MIRA
INFORM REPORT
|
Report Date : |
02.08.2008 |
IDENTIFICATION
DETAILS
|
Name : |
XL TELECOM AND ENERGY LIMITED |
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Formerly Known As : |
XL TELECOM LIMITED |
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Registered Office : |
335, Chandralok Complex, S. D. Road, Secunderabad - 500 003, Andhra Pradesh |
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Country : |
India |
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Financials (as on) : |
30.06.2007 |
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Date of Incorporation : |
03.10.1985 |
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Com. Reg. No.: |
01-5844 |
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CIN No.: [Company
Identification No.] |
U31300AP1985PLC005844 |
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TAN No.: (Tax Deduction & Collection Account No.) |
HYDX00001B |
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Legal Form : |
A closely held public limited liability company. |
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Line of Business : |
Manufacturing of Telecom Cable Jointing Kits, Heat Shrink type for Jelly Filled Cables. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 7700000 |
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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 reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Their trade relations are reported as fair. Payments are reported as usually correct and as per commitments.
The company can be considered normal for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
335, Chandralok Complex, S. D. Road, Secunderabad - 500 003, Andhra Pradesh, India |
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Tel. No.: |
91-40-27849094/5211 |
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Fax No.: |
91-40-27840081 |
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E-Mail : |
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Website : |
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Corporate Office : |
C2, Pooja Plaza, Vikrampuri, Secunderabad – 500 003, Andhra Pradesh, India |
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Tel. No.: |
91-40-278833333 (30 lines) |
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Fax No.: |
91-40-27883344 / 27840081 |
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Factory : |
Kits & SPV
Division Shed No. 30, 31, 32, IDA, Mallapur, Hyderabad - 500 076, Andhra Pradesh
SMPS & UEP
Division Plot No. 198/A, IDA Cherlapally, Hyderabad - 500 051, Andhra Pradesh Ethanol Division Plot Nos. B 8 to B 10, amd B 18 to B 21 DC, Kushnoor NANDED (District), Maharashtra State |
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Branch 1 : |
335, Chandralok Complex, SD
Road, Secunderabad - 500003, |
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Tel. No.: |
91-40-27849094, 27840109,
27847287 |
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Fax No.: |
91-40-27840081 |
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E-Mail : |
Info : info@xltelecom.net Sales : sales@xltelecom.net Support : support@xltelecom.net Purchase : purchase@xltelecom.net Careers : careers@xltelecom.net Investor Relations : investorrelations@xltelecom.net |
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Branch 2 : |
105, Centre Point, Andheri Kurla Road, J.B.Nagar,
Andheri (East), Mumbai - 400 059, India |
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Tel. No.: |
91-22-28251164 |
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Fax No.: |
91-22-28251160 |
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E-Mail : |
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Branch 3 : |
611, New Delhi House, 27, Barakhamba Road, New
Delhi-110 001 |
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Tel. No.: |
91-11-51511419 |
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Fax No.: |
91-11-51511418 |
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E-Mail : |
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Branch 4 : |
Forta
Import Export S.L. C/ Aragon, 15, 28840 Mejorada Del Campo, Madrid
- SPAIN |
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Tel. No.: |
Mr.
Juan Jose: 34 630 082 391 |
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Telefax No.: |
34 91 563 7229 |
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E-Mail : |
Spain Office : fortaimex@xltelecom.net |
DIRECTORS
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Name : |
Mr. Dinesh Kumar |
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Designation : |
Managing Director |
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Address : |
Plot No. 1, Lalitha Nagar, West Marredpally, Sec’Bad-500026 |
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Date of Birth/Age : |
23/12/1963 |
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Date of Appointment : |
15/12/1998 |
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Name : |
Mr. Rajeev Kumar Jain |
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Designation : |
Executive Director |
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Name : |
Mr. Aneesh Mittal |
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Designation : |
Whole Time Director |
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Address : |
Flat #3, Coromandel Apartment, Ameerpet, Hydesrabad-16 |
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Date of Birth/Age : |
05/05/1962 |
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Date of Appointment : |
15/12/1998 |
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Name : |
Mr. Pramod Kumar Jain |
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Designation : |
Whole Time Director |
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Address : |
36, Vauhini Nagar, Sikh Village, Sec,Bad –11 |
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Date of Birth/Age : |
21/06/1966 |
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Date of Appointment : |
26/10/2002 |
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Name : |
Mr. Wofgang Knop |
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Designation : |
Director |
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Address : |
D-58091, Profil Strabe, Germany |
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Date of Birth/Age : |
17/02/1944 |
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Date of Appointment : |
29/10/1997 |
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Name : |
Mr. Rajiv Garg |
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Designation : |
Director |
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Address : |
403, Siblee Towers, Mumbai –400018 |
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Date of Birth/Age : |
27/06/1955 |
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Date of Appointment : |
29/10/1990 |
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Name : |
Mr. T. Muralidharan |
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Designation : |
Director |
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Name : |
Mr. Charles Limpens |
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Designation : |
Director |
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Name : |
Ms. Seema Jain |
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Designation : |
Director |
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Name : |
Ms. Renu Mittal |
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Designation : |
Director |
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Name : |
Mrs. Ritu Lal Kumar |
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Designation : |
Director |
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Address : |
Plot No. 1, Lalitha Nagar, West Marredpally, Sec’Bad-500026 |
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Date of Birth/Age : |
08/11/1965 |
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Date of Appointment : |
26/10/2002 |
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Name : |
Mr. Sharad S Patil |
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Designation : |
Director |
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Name : |
Mr. K Vasudeva Rao |
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Designation : |
Director |
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Name : |
Dr. R. Srinivasan |
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Designation : |
Chairman |
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Name : |
Mr. Ahsok Kumar Goyal |
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Designation : |
Director |
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Name : |
Mr. V Visweswara Rao |
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Designation : |
Director (Finance) |
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Name : |
Mr. Naresh Chand Singhal |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Ms. Ch. Bhavani |
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Designation : |
Company Secretary and Compliance Officer |
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Name : |
Mr. Sateesh Gupta |
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Designation : |
Company Sectetary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
(As on 24.08.2007)
|
Category
of Shareholder |
Pre Issue |
Post Issue |
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No. of Shares |
Percentage of
Holding |
No. of Shares |
Percentage of
Holding |
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Shareholding
of Promoter and Promoter Group |
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Indian Promoters |
4185598 |
28.86 |
8865598 |
44.89* |
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Foreign Promoters |
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Total |
4185598 |
28.86 |
8865598 |
44.89 |
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Public
shareholding |
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Institutions |
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1002771 |
6.91 |
1002771 |
5.08 |
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Mutual Funds and UTI |
247111 |
1.70 |
247111 |
1.25 |
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Venture Capital Funds |
500000 |
3.45 |
500000 |
2.53 |
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FIIs |
10000 |
0.07 |
10000 |
0.05 |
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Foreign Venture Capital
Investors |
1000000 |
6.90 |
1000000 |
5.06 |
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Total |
2759882 |
19.03 |
2759882 |
13.97 |
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Non-institutions |
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Private Corporate Bodies |
4588986 |
31.65 |
4988986 |
25.56 |
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Indian Public |
2828484 |
19.50 |
2998484 |
15.18 |
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NRIs |
37595 |
0.26 |
37595 |
0.19 |
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Clearing Members |
91070 |
0.63 |
91070 |
0.46 |
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Others |
9801 |
0.07 |
9801 |
0.05 |
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Total |
7555936 |
52.11 |
8125936 |
41.14 |
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TOTAL |
14501416 |
100.00 |
19751416 |
100.00 |
i.
The above table has been prepared on the basis
of the shareholding pattern as on 24th August, 2007.
ii.
The Post-issue shareholding pattern in the above
table has been prepared on the basis that the proposed allottees would have
subscribed to and been allotted 5250000 warrants to be converted into equity
shares within 18 months from the date of allotment of the Company. In the event
for any reason, they does not or are unable to subscribe to and/or are the
allotted the warrants, the shareholding pattern in the above table would
undergo corresponding changes.
iii.
The post-issue shareholding pattern has been
prepared without considering the conversion portion of proposed issue of FCCBs
/ ADRs / GDRs / other convertible securities into Equity shares. The post issue
shareholding of Promoters will be further reduced on conversion / issue of
equity shares on FCCBs / ADRs / GDRs / other convertible securities.
* The post issue shareholding pattern of
promoters are before the dilution / issue of FCCBs / ADRs / GDRs / other
convertible securities.
Proposed time within which the allotment shall be completed
The Allotment of warrants shall be completed
within 15 days from the date of General Meeting provided that where the
allotment on preferential basis is pending on account of pendency of any
approval od such allotment by any regulatory authority or the Central
Government, the allotment shall be completed within 15 days from the date of
such approval.
BUSINESS DETAILS
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Line of Business : |
Manufacturing of CDMA Phones, SMPS, Cable Joining kits, Fusion Splicing Machines, Solar photovoltaic Systems, Ethanol |
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Products : |
· Cable Jointing Kits · OFC Accessories · Solar Items · SMPS Systems · Fusion Splicers · CDMA Phones · SMPS · Cable Joining kits · Fusion Splicing Machines · Solar photovoltaic Systems · Ethanol |
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Customers : |
·
Bharat Sanchar Nigam Limited (Department of Telecommunications),
Government of India ·
Mahanagar Telephone Nigam Limited ·
Indian Railways ·
Departments of Defence ·
Telecommunications Consultants of India Ltd. ·
State Nodal Agencies of the Ministry of Non-Conventional Energy
Sources ·
Private sector companies |
PRODUCTION STATUS
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Particulars |
Unit |
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Installed Capacity |
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Cable Jointing Kits |
Nos. |
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500000 |
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SMPS 100 Amps |
Nos. |
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|
1440 |
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SMPS 25 Amps |
Nos. |
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1440 |
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Solar Modules 70W |
KW |
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2000 |
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CDMA Phones |
Nos. |
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3000000 |
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Ethanol |
BL |
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45000000 |
GENERAL
INFORMATION
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Customers : |
· DOT and MTNL ·
Bharat Sanchar Nigam Limited (Department of
Telecommunications), Government of India ·
Mahanagar Telephone Nigam Limited ·
Indian Railways ·
Departments of Defence ·
Telecommunications Consultants of India Ltd. ·
State Nodal Agencies of the Ministry of Non-Conventional
Energy Sources · Private sector companies |
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No. of Employees : |
470 |
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Bankers : |
· Canara Bank, Mahatma Gandhi Road, Securnderabad, Andhra Pradesh, India · Vijaya Bank, M G Road, Secunderabad, Andhra Pradesh, India · The Federal Bank Limited · Dev Credit Bank Limited · The Bank of Nova Scotia · IDBI Bank Limited · State Bank of Hyderabad, Begumpet Branch, Hyderabad-560016, Andhra Pradesh, India · Indian Overseas Bank |
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Facilities : |
Secured
Loans:
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Banking Relations
: |
Good |
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Auditors : |
Satyanarayana & Company Chartered Accountants Secunderabad, Andhra Predesh |
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Collaborations : |
· Corning · Kyocera · Axess-tel |
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Associates/Subsidiaries : |
· LFM Engineering Private Limited · Lakshmi Telecom Products · Snehlatalal Family Welfare Trust |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
20000000 |
Equity Shares |
Rs.10/- each |
Rs. 200.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
14501416 |
Equity Shares |
Rs.10/- each |
Rs.145.014 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
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SHAREHOLDERS
FUNDS |
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|
|
1] Share Capital |
145.014 |
105.432 |
33.455 |
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2] Share Application
Money |
0.000 |
0.000 |
0.000 |
|
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3] Reserves &
Surplus |
1387.533 |
648.148 |
261.547 |
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4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
1532.547 |
753.580 |
295.002 |
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LOAN FUNDS |
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|
1] Secured Loans |
643.260 |
575.914 |
527.497 |
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2] Unsecured
Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING
|
643.260 |
575.914 |
527.497 |
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DEFERRED TAX
LIABILITIES |
34.640 |
32.408 |
0.000 |
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TOTAL
|
2210.447 |
1361.902 |
822.499 |
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APPLICATION OF FUNDS
|
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FIXED ASSETS [Net Block]
|
267.713 |
209.756 |
221.103 |
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Capital work-in-progress
|
0.000 |
0.000 |
0.000 |
|
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INVESTMENT
|
0.000 |
0.000 |
0.316 |
|
DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS &
ADVANCES
|
|
|
|
|
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|
Inventories
|
344.007 |
397.851 |
121.939
|
|
|
Sundry Debtors
|
1817.416 |
888.805 |
496.190
|
|
|
Cash & Bank Balances
|
271.282 |
120.996 |
83.421 |
|
|
Other Current Assets
|
0.000 |
0.000 |
0.000
|
|
|
Loans & Advances
|
63.460 |
42.219 |
21.993
|
Total Current Assets
|
2496.165 |
1449.871 |
723.543 |
|
Less : CURRENT
LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
489.994 |
229.915 |
86.929 |
|
|
Provisions
|
109.632 |
67.810 |
35.534
|
Total Current Liabilities
|
599.626 |
297.725 |
122.463 |
|
Net Current Assets
|
1896.539
|
1152.146
|
601.080
|
|
|
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MISCELLANEOUS EXPENSES
|
46.195 |
0.000 |
0.000 |
|
|
|
|
|
|
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TOTAL
|
2210.447 |
1361.902 |
822.499 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
|
|
Sales Turnover |
5231.434 |
3977.037 |
3026.300 |
|
|
Other Income |
14.202 |
5.367 |
4.900 |
|
|
Total Income |
5245.636 |
3982.404 |
3031.200 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
256.080 |
138.059 |
107.300 |
|
|
Provision for Taxation |
54.311 |
31.342 |
47.900 |
|
|
Profit/(Loss) After Tax |
201.769 |
106.717 |
59.400 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency |
21.096 |
2.107 |
0.000 |
|
|
|
|
|
|
|
|
Import of raw material CIF value |
1029.907 |
2650.842 |
0.000 |
|
|
|
|
|
|
|
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Expenditures : |
|
|
|
|
|
|
Cost of Materials |
4557.345 |
3518.718 |
0.000 |
|
|
Manufacturing Expenses |
0.000 |
0.000 |
1.900 |
|
|
Administrative Expenses |
276.628 |
191.934 |
122.900 |
|
|
Raw Material Consumed |
0.000 |
0.000 |
2602.300 |
|
|
Excise Duty |
0.000 |
0.000 |
17.200 |
|
|
Increase/(Decrease) in Finished Goods |
0.000 |
0.000 |
(11.700) |
|
|
Employee cost |
0.000 |
0.000 |
38.500 |
|
|
Interest |
139.384 |
118.210 |
123.500 |
|
|
Power & Fuel |
0.000 |
0.000 |
4.100 |
|
|
Depreciation & Amortization |
16.199 |
15.483 |
12.900 |
|
|
Miscellaneous Expenses |
0.000 |
0.000 |
12.300 |
|
Total Expenditure |
4989.556 |
3844.345 |
2923.900 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.09.2007 |
31.12.2007 |
31.03.2008 |
|
Type |
1st Quarter |
2nd Quarter |
3rd Quarter |
|
Sales
Turnover |
1505.900 |
1504.500 |
1723.000 |
|
Other
Income |
11.100 |
3.100 |
3.900 |
|
Total
Income |
1517.000 |
1507.600 |
1726.900 |
|
Total
Expenditure |
1394.600 |
1352.200 |
1467.800 |
|
Operating
Profit |
122.400 |
155.400 |
259.100 |
|
Interest |
35.700 |
45.800 |
99.000 |
|
Gross
Profit |
86.700 |
109.600 |
160.100 |
|
Depreciation |
5.100 |
5.000 |
5.400 |
|
Tax |
21.300 |
18.000 |
13.300 |
|
Reported
PAT |
60.300 |
86.600 |
141.400 |
KEY RATIOS
|
PARTICULARS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
|
Debt-Equity
Ratio |
0.53 |
1.05 |
1.74 |
|
Long Term
Debt-Equity Ratio |
0.14 |
0.27 |
0.34 |
|
Current Ratio |
2.11 |
1.71 |
1.26 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
15.59 |
13.52 |
11.77 |
|
Inventory |
14.28 |
15.71 |
33 |
|
Debtors |
3.92 |
5.9 |
6.92 |
|
Interest Cover
Ratio |
2.84 |
2.17 |
1.87 |
|
Operating Profit
Margin(%) |
7.77 |
6.65 |
8.05 |
|
Profit Before Interest
And Tax Margin(%) |
7.46 |
6.27 |
7.63 |
|
Cash Profit
Margin(%) |
4.11 |
2.99 |
2.39 |
|
Adjusted Net
Profit Margin(%) |
3.81 |
2.61 |
1.96 |
|
Return On
Capital Employed(%) |
22.87 |
23.81 |
32.42 |
|
Return On Net
Worth(%) |
17.66 |
20.35 |
22.88 |
LOCAL AGENCY
FURTHER INFORMATION
MANAGEMENT
DISCUSSION & ANALYSIS
Future
plans
In addition to the existing business, the company as a strategy to de-risk, and
looking at exponential growth opportunities in the company's focused Energy
areas, has decided to significantly increase its focus both in Solar
Photovoltaic and Ethanol Products. In Solar, Subject has decided to expand the
annual capacity of its 100% EOU facility for manufacture of Solar Photovoltaic
Modules from existing 24 MW to 65 MW with a capital outlay of Rs.450 Millions
and also to establish EOU for producing 'Solar Cell', which is a basic Raw
Materiel for SPV Modules, with overall capital outlay of Rs.2600 Millions for
an annual capacity of 120 MW in the first phase.
Further the Company has also initiated backward integration project in Ethanol
Segment by establishing the Multi-feed Distillery Unit, to reduce the risk of
seasonality of Molasses and to improve cost management especially with three
year, visibility in Ethanol Order for full capacity with a capital outlay of
Rs. 650 millions.
Change
of Name of the Company
During the year, the Company has changed its name from XL Telecom Limited to XL
Telecom and Energy Limited effective from 7th March, 2007.
Forward
looking statements
Statements in this Management Discussion and Analysis of Financial Condition
and Results of Operations describing the Company's objectives, expectations or
predictions may be forward looking within the meaning of applicable securities
laws and regulations. Forward-looking statements are based on certain
assumptions and expectations of future events. The Company cannot guarantee
that these assumptions and expectations are accurate or will be realised. The
Company assumes no responsibility to publicly amend, modify or revise
forward-looking statements, on the basis of any subsequent developments,
information or events. Actual results may differ materially from those
expressed in the statement. Important factors that could influence the Company's
operations include cost of inter connection charges, determination of tariff
and such other charges and levies by the regulatory authority, changes in
government regulations, tax laws, economic developments within and outside the
country and such other factors.
The following discussions on the financial condition and results of operations
should be read together with the audited financial statements and the notes to
those statements included in the Annual Report. The following discussions are
based on the audited financial statements for the period ended 30th June, 2007
and on information available from other financial of the Company.
Overall review
Subject was originally incorporated as a Private Limited company under
Companies Act, 1956 on October 3, 1985 in the name of "XL Cable Splices
Private Limited". Subsequently the name of the company was changed to
"XL Telecom Private limited" on December 18,1985. Later, the Company
changed its status to a public limited with effect from December 31, 1990. The
name of the Company was again changed from XL Telecom Limited to XL Telecom and
Energy Limited with effect from 7th March, 2007. The equity shares of the
Company were listed on the Bombay Stock Exchange Limited and the National Stock
Exchange of India Limited with effect from 28th December,
2006.
Industry
Structure
In March 1999, the Government announced the New Telecommunications Policy, 1999
("NTP 1999"), which permitted Fixed Service Providers (FSP) and
Cellular Mobile Telephone Service Providers (CMTS) to migrate from a fixed
licence fee regime to a revenue sharing arrangement and an extension of the
initial license term from 10 to 20 years. It also permitted unlimited
competition in fixed line services. The Government also permitted the entry of
an additional private mobile service provider in all the telecom circles.
In October 1999, the Department of Telecommunications ("DoT") was
bifurcated into two departments: the DoT which performs the role of licensor
and policy maker, and the Department of Telecom Services, which was to function
as the service provider. The service provider was corporatised in October 2000
as a new entity with the name Bharat Sanchar Nigam Limited (BSNL), which
provides telecommunication services in the entire country except in Delhi and
Mumbai, where Mahanagar Telephone Nigam Limited (MTNL) is the Government
controlled service provider. In August 2000, the Government announced the terms
of the policy for liberalization of national long distance services, initiating
unlimited competition in these services. Subsequently, licences were awarded by
the Government to the selected bidders in mobile services.
In January 2001, based on the recommendation of Telecom Regulatory Authority of
India (TRAM, the Government issued guidelines to permit fixed line service
providers to provide limited mobility services using Wireless in Local Loop
("WLL") technology, within the Short Distance Charging Area (SDCA),
in which the subscriber is registered. In October 2003, TRAI recommended to the
Government that basic service providers providing limited mobility services
using WLL technology pay a specified amount as an additional entry fee for such
services.
In November 2003, an addendum to NTP 1999 was issued to include the following
categories of licences for telecommunication services:
·
A unified licence for telecommunication services, permitting
the licensee to provide all telecommunication / telegraph services covering
various geographical areas using any technology; and
·
A licence for unified access (fixed line and mobile) services, or a unified
access services licence ("UAS Licence"), permitting the licensee to
provide basic and / or mobile services using any technology in a defined
service area.
There is no limitation on the number of UAS Licences that can be granted in any
circle although availability of spectrum will limit the number of service
providers who propose to provide wireless services.
The Government, through Press Note 5 (2005 Series), dated 3rd November, 2005
raised the foreign direct investment limit applicable to the telecommunications
sector from 49% to 74% (held directly or indirectly), subject to compliance
with certain conditions. The Government of India issued Press Note 3 (2007
Series) dated 19th April, 2007 whereby Press Note 5 (2005 Series) was
superseded. All telecom service providers are required to submit unconditional
compliance report within 3 months from date of issue of Press Note 3 (2007
Series).
Subject operates in the infrastructure accessory space in fixed line telephony
and in consumer hardware space in wireless telephony.
Fixed Wireless Phones:
Subject operates in Fixed Wireless Phones segment in the Telecom Sector currently
in association with Axesstel, a NASDAQ listed US based company. The demand for
Fixed Wireless Phones is increasing exponentially and during the last two
years, the actual growth in the Fixed Line business is only due to these
phones. Post the Unified licence regime, all the mobile operators were given
permission to compete in the Fixed Line segment, which was dominated for ages
by BSNL and MTNL. Fixed Wireless Phones though operate in the same technology
as the Mobile phones; for the purpose of differentiation was given the status
of Land Line more in terms of tariff for outgoing calls chargeable to the
customers, which was at that time much cheaper than the regular mobile phone
tariff.
Most of the major cellular telephone operators are focusing currently on this
segment for their future growth in the customer base, especially in view of
approaching a stagnation in mobile connections in the metros, urban and semi
urban areas. Current market focus is the smaller towns and villages where
people are more familiar with the land line model and hence the growth in this
segment is expected to be more than mobile phones, which can be seen in the
following graph for the current year:
As they understand from the cellular operators the growth in
demand going forward is to be in the FWP business and hence the company is
planning to be aggressive in the segment including the FWP with GSM Technology,
which is being introduced in India in the current fiscal.
ETHANOL MARKET:
INTEGRATED AND ENERGY EFFICIENT PRODUCT10N OF ETHANOL FROM SUGAR FACTORY
STREAMS
World Ethanol Scenario depict a robust industry and an increasing emphasis on
the use of Ethanol as a partial substitute for fossil fuels.
·
Brazil is worlds # 1 in both production and consumption. Its
production is around 16 billion litres.
Uses up to 30% anhydrous ethanol for blending in fuel.
·
Domestic demand not likely to increase. Growth only through
exports.
·
Land, water and raw material are no constraint for
expansion.
·
Production expected to remain between 17-19 billion litres up to 2010
·
Columbia has mandated a 10% blend in Gasoline (E10); Gautemala Elsalvador,
Nicaragua, Honduras and Costarica likely to mandate E10. Domestic requirement
likely to outstrip production till atleast 2012.
USA
·
#2 in the world in terms of production and
consumption.
·
Consumption and production show high growth 8 billion litres
in 2002 to 9 billion litres in 2003.
·
Corn and wheat are the main feedstocks.
·
MTBE ban in California and other states has boosted demand.
·
Production estimated to touch 12 billion litres by
2012.
Japan
·
Fuel ethanol drive has not yet taken off.
·
However, move afoot to go with E-3, E-5 and eventually E-10
by 2010.
·
Current import 450-500 mil. Litres. Requirement could be as high
as 6 billion litres if E-10 mandated by 2010.
·
100% of the requirement will be imported due to absence of
suitable raw material.
India
& Asia Pacific (Non Japan)
·
India has mandated fuel ethanol blended fuels. Currently
moving toward an E-5 mandate
·
Indian production capacity estimated at 1.5 billion lit in
2007.
·
Thailand, Australia, Philippines all making progress on fuel
ethanol.
·
New licences issued in Thailand. Thailand will ban MTBE by
2007.
The industry looks poised for growth world over. Ethanol production is
currently 33 billion liters and is likely to grow to 60-70 billion litres by
2012.
India is ahead of most regional countries in the growth of capacities. Most
likely forecast points to an overall 82-100% growth in global production to 65
billion liters by 2012.
SOLAR ENERGY MARKET:
Every day, the surface of planet Earth is blasted with so much solar energy
that, if fully harnessed, 60 seconds worth could power the world's total energy
requirements for one year. Solar cells convert solar rays directly into
electricity. Non polluting Photovoltaic (PV) cells use no fuel, mechanical
turbine, or generator to produce electric current. Solar energy is renewable,
clean, and abundant the ideal next-generation energy.
Global PV Cell Production by
Country
Geographically, the market for solar PV is global and was dominated by Japan
(and has been since the 1970s) with 37% of worldwide production in 2006,
followed by Europe (Germany predominantly) at 27%. The United States produced 8%
of worldwide solar PV cells in 2006. Europe and US remain major export markets
for producers else where in the world.
The solar PV market has grown by more than 30% in each of the last eight years.
The solar PV industry grew 41% to 2.5 GW of new solar PV manufacturing output
in 2006 from 1.8 GW in 2005. According to Clean Edge research, the solar PV
industry is expected to grow from $15.6 billion in 2006 to $69.3 billion in
2016. The California Solar Initiative is expected to increase the annual California
market for solar PV modules to as much as $3.2 billion by 2015. Cumulatively;
they estimate the California Solar Initiative alone could add an incremental
$13.7 billion of solar PV revenue through 2015.
Solar PV's steady growth is being fueled in large part by government policies
around the world at the national, regional, and local levels. Japan, a
long-time leader in solar PV sales and the world's largest solar PV producing
country, increased production 11% to 927 MW in 2006 (from 833 MW in 2005),
while Europe (primarily Germany) grew 42% to 678 MW (from 477 MW in 2005). U.S.
solar PV sales grew 31% in 2006, reaching 202 MW.
Fifteen solar PV manufacturers supplied 77% of the world's PV cells / modules
in 2006. Grid-connected solar PV systems, also called Grid interface systems,
supply surplus power to the utility grid during peak solar production hours to
coincide with high industrial demand. A majority of solar power installations
internationally incorporate the use of PV systems to supplement the grid
supplied electricity both as a way of reducing ongoing electricity costs as
well as providing peak shaving capabilities and improved power quality and
reliability for commercial operations.
Subject is focusing the globally growing Grid-connected Solar Installations
more than standalone systems. Grid connected Installations have been growing
exponentially during the last few years and expected to show high growth in the
coming years as per research reports. Most projections see a US$ 16 Billion
market space by 2015.
Illustratively, the US installations have grown as
follows:
ENERGY
DIVISION:
Solar Division:
The Solar division of the Company produces Solar modules from Solar cell
imported from a number of global suppliers. These modules are supplied with in
India and exported, mainly to Europe.
The company used the IPO proceeds to establish an 100% Export Oriented Unit for
manufacture of Solar Photovoltaic Modules with an annual capacity of 24 MW and
capital expenditure of Rs.80 Millions. The company has executed the first
orders from Europe and is in the advanced stage of obtaining the necessary
quality certifications before launching a full scope exploitation of the
European market.
The Company has also decided to expand the production capacity of the Solar
Modules further from the 24 MW to 64 MW by setting up new, fully automated
Module line of a capacity of 40 MW in view of huge global opportunity for Solar
Energy with a capital outlay of Rs.450 millions.
Further, to de-risk itself from potential short supply of Solar Cells, the
Company has decided to invest in a state-of-the-art Solar Cell manufacturing
plant with an annual capacity of 120 MW and capital outlay of Rs.2600 Millions.
The company sees this project as projecting it in the forefront of Solar Energy
business globally and accord it the leadership position in India.
Ethanol Division:
The Company produces Ethanol from molasses and de-natured spirit sourced from
distilleries in the sugar belt in Southwestern Maharashtra. It has secured
committed orders from OIL companies for the 3 year period ending 31.03.2010 for
the full capacity of the Existing Ethanol Plant.
In view of this, the management has decided to invest in the backward
integration project to produce Special Denatured Spirit from molasses
feedstock. This would make the Company exercise better control over its raw
material availability. The project would be executed in a subsidiary company
which has currently a licence to produce 150 KLPD. The company is working with
IDBI for financial closure and the project is expected to go on stream in the
last quarter of 2007-08.
Opportunities
·
Shift of MTNL / BSNL / Private Operators' focus from wired
line to wireless technology.
·
Blending requirements for ethanol with petrol expected to
increase to 10% from the current 5% level. Policy to be made mandatory all over
India from the current applicability in 9 states.
·
GOT to introduce blending policy of ethanol with diesel
also
·
Huge global demand for solar Panels Market size to grow from
US$16 billion to $64 Billion
Threats
Government's policy relaxation for imports of telecom products
OUTLOOK
Telecom:
Subject has grown in the Telecom segment about 100% CAGR in the last five
years. However, as the market matures, they see the existing product range to
continue to contribute about the current level of revenues and expect a more
lattish growth in the present product line. For continued growth, they will
need to look at possibilities of diversification into new product lines.
Energy:
Subject sees the Energy sector as a key to its medium term growth. It has
embarked on a major expansion in both segments that it operates in and, in
parallel, adopted a strategy of greater control over the value chain and to
de-risk the business. With the ever increasing demand for renewable energy
power generation across the Globe, the demand for the Solar Photovoltaic
Systems is growing by the day. It is understood that 400l0 of new energy
generation capacity between 2007 and 2015 is going to come from Solar
Technology.
In view of this huge opportunity the company as explained
earlier in the Management Discussion, has decided to invest in expanding the
Module capacity to 64 MW and also invest in Solar Cell manufacturing capacity
of 120 MW The project should be commissioned by June 2008 and commercial
production should begin in July 2009.
The Ethanol segment is expected to maintain steady growth as present demand for
fuel Ethanol is not being fully met. Further, the Group of Ministers of the
Government of India has already recommended going to E10 from E5 presently
which creates a very assured demand scenario.
With new plant capacities being added in both segments of the Energy Division
and with steady growth in the telecom segment, the company expects to approach
a turnover of about Rs.8000 millions, at 75% capacity utilization, subject to
market risks remaining manageable and project completion not encountering any
unforeseen hurdles.
Risks and concerns
·
Delay in execution of new projects and consequential
business opportunities.
·
Government Policies regarding the imports and exports.
·
Further, Rupee appreciation would seriously affect the
export business being planned in the Solar Segment.
Internal control systems and their
adequacy
An Audit Committee of the Board of Directors has been constituted as per the
provisions of Section 292A of the Companies Act, 1956 and Corporate Governance
requirements specified by the Stock Exchanges.
The Internal Audit function is looked after by an independent firm, which
conducts reviews and evaluates and presents its reports to the Audit Committee
and the management at regular intervals. The Internal Auditor's reports dealing
with Internal Control Systems are considered by the Audit Committee and
appropriate actions are taken, wherever deemed necessary.
Financial performance - Overview
Revenues
During the year, Company earned total revenues of
Rs.5245.636 millions compared to previous year revenues of Rs.3982.404 millions
registering a growth of 31.72%.
Segmentwise
performance
Company operates business into two segments i.e. Telecom and Energy.
Telecom
During the year, the company earned revenues of Rs. 4377.403 millions
compared to previous year of Rs.3479.646 millions registering an increase of
25.80%.
Energy
During the year, the company earned revenues of Rs. 920.675 millions compared
to previous year of Rs. 603.676 millions registering an increase of
52.51%.
Product wise revenues of the company are as under:
|
Products |
30.06.2007 (Rs. In millions) |
|
Telecom |
|
|
CDMA Phones and Components |
3934.696 |
|
SMPS Systems |
403.658 |
|
Jointing Kits and Optic Fiber Systems |
17.953 |
|
Exports |
21.096 |
|
Total Telecom Revenues |
4377.403 |
|
|
|
|
Energy |
|
|
Ethanol |
918.365 |
|
Solar Photovoltaic Systems |
2.310 |
|
Total Energy Division Revenues |
920.675 |
|
|
|
|
Total Revenues |
5298.078 |
Dividend
During the year the company has declared an Interim Dividend
of 10% i.e. Re.1 per equity Share on 1,45,01,416 equity shares of Rs.10/- each
of the Company and it is proposed to confirm the same. However, in view of huge
investments proposed to establish Distillery Project, Solar Cell Project and
Solar Module Expansion Project with a total capital outlay of over Rs.3700
millions, the Board of Directors have decided not to declare any final dividend
to conserve the much needed cash for the company's growth projects.
Contingent Liabilities
|
Particulars |
30.06.2007 (Rs. In millions) |
|
Guarantee / Counter Guarantees given on sale
contracts |
255.135 |
|
Letter of Credits by banks |
559.579 |
|
Estimated amount of contracts remaining to
be executed on capital account (net of advances) not provided for amounting
to |
NIL |
The Name of the Company has been changed to
M/s. XL Telecom and Energy Limited as approved in the EGM held on 28.02.2007 and
as per approval of Registrar of Companies vide ROC approval dated 07.03.2007.
Fixed Assets
·
Land
·
Buildings
·
Plant and Machinery
·
Computers
·
Vehicles
·
Furniture and Fixtures
·
Office Equipment
The company is also
SSI Unit manufacturing Cable Jointing Kits and
Mechanical Closures.
The company is
having technical collaboration with :
·
RXS
Schrumpftechnik Garnituren, Germany
·
AMP of UK
·
Josltn,
California, USA
Subject has
partnership with Kuocera Wireless Corporation for manufacturing, Sales and distribution
of CDMA mobile phones is set to lead the way in retail sale of CDMA mobile
phones in cooperative with the leading CDMA operators in India. In addition,
Subject is poised to forge alliance and support many other potential business
partners to help introduce and promote new technology products through its
distribution network. The move into retail promises with consumers, subject is
looking forward to cooperate with potential business partners in the area of
OEMs/Traders who intend to establish in one of the most promising markets and
looking for opportunity for strong partner in distribution of their products,
with a vision to-
·
Create large
set up of Distributors/Retailer/Resellers network across pan India.
·
Crete platform
to launch new products in India.
·
Create Online
Customer Supply Relationship Management SCM+CRM.
Commercial Bank SBU
IDBI, Hyderabad – 29, dated 01/09/2005
FLC (One off ) Rs.
370.900 millions
Treasury Limit
(LER) Rs. 37.100 millions
Website Details :
The telecommunications revolution has increased the need for
high-quality back up products. XL Telecom helps to keep the world connected
through its range of world-class heat shrink wrap around cable jointing kits.
Subject's large
state-of-the-art manufacturing facility in India boasts of the finest in every
sphere of activity. Backed by sophisticated equipment, the production is
totally automated and adheres to the most stringent parameters. With only five
persons controlling the process, the fully electronic functioning allows no
room for human error. The factory has a large production capacity of about 1000
meters per shift in eight hours - enabling the company to meet both delivery
schedules and budgets without any hiccups.
Subject's strength also
lies in the expert team of highly qualified and experienced managers and
workers who work in tandem with a comprehensive quality control department to
assure excellence at every stage of manufacture.
The results are products that serve as the backbone of the
telecommunications industry and are instrumental in bringing the future to the
doorsteps.
Subject was incorporated
at Hyderabad as a private limited company in 1985 and became a public limited
company in 1990. The company is partnered by Corning, Inc., and Kyocera Inc. of
USA.
Products :
CDMA Mobile Phones
Subject manufactures the top-flight, high quality Kyocera CDMA 2000 1X, RTT
mobile phones for sale in India at their state-of-the-art facility located at
picturesque Cherlapally on the outskirts of Hyderabad.The plant is equipped
with the latest CDMA mobile phone testing machinery which is capable of
simulating all the phones' functionality.The environment within the plant is
completely controlled and static free. Personnel working within the plant are
specially trained in the manufacture and testing of the Kyocera CDMA phones.
Fixed Wireless
Desktop Phones & Terminals
Subject has active technical collaboration with a leading multinational company
Axesstel Inc. for the assembly, manufacture and sale of fixed wireless
handsets. Subject will assemble these kits, load the required software into
phones, test the products and distribute to various BSNL depots. Subject is a
dedicated supplier of telecom products to telecom operators and service
providers like TATA, Reliance, BSNL, MTNL and international clients like MTML
and Telelinks as well as network integrators like Nortel and Ericsson
Subject, Leaders in manufacturing of Telephone Jointing Kits is bringing its
expertise to manufacture Switch Mode Power supply systems in 48V in modules of
25A & 100A for powering the telecommunications networks.
In technical collaboration with SMPS DE, Austria, Subject produces 25 –
200 AMPS SMPS power plants including power electronic accessories like AC–DC-AC
Converters/ Invertors.
Fusion Splicing
Machines
Fusion splicing machines made by Corning Cable Systems are sold and
serviced by company in India. Fully qualified engineers, trained by Corning
Cable Systems, Inc., USA, service and maintain all types of optical fusion
splicing machines and fibre optic cable accessories and closures.
Cable Jointing
Kits/Mechanical Closures
Subject’s heat shrink wrap-around sleeves are an effective and quick way
of joining cables. With merely the even application of a soft propane based
flame around the sleeve, the spliced cable can be joined and insulated smoothly
and quickly Subject’s plant at Hyderabad, India, has been installed in
technical collaboration with Corning Cable Systems, Inc of USA. The plant is
capable of producing 500,000 cable jointing kits annually. Solar Photo-Voltaic
Systems
Harnessing the power of the Sun, Subject has a manufacturing facility
which can produce solar photo-voltaic cells of up to 2 MW capacity. These are
used as power plants for rural exchanges and include plants producing as much
as 25 KW to power entire villages besides solar home lighting systems and
street lighting systems.
Subject is the current market leader in solar power lighting systems.
Ethanol Division
Subject has ventured into the arena of launching its fuel ethanol plant
in an innovative plan aimed at simultaneously bolstering security of energy
supplies and improving farm
incomes.
Subject’s state-of-the-art ethanol production plant set up at Nanded is
the largest stand alone plant in India and has the capacity to produce 0.15 million litres of ethanol per day through the molecular sieve method.
Solar Division
Subject
is manufacturers of Solar Photovoltaic Modules, established in 1992. Subject
has over 15 year's experience of manufacturing its Solar Photovoltaic Modules
and systems to various agencies in India. The Company's products are marketed
to:
- Bharat
Sanchar Nigam Limited (Department of Telecommunications), Government of
India
- Mahanagar
Telephone Nigam Limited
- Indian
Railways
- Departments
of Defence
- Telecommunications
Consultants of India Limited
- State Nodal
Agencies of the Ministry of Non-Conventional Energy Sources
- Private
sector companies
In 2005,
in response to rapid growth of the Solar Industry, Subject has successfully
ramped up its manufacturing capacity to enable production of 24MW of
crystalline modules per annum. By this year end the existing capacity of 24MW
will be ramped upto 60MW per annum.
Subject
is managed by a team of qualified technocrats having decades of experience in
the relevant field with the prime objective of promoting the Non-Conventional
Energy Systems.
Subject
has established a quality management system that is in compliance with the
International Quality system standard ISO 9001-2000 for the Manufacture of
Solar Photovoltaic Modules and other products.
Subject
Solar Photovoltaic Modules for Indian Market have the approvals of Solar Energy
Centre (SEC), Ministry of Non-Conventional Energy Sources (MNES), New Delhi,
Department of Telecom (DOT), Ministry of Railway and Ministry of Defence. The
testing of Solar Modules for DOT/BSNL is similar to IEC specification. Subject
has applied for certification as per IEC 61215 and Safety Class II at TUV
Rheinland. Subject has also applied for UL Listing of solar panels.
Subject
manufactures SPV modules of various capacities ranging from 5Wp to 280Wp
catering to domestic and international customer requirements.
Subject
crystalline modules are available in framed and laminates versions both modules
feature a rugged laminate design. The efficient design of the modules is
ideally suited for medium and high power applications. The module is designed
for easy interconnection to achieve voltage and current configuration for grid
connected systems as well as stand-alone systems. Each of the modules is
supplied with bypass diode fixed to it.
Network Engineering
Subject’s systems and
network engineers are extremely talented and highly experienced in the line of
Network Engineering. Networking large and medium sized organizations has been a
prized activity within the company and is approached with the same care and
proficiency as other engineering projects.
Vendor
evaluation:
Subject’s vendor evaluation
process is a standardized, quality oriented process. Vendors are evaluated
according to their experience, supply record and maintenance capability. The
list of vendors is updated re-evaluated regularly.
The personnel are quality
conscious and dedicated. Throughout the project, the program manager and the
engineers make suggestions and recommend specific hardware and software to suit
the customer’s budgetary constraints always keeping in mind the ultimate
objective of the customer.
Each stage of the project
is mapped to ensure that nothing is out of place or results in network failure.
Scalability is the prime
concern for Subject’s engineers who ensure that the customer’s network is
always scalable but robust without wasting space, time and effort.
Networks set up by the engineers seldom need more than troubleshooting
which can be done by customers’ personnel trained by the engineers. Major
problems are responded to very rapidly in an attempt to ensure minimum downtime
for the network.
Business Opportunities
Forge
an alliance with us. Reap the benefits of partnering with India's fastest
growing manufacturer of high quality globally marketed CDMA phones (Handsets
and FWTs) and telecommunication products. They believe this to be a win-win
situation in this continuously changing business economy.
They
are currently seeking partners in:
1.
Phone Housing, covers etc. - Injection Molding and others
2.
Data cables
3.
Patch Panel Antennas, connectors, etc.
4.
Feeder Cables
5.
Connector for Feeder Cables
6.
Packing material for individual phones
7.
Print Material- user guides, leaflets, etc
Press Release
XL Telecom allots equity shares
Hyderabad,
Jan. 9
XL Telecom
and Energy Ltd informed the BSE today that the company allotted 11,93,698
equity shares of Rs 10 each at a premium of Rs 250 per share upon conversion of
Foreign Currency Convertible Bonds (FCCBs) equivalent to $7.8 million.
Consequently, Triple M Investments Ltd was allotted 6,58,064 shares, Macquarie
Bank Ltd 76,519 shares and Morgan Stanley Mauritius Company Ltd 4,59,115
shares, respectively.
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 :
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.42.37 |
|
UK Pound |
1 |
Rs.84.01 |
|
Euro |
1 |
Rs.65.96 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
69 |
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/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 |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|