MIRA
INFORM REPORT
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Report Date : |
26.04.2008 |
IDENTIFICATION
DETAILS
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Name : |
HIGH STREET PHOENIX– UNIT OF THE PHEONIX MILLS LIMITED |
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Registered Office : |
462, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
27.01.1905 |
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Com. Reg. No.: |
000200 |
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CIN No.: [Company
Identification No.] |
L17100MH1905PLC000200 |
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Tan No : |
MUMT09705D |
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Pan No : |
AAACP3325J |
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Legal Form : |
Public Limited Liability Company. Company’s Shares are listed on the
Stock Exchange. |
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Line of Business : |
Subject is engaged in the business of cotton and blended yarn, real
estate, construction, and entertainment. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 8383568 |
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Status : |
Very Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a reputed Company having fine track. Available Information
indicates high financial responsibility of the company. Trade relations are
fair. Business is active. Payments are reported as usually Correct and as per
commitments. The Company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to
long–run. |
LOCATIONS
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Registered Office / Corporate Office: : |
462, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013, Maharashtra,
India |
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Tel. No.: |
91-22-2496 4307 / 8 / 9 |
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Fax No.: |
91-22-2493 8388 |
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E-Mail : |
phoenix_mills@vsnl.com |
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Website : |
http://www.thepheonixmills.com |
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Admin Office : |
Market City Resources Private Limited, Shree Laxmi Woolen
Mills Estate, R R Hosiery Building, Ground Floor, Shakti Mills, Dr. E Moses
Road, Mahalaxmi, Mumbai – 400 011, Maharashtra, India. |
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Tel. No.: |
91-22-3001 6600 |
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Fax No.: |
91-22-3001 6601 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. Ashok Kumar Ruia |
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Designation : |
Chairman and Managing Director |
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Age : |
64 Years |
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Qualification : |
Graduate from Cambridge |
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Other Directorship : |
v Bellona Finvest
Limited v Pallazzio Hotels
and Leisure Limited v Market City
Developers Limited v Galaxy
Entertainment India Limited |
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Name : |
Mr. Atul Ruia |
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Designation : |
Jt. Managing Director |
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Age : |
36 Years |
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Qualification : |
Chemical Engineer Bachelors in Business Management |
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Other Directorship : |
v Galaxy
Entertainment Corporation Limited v U P Asbestos
Limited v Bellona Finvest
Limited v Pallazzio Hotels
and Leisure Limited v Market City
Developers Limited v Galaxy Life
Style Restaurants Limited |
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Name : |
Mr. Pramod Rawool |
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Designation : |
Wholetime Director |
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Age : |
52 Years |
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Qualification : |
B. Sc. |
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Name : |
Mr. Bharat Bajoria |
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Designation : |
Director |
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Age : |
53 Years |
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Qualification : |
B. Sc. (Hons.) |
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Other Directorship : |
v The Bormah Jan
Tea Company (1936) Limited v Teesta Valley
Tea Company Limited v Teesta Valley
Exports Limited v McLeod and Company
Limited v McLeod Russel
India Limited v Globe (India)
Limited v Doom Dooma Tea
Company Limited v Tezpo Tea
Company Limited |
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Name : |
Mr. Anand Bajoria |
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Designation : |
Director |
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Age : |
34 Years |
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Qualification : |
B B A |
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Other Directorship : |
v Huldibari
Industries and PLN Company Limited v Somabaria
Company Limited v Indo Carbon
Industries Limited v Express
Newspapers Limited |
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Name : |
Mr. Amit Kumar Dabriwala |
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Designation : |
Director |
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Age : |
34 Years |
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Qualification : |
B. Com |
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Other Directorship : |
v Dabriwala
Banijya Udyog |
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Name : |
Mr. Amit Dalal |
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Designation : |
Director |
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Age : |
44 Years |
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Qualification : |
B.Com; PGDBM |
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Other Directorship : |
v H L Investment
Company Limited v Manugraph India
Limited v Sutlej Textiles
and Industries Limited |
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Name : |
Mrs. Priti Khimji |
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Designation : |
Director |
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Age : |
41 Years |
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Qualification : |
B. Com; FGA |
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Name : |
Mr. Shiv Ramakrishnan Iyer |
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Designation : |
Director |
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Age : |
40 Years |
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Qualification : |
B. Com; FCA |
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Other Directorship : |
v Man
Infraconstruction Limited v Praj Industries
Limited |
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Name : |
Mr. Bhanu Patki |
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Designation : |
Director |
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Age : |
45 Years |
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Qualification : |
B. Arch (Hons.) |
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Name : |
Mr. Suhail Nathani |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Neelabja Chakrabarty |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 30.09.2007
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Category of Shareholders |
No.
of Shares |
%
of Holding |
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(A) Shareholding
of Promoter and Promoter Group2 |
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(1) Indian |
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Individuals/ Hindu Undivided Family |
1354706 |
7.08 |
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Bodies Corporate |
7815294 |
40.84 |
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Sub Total (A)
(1) |
9170000 |
47.92 |
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(B) Public
shareholding |
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(1) Institutions |
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Mutual Funds/ UTI |
315681 |
1.65 |
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Financial Institutions / Banks |
14100 |
0.07 |
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Foreign Institutional Investors |
8159216 |
42.64 |
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Sub-Total (B)
(1) |
8488997 |
44.36 |
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(2)
Non-institutions |
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Bodies Corporate |
195062 |
1.02 |
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Individuals |
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Individuals -i. Individual shareholders
holding nominal share capital up to Rs 0.100 million |
1120354 |
5.85 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 million |
143382 |
0.75 |
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Any Other (specify) |
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Clearing Members |
2348 |
0.01 |
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NRIs |
15613 |
0.08 |
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Sub-Total (B)
(2) |
1476759 |
7.72 |
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(B) Total Public
Shareholding (B) = (B) (1) + (B) (2) |
9965756 |
52.08 |
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TOTAL (A) + (B) |
19135756 |
100 |
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GRAND TOTAL (A)
+(B) |
19135756 |
100 |
BUSINESS DETAILS
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Line of Business : |
Subject is engaged in the business of cotton and blended yarn, real
estate, construction, real estate and entertainment. |
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Products : |
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GENERAL
INFORMATION
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Bankers : |
Corporation Bank |
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Facilities : |
(Rupees in millions)
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
A M Ghelani and Company,
Chartered Accountants |
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Subsidiaries : |
v Bellona Finvest
Limited v Pallazzio Hotels
and Leisure Limited (Formerly - Exotic Finvest Limited.) v Market City
Developers Limited (Formerly – Silly Point Restaurants Private Limited) |
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Associates : |
v Market City
Resources Private Limited v B R
International v B R Ruia
Foundation v Ashok Apparels
Private Limited v R R Hosiery
Private Limited v R R Hosiery v 27 Legal Trust v 460 Trusts v 330 Various
Trusts v Radha Krishana
Ramnarain Private Limited v Atul Ashok Ruia
Trust v Phoenix
Construction Company v Senior Holding
Private Limited v Galaxy Entertainment
Corporation Limited v Galaxy Bowling
Company Limited v Galaxy Life
Style Restaurants Limited v Check Mate (R R
Private Limited) v R R Textiles v Ashok Kumar Ruia
(101 Trusts) v Ashok Kumar Ruia
(17 Trusts) v Atul Ruia HUF
(12 Trusts) v Atul Ruia HUF
(71 Trusts) v Amla Ruia (25
Trusts) v Gayatri Ruia (34
Trusts) v Padmashil
Finvest Private Limited v The Bormah Jan
Tea Company (1936) Limited v Teesta Valley
Tea Company Limited v Teesta Valley
Exports Limited v McLeod and
Company Limited v McLeod Russel
India Limited v Globe (India)
Limited v Doom Dooma Tea
Company Limited v Tezpo Tea
Company Limited v Huldibari
Industries and PLN Company Limited v Somabaria
Company Limited v Indo Carbon
Industries Limited v Express
Newspapers Limited v Dabriwala
Banijya Udyog v H L Investment
Company Limited v Manugraph India
Limited v Sutlej Textiles
and Industries Limited v Man
Infraconstruction Limited v Praj Industries
Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
3,00,00,000 |
Equity Shares |
Rs. 10/- Each |
Rs. 300.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
1,22,50,000 |
Equity Shares |
Rs. 10/- Each |
Rs. 122.500
millions |
Note:
(Of the above shares 1,12,000 shares of Face Value
Rs. 100/- and 98,00,000 shares of Face Value Rs. 10/- have been allotted as
fully paid up Bonus shares by capitalisation of Reserves.)
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
122.500 |
122.500 |
24.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1973.392 |
375.369 |
335.400 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
2095.892 |
497.869 |
359.900 |
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LOAN FUNDS |
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1] Secured Loans |
1823.870 |
912.586 |
711.500 |
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2] Unsecured Loans |
1682.596 |
10.420 |
1.100 |
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TOTAL BORROWING |
3506.466 |
923.006 |
712.600 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.394 |
0.000 |
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TOTAL |
5602.358 |
1421.269 |
1072.500 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2221.436 |
1570.660 |
795.300 |
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Capital work-in-progress |
0.000 |
0.000 |
161.700 |
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INVESTMENT |
1810.346 |
64.898 |
55.100 |
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DEFERREX TAX ASSETS |
2.755 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
3.092
|
3.143 |
1.900 |
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Sundry Debtors |
42.480
|
61.572 |
74.200 |
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Cash & Bank Balances |
99.392
|
3.292 |
25.800 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
2243.743
|
477.614 |
412.400 |
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Total
Current Assets |
2388.707
|
545.621 |
514.300 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
410.960
|
588.678 |
350.300 |
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Provisions |
410.431
|
171.846 |
103.900 |
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Total
Current Liabilities |
821.391
|
760.524 |
454.200 |
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Net Current Assets |
1567.316
|
(214.903) |
60.100 |
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MISCELLANEOUS EXPENSES |
0.505 |
0.614 |
0.300 |
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TOTAL |
5602.358 |
1421.269 |
1072.500 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
2359.969 |
571.239 |
411.300 |
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Other Income |
0.000 |
0.000 |
42.700 |
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Total Income |
2359.969 |
571.239 |
454.000 |
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Profit/(Loss) Before Tax |
1860.988 |
226.708 |
153.500 |
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Provision for Taxation |
219.051 |
59.956 |
46.300 |
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Profit/(Loss) After Tax |
1641.937 |
166.753 |
107.200 |
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Expenditures : |
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Administrative Expenses |
11.710 |
9.330 |
97.500 |
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Raw Material Consumed |
0.760 |
0.800 |
9.400 |
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Consumption of stores and spares parts |
2.150 |
1.230 |
13.400 |
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Increase/(Decrease) in Finished Goods |
0.010 |
(0.120) |
3.800 |
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Salaries, Wages, Bonus, etc. |
3.200 |
2.330 |
24.900 |
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Interest |
3.780 |
4.330 |
21.100 |
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Power & Fuel |
7.676 |
6.759 |
91.700 |
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Depreciation & Amortization |
73.469 |
47.738 |
30.800 |
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Other Expenditure |
489.521 |
343.281 |
7.900 |
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Total Expenditure |
498.981 |
344.531 |
300.500 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
31.03.2008 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
4th
Quarter |
|
Sales Turnover |
130.900 |
167.600 |
201.900 |
230.800 |
|
Other Income |
7.900 |
44.900 |
115.600 |
1374.700 |
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Total Income |
138.800 |
212.500 |
317.500 |
1605.500 |
|
Total Expenditure |
45.200 |
45.400 |
58.200 |
185.100 |
|
Operating Profit |
93.600 |
167.100 |
259.300 |
1420.400 |
|
Interest |
7.600 |
0.000 |
34.000 |
0.001 |
|
Gross Profit |
86.000 |
167.100 |
225.300 |
1420.200 |
|
Depreciation |
13.000 |
22.00 |
18.20 |
19.500 |
|
Tax |
0.000 |
67.800 |
35.400 |
89.000 |
|
Reported PAT |
73.000 |
77.400 |
171.600 |
1343.900 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
1.87
|
2.58 |
2.84 |
|
Long Term Debt Equity Ratio |
1.08
|
2.47 |
2.75 |
|
Current Ratio |
0.85
|
0.83 |
1.07 |
|
Turnover Ratios |
|
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Fixed Assets |
0.43
|
0.47 |
0.54 |
|
Inventory |
200.55
|
220.44 |
72.80 |
|
Debtors |
11.94
|
8.12 |
5.63 |
|
Interest Cover Ratio |
4.94
|
6.24 |
8.27 |
|
Operating Profit Margin (%) |
41.69
|
57.50 |
49.94 |
|
Profit Before Interest and Tax Margin (%) |
30.01
|
49.01 |
42.45 |
|
Cash Profit Margin (%) |
32.93
|
38.76 |
33.55 |
|
Adjusted Net Profit Margin (%) |
21.25
|
30.27 |
26.06 |
|
Return on Capital Employed (%) |
5.49
|
23.81 |
21.87 |
|
Return on Net Worth (%) |
11.14
|
52.64 |
51.59 |
LOCAL AGENCY FURTHER
INFORMATION
History
The Company was incorporated in 1905 was promoted by Radhakrishna R Ruia and managed by Ashokkumar R Ruia. The company is mainly engaged in cotton and blended yarn, real estate, construction. As textile industry is facing tough competition and company is now focusing on real estate and entertainment.
The company entered into a joint venture with Galax Entertainment Corporation
Ltd viz Equity Participation through its subsidiary Bellona Finvest Limited to
take advantage of growing opportunities in the entertainment segment. Bellona
Finvest and Exotic Finvest Pvt Ltd are the subsidiary companies of Phoenix
Mills Limited.
The company was earlier declared as Sick by BIFR but the Bench-I of the
BIFR has one again declared that the company has ceased to be a Sick company
and the company has made a fresh reference to BIFR in 2001-02.
BUSINESS VISION AND
PERFORMANCE:
During the year, The Company continued being on a fast track growth trajectory, with its focus on carving out a niche for itself in the booming real estate sector. Be it mega retail malls, entertainment complexes, commercial space or hospitality units, the Group is determined to make its presence felt in India in the years to come. The Company's mission is to build unique, modem and high quality retail and entertainment centres, working spaces and hospitality units at various strategic locations in India. Employing the best of minds, proprietary material and state-of-the-art machinery blended with an extraordinary mix of pragmatism, eco-friendliness and aesthetic values will make every project of the Company a landmark.
The Company has posted robust results during the year under review with total
income at Rs. 2359.90 million, up from the previous year's figure of Rs. 571.24
million thus registering a growth of over 313 percentage over last year. Profit
before extra-ordinary items and tax at Rs. 1861.91 million (Rs. 227.61 million
in the previous year), recorded a growth of about 718 percentage.
Profit after tax is higher at Rs. 1641.94 million from Rs. 166.75 million of
the previous year. Earning per Share (EPS) moved up significantly to Rs. 134
compared to Rs. 14 in the previous year.
EXPANSION PLAN:
The Company has initiated actions on a scheme of amalgamation, to amalgamate
Ashok Ruia Enterprises Private Limited (AREPL), a Promoter Group Company, with
the Company. As a result, the shareholders of AREPL will receive 8 equity
shares of the Company in exchange for 5 issued and outstanding equity shares of
AREPL. They anticipate issue and allotment of 8 million equity shares due to
the aforesaid amalgamation. April 1, 2007 is the Appointed date as per
the
Scheme of Amalgamation filed with the High Court, Mumbai. Subsequent to the
completion of the amalgamation, they will hold equity interests in
project-specific companies that will develop the following projects:
* Market City - Mumbai (Kurla) - a development located in the eastern Mumbai
suburb at Karla with approximately 4.05 million square foot (including 1.35
million square foot of parking) of Developable Area. AREPL holds a 25.5% equity
interest in the project- specific company that will implement the
development.
* Market City - Bangalore - a development located in the commercial area of
White field in Bangalore with approximately 2.81 million square foot (including
0.80 million square foot of parking) of Developable Area. AREPL holds a 21.3 %
equity interest (plus a 10.0% interest held through a 66.7% held subsidiary) in
the project- specific company that will implement the development. Such equity
interest of AREPL could increase by 2.92% depending upon certain parameters. A
5-star hotel will also be developed as part of Market City Bangalore. The hotel
is projected to be approximately 460,000 square feet with approximately 210
keys and 60 serviced apartments. Subsequent to the completion of the hotel,
they intend to sell the hotel to a project-specific company, in which an
approximate 49% equity interest is intended to be held by Atlas Hospitality
Company Private Limited.
* Market City - Chennai - a development located at Velachery in Chennai with
approximately 2.40 million square feet (including 0.45 million square feet of
parking) of Developable Area. In addition to the usual market city components,
Market City Chennai is also expected to include an IT park. AREPL holds a 33.3%
equity interest in two project specific companies that will implement the
development.
* Market City - Pune - a development located on Nagar Road in Pune with approximately 2.23 million square foot (including 0.50 million square foot of parking) of Developable Area. AREPL holds a 5 1.0% equity interest in the project-specific company that will implement the development.
* Market City - Raipur - a development located near the railway station in Raipur with approximately 1.98 million square foot (including 0.50 million square foot of parking) of Developable Area. AREPL holds a 33.3% equity interest in the project-specific company that will implement the development.
AREPL wholly owns Market City Resources Private Limited, which employs
individuals to research and develop Market City projects.
In addition, the company is also exploring the possibilities of development of
Market City projects in a number of other cities across India including Indore,
Thane, Goa, Hyderabad, Kolkata, Ahmedabad and other tier I and tier II cities
of the country.
The Company has augmented funds for the above projects through a combination of
preferential allotment of shares to Foreign Institutional Investors (FIIs) as
well as issue of securities through Qualified Institutional Placements
(QIP).
MANAGEMENT DISCUSSION
AND ANALYSIS
The Financial Year 2006-2007 has been a year of spectacular performance for the
Company. The handsome financials recorded by the Company are true testimony for
this.
The business operations of the Company are segmented into Real Estate
Development, Textile Trading and Others. This segmentation forms the basis for
review of operational performance by the Management.
ECONOMIC OVERVIEW
In 2006-07, the Indian Economy witnessed vigorous growth with strong macroeconomic fundamentals characterized by all round development. The economy grew at 9.2% in 2006-07 and by most accounts has surpassed expectations.
The overall macroeconomic fundamentals are robust, particularly with tangible
progress towards fiscal consolidation and a strong balance of payments
position. With an upsurge in investment, the outlook is distinctly
upbeat.
With higher growth, India will see emergence of a larger and richer consumer
market. The country is also expected to see a change in consumption pattern
with expenditure in real estate, healthcare, recreation, transport and
communications going up substantially.
INDUSTRY OVERVIEW
Real Estate Industry:
The Indian Real Estate market has seen a multi-level rise in the last few
years. Starting from infrastructure development to residential 'complex,
commercial real estate to retail space development the Indian property market
is booming with all kinds of activities.
The buoyant growth in the economy has stimulated demand for land and developed
real estate across all segments. Demand for residential, commercial and retail
real estate is rising throughout the country, accompanied by increased demand
for hotel accommodation and improved infrastructure.
The nature of demand is also changing, with heightened consumer expectations that
are influenced by higher disposable incomes, increased globalization and the
introduction of new real estate products and services.
In recent years, the sector has also exhibited a trend towards greater consolidation and transparency by various regulatory reforms. These reforms include:
* The support of the GoI for the repeal of the Urban Land Ceiling Act, with
nine state governments having already repealed the Act;
* Modifications in the Rent Control Act to provide greater protection to homeowners
wishing to rent out their properties;
* Rationalization of property taxes in a numbers of states; and
* The proposed computerization of land records.
This trend has contributed to the development of reliable indicators of value and organized investment in the real estate sector by domestic and international financial institutions. It has also resulted in the greater availability of financing for real estate developments. Regulatory changes permitting foreign investment are expected to further increase investment in this sector.
SEGMENTS
Commercial Real Estate:
The recent growth of the commercial real estate sector in India has been fuelled, largely by the increased revenues of companies in the services sector, particularly in the IT and ITES sectors. Industry sources expect the IT and ITES sectors to continue to grow and generate additional employment.
According to industry reports, demand for space in the IT and ITES sectors is
expected to increase at a CAGR of 25% over the three-year period ending
2007-2008 and at a CAGR of 24% over the five year period ending 2007-2008. It
is estimated that the IT and ITES sector would require additional space of
approximately 87 million square feet between the fiscal years 2006 and
2008.
Retail Real Estate:
Industry estimates suggest that over the last few years, retail has become one of the fastest growing sectors in the Indian economy. Retail industry in India is currently estimated to be more than US$300 billion, of which organized retailing makes up 3-4%. AT Kearney has identified India as the leading retail destination in their annual list of most attractive countries for international retail expansion (Source: Global Retail Development Index 2006).
Organized retail is expected to grow at the rate of 25-30% per annum and is projected to attain a size of US$ 100 billion by 2010. Considering the vast potential in the retail business, 51% FDI in single brand retailing has also been allowed recently. This move is anticipated to attract foreign investments, technology, global best practices and cater to the demand for high quality branded goods in India.
The retail boom has percolated to the Tier-II and Tier-III cities of India, as well. Out of the total 361 mall projects currently under way in India, 227 are in the top 7 cities while the remaining 134 are distributed over various Tier-II and Tier-III cities. These statistics reveal the far-reaching effects of positive macro trends in changing the consumer preferences and shifting mindsets towards organized retailing experience. Besides new malls, close to 35 hyper markets, 325 large department stores and over 10,000 new outlets are also under development. India's vast middle class and its virtually untapped retail industry are key attractions for global retail giants wanting to enter newer markets.
Recent growth in the hospitality sector in India has primarily been caused by
the strong and buoyant economy, increased business travel and tourism. Room
demand is expected to grow at a CAGR of 10% over the next five years and growth
in occupancy rates is likely to be assisted by factors such as increase in the
number of incoming travellers and huge investments in the hotel industry.
Cinema and Entertainment:
The Indian entertainment industry is currently estimated at Rs. 234 billion, with films contributing a significant proportion. While the industry is expected to grow annually at almost 21% to reach approximately Rs. 617 billion by 2010, the Indian cinema industry is expected to reach Rs. 153 billion in 2010, contributing 25% to India's entertainment industry.
Multiplex Cinemas:
The key economic advantages of multiplex cinemas over single screen cinemas include better occupancy ratios and the ability for cinema operators to choose to show movies in a larger or a smaller theatre based on expected audience size. Multiplex cinema operators are therefore able to maintain higher capacity utilization compared to single-screen cinemas and can also provide a greater number of film showings. Further more, multiplexes allow for better exploitation of the revenue potential of the movies
The key growth drivers responsible for the expected increase
in the number of multiplex cinemas include an increase in disposable income
across an expanding Indian middle class, favorable demographic changes, strong
growth in organized retail and the availability of entertainment tax benefits
for multiplex cinema developers.
Residential Real Estate:
The growth in the residential real estate market in India has
been largely driven by rising disposable incomes, a rapidly growing middle
class, low interest rates, fiscal incentives on both interest and principal
payments for housing loans and heightened customer expectations as well as
increased urbanization and nuclearisation.
The number of households with annual incomes of between Rs. 2 million and Rs. 5
million per year, Rs. 5 million and Rs. 10 million per year and in excess of
Rs. 10 million per year is expected to increase in size by 23%, 26% and 28%, respectively,
between the fiscal years 2002 and 20 10.
BUSINESS OVERVIEW
The Company aims to develop and operate large retail-led, mixed-use developments in city-centric locations in India. The primary business, at present, is the development, operation and ownership of an integrated landmark development, "High Street Phoenix" in Lower Parel, Mumbai, which includes retail and entertainment, commercial, hotel and residential properties. They are also in the process of executing 'Market City' projects and hotel development projects across select cities in India.
The operations generally span most aspects of real estate
development, from the planning, execution and marketing of projects, through to
the management, maintenance and sales of the completed development.
High Street Phoenix:
Of the 17.3 acres comprising of High Street Phoenix (HSP), 13.3 acres are
freehold land owned by the Company and approximately 4.0 acres are subject to a
999 years lease from the Municipal Corporation of Greater Mumbai.
Phase I and Phase II of HSP, comprising approximately 1.4 million square feet
of residential, retail and entertainment, commercial and parking space has been
successfully completed. Upon completion of the final two phases of development,
Phase-III and Phase-IV, HSP will include approximately an additional 1.76
million square feet of retail and entertainment, hotel, commercial and parking
space, including a five-star deluxe hotel managed and operated by Shangri-La
and a seven screen multiplex.
Amalgamation of AREPL with the
Company:
The Company is currently undergoing a merger with Ashok Ruia Enterprises
Private Limited ("AREPL"), a Promoter Group company, which upon
completion will merge with and into the Company. The Scheme of Merger is
already been approved by the shareholders of the Company in the Extra-ordinary
General Meeting dated 02nd August 2007 and same will be effective post the
sanction of the High Court, Mumbai. The Merger process is expected to be over
by the middle of October 2007.
AREPL holds interests in innovative "Market City" projects in Mumbai
(Kuria), Bangalore, Chennai, Pune and Raipur, which currently represent 13.47
million square feet of Developable Area.
"Market city" projects are conceptualized as large scale, retail led real estate developments, typically over 2.0 million square feet in Developable Area, in city center locations in close proximity to high catchment areas. The proposed market city projects will encompass retail and entertainment space, including food and beverage and multiplex facilities, outdoor space and commercial office space. All of these projects will be undertaken by project-specific companies in which the Company will hold, subsequent to the completion of the proposed amalgamation, equity interest ranging from 25.5% to 51.0%.
As of and for the year ended March 31, 2007, AREPL had consolidated total
assets of Rs. 2.34 billion, consolidated total liabilities of Rs. 2.34 billion,
no consolidated income and consolidated loss of Rs. 0.61 million.
The amalgamation is expected to substantially increase the Company's consolidated assets, investments and liabilities, its business and operations and total issued and outstanding equity shares.
Atlas Hospitality Services Private Limited (Subscription of Shares)
The Company also intends to subscribe to 75% of the issued and outstanding
equity shares of Atlas Hospitality Services Private Limited that holds equity
interests in four hotel property developments in India, located in Mumbai
(Kurla), Chennai, Pune and Agra. Atlas owns equity interests ranging from 33.3%
to 68.7% in the project. Specific companies that will develop and own the hotel
property developments as of and for the year ended March 31, 2007. The
acquisition is expected to substantially increase the Company's consolidated
assets, investments and liabilities, as well as its business and
operations.
OPERATIONS DURING THE PAST
YEAR
As of March 31, 2007, they had 1.09 million square feet of space leased or available for lease at High Street Phoenix and in the fiscal year 2007, they sold 175,000 square feet of space at High Street Phoenix. They derived in the fiscal years 2007, Rs. 615.7 0 million of income from the lease of properties, including the provision of amenities and services to the lessees of properties, and Rs. 468.75 million of income from the sale of properties in the fiscal year 2007.
Sales and Other Incomes:
The Company achieved a revenue growth of Rs. 1121.060 million as compared to Rs
575.270 million in the previous year.
EPC and land costs:
Phases III and IV of High Street Phoenix are under development and the Company expects to incur significant EPC costs for their development.
OPPORTUNITIES AND
THREATS
India today stands on the cusp of a revolution. Confidence and optimism reign high. The real estate development industry in India has also gained significant momentum. Strong economic growth, influx of foreign investments and the growing middle~ class make this sector highly attractive.
The Company's opportunities lie in the adequate demand for shopping centers,
malls, theatres, auditoriums, stadiums, clubs, spas, resorts for entertainment
purposes. The opportunity is largely driven by demographics, considering 60% of
its population is under 29 years and 150 million households are expected to
join the consuming class by 2010.
However, with opportunity comes competition. The Company may face competition from
other leading players in the industry or other similar projects coming up.
Uncertainties related to the maintainability of high price as to the present
standard is an area of concern with the huge surplus land available for the
development to the private developers. Any slow-down in the economy or
political upheaval might also affect the revenues and margins.
RISKS AND CONCERNS
In the highly competitive market, the Company's ability to manage diverse risks
determines its success. The Company ensures that the risks it undertakes are
commensurate with better returns. While management is positive about the
Company's long-term outlook, they are subject to the following risks and
uncertainties:
Economic Risk:
The performance and growth are dependent on the health of the Indian economy.
The economy could be adversely affected by various factors such as political,
social disturbances, natural calamities etc. Any slowdown in the Indian economy
may impact the business and financial performance.
India's economy grew at a rate of 9.2% during 2006-07 and is expected to
continue demonstrating this growth in the coming years. The growth story is
backed by high investment rate, attractive demographics, as well as good
consumption and export demand. This is expected to lead to higher levels of
disposable incomes and thus lead to an even higher rise in consumerism. Given
the strong fundamentals, they strongly believe that the momentum in the Indian
economy will continue.
Regulatory Risk:
They operate in a highly regulated environment, and any adverse change in
existing and new laws, regulations and government policies affecting the
sectors in which they operate could affect the operations and the
profitability. Restrictions on foreign direct investment in the real estate
sector may also hamper the ability to raise additional capital.
The regulatory framework, particularly of the real estate industry in India, is
evolving. The recent years have seen the real estate sector exhibiting a trend
towards greater organization and transparency by various regulatory reforms.
Steps like the repealing of the Urban Land Ceiling Act in some states,
modifications in the Rent Control Act, FDI relaxations etc. are reforms that
are giving an overall positive boost to the industry and they continue to
remain optimistic about future regulatory and policy framework.
Concentration Risk/ Dependency
Risk:
They currently depend on High Street Phoenix (HSP) for almost all of the income. The income from HSP during the fiscal year 2007 stood at 98% of the total income. Any failure of HSP to generate income would have an adverse effect on the total income and profitability.
The Company has undertaken various expansion plans, thus broadening its income base. Development of Market City Projects including those to be acquired as a result of the merger and acquisition is expected to diversify the revenue streams. However, until the merger, acquisition and projects are complete, they expect the income from HSP to continue to comprise of almost all of the total income.
Implementation Risk:
They are embarking on an ambitious growth strategy, which
involves, as a result of the merger and acquisition, equity interests in, and
the development of, seven market city projects and hotels in various prominent
locations all over India. The expansion and diversification is on a scale that
is unprecedented in the history and places significant demand on the management
as well as the financial, accounting and operating systems among other resources.
They may come across challenges implementing the strategies, particularly the
growth strategy.
The creation and management of HSP has not only given us an all-round
experience in understanding the real estate sector but have also given us an opportunity
to understand the nuances of retail, residential, commercial and hospitality
sector. The success of HSP has further given us the confidence to execute other
impending projects, they will continue to remain focused on the core competency
and develop and improve the operational, financial and other internal
controls.
OUTLOOK
Considering the strong economic growth, retail boom and the strong waves in the
infrastructure and real estate development, they strongly believe in a
promising future. India is entering a golden age of consumerism backed by
strong demographics. the Company, with its integrated retail-led development is
expected to be a major beneficiary for the same.
They intend to replicate the success in HSP, by executing Market City and hotel development projects. They are also penetrating into other metropolitan cities, including in other areas in Mumbai, as well certain Tier II cities in India, which they believe have a potential for high growth.
Company Profile
Subject is poised to carve a niche in the booming Indian real estate sector. Led by a young Managing Director, Atul Ruia and a team of professionals, the Phoenix Group is set to take on the challenge of redefining life style in Indian cities. Be it mega retail malls, entertainment complexes, commercial space or hospitality units, the Group are determined to make its presence felt in India.
The Group has been a pioneer in converting mill land into modern, multi-use integrated property. High Street Phoenix was the first consumption center developed in India. The complex has been developed on 1.5 million square feet of space and houses retail and entertainment, commercial and residential complexes.
It has today become the model for development of shopping and entertainment hubs across the country. Its operations span most aspects of real estate development; from planning, execution and marketing of projects, to management, maintenance and sales of the completed development.
The Group plans to foray into developing real estate in eight cities measuring a total of 214 lakh square feet. These include Mumbai, Bangalore, Chennai, Pune, Raipur, Agra and Indore.
The plan includes retail units, entertainment complexes, commercial units, hotels, parking and residential complexes.
The Phoenix Group relies on its team's strengths, which include exceptional project management capabilities; project planning and aggressive rollout plans.
The Company has been formed to develop malls by the brand
name Phoenix United across north
India, particularly in UP covering cities including Lucknow, Agra, Bareilly
& Varanasi. These projects are coming up as city-centric land parcels
between 15 and 25 acres.
Profile and Experience:
Mr. Ashok Kumar Ruia joined the board of the
Phoenix Mills Limited in 1971. He is now actively involved in expanding the
existing activities and embarking upon new projects. He was in the Committee of
the Mill Owner’s Association, Bombay for several Years. Mr. Ashok Kumar Ruia
also takes keen interest in social activities. In addition to this he has
pursued an active career in the competitive world of sports. He has the unique
distinction of representing his country in two sports, bridge and golf, and
thus demonstrates his continuous desire to excel in whatever he undertakes.
Mr. Atul Ruia is the key force behind the
development of High Street Phoenix. Mr. Atul Ruia is a graduate in chemical
engineering from the University of Pennsylvania and holds a degree in business
management from the Wharton school of finance. Mr. Atul Ruia has been
responsible for charting the strategic direction for Phoenix Real Estate
Expansions. He has a hands on management style and is closely involved in all
of the Company’s
Ventures.
Mr. Pramod Rawool joined The Phoenix Mills
Limited, in June 2000 as a General Manager, HR and Liaison. He is a graduate in
personnel management and having wide experience in textile industry handling
variety of assignments. He was promoted to the position of the Wholetime
Director in the Year 2003.
Presently, he is actively involved in
liasoning matters with the BMC, Central Government, State Government and other
statutory authorities. His key area of working is HRD recruitment and training,
settlement of grievances, getting project approvals from BMC and other corporate
bodies and implementing them.
Mr. Bharat Bajoria is the Managing Director Of
Teesta Valley Tea Company Limited and The Bormah Jan Tea Company (1936) Limited
and he is having directorships in other companies. As a leader of the Indian
tea industry, Mr. Bajoria held in the past, the position of Chairman of Indian
Tea Association and Consultative Committee of Plantation Association. Mr.
Bajoria was also the Chairman of Darjeeling Planters Association and Special
Committee for Generic Tea Promotion in India. Mr. Bajoria is a member of Indian
Chamber of Commerce.
Mr. Anand Bajoria is currently a Director of
an established business group based in Kolkata. He is from a well known
Industrial family of Kolkata which ran several jute mills and tea gardens. Mr.
Bajoria has completed his education from the University of Pennsylvania (B B
A). He is currently involved in the production of tea and exporting the same to
UK and Germany. His Company is also diversifying into medicinal crops and
Jutropha Plantations and tea toursium.
Mr. Amit Kumar Dabriwala has graduated from
the Calcutta University. He has been associated with the capital markets since
1996 as a Director of United Credit Securities Limited (UCSL), a member of the
National Stock Exchange which was formed by him. He also responsible for
setting up the Mumbai Branch of United Credit Securities Limited and both the
branches have seen significant growth. In 2004 he set up JNR Securities Broking
Private Limited which is a member of Bombay Stock Exchange. He is also involved
in activities such as real estate development and leasing and hire purchase
through the other companies, within the united credit group.
Mr. Amit Dalal has worked as an investment
analyst in the United States of America. He is currently the Managing Director
of Amit Nalin Securities Private Limited a broking Company in National Stock
Exchange of India Limited and Bombay Stock Exchange Limited Since October 1997.
Mr. Dalal holds a Post Graduate Diploma in Business Management from University
of Massachusetts.
Mrs. Priti Khimji comes from an illustrious
industrial family and is very knowledgeable and well versed with the
international market and foreign brands which makes her a very useful member of
the marketing team. She holds a bachelor’s degree in Commerce from University
of Mumbai and FGA from UK.
Mr. Shiv Ram Krishnan Iyer is a Chartered
Accountant based in Mumbai. He is a Partner with Patel Rajeev Siva and
Associates, a reputed tax and audit firm. He assists companies in setting up
integrated financial accounting and management reporting systems. He also
advises companies on capital structuring for new and expansion projects.
Mr. Patki has vast experience in the
architectural segment. He is one of the Mumbai’s renowned architects with a number
of prestigious projects to his design credit. He is currently the managing
Director of M/s P G Patki Architects Private Limited a reputed architectural
firm over four decades. Mr. Patki brings in rich experience in conceptualising
designs for the most prestigious hospitality firms in India. He is currently
the core architect in-charge of designing and conceptualising for various
Phoenix and Market City Projects. He has graduated from J J School of arts with
honours. He is an associate of the Royal Institute of British Architects and a
fellow of Indian Institute of Architect and has lectured at design colleges in
Europe and US.
Group Companies
EWDPL
The Company is a Tier II city centric retail mall, mixed
use developer, currently engaged in the construction and operation of mixed-use
retail centers and townships. Its past projects include Indore's first and
largest retail mall - Treasure Island Indore, a 650,000 sq foot mall cum hotel
which was voted the best designed mall in India for the last year. Treasure
Island Indore offers five levels shopping, entertainment (PVR multiplex),
hospitality and dining and hosts over 100 retail outlets.
Big Apple
The Company was formed as a holding for development of
Malls, Multiplex's and other real estate ventures, in India. The company is
promoted by two major players of the country, The Phoenix Mills Ltd, Mumbai,
and UPAL, Lucknow, one of the largest manufatacturer of Asbestos Cement Sheets.
Operations
During the year, the total income of the
company increased to Rs. 6.095 millions (Previous Year Rs. 5.813 millions) for
the year ended 31.03.2007, the company has entered a Net Profit of Rs. 3.089
millions as against Net Profit of Rs. 2.310, millions for the previous year
ended 31.03.2006 after making provision for tax.
The Company has entered into a partnership
agreement with M/s. Gold Seal Holding Private Limited with effect from
28.03.1987 for development of land belonging to the Company (admeasuring 22400
sq. yards) and for dealing in real estate in the firm name M/s. Pheonix
Construction Company. The accounts of the partnership firm have been finalised
upto the financial year 2005-06. The details of the Capital Accounts of the
Partners as per the Financial Statements of the firm are as under:
|
Sr. No. |
Name of the Partners |
Profit Sharing Ratio |
Total Capital on |
|
|
|
|
|
31.03.2006 |
31.03.2005 |
|
1. |
The Phoenix Mills Limited |
50% |
30.895 |
21.335 |
|
2. |
Gold Seal Holding Private Limited |
50% |
37.388 |
27.828 |
This Company has accounted for its share of
profit amounting to Rs. 9.560 millions pertaining to the financial year 2005-06
in the accounts under report. The Share of profit/loss for the financial year
2006-07 will be accounted in the books of the Company on the finalisation of
the accounts of the firm. [Refer to Accounting policy Note No. A (a) (3)].
The Company has entered into a partnership
with M/s. Gold Seal Holding Private Limited from 28, March 1987 for development
of land belonging to Company and for dealing in real estate in the firm name of
M/s. Pheonix Construction Company. The said Partnership the Company’s capital
account was credited with a sum of Rs. 44.649 millions being the Value of the
land contributed by the Company as its capital in the said partnership firm.
The Company however represented that it was entitled to a credit in respect of
higher sum to its capital in the said partnership firm. The Company however
represented that it was entitled to a credit in respect of higher sum to its
capital account which claim was resisted by the said M/s. Gold Seal Holding
Private Limited. In accordance with the partnership agreement, the matter was
reffered for Arbitration to a Sole Arbitrator. The award of the Arbitrator was
received in the financial year 1986-87 and as per the award. The capital in the
said firm was to be enhanced by Rs. 89.319 millions. Accordingly the Company
debited the investment in the capital of the firm and credited the Capital
Reserve by Rs. 89.319 A sum of Rs. 115.631 millions was transferred from
capital reserve to general reserve in the financial year 2001-02 representing
the amount realized in respect of the said land contributed by the Company as
its capital in the Partnership firm.
The award also refers to some additional
benefits that the Company may be entitled to receive in the future which
benefits apart from being contingent are presently not capable of being
evaluated in money terms and hence are nit adjusted in the Company’s accounts
and will be dealt with in the future approximately. No provision for tax has
been made in the books of accounts of the Company in relation to the said award
in view of the advice received by the Company from its tax Consultants
according to whom the Company is not liable to pay any income tax thereon at
present.
Press Release
The Phoenix Mills Limited celebrates its centenary
The Phoenix Mills Limited (PML) is celebrating its centenary year. With
a view to enhance its shareholder value, PML is leased to offer the following:
1 A final dividend @ 100% on the equity share capital of the Company
(existing share capital: 45,000 shares of Rs. 100 each)
2 A sub division (stock split) of the face value of equity shares from
Rs.100 per share to Rs. 10 per share.
3 Issue of bonus shares in the ratio of 4:1 i.e. 4 shares for every 1
share held by the shareholder
4 Investment by Foreign Institutional Investors (FIIs) / Sub
Accounts registered with SEBI to the extent of 49% of the Paid up Share
Capital of the Company.
PML has also decided to take forward the concept of Consumption Center
(such as their flagship development - High Street Phoenix) to Tier-I metros.
Identification and negotiation for acquisition of large land banks is in
Progress
PML is also in discussion with venture funds and private equity
investors to enter into a strategic relationship to partner them in their
future growth plans.
Phoenix Mills approves Stock Split (1:5)
Mumbai, 19.12.2007
The Board of Directors of Phoenix Mills
Limited (Phoenix) pioneers in large format, retail led, mixed-use developments,
has announced its intention to reorganize the capital structure of the Company.
The Current Capital Structure, consisting of
30,00,000 Equity Shares of Rs. 10/- Each including the issued as well as
un-issued equity shares, by sub-dividing the face value of the said shares of
Rs. 10/- per share to Rs. 2/- per share. Thus, each existing equity share of
Rs. 10/- will be subdivided into 5 equity shares of Rs. 2/- each.
Mr. Mahesh Iyer, CFO – Phoenix Mills Limited
commented “They recognised the capital structure through the sub division of
the face value of equity shares into smaller denominations, which enables
enhancement of shareholder’s value and facilities more liquidity of shares on
the Stock Exchanges.”
About Phoenix Mills Limited
The Company was incorporated in 1905 and is
now focused on real estate development and allied businesses. It has emerged as
a leading retail centre developer in India with its High Street Phoenix Mills
property in Mumbai.
Phoenix Mills raises Rs. 3.18 billion through a Preferential Issue
Mumbai, 03.08.2007
The Company was Pioneers in large mixed -use developments,
has indicated that its Board has approved the Preferencial allottment of
19,85,756 equity shares of Rs. 10/- each for cash at a price of Rs. 1600
(Including a premium of Rs.1590 per equity share) aggregating to Rs.
317,72,09,600 at its board meeting held on 09.06.2007.)
The Preferential allotment has been made to
multiple investors, which include:
v DWS Invest Bric Plus – 320,000 shares
v DB Fund Mauritius Limited – 90,000 shares
v HSBC Financial Services (Middle East) Limited – 415,000 shares
v Americorp Ventures Limited – 300,000 shares
v Barclays Capital Mauritius Limited – 126,756 shares
v Citigroup Global Markets Mauritius Private Limited – 471,500 shares
v Rhodes Diversified – 262,500 shares
The equity share capital of the Company has
increased to Rs. 142 million following the completion of the preferential
issue.
Phoenix is undertaking various initiatives to
accelerate its growth and size of operations. The Company plans to utilize the
proceeds of the issue towards acquisition and development of various market
city projects, retirement of high cost debt and infusion of equity in various
Market City SPVs.
Phoenix is currently scouting the property
market to identify suitable locations across the country for the development of
“Market Cities”. Market City is a unique concept developed by Phoenix, which
are city centric, large size mixed format retail developments of approximately
2 million Square feet. The Company intends to set up about 10 Market Cities
across Metros and relatively smaller retail format developments of about 1
million Square feet in Tier II cities across the nation. The market City brand
is owned by Phoenix.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l Anti-Money
Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
The 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.
The 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. 40.18 |
|
UK Pound |
1 |
Rs. 79.25 |
|
Euro |
1 |
Rs. 62.90 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
|
72 |
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, they have no basis upon which to
recommend credit dealings |
No Rating |
|