
Research is a critical thrust area for the Company because it is the foundation
upon which Company's strategy of manufacturing and marketing of Bulk Drugs
& Intermediates (including contract manufacturing) and Fine Chemicals,
Quats & Speciality Chemicals stands.
The Company has created a state-of-the-art R & D center and cGMP pilot
facility at Bavla, which was commissioned on 1st September, 2006. The center
comprises three floors measuring total built up area of 4500 square meters.
There are eight independent Chemical laboratories, Kilo lab, Analytical
development laboratories, Library and cGMP Pilot Plant. The Chemical
laboratories are equipped with Imported Work stations, High and Low heating
cooling systems, High vacuum and Cryogenic systems and having separate
classical and instrumentation labs. Kilo lab is equipped with equipments such
as Buchi Reaction assembly, Laboratory model centrifuge, Rotatory vacuum drier
and Lyophilizer. Pilot Plant is divided into two sections i.e. Chemical
processing area and Pharma area. Both sections are having Stainless Steel
Reactors, Glass Lined Reactors and Hastealloy reactors, Centrifuge, Tray Drier,
Rotatory Vacuum Drier etc. Analytical Development Lab is having all modern
equipments for the analysis of raw materials, intermediates and finished
products. These includes HPLC, GC, LC -MASS, GC-MASS, ICP, NMR, CHN Analyser,
HPTLC, XRD Spectrophotometer etc. At present more than 150 scientists are
working in two shifts. At its full capacity, 200 scientists will be working on
a 3-shift basis. This center focuses on contract research at lab, kilo and
Pilot Plant scales. In addition to
Contract research, process improvement of contract manufactured molecules and
technology transfer form an integral part of Company's R & D focus. The
Company's R & D orientation and understanding of synthetic routes of
process innovation has enabled the Company to undertake development work for
its customers under CDA with the intention of getting long-term manufacturing
contracts. Further, to give impetus to the contract manufacturing assignments -
both in the pharma and non-pharma segments and to capitalize on the potential
outsourcing market related to the pharmaceutical and chemical industries, the
Company has developed and strengthened its contract research capabilities of
APIs and intermediates.
Considering the importance of R & D activities and the availability of its
expertise in Europe, the Company is creating the knowledge base in India and
outside by acquisitions of Synprotec DCR Limited, IO 3S Inc. and Carbogen Amcis
AG.
QUALITY, SAFETY, HEALTH &
ENVIRONMENT (QHSE) & RESPONSIBLE CARE:
The Company's products and processes are developed in accordance with strictly
defined rules to ensure the safety and Health of workers as well as to protect
the environment. This is achieved by conducting the Risk Assessment, Safety
Audits, HAZOP study and Environment audits. Special consideration is accorded
to aspects of safety, health and environmental protection right from the start
of the development process and production.
All manufacturing plants follow responsible care. The Company is making efforts
to avoid any impact of the Company's operations on the environment and people.
Safety, Health and Environment issues are accorded top priority so as to be in
full compliance with national and international regulations. In fact the focus
of Company's efforts, in the speciality chemicals segment is on converting the
'user friendly' processes into 'eco-friendly processes.'
The Company's efforts towards environment protection are recognized by State
Level, National Level and International level Awards from time to time. During
the year the Company has won prestigious awards at:
* State level Safety Award From Gujarat Safety Council in Drugs and pharmaceutical,
Food and Dairy sector.
* National level Environment Excellence Award from Greentech Foundation in
Chemicals Sector and,
* Prashansha Patra from National Safety Council of India, Mumbai in
manufacturing sector.
The Company is also certified for Integrated Management System (ISO 9001:2000,
ISO 14001:2004 and OHSAS 18001:1999) for sites at Bavla, Naroda, Corporate
office and Mumbai Office and continuing to maintain standards there
under.
BUSINESS PROSPECTS:
The Company, in line with its vision, has firmly established itself as a
preferred partner of choice to the global Pharma majors in the rapidly emerging
Contract Research and Manufacturing (CRAM) segment, thanks to the focused and
consistent approach adopted over last several years. With the successful
delivery of various products to Solvay on long term basis, many other major
Pharma MNCs have approached the Company for long term manufacturing contracts
and many more contracts are in the pipeline. Again, while the primary focus is
on the Pharma sector, the Company is consistently striving to balance both
Pharma and non-Pharma sectors, positioning itself as a Company with extremely
strong chemistry skill sets, management depth, research centric approach and world
class facilities to compliment its efforts. Needless to say, the Company
strives to work with the Innovators in a non-conflicting environment.
The Company is indeed proud to mention that while at macro level,
The Company is well positioned to emerge as an outsourcing partner of choice
due to Company's quest for quality control, desire for innovative research
& cohesive alliance with the formulation industry.
Contract Research and Contract Manufacturing (CRAMS) business is the core of
the Company's business model. The impact of focus on CRAMS business is
reflected by the CRAMS share in the total turnover increasing from 52% in
Financial year 2005-06 to 56% in Financial year 2006-07.
With the acquisition of Carbogen Amcis AG and its full integration with the
business of the Company, future business prospects more particularly in CRAM
segment are bright.
Acquisition of Carbogen Amcis AG.:
As reported last year, the Company completed acquisition process successfully
and business of Carbogen Amcis AG. (CA) was integrated w.e.f. 23 rd August,
2006.
Carbogen Amcis is one of the top companies having a combination of Research and
manufacturing in the world. The Company will enhance the business prospects of
CA by driving synergies between the two companies. Expanding the product suite
and renewing the focus on key accounts will enhance the scale of operations.
Jointly the Indian and Swiss businesses can serve the entire drug life cycle of
15-20 years. subject also hopes to leverage its high operational efficiency in
Dishman Arabia Limited:
The Directors are pleased to inform you that another joint venture in
The said JV is to take the business of process and manufacture of
pharmaceuticals along with its supporting chemicals, intermediates and provide
know how and know how assessments in the pharmaceutical and chemical field
activities. Initially the share capital of the JV will be SR 1.00 million
(Saudi Riyals one million) and both the partners will have equal shareholding
in the said JV.
Dishman Japan Limited:
The Company has established marketing Joint Venture (JV) in
DJL will market the products and services of subject group as a whole, in
By establishing the Company in
The Company considers this as an extremely important step forward since Japan
Government has announced an open door policy for API's and intermediates and
many Japanese companies are looking for suitable partners for contract research
and API contract manufacturing on long-term basis.
Disinfectants Division:
The Company has developed a unique position in bulk actives in the area of
disinfectants. subject produces as many as 15 actives for disinfectant. Apart
from popular hospital disinfectants such as Cetrimide and Chlorhexidine, the
company's R&D has developed very sophisticated molecules such as Octenidine
and Mecetronium Etho Sulphate. This division will make product used in
Operation Theatres and related Surgical Procedures, Hospital Hygiene Products
Wound Dressings and products specialized in Oral Care and Dental Hygiene used
by Specialists as well as Consumers. The speciality products will be focused
for effective eradication of MRSA (Methicillin Resistant Staphylococcus
Aureus). The activities of division will also encompass the extending usage of
its API to Agriculture & Food Industry and for general Hygiene purpose. The
Company also plans to file several applications related patents for the
products of the division. Expense envisaged is not in excess of Rs.50 Millions
and company intends to enter into marketing relationship world-wide with
reputed Pharma companies. The Company expects a huge value addition on its bulk
actives by this strategy and in next five years, this division is likely to
contribute significant growth to subject Group's total revenue.
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT:
AN INDUSTRY OVERVIEW
The global Pharma Industry outsourcing market is estimated at USD 48 billion
with a consistent growth rate of 10% over the past 5 years and is expected to
touch USD 55 billion over the next 2 to 3 years with
The Contract Research and Manufacturing Services (CRAMS) business provides
manufacturing and research services to global pharmaceutical and agrochemical companies
in both innovative and generic space. The CRAMS segment is mainly divided into
two segments: CRAMS I (fine chemicals) and CRAMS II (advanced intermediates and
nutrition products). In FY2006, the CRAMS segment revenues contributed 61% to
total Pharmaceutical and Life Science Products (PLSP) revenues, with CRAMS I
and CRAMS II at 12% and 49% respectively. They believe that the CRAMS business
is expected to grow at a Compounded Annual Growth Rate (CAGR) of 33% from
Rs.4.2 billion in FY2006 to Rs.7.4 billion in FY2008E, with CRAMS I and CRAMS
II expected to witness 59% and 26% revenue CAGR respectively. The value growth
is expected to witness more from CRAMS I business compared to CRAMS II
business, as the stage of fine chemicals is much closer to APIs stage than
advanced intermediates.
Contract Manufacturing, Contract Research and Contract Sales are the broad
segments of the industry. API manufacturing, Clinical Research and Basic
research are the major outsourcing services to the extent which Indian service
providers are utilized. As a result, many global Pharma companies realize
With the recent announcements by many MNCs of either reduction of their work
force or closure of their manufacturing units outside
India is emerging as a major destination for contract research and
manufacturing services with its existing pool of skilled human resource, low
cost advantage, technical expertise (Information Technology, Chemistry,
Biotechnology and Process Engineering), manufacturing capability (with highest
number of USFDA approved plants), diverse genetic pool, confidentiality and
trust worthiness. subject being the first mover is one of the major players in
the field.
SWOT Analysis of the Company:
Though subject commenced as a 'Quats' Company, it being a R & D driven
Company, has focused on custom chemical synthesis for last many years, which is
generating increased revenue at higher margins.
subject undertakes Contract Research for patent / license holders of either
recently patented products or for their generic products to be marketed in the regulatory
markets and supply of trial products. It also enters into long-term supply
contracts for the supply of APIs/Intermediates. This is in addition to
subject's regular manufacture and marketing of the marketable molecules,
comprising Quats, PTCs, APIs and Intermediates etc.
Strengths :
* Management depth and ability to mange client relationships.
* R &D capabilities to develop efficient and cost effective process at
short notice having a State-of-the-Art dedicated R & D center at
Bavla.
* Enhanced presence in the international market through international
subsidiaries.
* Multi-purpose and multi-product production facilities having ISO 9001:2000,
ISO 14001:2004 and OHSAS 18001:1999 Quality certifications.
* USFDA approved Plant located at Bavla, to manufacture Eprosartan
Mesylate.
* New Acquisition of R & D companies abroad with specialization in specific
synthetic chemistry for APIs and/ or healthy pipe line product for contract
manufacturing.
Weaknesses :
* Reliance on business from a relatively smaller number of clients. However,
successful attempts made to increase the number of large clients on long-term
contract basis.
* Business revenues skewed towards Europe, though the share of
* MNCs prefer larger balance sheet. (subject balance sheet is becoming stronger
and stronger, year after year)
Opportunities :
* Large number of pharmaceutical companies losing their blockbuster drug
patents, thereby increasing the scope for outsourcing to countries that offer a
low cost manufacturing base such as
* Indian pharmaceutical segment witnessing change in business dynamics: Focus
on export orientation.
* Growth of Generics market in US and
* CMO opportunities with other large MNCs : Patented Drugs .
* High value Quats Business and newer Quats applications.
* High potency product (high cost; low volume) manufacture
* A few of the products on which R & D activities are carried out for the
clients and after completion of Phase III of trials are commercialized, may be
converted into contract manufacturing.
Threats :
* Competition from other Indian companies operating in similar segments.
* Competition from countries that offers low cost manufacturing base such as
* The patent/license holder may abandon the NCE at any stage due to various
reasons.
Segment-wise or product-wise performance:
The company's management had the foresight to position itself as a premier
contract manufacturing organization ('CMO') based on its R&D experience and
relationships developed with global MNC customers. To facilitate this
graduation, in 1997, the company set up a modern production facility at Bavla,
now a 100% EOU, near Ahmedabad. Currently, the company has eight multi purpose
production units at Bavla, out of which two (including one US FDA approved
facility) are commercially dedicated for contract manufacturing for Solvay
Pharmaceuticals B.V.,
Company's present business is organized in two major segments: (i) QUATs and
Speciality chemicals; Intermediates & APIs (Marketable Molecules or 'MM
Segment') and (ii) Contract Research and Manufacturing ('CRAM Segment') . In
each of these segments, Company undertakes 'regular' and 'customized'
production.
Regular production is the annual planned production of chemicals, intermediates
and APIs marketed by them and their subsidiaries, while customized production
is production of chemicals, intermediates and APIs undertaken by the Company
based on long-term contracts or agreements entered into with the
customers.
To continue the growth rate, the company has adopted various marketing strategies
including increase in number of clients to reduce the dependency on one or
other client, increase the number of products range to reduce risk of product
failure; to enter contract manufacturing through contract research of new
molecules etc. and enter the specific market with marketing innovation such as
in Japan through establishment of marketing Joint Venture (JV), technology
transfer in the developing markets, where technology is licenced to API
manufacturer with a stipulation that the intermediates are to be provided from
subject on a long term basis.
The break-up of Company's total income from the product segments viz. 'MM
Segment' and 'CRAMS segment' for the last three years is as under :
(Rs. In mn.)
|
Product segment |
31/03/2005 |
31/03/2006 |
31/03/2007 |
|
QUATS and Specialty Chemicals, Intermediates and APIs
(Marketable Molecules or 'MM Segment') |
838.52 |
1187.96 |
1561.63 |
|
Contract Research and Manufacturing (CRAMS) |
820.75 |
1163.27 |
1569.67 |
|
Total |
1659.27 |
2351.23 |
3131.30 |
Outlook:
The global market size for Contract manufacturing is estimated at US$ 48
billion growing at 10% per annum. This space has high entry barriers and a long
gestation period as there are stringent quality requirements; establishment of
long-term relationship, validation etc. which takes 2-3 years without any
revenues in the interim. Today,
To ensure Company's long-term success, the management is focusing on R & D
with contract research leading to future manufacturing contracts. Given the
pressure on innovators to cut costs and the long lead-time taken to ink a
manufacturing deal, they believe there is a high probability that innovators
will deal with their research partners for manufacturing as well. Contract
Research and Manufacturing (CRAM) business is the core of company's business
model and company has undertaken a series of overseas acquisitions, to seize
the opportunities in this field. After accomplishing successful small
acquisitions of Syprotec DCR Limited, in U.K. and IO3S of Bern in Switzerland,
through its wholly owned subsidiary, Dishman Switzerland Limited in January,
2006, the Company has acquired Switzerland-based CarboGen Amcis AG, engaged in
process research on APIs and low-volume, high-value API and hypo Potency
products manufacturing, in August, 2006. This has already added and will
continue to add substantially to the company's consolidated revenue.
Subject is well poised to participate in this growing opportunity. The Company
is selling its products in Europe,
Subject has been successful in achieving growth through CRAM business and
continues to strive for higher growth by entering into new long-term
contracts.
Financial Performance Review:
The financial performance of the Company as a whole (on consolidated basis) is
as under :-
Subject’s net sales turnover increased to Rs.5785.700 Millions during 2006-2007
as against Rs.2774.400 Millions during the year 2005-06, an increase of 109%
year-on-year. Out of the net sales turnover, the domestic sales was Rs.727.300
Millions while Export sales was Rs.5058.400 Millions; on a year-on-year basis,
there was an increase of 44% in Domestic sales and 124% increase in Exports
sales.
The Operating Profit increased to Rs.1384.300 Millions from Rs.725.100 Millions
in the previous year, yielding an increase of 91% over the previous year.
The Company's Profit before Tax and other adjustments increased from Rs.545.200
Millions in the previous year to Rs.959.700 Millions in the year ended
31-03-2007, yielding an increase of 76% over the previous year.
The Other Income of the Company was Rs.232.100 Millions for the year as against
Rs.38 Millions in the previous year.
Depreciation for the year was Rs.263.100 Millions compared to Rs.120.500
Millions for the previous year. The higher charge was on account of the higher
capital expenditure including setting up new R&D facility at Bavla and
acquisition of Switzerland base Company namely Carbogen Amcis AG.
The net Profit for the year increased from Rs.508.400 Millions in the previous
year to Rs.917.100 Millions, yielding an increase of around 80% over the
previous year.
Gross Block of the fixed assets at the end of the year increased to Rs.6728.800
Millions compared to the previous year's figure of Rs.2563.500 Millions.
Review of financial performance of the Company on unconsolidated (stand alone)
basis is as under :-
subject's net sales turnover increased to Rs.2799.500 Millions for the year
ended 31-03-2007 as against Rs.2156.800 Millions for the year ended 31-03-2006,
yielding an increase of 30% year-on- year. Out of the net sales turnover, the
domestic sales was Rs.727.300 Millions while Export sales was Rs.2072.200
Millions, indicating a year-on-year increase of 45% in Domestic sales and 30%
increase in Exports sales.
The Company's Profit Before Tax and other Adjustment increased from Rs.478.900
Millions in the previous year to Rs.648 Millions in the year ended 31-03-2007,
yielding an increase of 35% over the previous year.
The Other Income of the Company was Rs.141 Millions for the year as against
Rs.42.100 Millions in the previous year. This includes Rs.56.200 Millions on
account of restatement of FCCB liability and receipt of Rs.24 Millions as
dividend from the associate concern.
Depreciation for the year was Rs.142.400 Millions compared to Rs.105.800
Millions for the previous year. The higher charge was on account of the higher
capital expenditure including setting up of new R&D facility at
Bavla.
The net Profit for the year increased from Rs.457.200 Millions in the previous
year to Rs.608.700 Millions, yielding an increase of 33% over the previous
year.
The Basic Earning Per Share of the face value of Rs.2/- for the year increased
to Rs.8.73 per share from the previous year's figure of Rs.6.66 per share, an
increase of 31% on the increased share capital issued during the year.
The Diluted Earning Per Share of the face value of Rs.2/- for the year
increased to Rs.7.53 per share from the previous year's figure of Rs.5.68 per
share, an increase of 33% on the increased share capital issued during the
year.
Capital Expenditure for the year increased to Rs.798 Millions as compared to
Rs. 653.400 Millions in the previous year.
The Company earned gross Foreign Exchange of Rs.1993 Millions during the year
and the net Foreign Exchange earned was Rs.1941.200 Millions, compared to
Rs.1548.100 Millions and Rs.1502 Millions, respectively during the previous
year.
It is in trade terms with :
Ø
Ø
Amar Industries
Ø
Eskay Corporation
Ø
Perfect traders
Ø
Keyara Chemicals
Ø
Ø
Ø
Lucky Chemicals
Industries
Ø
Maruti Containers
Ø
Ami Industries
Corporation
Ø
Time Packing Limited
Ø
Chitra Engineering Works
Ø
Yasho Industries Private
Limited
Ø
Indo Chem Engineering
Company
Ø
Shreenath Enterprises
AS PER WEBSITE
Subject,
is a globally-focused company, involved in the manufacture of APIs (active
pharmaceutical ingredients), API intermediates, quaternary compounds and fine
chemicals. Headquartered in
subject is a quality conscious, fast
growing, R&D intensive organization with a progressive approach. Their
continuous progress has been achieved through the skills of their workforce,
commitment to new technologies and dedication to good customer service.
Since
1998, subject has diversified its interests to contract research and
manufacture sector. Within a short span of 5 years, subject has acheived several
contract research and manufacturing projects and is all set to emerge as
Their
"At subject they strive to be a dynamic,
environment-conscious supplier to the life sciences industry, with a relentless
drive to meet the highest quality standards required by the marketplace, with
usage of advanced technologies for improved efficiency, cost containment and
quality of human life."
Subject’s present business is organised into the
following segments:
Established Portfolio
Ø
Quats and specialty chemicals
Ø
Intermediates and active pharmaceutical ingredients
(APIs)
Specialized services
Ø
Pharmaceuticals Outsourcing
Ø
Contract manufacture
Ø
Contract research
Quats and specialty chemicals
Subject produces diverse quaternary compounds (called “quats”). Quats
are used as catalysts to transfer a reactant from one phase to another. In the
role of a catalyst, a quat provides the following benefits:
Initiates the reaction
Decreases reaction time
Decreases reaction temperature,
Eliminates the use of toxic and carcinogenic solvents
Facilitates the separation of non-reacted reactants from products
Increased yields through suppression of side reactions
Since quats are used in catalytic quantity, the additional cost involved
in using the quats is negligible and the benefits are compelling. Quats are
classified into short chain quaternary ammonium compounds, long chain
quaternary ammonium compounds, quaternary phosphonium compounds, phosphoranes,
pyridinium quats and Wittig reagents.
Strategy for quats and specialty chemical business:
In the
past subject focused more on volume sales whilst trying to ensure optimum cost
of production. This practice resulted in gaining synthetic chemistry skills in
the production process, whilst establishing excellent business relationships
with key customers in the quats market. Recently, subject changed this focus to
develop and produce niche quats that have specialised applications and have
higher prices. This ensures that subject’s portfolio of quats does not become
“commodities” in nature.
The quats produced by subject find multifarious applications as PTCs and
in manufacture of pharmaceuticals, dyes, agrochemicals, paints, perfumery
aldehydes and flavours, polymers, paper etc. PTCs are chemical substances that
improve process time and yield of chemical reactions involving two separate
phases such as liquid-solid or gas-liquid. They are integral to reactions like
alkylation, oxidation, reduction, displacement, etherification and
esterification.
Subject
has a unique advantage over competitors in quat production owing to its
dedicated facilities and longterm experience in establishing and improving
technology to manufacture quats at the least possible cost and best possible
quality. At Naroda, subject has a dedicated facility for each of
the quats and continuous production is undertaken for regular large volumes.
They have an impressive customer profile for PTC products in the chemical
industry. For quats, the client list included more than 1000 customers
including global pharma and agro majors, which are “Blue Chip” household
names”.
Intermediates and APIs
Subject
graduated from being a leading quats producer to a global supplier of
intermediates, APIs and services to the generic pharmaceutical industry,
utilizing its ability to handle complex chemistries. Expertise was built up in
the development, process optimization, scale-up and cGMP production of
intermediates and APIs. Equally, subject is familiar with international
intellectual property rights (IPR) and all processes are carefully checked to
avoid patent infringement. The experience of subject’s R&D scientists, the
competence of its chemists and the flexibility of its GMP facilities, provide
to customers products with global quality.
Subject’s capabilities include synthesis route selection with respect
for patents, laboratory process validation, optimization and verification of
the prospects for successful scale-up from bench to commercial quantities. At
the plants, production is undertaken in multi-purpose and multiproduct
equipment. Final steps of manufacture like purifications, drying and milling
are handled in separate departments and are often done with very specific
criteria to meet the most demanding customer needs.
Intermediates
Subject started investing in drug
intermediates in 1998, when s PTC customers requested the supply of drug
intermediates. In the short period since then, extensive progress has been made
in developing customer-specific intermediates. Using PTC knowledge, various
fast-moving intermediates have been synthesized and been offered at competitive
prices. subject’s drug intermediates business can be subdivided into the
following:
Ø
Drug intermediates developed by subject and offered to the
market
Ø
Drug intermediates that are specifically developed on one or
more customer’s requests. These are either offered
exclusively to these customers or to any other markets with the customers’
consent.
Bulk drugs/APIs
Certain
niche bulk drugs have been identified. Subject’s better technology, using phase
transfer catalysts, and presence in the
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.39.70 |
|
|
1 |
Rs.80.10 |
|
Euro |
1 |
Rs.56.09 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
66 |
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 |
|