MIRA INFORM REPORT
|
Report
Date : |
25.09.2007 |
IDENTIFICATION DETAILS
|
Name : |
RALLIS INDIA LIMITED |
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Registered
Office : |
Apeejay
House, 7th Floor, |
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Country
: |
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Financials
(as on) : |
31.03.2007 |
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Date
of Incorporation : |
23.08.1948 |
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Com.
Reg. No.: |
11-14083 |
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CIN
No.: [Company Identification No.] |
U36992MH1948PLC014083 |
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TAN
No.: (Tax
Deduction & Collection Account No.) |
MUMR16455F |
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PAN
No.: (Permanent
Account No.) |
AABCR2657N |
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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 : |
Manufacturing of Pharmaceuticals, Fertilisers, Fine
Chemicals and Leather Chemicals. |
RATING & COMMENTS
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MIRA’s
Rating : |
A |
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
7000000 |
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Status
: |
Good |
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Payment
Behaviour : |
Regular |
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Litigation
: |
Clear |
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Comments
: |
Subject
is a well-established and diversified company having satisfactory track. Available information indicates high
financial responsibility of the company.
Financial position of the company is good. Business is active. Payments are usually correct and as per
commitments. The company can be considered normal for business dealings
at usual trade terms and conditions. |
LOCATIONS
|
Registered
Office : |
Apeejay
House, 7th Floor, |
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Tel.
No.: |
91-22-56652700 |
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Fax
No.: |
91-22-56652842 |
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E-Mail
: |
1. vijay.rallis@rallis.sprintrpg.ems.vsnl.net.in 2. vijay.rai@rallis.sprintrpg.ems.vsnl.net.in |
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Website
: |
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Factory: |
Rallis
House, 21, Damodardas Sukhadvala Marg, Mumbai 400 001, |
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Agrochemicals Plants : |
Ø Thane-Belapur Road, Thane - 400
601, Ø Village Bir Dadralab Block, Ø Survey No. 16/2B, 16/2C, 146, Ø GIDC Estate, Plot No. 3301,
Ankleshwar - 393 002, District Bharuch, Ø GIDC Estate, Plot No. 2808,
Ankleshwar - 393 002, District Bharuch, Ø C 5/6, MIDC Industrial Area, Phase
III, Shivani, Ø Plot No. D-26, Lote Parsuram,
MIDC, Near Hotel Vakratunda, Taluka Khed, District Ratnagiri - 415 722, Ø 20, Ø 15 A, MIDC, Turbhe, Ø GIDC Estate, Plot No. 3000,
Ankleshwar – 393 002, District Bharuch, Ø IDA, Phase II, Patancheru, Medak
District, |
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Fine Chemical Plants : |
Ø Sandynalla, Ø A-14/A, Sipcot Industrial Complex,
Cuddalore - 607 005, Tamil Nadu, |
DIRECTORS
|
Name : |
Mr. R.
Gopalakrishnan |
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Designation
: |
Chairman |
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Name : |
Mr.
Venkatrao S. Sohoni |
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Designation
: |
Managing
Director |
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Name : |
Dr. F. A.
Mehta |
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Designation
: |
Director |
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Date of Birth : |
31.07.1928 |
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Qualification : |
Master of
Arts in Politics and History, Master of Science in Economics and Doctorate in International
Economics from the |
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Date of Joining : |
23.08.1972
and on 28.12.1992 appointed as Chairman 31.03.2003
resigned as Chairman |
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Other Directorships : |
Ø
Siemens Limited, Chairman Ø
Tata McGraw – Hill Publishing Company Limited – Chairman Ø
Tata Investments Corporation
Limited Ø
Escorts Limited Ø
IVP Limited |
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Name : |
Dr. Ram
S. Tarneja |
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Designation
: |
Director |
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Date of Birth : |
07.12.1931 |
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Qualification : |
B.A. (Hons.), |
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Date of Joining : |
30.05.1985 |
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Other Directorships : |
Ø Jolly
Board Limited – Chairman Ø NESCO
Limited Ø Ballarpur
Industries Limited Ø Bennett
Coleman & Company Limited Ø Bharat
Gears Limited Ø Gati
Limited Ø Housing
Development Finance Corporation Limited Ø ITC
Limited Ø Otis
Elevator Company ( Ø Phillips
Carbon Black Limited Ø Transcorp
International Limited Ø Phoenix
Township Limited Ø Bhoruka
Textiles Limited Ø GIVO
Limited Ø Sir
Owens Williams Innovestment Limited Ø Nissin
ABC Logistics Private Limited – Chairman Ø Arim
Metal Industries Private Limited -
Vice Chairman |
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Name : |
Mr. V. N.
Nadkarni |
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Designation
: |
Director |
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Name : |
Mr. Russi
Jal Taraporevala |
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Designation
: |
Director |
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Name : |
Mr. B. D.
Banerjee |
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Designation
: |
Nominee
Director |
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Name : |
Mr. Homi
R. Khusrokhan |
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Designation
: |
Director |
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Name : |
Mr.
Prasad R. Menon |
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Designation
: |
Director |
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Name : |
Mr. E A Kshirsagar |
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Designation
: |
Director |
MANAGEMENT TEAM
|
Name : |
Mr.
Venkatrao S. Sohoni |
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Designation
: |
Managing
Director |
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Name : |
Mr.
Shirin V. Balsara |
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Designation
: |
Director - Legal & Company Secretary |
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Name : |
Mr. B. S.
Uberoi |
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Designation
: |
Executive
Vice President - FCM & Corporate
Affairs |
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Name : |
Mr. H. C.
Ahuja |
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Designation
: |
Vice
President - Supply Chain &
Manufacturing |
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Name : |
Mr. V. G.
Gadre |
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Designation
: |
Chief
Information Officer |
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Name : |
Mr. Anil
Mehta |
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Designation
: |
Vice
President - International Business |
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Name : |
Mr. M. S.
Mithyantha |
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Designation
: |
Vice
President - Research & Development |
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Name : |
Mr.
Soumen Mitra |
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Designation
: |
Chief
Financial Officer |
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Name : |
Brig. J.
S. Oberoi |
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Designation
: |
Vice
President - Agri Business |
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Name : |
Mr. K. N.
Pardiwalla |
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Designation
: |
Chief
Internal Auditor |
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Name : |
Mr. A. K.
Shetty |
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Designation
: |
Vice
President - Sales & Marketing |
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Name : |
Ms. Aruna
Bhinge |
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Designation
: |
General
Manager – Strategic Planning |
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Name : |
Mr.
Rajesh Dahiya |
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Designation
: |
Head –
Human Resources |
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Name : |
Mr. P. S.
Meherhomji |
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Designation
: |
Company
Secretary |
MAJOR SHAREHOLDERS
Distribution
of Shareholding as on Quarter ended 30th June, 2007
|
Names of Shareholders |
No. of Shares |
Percentage of Holding |
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Indian |
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Bodies Corporate |
5417387 |
45.20 |
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Public |
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Institutions |
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Mutual Funds / UTI |
2962340 |
24.72 |
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Financial |
10738 |
0.09 |
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Central |
53410 |
0.45 |
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Insurance |
395061 |
3.40 |
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Foreign Institutional |
107308 |
0.90 |
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Non-Institutions |
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Bodies Corporate |
931040 |
7.77 |
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Individuals- |
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Individual |
1479028 |
12.34 |
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Individual |
627781 |
5.24 |
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Any Other (Trusts) |
500 |
0.00 |
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Total |
11984593 |
100 |
BUSINESS DETAILS
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Line
of Business : |
Manufacturing of Pharmaceuticals, Fertilisers, Fine
Chemicals and Leather Chemicals. |
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Products
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Exports
to : |
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Imports
from : |
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PRODUCTION STATUS
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Particulars |
Unit |
Installed Capacity |
Actual Production |
PESTICIDES:
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Formulations |
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Solids |
Tonnes |
22825 |
13364 |
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Liquids |
Kiloliters |
17600 |
8731 |
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Plant
Growth Nutrients |
Tonnes |
NA |
570 |
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Gelatine |
Tonnes |
0.000 |
0.000 |
|
Phosphoryl
(Animal Feed Supplement) |
Tonnes |
0.000 |
0.000 |
GENERAL INFORMATION
|
No. of
Employees : |
1038 |
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Bankers
: |
Ø State Bank of Ø Union Bank of Ø Deutsche Bank Ø Citibank N.A. Ø Credit Agricole Indosuez Ø Corporation Ø BNP Paribas Ø HDFC Bank Limited Ø IDBI Bank Limited Ø UTI Bank Limited Ø UCO Bank Ø United Western Bank Limited |
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Banking Relations : |
Good |
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Auditors
: |
S. B.
Billimoria & Company Chartered Accountants |
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Solicitors
& Advocates: |
Crawford Bayley and Company |
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Associates
: |
Ø Akola Chemicals Limited Ø Amba Trading & Manufacturing
Company Limited Ø Pazchem Limited |
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Subsidiaries
: |
Ø Ralchem Limited Ø Rallis Hybrid Seeds Limited Ø Rallis Farm Management Services
Limited Ø Siris India Limited Ø Rallis Finance & Investments
Company Limited Ø Sankhya Garments Limited |
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Membership
: |
Ø Confederation of Indian Industry |
CAPITAL STRUCTURE
Authorised
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
50,000,000 |
Equity
shares |
Rs. 10/- |
Rs. 500.000 millions |
|
150,000,000 |
Cumulative
Redeemable Preference shares |
Rs. 10/- |
Rs. 1500.000 millions |
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Total |
|
Rs. 2000.000 Millions |
Issued,
Subscribed & Paid-up Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
11,980,000 |
Equity
shares |
Rs. 10/- |
Rs. 119.800 millions |
|
88,000,000 |
7.5%
Cumulative Redeemable Preference Shares |
Rs. 10/- |
Rs.
880.000 millions |
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Total |
|
Rs. 999.800 millions |
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 |
999.800 |
999.800 |
999.848 |
|
2]
Reserves & Surplus |
1117.900 |
756.300 |
461.781 |
|
3] Profit
& Loss Account |
0.000 |
0.000 |
0.000 |
NETWORTH
|
2117.700 |
1756.100 |
1461.629 |
|
LOAN
FUNDS |
|
|
|
|
1]
Secured Loans |
287.800 |
323.900 |
560.691 |
|
2]
Unsecured Loans |
60.100 |
832.600 |
824.619 |
TOTAL
BORROWING
|
347.900 |
1156.500 |
1385.310 |
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|
|
|
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TOTAL
|
2465.600 |
2912.600 |
2846.939 |
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APPLICATION
OF FUNDS |
|
|
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|
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|
FIXED
ASSETS [Net Block] |
1393.400 |
1613.900 |
1708.249 |
|
Capital
work-in-progress |
47.700 |
38.900 |
110.318 |
|
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|
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INVESTMENTS |
317.300 |
494.800 |
4.575 |
|
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CURRENT
ASSETS, LOANS & ADVANCES |
|
|
|
|
Inventories |
1235.200 |
1433.200 |
1203.863 |
|
Sundry
Debtors |
924.000 |
867.300 |
873.977 |
|
Cash
& Bank Balances |
229.000 |
140.100 |
133.909 |
|
Loans
& Advances |
1119.000 |
**816.900 |
486.127 |
|
Total Current Assets |
3507.20 |
3257.500 |
2697.876 |
Less: CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
Current
Liabilities |
2350.600 |
2250.100 |
1492.304 |
Provisions
|
470.700 |
296.800 |
282.415 |
Total Current Liabilities
|
2821.300 |
2546.900 |
1774.719 |
|
Net Current Assets |
685.900 |
710.600 |
923.157 |
|
|
|
|
|
|
MISCELLANEOUS
EXPENSES |
21.300 |
54.400 |
100.640 |
|
|
|
|
|
TOTAL
|
2465.600 |
2912.600 |
2846.939 |
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
6768.000 |
6536.500 |
6105.300 |
|
|
Other Income |
841.500 |
389.800 |
472.800 |
|
|
Stock adjustment |
(281.400) |
290.000 |
78.900 |
|
|
Total
Income |
7328.100 |
7216.300 |
6657.000 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
550.100 |
445.300 |
341.700 |
|
|
Provision for Taxation |
(31.000) |
20.100 |
6.700 |
|
|
Profit/(Loss) After Tax |
581.100 |
425.200 |
335.000 |
|
|
|
|
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Earnings
in Foreign Currency : |
|
|
|
|
|
Total
Earnings |
NA |
1531.700 |
1195.293 |
|
|
|
|
|
|
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|
Imports
: |
|
|
|
|
|
Total
Imports |
NA |
NA |
938.237 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Excise duty |
547.500 |
614.000 |
624.100 |
|
|
Manufacturing Expenses |
391.600 |
418.700 |
145.300 |
|
|
Administrative Expenses |
687.700 |
658.000 |
754.900 |
|
|
Raw Material Consumed |
3508.500 |
3716.000 |
3421.000 |
|
|
Employee cost |
528.300 |
481.500 |
525.200 |
|
|
Miscellaneous expenses |
392.400 |
336.300 |
271.900 |
|
|
Interest |
203.200 |
159.700 |
204.600 |
|
|
Power & Fuel |
208.800 |
221.400 |
209.300 |
|
|
Depreciation & Amortization |
310.000 |
167.500 |
161.100 |
|
Total
Expenditure |
6778.000 |
6773.1000 |
6317.400 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2007 |
|
Type |
|
|
1st Quarter
|
|
Sales Turnover |
|
|
1179.100 |
|
Other Income |
|
|
7.500 |
|
Total Income |
|
|
1186.600 |
|
Total Expenditure |
|
|
1117.500 |
|
Operating Profit |
|
|
69.100 |
|
Interest |
|
|
11.900 |
|
Gross Profit |
|
|
57.200 |
|
Depreciation |
|
|
36.800 |
|
Tax |
|
|
6.300 |
|
Reported PAT |
|
|
14.200 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.39 |
0.79 |
1.44 |
|
Long Term Debt -Equity Ratio |
0.05 |
0.57 |
0.92 |
|
Current Ratio |
1.01 |
1.17 |
1.25 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
2.40 |
2.32 |
2.20 |
|
Inventory |
5.07 |
4.96 |
5.43 |
|
Debtors |
7.56 |
7.51 |
4.70 |
|
Interest Cover Ratio |
0.82 |
3.06 |
2.39 |
|
Operating Profit Margin (%) |
7.03 |
10.03 |
10.64 |
|
Profit Before Interest and Tax Margin (%) |
2.45 |
7.47 |
8.00 |
|
Cash Profit Margin (%) |
5.37 |
7.42 |
7.20 |
|
Adjusted Net Profit Margin (%) |
0.79 |
4.86 |
4.56 |
|
Return On Capital Employed (%) |
6.25 |
17.42 |
14.34 |
|
Return on Net Worth (%) |
(1.18) |
34.53 |
28.27 |
LOCAL AGENCY FURTHER
INFORMATION
HISTORY
Subject was incorporated in the year 1948. Subject, the successor
of Rallis Brothers and a member of Tata Group is engaged in the business of
manufacture and Trading of Pesticides, Fertilisers and Finechemicals.
The Company's Agribusiness division is the distributor of Pesticides,
fertilisers, micro-nutrients, seeds, animal feed and other agro inputs. Rallis
is the second largest pesticide company in the country with a market share of
13%.
The company discontinued marketing of Monsanto seeds during
the year 2001-02. And the company is now looking at national and international
marketing alliances, including possible tie-ups in the area of
bio-technology.
The company has commenced production of a range of ethylene oxide condensates
based surfactants, which found captive use in its agrochemical formulations during
1999-2000. This help the company to reduce the cost. During 2000-2001, the
company established seed processing facilities at Dhar (MP) and Patancheru,
near
The Rallis Agro Research Centre, based in
The Fine Chemicals division of the company operates two factories both in
Tamilnadu at Ootacamund and Cuddalore. The company has suspended the
manufacturing activity at Cuddalore plant as the thirdparty manufacturing
offers a cheaper alternative. Rallis is the leading producer and distributor of
agro-based tanning materials from a variety of forest products. During 2004,
the company sold out its Gelatin business of the Fine Chemicals Division to
Sterling Biotech Limited
Rallis is undertaking restructuring of its business which
includes consolidation, merger and selloff. First step in this regard was taken
by Rallis is merger of its 5 subsidiaries viz Ralchem Limited,Rallis Finance
& Investments Company Limited,Rallis Hybrid Seeds Limited,Rallis Farm
Management Services Limited and Sankhya Garments Limited with itself. The
petitions has been filed and the company awaiting final hearing by the court.
It has also filed a petition for merging sixth subsidiairy viz Siris India Limited
with itself. During 2003-04, the Company received the approval from the court
for the merger of six subsidiaries with itself.
The Pharmaceutical business of Rallis, which engaged in marketing of household
remedies and manufacturing of basic drugs was sold to Shreya Life Sciences Pvt Limited
a member of
Rallis has discontinued the distribution of bulk fertilizers and the
arrangement with Tata Chemicals came to an end from 1st March,2003. It is also
shifting its focus from a seeds distributor to become a sourcing and branding
company with focussed R&D.
During 2005, the company transferred its Knowledge Services
Business which includes the Research & Development Centre at
In the year 2005, the company increased its installed
capacity of Pesticides (Solids) by 920 Tonnes. With this expansion, the total
installed capacity of Pesticides (Solids) has increased upto 22825
Tonnes.
In 2006, The company has been established new
The company has started the sourcing and markeitng of Bt Cotton Seeds. An
In 2007, The company has incorporated a subsidiary in
The first year of Bt cotton seed marketing has been rewarding and valuable
experience gained, which will support expansion of this activity in the coming
year. Preparation to expand into marketing of seeds in the rice and vegetable
markets has been initiated.
COMPANY
PERFORMANCE:
During the year, the Company earned a net profit
of Rs.5811 millions, as against a profit of Rs.42.52 Million in the previous
year.
During the 2nd quarter of the FY 2006-07, the Company took necessary steps to
realize profits from the sale of unutilized assets, including land. Based on
technical estimates, the Company has accelerated the depreciation charge on
certain facilities, which has resulted in additional expenditure of Rs.148 Million.
Further, based on more stringent criteria set for evaluating the receivables,
expired materials, etc. recognized in earlier years, there has been an
additional charge of Rs.200 Million. The impact of all these decisions was
reflected in the results reported for the quarter ending September 30, 2006.
As per Indian GAAP, the revenue from the sale of assets had to be shown under
the heading 'Other Income' and the provisions made had to be included in the
figure for'Other expenditure' and 'Depreciation' In the interest of
transparency, the Directors wish to point out that profit from operations in
the year ended March 31, 2007 should be considered as being Rs.350 Million
(Rs.300 Million in FY 2005-06). This increase of 16.7% is the real indicator of
progress made in managing the business of the Company. Such a comparison is not
readily available from the numbers as presented because of the guidelines for
reporting of financial results which the Company has to adhere to.
It is hoped that the shareholders will recognize, in these results,
Management's priority for ensuring
profitable growth of the core business of the
Company.
OPERATIONS:
Pesticides:
The domestic pesticides market showed virtually no growth during the year.
Generic competition was severe and margins were under pressure. The erosion of
selling prices was moderate compared to last year and this downward pressure is
expected to decrease in future.
Lack of pest pressure in the Rabi rice markets and the growth of Bt cotton
acreage were some of the reasons for this poor growth of pesticides sales, in
addition to the inconsistent monsoon.
The Company's sales, however, showed a modest increase. This was achieved
because the Company has an excellent distribution network covering the entire
country and could take advantage of opportunities in areas less affected by
poor rainfall.
New products introduced - particularly Applaud - to control Brown Plant Hopper
in rice and Taqat - a combination fungicide - performed well and helped the
Company to increase its sales in a stagnant
market.
International Business grew marginally because
stocks in the pipeline at the start of the year remained unconsumed in some
territories. There has, however, been a satisfactory increase in the alliances
formed and the prospects for increasing export business in the coming year are
favorable.
Seeds and Plant Growth Nutrients:
Seeds and Plant Growth Nutrients still represent
a small share of the Company's sales and profits. The first year of Bt cotton
seed marketing has been rewarding and valuable experience gained, which will
support expansion of this activity in the coming year. Preparation to expand into
marketing of seeds in the rice and vegetable markets has been initiated.
Leather Chemicals:
Sales increased by 15% compared to the prior
year. Working capital was controlled satisfactorily.
Research & Development:
There was continued progress in the NMITLI (New Millennium Indian Technology
Leadership Initiative) project. The molecules identified as fungicides will now
be developed further. New formulations and combinations of currently marketed
products to ensure better efficacy and differentiation as well as improvements
in manufacturing processes to enable better yields are focus areas for this
Group.
Submission of Registration dossiers to enable sale of the Company's products in
Taxation:
In accordance with the Accounting Standard AS-22
accounting for taxes on income, deferred tax asset amounting to Rs.81.1 Million
is not recognized in view of uncertainty of its reversals in the future.
SUBSIDIARY:
During the year, the Company has incorporated a subsidiary in
The subsidiary has not yet completed its first year of operations and hence its
audited accounts are not available for y'~ inclusion in this year's annual
report. For this reason, its accounts have not been consolidated with the
accounts of the Company as on 31st March, 2007.
The Company has applied to the Central Government for exemption from attaching
the audited accounts of the subsidiary with the balance sheet of the
Company.
A.
CONSERVATION OF ENERGY: a) Energy Conservation Measures Taken:
Implementation of novel technologies along with
the ongoing TPM (Total Productive Maintenance) initiatives (e.g. commissioning
of Captive Power Plant) has helped the Company in energy conservation during
the year; To maintain the momentum of enterprise value creation process, DISHA
(Drive Innovative Solutions with Hyper Achievements) has begun to put increased
emphasis on energy conservation. Under this initiative, various audits were
conducted and the findings are being implemented through process and project
execution. Increased market demand for in-house produced technical products was
met by achieving improved cycle time coupled with effective integration of
various support processes, thereby eliminating major capital expenditure. The
approach to cost containment is being achieved by means of energy conservation,
high plant utilization etc.
On Manufacturing and Supply chain front, demand
and supply equilibrium has improved compared to that of previous year. Spirit
of dedication and unceasing efforts of devoted teams within the Organization
resulted in reduction of inventories, and better working capital management that
were under regular management review against industry benchmarks.
b) Additional Investments and Proposals,
if any, being implemented for reduction of Energy
Consumption:
Project DISHA identified various avenues to bring in improvements, like replacement
of high energy consuming fittings/appliances with modern energy efficient ones,
alternate fuels etc. and they have resulted in substantial reduction in energy
consumption. Modernization of the manufacturing plants was done for process
improvement, capacity enhancement and automation for reducing variability in
operation.
(1)Specific
areas in which R & D is carried out by the Company:
Chemical synthesis/process development of new
products in the areas of agrochemicals was carried out. Through 'Design of
Experiments' (DOE), process improvement and cycle time reduction were
undertaken in the manufacture of existing products. Safety, Health and
Environment (SHE) issues were given special emphasis in the process development
work.
New formulation development work was undertaken with specific objective of
preparing products with enhanced bioefficacy and increased safety to end-user.
Development of eco-friendly products was given special attention. Several
eco-friendly formulations are under various stages of development. Efforts
continued on developing cost-effective packaging with minimal environmental
impact.
INDUSTRY
STRUCTURE AND DEVELOPMENTS:
The Indian agrochemical industry experienced a modest year and the market
showed a marginal decline during the year 2006-07. The uneven distribution of
the South West monsoon adversely affected
Acreage under Bt Cotton increased in all the
cotton growing areas. Heliothis (American Bollworm) incidence in the cotton
crop remained low. However, there was increased incidence of Sucking Pests,
Spodoptera and Weeds. Consequently, there was reduced off take for Heliothiis
chemicals and an increase in volumes for other segments.
Industry witnessed the introduction of new fungicide and insecticide products
from few players especially for paddy, and in the fruits and vegetables crop
segments.
Pesticide raw material costs, particularly for
petroleum based inputs, alcohols and metals like copper have gone up during the
year, resulting in the overall cost escalation of products like Neonicotinoids,
Wheat Herbicides, synthetic pyrethroids and other generics. This has lead to
pressure on realizations and margins. The Company focused on cost effectiveness
and brand building initiatives to protect the price realization and
profitability.
The drivers of growth of the agrochemical industry in 2007-08 would be normal
and well distributed monsoon, moderate pest infestation, improved acreages for
key crops like cotton, paddy, chilli and wheat and improved affordability for
farmers because of good commodity prices.
Rallis' overall performance:
The financial year ended with a net profit of Rs.58.11 Million, as against a
net profit of Rs.425.2 Million in the previous year.
REVIEW OF
OPERATIONS:
Agro
Inputs:
(1)
Pesticides:
a)
Domestic formulations business:
The Company's domestic formulations business has
shown 6% growth in 2006-07 in an environment of marginal decline in
consumption. This was possible due to timely introduction of new products,
coupled with aggressive demand generation work at the farmer levels. The
Company introduced three new products - Nova, Applaud and Taqat during the year
and has received a very good response from the farmers for these. Nova and
Spiro brands have contributed to the growth in the Spodoptera segment in Cotton,
while Applaud was a major growth driver in the paddy Brown Plant Hopper
segment. Taqat has contributed to the growth in the Fruits and Vegetable
segment. Product positioning and Brand building efforts of Applaud and Taqat
were well received by customers and enhanced their market presence
considerably. The Company is putting all round efforts to introduce new
products continuously.
The Company has also registered a growth in sales of Tata Metri, a major brand
in the herbicides segment due to increased use on Sugarcane crop.
For the year 2007-08, the Company has clearly identified the focus products and
priority segments to maintain the thrust in growth areas. Matching customer
contact programs are chalked out to enable the fulfillment of marketing plans.
The Company has taken initiatives to strengthen present farmer contact program
(Standard Visit List) by introducing Power Farmer Concept to enhance the Farmer
Relations. Power Farmer program in combination with strengthening of 4S
Campaigns and Help lines will give the Company great impetus in the direction
of customer centric approach. 'Dr. Vishwas' will remain as a communication
package in all their customer related programs. The Company is widely using
Focus Group discussions frequently to understand the customer needs.
The Company has already initiated programs towards strengthening the
relationship with channel partners who are vital links in converting the demand
generated through various farmer level programs.
b) Institutional Business:
The Domestic Institutional business maintained its market share during the year
2006-07 by achieving its budgeted sales in all Technical and Bulk products.
However, profitability suffered on account of severe price erosion.
Seed Treatment Chemicals business grew significantly in the Bt cotton segment
and the Company could take a substantial share in it.
Major challenge to institutional business continues to be the competition from
low cost sources like
c) International Business:
The International business achieved sales of Rs.1550 Million, a growth of 2%
over the last year. This was achieved in spite of difficult conditions in the
international market, wherein the world market dropped by 3.7% over the previous
year.
This was achieved by focusing on growth in supply contracts with key customers
and sales in new geographies. The Company also initiated and stabilized the
Australian operations, the new subsidiary of subject.
2006-07 was an important year for the International Business Division as it was
recognized as a crucial growth area for the Company. The Company took the help
of a world renowned business consultancy firm and jointly with Company
officials, worked out an aggressive plan for growth. This initiative has been
named as Apollo, signifying the Greek God for Sun and Growth. Apollo plan
focuses on securing contract manufacturing projects, entry in protected markets
with registrations, expansion of operations into countries with registration based
sales. The Company has put together clear projects to action these initiatives.
There are teams working on these projects, with an overall Champion for
Apollo.
(2) Seeds:
The Company was able to anticipate the benefits of Bt Cotton and proactively
entered this growing segment during the last year. Their alliance with
Nuziveedu Seeds, who are the leaders in Bt Cotton seeds, is yielding good
results which are evident in success of advance booking scheme. The Company
marketed superior quality cotton seeds of Nuziveedu seeds, carrying
biotechnology traits in their brand names in key markets. More than 0.1000
million farmers benefited because of introduction of Bt Cotton by the Company
and the number is multiplying many fold in the coming year. Hybrid Rice segment
is likely to grow fast due to higher yield potential. The Company is planning
to enter this segment through the alliance route and help in improving the
profitability and attractiveness of Rice Cultivation in
(3) Plant Growth Nutrients:
Plant growth nutrients specially improve the
quality and shelf life of fruits and vegetables, which in turn helps the
farmers to add value and realize higher price. With the retail revolution
gaining ground and increased emphasis by consumer on quality of fresh fruits
and vegetables, due focus was given on sales of Plant Growth Nutrients in this
growing segment.
Product rationalization by phasing out the low contributing products and
focusing on high contributing products like 0Solubor' has given good
results.
Leather Chemicals:
Sales to small and medium tanners were affected due to shortage of hides and
consequently high prices, and the rising competition especially from
Usage of fat liquors and syntans from their
Agency ICAI is gaining ground with technical trials and positive results in
tannery belts.
Exports of Myrabalam gained momentum in the
latter part of the year and is expected to do well in future
as a mixture with other veg tans. Trial
consignments have been sent to
Reduction of fixed expenses, inventory control and increase in third party
business to reduce overdue outstandings, is their prime focus.
OPPORTUNITIES AND OUTLOOK:
Rapid growth in area under Bt Cotton hybrids and improvements in yield of
cotton crop is opening up the opportunities for more consumption of sucking
pest insecticides, seed treatment chemicals, fungicides, herbicides and plant
growth nutrients. The Company would also gain in its Bt cotton seeds business
due to the same reason. The Company stands strong in the portfolio for cotton
farmers.
The Company has successfully launched three new
products in the year 2006-07 - Nova, Applaud and Taqat. Especially, Applaud has
been a great success in the year, wherein the Company gained a phenomenal
response from paddy growers. All the three brands have been very well received
in the very first year of launch and are expected to grow further in future.
As per website details
Subject units awarded
5 star rating for Best Practices by British Safety Council Mumbai, April 2007
Three subject units, located at Ankleshwar, Lote and Turbhe,
after undergoing independent evaluation by British Safety Council auditors for
compliance with best practices, have been awarded a 5 star grading for health
and safety performances. The ratings demonstrate the company’s commitment to
best practices towards health and safety. The three units had shown sustenance
of best practices as reflected in their internal monitoring.
In pursuit of world-class standards across its manufacturing
units, subject has adopted the elements of British Safety Council in the
processes of safety and health management system for compliance with performance
measures.
Subject awarded RBNQ
Award Mumbai, March 2007
Subject has been awarded a Commendation Certificate in the
2006 cycle of the IMC Ramkrishna Bajaj National Quality (RBNQ) Award in the
category - Manufacturing.
The RBNQ Award evaluation process is rigorous and has high
standards for Business Excellence. To be chosen for a commendation certificate
is an achievement that all at subject can be proud of.
IMC RBNQA model is same as Tata Business Excellence Model.
Over years IMC RBNQA has become one of the prestigious awards in
IMC RBNQA committee
identified followings, as benchmark practices of subject:
1. Cascading of Company goals to last level
2. Rallis Internal Control Rating (RICR)
3. SAP , they way we leverage
4. 4S & Dr. Vishwas (Marketing practices)
5. Arjun training (sales training)
6. TPM with 6-Sigma implementation in factories
All those responsible for and involved with the processes
that have enabled subject to qualify for this recognition have to be
congratulated.
Subject doubles
dividend to 80 per cent for FY 2006-07: significant increase in Q4
Mumbai,
April 2007:
Q4 FY 2006-07
Subject reported 11.4 per cent increase in sales
and a 219 per cent increase in PAT for quarter ending March 31, 2007, compared
to last year’s corresponding period. The board of directors also recommended a
dividend of 80 per cent for the financial year.
The continuing success of newly introduced products Applaud and Taqat during
this quarter ensured an improved product mix. The overall margin increased from
45 per cent last year to over 50 per cent during the current quarter.
Sales of Applaud — a novel insect growth regulator used to control the dread
Brown Plant Hopper in rice — reached a level of over Rs370 crore during this
first year of its launch.
Whole year FY 2006-07
Although the crop protection industry saw a
decline of sales, subject increased sales.
EBITDA for the year was 39 per cent higher at Rs
969.000 millions compared to Rs 697.000 millions last year.
PAT at Rs 581.100 millions is 37 per cent higher than the previous year.
Growth
The company is poised to expand its operations
abroad and also to introduce new products which will meet the changing pest
problems in
The company also reported receiving the coveted 5 star rating from the British
Safety Council for its factories in Lote, Turbhe and Ankleshwar.
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 |
8 |
|
PAID-UP
CAPITAL |
1~10 |
7 |
|
OPERATING
SCALE |
1~10 |
7 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS
SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT
LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
|
|
DEMERIT
POINTS |
|
|
|
--BANK
CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER
ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT
POINTS |
|
|
|
--SOLE
DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT
ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER
MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
64 |
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 |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound
financial base with the strongest capability for timely payment of interest
and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working
capital. No caution needed for credit transaction. It has above average
(strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial & operational base
are regarded healthy. General unfavourable factors will not cause fatal
effect. Satisfactory capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered
normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable
factors carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent.
Repayment of interest and principal sums in default or expected to be in
default upon maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists.
Caution needed to be exercised |
Credit not recommended |