MIRA
INFORM REPORT
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Report Date : |
04.12.2008 |
IDENTIFICATION
DETAILS
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Name : |
BOMBAY RAYON FASHIONS LIMITED |
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Formerly Known
As : |
BOMBAY RAYON FASHIONS PRIVATE LIMITED |
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Registered Office
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D-1st Floor, Oberoi Garden Estates, Chandivali, Farms Road,
Chandivali, Andheri (East), Mumbai – 400072, Maharashtra |
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Country : |
India |
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Financials (as
on) : |
31.03.2008 |
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Date of
Incorporation : |
21.05.1992 |
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Com. Reg. No.: |
11-66880 |
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CIN No.: [Company
Identification No.] |
L17120MH1992PLC066880 |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business
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Manufacturer of textiles consisting of fabrics and garments |
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 30230000 |
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Status : |
Good |
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Payment
Behaviour : |
Usually correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having satisfactory track. Trade relations
are fair. Financial position is good. Payments are usually correct and as per
commitments. The company can be considered good for any normal business dealings at
usual trade terms and conditions. It can be regarded as a promising business partner in a medium to long
term. |
LOCATIONS
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Registered
Office/ Human Resource
Department : |
D-1st Floor, Oberoi Garden Estates, Chandivali, Farms Road,
Chandivali, Andheri (East), Mumbai-400072, Maharashtra, India |
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Tel. No.: |
91-22-66955566 |
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Fax No.: |
91-22-28476992 |
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Email : |
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Website : |
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Registrar/ Transfer Agent: |
Mr. Joy Varghese, Intime Spectrum Registery Limited C -13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West),
Mumbai – 400078, Maharashtra, India |
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Tel. No.: |
91-22-25963838 (Extension – 293) |
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Fax No.: |
91-22-25946969 |
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E-Mail : |
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Factory 1 : |
Weaving of Fabrics Raj Rajeshwari Compound, Sonale Village, Bhiwandi |
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Factory 2 : |
Weaving of Fabrics TTC Industrial Area, Navi Mumbai |
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Factory 3 : |
Garment Manufacturing 57 / A, 3rd Phase, Peenya Industrial Area, Bangalore -
560058 |
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Factory 4 : |
Garment Manufacturing 288, 4th Phase, Peenya Industrial Area, Bangalore - 560058 |
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Factory 5 : |
Weaving of Fabrics 227 / 3, Khanvel Main Road, Kherdi, Silvassa |
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Factory 6 : |
Garment Manufacturing 19th KM 53 / 10, Madanayakanna Hialli, Madavara Post
Dasunp, Bangalore - 562123 |
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Factory 7 : |
Garment Manufacturing 151, Babaasabara Palya, Mysore Road, Kengeri, Bangalore - 560058 |
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Factory 8 : |
Yarn Dyeing, Processing and Garment Manufacturing Plot Number / Survey Number 21 to 32 (P), KIADB Apparel Park, Near
Railway Station, Doddaballapur – 561203 (under set up) |
DIRECTORS
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Name : |
Mr. Janardan Agarwal |
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Designation : |
Chairman |
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Name : |
Mr. Aman Agarwal |
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Designation : |
Vice Chairman |
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Date of Birth/Age : |
36 Years |
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Qualification : |
M.B.A. (Australia) |
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Experience : |
14 Years |
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Date of Appointment : |
31.01.2003 |
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Name : |
Mr. Naseer Ahmed |
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Designation : |
Joint Vice Chairman |
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Name : |
Mr. Prashant Agarwal |
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Designation : |
Managing Director |
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Date of Birth/Age : |
34 Years |
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Qualification : |
B. Tech., M.S. (U.S.) |
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Experience : |
12 Years |
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Date of Appointment : |
01.09.1997 |
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Name : |
Mr. Uday Mogre |
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Designation : |
Executive Director (Corporate) |
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Name : |
Mr. A R Mundra |
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Designation : |
Executive Director (Finance) |
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Name : |
Mr. Pravin P Shah |
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Designation : |
Director |
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Name : |
Mr. B S Bhesania |
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Designation : |
Director |
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Name : |
Mr. S B Agarwal |
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Designation : |
Director |
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Name : |
Mr. John Mathew |
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Designation : |
Nominee Director, EXIM Bank |
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KEY EXECUTIVES
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Name : |
Ms. Prachi A. Deshpande |
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Designation : |
Company Secretary |
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Address |
D 1st Floor, Oberoi Garden Estates, Chandivali Farms Road,
Chandivali, Andheri (East), Mumbai –
400072, Maharashtra, India |
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Tel. No.: |
91-22-66955566 |
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E-Mail.: |
MAJOR SHAREHOLDERS
As on 31.03.2008
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoter Group |
27359160 |
43.43 |
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Mutual Funds and UTI |
9283263 |
14.74 |
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Banks / Financial Institutions / Insurance Companies |
257000 |
0.41 |
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Foreign Institutional Investors |
16268950 |
25.82 |
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Private Corporate Bodies |
5168062 |
8.20 |
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Non-Resident Indians |
523746 |
0.83 |
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Clearing Member and Trust |
83038 |
0.13 |
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Public |
4056781 |
6.44 |
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Total |
63000000 |
100.00 |
BUSINESS DETAILS
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Line of Business
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Manufacturer of textiles consisting of fabrics and garments |
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Products : |
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Exports to : |
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Products : |
· Tom Tailor · DKNY · Liz Clairborne Source |
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Countries : |
· Europe · U.S.A. |
PRODUCTION STATUS As on 31.03.2008
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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Fabrics |
Million Metres |
50.00 |
55.33 |
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Garments |
Million Pieces |
28.80 |
15.26 |
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GENERAL
INFORMATION
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Customers : |
· Wholesalers · Distributors · Retailers |
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No. of Employees
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6773 |
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Bankers : |
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Facilities : |
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Banking Relations : |
Satisfactory |
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Auditors : |
V. K. Beswal and Associates Chartered Accounts |
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Address : |
Mumbai |
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Associates/Subsidiaries
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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70000000 |
Equity Shares |
Rs.10/- each |
Rs.700.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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63000000 |
Equity Shares |
Rs.10/- each |
Rs.630.000 Millions |
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Out of the above:
- 11587600 equity shares were issued as fully paid up pursuant to
scheme of Amalgamation.
- 3998000 equity shares were issued as fully paid up bonus shares by
capitalization of Profit and Loss Account.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
630.000 |
630.000 |
489.797 |
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2] Advance Money received for convertible
warrants |
126.270 |
126.270 |
0.000 |
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3] Reserves & Surplus |
5289.647 |
4200.073 |
1043.845 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
6045.917 |
4956.343 |
1533.642 |
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LOAN FUNDS |
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1] Secured Loans |
6667.264 |
3195.630 |
841.114 |
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2] Unsecured Loans |
476.333 |
138.914 |
108.751 |
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TOTAL BORROWING |
7143.597 |
3334.544 |
949.865 |
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DEFERRED TAX LIABILITIES |
224.099 |
134.094 |
14.888 |
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TOTAL |
13413.613 |
8424.981 |
2498.395 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
4114.635 |
3059.497 |
687.023 |
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Capital work-in-progress |
2678.065 |
480.552 |
515.182 |
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INVESTMENT |
580.752 |
1357.668 |
100.125 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
3217.045
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1751.138
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833.539
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Sundry Debtors |
2018.365
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1020.045
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346.159
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Cash & Bank Balances |
551.877
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772.644
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117.142
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Other Current Assets |
0.000
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0.000
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0.000
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Loans & Advances |
1308.420
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734.729
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288.178
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Total
Current Assets |
7095.707
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4278.556 |
1585.018 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
708.606
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650.815
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302.920
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Provisions |
346.940
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100.477
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86.033
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Total
Current Liabilities |
1055.546
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751.292
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388.953 |
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Net Current Assets |
6040.161
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3527.264
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1196.065
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
13413.613 |
8424.981 |
2498.395 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
9261.105 |
4893.817 |
1989.803 |
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Other Income |
177.608 |
70.970 |
13.729 |
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Total Income |
9438.713 |
4964.787 |
2003.532 |
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Profit/(Loss) Before Tax |
1715.903 |
755.985 |
254.620 |
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Provision for Taxation |
504.605 |
211.850 |
72.818 |
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Profit/(Loss) After Tax |
1211.298 |
544.135 |
181.802 |
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Earnings in Foreign Currency : |
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Export Earnings |
3880.057 |
2027.432 |
NA |
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Total Earnings |
3880.057 |
2027.432 |
NA |
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Imports : |
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Raw Materials |
305.350 |
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317.187 |
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Stores & Spares |
20.475 |
0.400 |
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Capital Goods |
1078.032 |
1124.190 |
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Total Imports |
1403.857 |
1308.125 |
317.187 |
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Expenditures : |
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Cost of Materials |
6563.337 |
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1748.912 |
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Manufacturing and Other Expenses |
1572.652 |
965.169 |
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Increase/(Decrease) in Finished Goods |
(989.999) |
(414.697) |
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Interest and Financial Charges |
258.297 |
130.173 |
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Depreciation & Amortization |
318.523 |
104.491 |
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Total Expenditure |
7722.810 |
4208.802 |
1748.912 |
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QUARTERLY RESULTS
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PARTICULARS |
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30.06.2008 1st Quarter |
30.09.2008 2nd Quarter |
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Sales Turnover |
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2750.700 |
2870.200 |
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Other Income |
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12.500 |
15.600 |
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Total Income |
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2763.200 |
2885.800 |
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Total Expenditure |
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2115.800 |
2183.500 |
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Operating Profit |
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647.400 |
702.300 |
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Interest |
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73.600 |
108.100 |
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Gross Profit |
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573.800 |
594.200 |
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Depreciation |
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92.900 |
96.100 |
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Tax |
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127.000 |
128.400 |
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Reported PAT |
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349.300 |
366.900 |
KEY RATIOS
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PARTICULARS |
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31.03.2008 |
31.03.2007 |
31.03.2006 |
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PAT / Total Income |
(%) |
12.83
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10.96 |
9.07 |
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Net Profit Margin (PBT/Sales) |
(%) |
18.53
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15.45 |
12.80 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
11.86
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8.24 |
8.82 |
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Return on Investment (ROI) (PBT/Networth) |
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0.28
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0.15 |
0.17 |
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Debt Equity Ratio (Total Liability/Networth) |
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1.36
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0.82 |
0.87 |
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Current Ratio (Current Asset/Current Liability) |
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6.72
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5.69 |
4.08 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject is one of the leading, vertically integrated textile companies in India. They are having a strong presence across the entire value chain of design, yarn dyeing, weaving, fabric processing, garment manufacturing and retail. The company manufactures a wide variety of fabrics and garments. The company operates through 13 manufacturing facilities including one sampling unit in Mumbai. They are located across Bangalore in Karnataka, Navi Mumbai and Thane in Maharashtra and Silvassa; in Dadra and Nagar Haveli.
Subject was incorporated on May 21, 1992 as Mudra Fabrics Private Limited On
October 13, 1992 the company was converted into a public limited company. In
September 30, 2004, the company got their present name, Subject During the year
2003-04, the company expanded the capacity by adding plant and machinery and
other assets to the value of Rs.40.261 millions.
In the year 2005, the company consolidated the Bombay Rayon Group business into
Subject In March 2005, Bombay Rayon Private Limited was amalgamated with the
company with effect from April 1, 2004. Also, the two partnership firms namely
Garden City Clothing and BR Exports were consolidated with the company with
effect from March 1, 2005. This results the consolidation of businesses from
fabrics, design development and garments under one corporate roof.
In September 5, 2005, the company incorporated a wholly owned subsidiary
company, BRFL Europe BV in Almere, Netherlands. In March 2008, the company
commenced commercial production in their Garment unit in Bangalore which is
having a capacity to manufacture 7.8 million pieces of garments per
annum.
During the year 2006-07, the company acquired DPJ Clothing Limited, a UK based
company which is engaged business of wholesale marketing and distribution of
clothing products. Also, the company incorporated a wholly owned subsidiary
namely, Bombay Rayon Retail Limited with a view to expand into domestic market
through retail segment. In April 2007, the company inaugurated the Integrated
Textile unit at Doddaballapur in Karnataka.
Bombay Rayon Apparels Private Limited was incorporated on June 26, 2007. In
August 2007, the said subsidiary company has taken over the garment business
from Leela Scottish Lace Private Limited at a consideration of Rs.1550 millions.
Subsequent to the takeover, the name of the company was changed to Leela
Scottish Lace Private Limited
During the year 2007-08, the company entered into an MOU with Government of
Maharashtra for setting up of new capacities for manufacturing of fabrics and
garments at various locations. In October 2007, the company acquired LNJ
Apparel, a unit of RSWM Limited which is engaged in the business of
manufacturing and exports of garments for a consideration of Rs.255.000
millions.
In May 2008, the company acquired garment business of Maryan Apparels Private
Limited for a consideration of Rs.147.400 millions. The unit is engaged in the
manufacturing and exports of garments and is situated at Thiruvananthpuram,
having manufacturing capacities of 2.40 mn pcs per annum. In May 5, 2008, the
company has set up a subsidiary under name BRFL Italia SRL at Parma, Italy,
which has taken over the brand 'Guru', and other retail business of Jam Session
Holding S r l, an Italian company.
The company is in the process of setting up the manufacturing units in the
Integrated Textile Parks at Islampur and Latur. Also, the company approved the
Scheme of Amalgamation of Leela Scottish Lace Private Limited, a wholly owned
subsidiary with the company.
OPERATIONS
The journey of record growth continued for the Company during the current
Financial Year also. The Turnover increased sharply by 1.89 times to
Rs.9270.641 millions as compared to Rs.4898.969 millions previous year, with
export turnover almost doubling to Rs.4210.926 millions from Rs.2134.084
millions. The Profit After Tax (PAT) for the year increased by 2.23 times to
Rs.1211.298 millions as compared to Rs.544.135 millions in the previous
year.
EXPANSION OF BUSINESS
ACQUISITIONS:
Garment Unit of RSWM Limited
'LNJ Apparel' a Unit of RSWM Limited (formerly known Rajasthan Spinning and
Weaving Mills Limited) has been acquired at a consideration of Rs.255.000
millions in October, 2007. The Unit is located at Bangalore and is engaged in
the business of manufacturing and exports of garments with manufacturing
capacity of 2.40 mn pcs p.a.
Garment Business from Maryan Apparels Private Limited
Garment Business of Maryan Apparels Private Limited has been acquired for a
consideration of Rs.147.400 millions in March, 2008. The unit is engaged in the
manufacturing and export of Garments and is situated at Thiruvananthpuram,
having manufacturing capacities of 2.40 mn pcs p.a.
EXPANSION OF MANUFACTURING CAPACITIES:
MOU with Government of Maharashtra: During the year, the Company entered into
an MOU with Government of Maharashtra with a package of incentives to be
provided for setting up of new capacities for manufacturing of fabrics and
garments at various locations. The package of incentives include interest subsidy
for term loans, reimbursement of employer's contribution to funds, single
window clearance and other benefits.
Expansion of processing and garmenting capacities:
The location of expansion project for new processing facilities with capacity
of 70 million mtrs p.a. of Fabrics and Garment unit with capacity of 20,000
pieces per day out of total capacity of 86,000 pieces per day has been shifted
from the State of Karnataka to the State of Maharashtra to capitalize the
incentives granted by Government of Maharashtra. The Garment units with
capacities of 14,000 pieces per day have already commissioned commercial
production and implementation of other garment and fabric capacities is going
on in full swing and expected to go for commercial production in the last
quarter of the coming financial year.
Further Expansion of Yarn Dyeing, Weaving,
Processing and Garmenting capacities:
During the year, the Company has embarked upon further expansion projects in the State of Maharashtra to set up the following capacities :
Yarn Dyeing - 29,206 kgs per day
Weaving - 380 Looms
Processing - 3,38,000 Mtrs. per day
Garmenting - 1,00,000 pieces per day
Based on the Techno-Economic Feasibility Report prepared by Gherzi Eastern
Limited, Mumbai and the financial appraisal by Axis Bank Limited, the total
cost of expansion project is estimated at Rs.9150 millions to be funded as
under:
Equity:
Rs.2510 millions (Rs.1250 millions out of funds raised under QIP and Rs.1260
millions by conversion of warrants into equity shares)
Debt: Rs.6100 millions.
Internal Accurals: Rs.540 millions
The debt component shall be under Technology Upgradation Fund Scheme (TUFs)
entitling the Company an interest subsidy of 5% and capital subsidy of 10% on
total investment in Processing and Garment Machineries.
Some of the proposed new capacities for garmenting shall be set up in the
Integrated Textile Parks of Islampur and Latur for which concerned SPVs have
received approvals from the Ministry of Textiles of Government of India
sanctioning the Scheme for Integrated Textile Park entitling to get subsidy of
40% of total infrastructure cost for setting up the same by SPVs. In addition,
the Company shall be entitled to various incentives as per the Package Scheme
of Incentives, 2007 announced by Government of Maharashtra.
The project execution work has been undertaken by finalising the critical
machineries with technologies and capacities for all yarn dyeing, weaving,
processing and garmenting is expected to be fully on stream by end of next
financial year.
SUBSIDIARY
COMPANIES:
BRFL Europe B.V. The wholly-owned subsidiary of the Company, BRFL Europe B.V at
Netherlands continued to play an important role for canvassing the business,
services to customers on products and designs.
On 5th May, 2008, the Company has set up a subsidiary under name BRFL Italia
SRL at Parma, Italy which has taken over the brand 'Guru' and other retail
business of Jam Session Holding S.r.l, an Italian Company. The Brand 'Guru' is
an internationally renowned brand having global presence. Presently, the
business has been acquired on lease with a put and call option. The aforesaid
acquisition has enabled the Company to spread its wings in European Markets in
the retail sector.
During the current financial year i.e. 2008-09, BRFL Europe B.V. has become a
subsidiary of Bombay Rayon Retail Limited, a subsidiary of the Company.
BRFL Europe B.V. has registered a net profit of 54.493 for the year ended 31st
March, 2008.
DPJ Clothing Limited
DPJ Clothing is engaged in business of wholesale marketing and distribution of clothing Products. The said subsidiary is helping in getting many mid size retailers of Europe by providing the services either by direct import or by import and delivery basis.
DPJ Clothing Limited has registered a net profit of 381,623 for the year ended
31st March, 2008.
Bombay Rayon Retail Limited
With a view to make foray into Retailing Business both at domestic and international markets, the Company is looking for different options and opportunities.
Leela Scottish Lace Private Limited. (formerly known as Bombay Rayon Apparels
Private Limited)
Bombay Rayon Apparels Private Limited was incorporated on 26th June, 2007. The said subsidiary company has taken over the Garment business from Leela Scottish Lace Private Limited at a consideration of Rs.1550 millions. The Garments business acquired comprises of manufacturing and exports of readymade garments to big international labels having eighteen manufacturing facilities at Bangalore, Chennai, Kochi and Thiruvananthapuram. Subsequent to the takeover, the name of the Company was changed to Leela Scottish Lace Private Limited. Leela Scottish Lace Private Limited., has registered a net profit of Rs. 60.411 millions for the period ended 31st March, 2008.
The Company has made an application to Central Government seeking exemption
from the requirements of attachment of annual accounts of the Subsidiary
Companies with the Annual Report for year ended 31st March 2008. The Annual
Accounts of the subsidiary companies and the related detailed information will
be made available to the members of the Company who seek such information. The
Annual Accounts of the subsidiary companies are open for inspection by any
member at the Registered office of the Company. Any member of the Company, who
wishes to obtain a copy of the financial statements of any of the subsidiary
companies, may send a request in writing to the Company Secretary at the
Registered Office of the Company.
MANAGEMENT DISCUSSION
AND ANALYSIS
Economic overview
India has been in a high growth mode since the last decade. The country has enjoyed a Compound Annual Growth Rate (CAGR) of 8.6% over the past five years. In 2007-08, India's GDP grew at a scorching rate of 9%. The per capita income grew to over Rs.0.032 million in the last fiscal from approximately Rs.0.029 million in the previous year, indicating growing purchasing power. In an evident shift of investor interest to emerging economies, India has emerged as the fourth most attractive business location in the world. Foreign Direct Investment (FDI) into the country surged to over USD 25 billion in 2007-08. India has the largest young population in the world, spurring a boom in consumption in the country. India's consumer market is the twelfth largest in the world, expected to be the fifth largest by 2025. Despite the global economic slowdown, India is expected to be in a sweet spot in 2008-09, growing at an average of around 8.5%. It is clear that India is all set to play a key role in the world economy.
Industry overview
The global textile and apparel industry, estimated at around USD 450 billion is one of the largest contributors to international trade. With the implementation of the Agreement on Textiles and Clothing (ATC), all trade barriers; both tax and non-tax imposed by the developed countries on imports from developing countries have come to an end with effect from January 1 2005, giving way to a free trade regime in global textile trade. China and India have been the biggest beneficiaries of this development and are expected to account for approximately 65% of global clothing exports in the coming years.
India accounts for 8% of the global trade in textiles and is ranked as the 6th
largest supplier in the world. The country is the largest producer of jute,
second largest producer of cotton yarn, second largest producer of silk and the
fifth largest producer of synthetic fibre/yarn globally.
The Indian textile and apparel industry, currently worth around USD 49 billion
is one of the largest industries in India. It makes a significant contribution
to the country economy, adding about 5% to the GDP, 14 % to the industrial
production and 17% to the total export earnings. Textile exports stood at USD
20.5 billion in 2007-08. It is the largest foreign exchange earning sector in
the country besides being the second largest provider of employment after
agriculture, being directly responsible for the employment of around 38 million
people and indirectly for another 50 million people.
Going forward, the outlook for the industry looks very encouraging. The
industry is becoming more competitive by embracing modern technology and work
processes, building strong brand equity and consistently achieving higher
growth rates than ever. Increasing organized retail penetration with global
giants entering the Indian markets, favourable demographics, rising disposable
income levels and a rapid change in consumer preference towards high-end value
added products are driving the domestic consumption demand. Export growth has
been high post quotas and is all set to soar higher in the near future. The
change in the product mix in favour of higher value-added products has
differentiated India from regional peers and contributed towards higher price
realizations and better margins.
Besides, the Indian Government has recognized the potential of the textile and
apparel sector and has undertaken several measures to give it a further boost.
Some of these include:
* The Indian textile and apparel industry is projected to receive an
impetus worth USD 35 billion as investments by 2012.
* A total of 30 integrated textile parks have been sanctioned under
the Scheme for Integrated Textile Parks (SITP). These parks would commence
operations by the end of 2008-09 and 10 more parks would be added by 2012 under
SITP.
* Technology Mission on Cotton has been launched to make available
quality raw material at competitive prices.
* Extension of the 5% interest subsidy via Technology Upgradation Fund
Scheme (TUFS) that facilitates the modernization and upgradation of the
textiles industry, previously slated to expire in March 2007.
* 100% FDI allowed through the automatic route.
* De-reservation of readymade garments, hosiery and knitwear from the SSI
sector.
* Fast progress on relaxing labour laws to improve sector productivity.
With textile SEZs offering flexible labour laws, a national rollout is widely
expected.
* Three centres of the National Institute of Fashion Technology (NIFT)
would be opened soon in Bhopal, Madhya Pradesh; Patna, Bihar and Shillong,
Meghalaya. Recently, two centres of NIFT have been opened at Rae Bareli, Uttar
Pradesh and Kannur, Kerela.
Business overview
Subject is one of India's leading, vertically integrated textile companies, having a strong presence across the entire value chain of design, yarn dyeing, weaving, fabric processing, garment manufacturing and retail. The Company is currently the largest garment manufacturer in India. BRFL's focus on vertical integration, innovative design and manufacturing high-end garments enable the Company to achieve higher margins than its peers.
BRFL manufactures a wide variety of fabrics and garments. Fabrics are sold in
the domestic market as well as exported. In the domestic market, fabric is sold
under the brand name Bombay Rayon' to garment manufacturers and retailers. In
the export market, fabrics are exported to the Middle East and European
countries. Garments are 100% exported to the USA and EU for reputed retail
brands.
BRFL presently operates through 13 manufacturing facilities (including one
sampling unit in Mumbai) located across Bangalore, Karnataka; Navi Mumbai and
Thane, Maharashtra and Silvassa; in Dadra and Nagar Haveli. Currently, BRFL's
yarn dyeing capacity is 1.4 million kg p.a. fabric manufacturing capacity is 55
million metres p.a. and garment manufacturing capacity is 30 million pieces
p.a. The Company has a quick turnaround time of 60 days which under fast track
delivery is reduced to 30 days as compared to the industry average of 90
days.
Acquisitions during the year
* Acquired the garment business of Leela Scottish Lace (P) Limited for a
total consideration of Rs.1550 million. The Company has been an established
garment manufacturer and exporter for the last 30 years, having 16 factories
and capacity of more than 50,000 pieces per day.
* Acquired the garment manufacturing unit 'LNJ Apparel' of RSWM Limited,
an LNJ Bhilwara Group company for Rs.255 million. The unit is located in
Bangalore, Karnataka having a manufacturing capacity of 8000 pieces per
day.
* Acquired the garment business of Maryan Apparel Private Limited' for
Rs.147.40 million. The unit is located in Thiruvanantpuram, Kerela having a
manufacturing capacity of 8000 pieces per day.
* Acquired the brand GURU' and the retail business of Jam Session Holding
S.r.l (Jam) through BRFL Italia S.r.l (BRFL Italia), a company promoted by BRFL
Europe B.V, a wholly-owned subsidiary of Bombay Rayon Retail Limited. The
holding company of these companies is Bombay Rayon Fashions Limited. GURU' is
an established, highend, European retail brand with substantial Goodwill in the
market. The Company plans to open a number of GURU' outlets globally in the
next 3 years.
BRFL has also signed a Memorandum of Understanding (MoU) with the Government of
Maharashtra for its upcoming expansion projects in the state. The MoU provides
for the various fiscal incentives for the Company that will enable it to become
the lowest cost producer of fabric and garments. The Company has initiated SPVs
which have already received approvals from the Ministry of Textiles,
sanctioning the project under SITP. The Company is also setting up
manufacturing units in these integrated textile parks. This expansion project
will facilitate an increase in the Company's processed fabric manufacturing
capacity to 235 million metres p.a. and garment manufacturing capacity to
250,000 pieces per day.
Opportunities
Globally, the textile and apparel industry is moving steadily on a high growth path. It is expected to grow to USD 700 billion from the current level of USD 450 billion by 2010 with demand for textiles and apparel expected to grow to 25% from current figures where Asia will contribute 85%. Currently, China controls around 40% of the global apparel trade directly. Of the remaining 60%, around half of it is dependent on China for raw material inputs. Thus, around 70% of the global trade is sourced from China, which has been the lowest cost producer for over two decades. However, over the last two years, there has been a distinct change in the scenario. A steep appreciation of the Chinese currency, wage increases, power shortages, interest rate hikes, efforts to clean up its image for the Olympic Games, decline in the level of incentives given to the textile industry and new regulations have lead to a decline in China's share. This coupled with the increase in the incentives given to the Indian textile and apparel industry has given India an edge over China.
India's domestic textile industry is also set to tread on a high growth path.
Favourable demographics, rising per capita disposable income, increasing
organized retail penetration and a change in the consumer preference in favour
of highend, value added products are driving the domestic textile and apparel
consumption demand. Indian textile and apparel sector is expected to grow to
USD 110 billion by 2012, of which the domestic market is estimated to be worth
USD 60 billion and exports valued at USD 50 billion. Textile exports stood at
USD 20.5 billion in 2007-08. This figure is likely to increase by 20% during
the current fiscal and grow to USD 40 billion by 2010.
BRFL's expertise, experience, high quality and vertically integrated execution
capabilities are factors that will help the Company leverage the plethora of
opportunities that lie ahead.
Outlook
Considering the imminent boom in the global textile and apparel industry, it is safe to say that the future of the Company looks very promising. Vision 2010 for textiles, formulated by the Government of India aims to increase the size of the Indian textile and apparel industry to USD 85 billion with exports amounting to USD 50 billion. BRFL is fully prepared to participate in this opportunity with aggressive expansion plans and growth strategies. The Company expects 2008-09 to be an inflection point for the business, preparing BRFL for higher growth then on.
The Company is the largest garment manufacturer in India. BRFL has a strong
client base, low labour costs, high productivity and enjoys economies of scale.
The Company displays manufacturing diversity with machines compatible to
cotton, nylon, polyester, linen and blends to hedge against changing trends in
fashion, hence retaining full capacity. BRFL has an experienced management team
and a highly innovative design team that churns out 5 new designs on a daily
basis. The Company has a consistent track record of project implementation
without significant cost and time overruns.
BRFL's vision is to become a complete apparel company. This will be
accomplished by moving up the value chain to higher value added products
through its vertically integrated business, increasing fabric and garment
manufacturing capacities, growing business organically through new product
launches and inorganically by acquiring new facilities. With continued focus on
innovative designs, the Company aims to become the lowest cost producer of
fabrics in the world by creating the best manufacturing facilities. BRFL also
aims to become the largest producer of fabrics and garments in the country and
a significant global player, with focus on the high - margin garment
segment.
To achieve its vision, BRFL is expanding its capacities across the value chain.
10.5 million kg p.a. capacity is being added to yarn dyeing facilities to take
the total capacity to 11.9 million kg p.a; 180 million metres p.a. capacity is
being added to fabric production facilities to take the total capacity to 235
million metres p.a. and 15 million pieces p.a. capacity is being added to
garment production facilities to take the total capacity to 75 million pieces
p.a. New manufacturing units are also being set up in Maharashtra (for fabric
and garments) and Bangalore, Karnataka (for garments). BRFL is on a lookout for
strategic international tie-ups for garment manufacturing with companies in
India, Japan and China to expand its global footprint. The Company believes this
is just the beginning and the best is yet to come.
Segmental Reporting:
The company is mainly engaged in the business of manufacturing of textiles consisting of fabrics and garment. Considering the nature of business and financial reporting of the company, the company has only one segment viz; textile as reportable segment. The company operates in Local and Export segments geographically. The sales for both are separately given, but to the nature of business the assets/ liabilities and expenses for these activities can not be bifurcated separately.
Contingent
liabilities not provided for:
|
|
|
Rs. in Millions As on 31.03.2008 |
|
Corporate guarantee given by the company for its wholly owned subsidiary for Term Loan given by a bank |
|
1135.427 |
|
|
|
|
FIXED ASSETS:
Land
Buildings
Plant and Machinery
Furniture and Fixtures
Office Equipments
Vehicles
Computers
WEBSITE DETAILS:
Profile:
Bombay Rayon manufactures one of the most versatile and technically advanced fabrics and apparels in India.
Presently, we are the largest shirt manufacturer in India. The fabric manufacturing facilities are 50 million metres per annum. The garment manufacturing facilities are 35 million pieces per annum.
BRFL currently employs over 32,000 people.
Milestones:
1986 Bombay Rayon Group was established by Mr. Janardhan Agarwal.
1990 First fabric manufacturing facility came into existence in Maharashtra.
1998 Bombay Rayon group commenced export of fabrics.
2001 Garment division was launched.
2005 Bombay Rayon Groups business was consolidated into BRFL.
The company made a successful IPO and
is listed on all the stock exchanges in India.
BRFL also acquired DPJ Clothing U.K., supplying to high
street retailers in U.K.
2005 BRFL set up 7 garment manufacturing facilities in Bangalore with 7000
machines.
2007 BRFL acquired ?Leela Scottish Lace? one of the largest garment
manufacturing units set up in
India, making BRFL one of the largest apparel groups in India.
2007 BRFL also acquired
?LNJ Apparel? a 1000 machine specialized bottoms plant.
2007 BRFL marked the commencement of the mega USD 250 million textile and
garment project under
a special MOU signed with the government of Maharashtra.
2008 BRFL acquired the iconic brand ?Guru.?
Mr. Janardhan Agarwal
Chairman
Janardan Agrawal, is the Chairman of the Company. He is the main person behind
the establishment and growth of the Bombay Rayon Group. As chairman he provides
strategic direction to the Company. He is accredited with the establishment of
the Bombay Rayon brand of fabrics in the local retail market. He has also set
up a unique bi-annual presentation of the company’s collections to the trade, a
very novel way of marketing products and has exhibited foresight and vision in
the continuously expanding business and has brought the same to its present
status. He has been the driving force behind the Group’s growth. Since 1997 Mr.
Agrawal is assisted by his sons Aman Agrawal and Prashant Agarwal. In spite of
adverse business cycles during the 1990’s the group has consistently made
profits in all its companies under his dynamic and compassionate leadership.
Mr. Aman Agrawal
Executive Vice Chairman
Aman Agrawal, is the Executive Vice-Chairman of Company. He is the elder son of Mr. Janardan Agrawal and has over 11 years of experience in the textile industry. Over the years he has developed expertise in weaving technology. The Group’s reputation of being capable of delivering any sort of complicated yarn, dyed fabric is mainly due to his efforts of building in-house expertise of transforming complex designs from drawing board to shop floor. He is currently in charge of fabrics manufacturing and controls all the fabrics manufacturing activities including procurement of yarn, other raw materials, production planning and control and Packing and logistics. He provides strategic direction in selection of technology and machineries in setting up new manufacturing facilities, improvement of production processes and new ventures. He has pursued management studies from Alexander College, Perth, Australia.
Mr. Prashant Agarwal
Managing Director
Prashant Agarwal, is the Managing Director of the Company. He is the younger son of Mr. Janardan Agrawal and has over 9 years of experience in the textile industry. Presently he is in charge of fabrics design, oversees marketing of fabrics and holds responsibility from initiation to delivery for the garment business. Mr. Prashant is accredited with development and growth of the Group’s export business. Under his leadership exports of fabrics grew multifold. The establishment of Bombay Rayon as a fashion brand in the international market and a reliable supplier of quality garments to top labels has been his achievement. The shift of strategic focus from a fabrics company to a fully integrated complete apparel company is due to his vision. He holds a bachelor degree in Chemical Engineering from University Institute of Chemical Technology, Bombay. He has done MS in Chemical Engineering and Petroleum Refining from Colorado School of Mines at Golden near Denver, State of Colorado, USA.
Mr. Naseer Ahmed
Joint Vice Chairman
Naseer Ahmed, is the Joint Vice-Chairman. He is a sitting member of the legislative council of the state of Karnataka. He was a minister of state for small-scale industries in the state of Karnataka from October 1990 to November 1992. He holds a bachelor degree in commerce from Kolar Gold Fields 1st Grade College. After completing his studies he entered in to active politics and held various positions in the Congress Party. He has promoted four companies in the textile sector. Over time his group has established a niche in the export market by supplying to top international brands.
Mr. Uday Mogre
Executive Director – Corporate
Uday C. Mogre, holds a bachelor degree in technology (Chemical Engineering) from Laxminarayan Institute of Technology, Nagpur and has a completed Post Graduate Diploma in Management from Indian Institute of Management, Ahmedabad. Mr. Mogre has over twenty-five years of experience and has initially worked with organizations like Advani Oerlikon Limited for eight years and then with Universal Luggage as General Manager (Finance). Later on he also worked with Reliance Industries Limited for fourteen years and his last assignment was with Texmaco group of companies (Jakarta, Indonesia) as Senior Vice President and Chief Financial Officer. During his long tenure with Reliance Industries Limited he worked as Executive Assistant to the Vice-Chairman for the first four years and later on he handled senior level positions in the textured yarn and fibre intermediate marketing and finally he was appointed Vice President (Finance). He was involved in project financing and implementation of SAP. In the initial stage of his career he worked as Scientific Officer with Heavy Water Project-Tuticorian. Department of Atomic Energy, Gol. Besides BRFL, Mr. Mogre does not hold directorship in any other Company.
Mr. A R Mundra
Executive Director – Finance
A.R. Mundra, has over twenty-four years of experience in finance, commercial and managerial related matters. He holds a bachelor’s degree in commerce and law (gold medallist). He is an associate member of the Institute of Chartered Accountants of India and also of the Institute of Company Secretaries of India. Besides this, he is a member of the International Institute of Business Management, London. Mr. Mundra’s core strength lies in fund procurement, internal controls, organizational systems and strategic planning. He has worked with organisations like Bhansali Engineering Polymers Limited as President, Welspun group of companies as Senior Vice-President (Finance) and Company Secretary and Chief Executive (Commercial). In the initial stage of his career he worked with Indian Rayon and Industries Limited, Birla group of companies and Gujarat Ambuja Cement Limited in various capacities. He was awarded ‘Samaj Shri’ for excellence in management by Indian Institute of Management Executives, Mumbai in 1994. Besides this, Mr. Mundra does not hold directorship in any other Company.
Dr. Pravin P. Shah
Independent Director
Dr. Pravin P. Shah, years is an independent Director on the Board. He has over thirty-four years of professional experience in the areas of financial consultancy, corporate structuring/restructuring, management consultancy, taxation, valuation, property matters, accounting, auditing, company law and FEMA matters etc. He is on the board of many companies including J. M. Morgan Stanley Private Limited, Adani Exports Limited, Bhansali Engineering Polymers Limited etc. Since 1980 he is a partner of Pravin P. Shah, a firm of chartered accountants undertaking specialized services mainly in the areas of public issues, private funding, foreign collaborations, business reorganizations, valuation, tax planning etc. From 1975 to 1980 he was director of Internal Consulting, WUI Inc., New York, a subsidiary of Xerox Corporation and was involved in providing in-house consulting services in the areas of business planning, costing, finance, new project evaluation, capital expenditure planning etc. Dr. Shah is a fellow member of Institute of Chartered Accountants of India (All India 4th Ranker in the final examination held in May 1969) and Institute of Cost and Works Accountants of India. He has also completed his Ph.D. in cost accounting from University of Bombay. He holds a bachelor degree in commerce from the University of Bombay (ranked first in order of merit).
Mr. B.S. Bhesania
Independent Director
B. S. Bhesania, has over forty eight years of professional experience. He is an Attorney-at-law, High Court, Bombay since 1962 and a Solicitor, Supreme Court of England and Supreme Court of Hongkong since 1981 and 1982 respectively. His association with Messers Mulla and Mulla and Craigie Blunt and Caroe dates back to 1959 and he is partner with that firm since 1971.
Mr. S.B. Agarwal
Independent Director
S. B. Agarwal, is an independent Director on the Board. He has over thirty-nine years of professional experience. For eighteen years from 1982 to 2000 he was Business Head for global textile companies in Aditya Birla Group having textile units at various locations in India and abroad. Before joining the Aditya Birla Group he was President and Chief Executive Officer of Rajasthan Spinning Mills (Bhilwara Group) for a brief period of two years. He has also worked with J. C. Mills, Gwalior a Birla group company for fourteen long years holding various positions including President. Mr. Agarwal has participated in various associations. Presently he is heading the textile group in the Indo-American Chamber, Mumbai and Textile Promotion Group of Federation of India Chambers of Commerce and Industries. He is a member of the Institute of Chartered Accountants of India. Mr. Agarwal holds a masters degree in commerce and economics and has also graduated in law.
Mr. John Mathew
Nominee Director - EXIM Bank
Chief General Manager in EXIM Bank of India with over 20 years experience in corporate banking and structured financing.
Ms. Prachi Deshpande
Assistant Company Secretary
Prachi Deshpande, Assistant Company Secretary is with the Company since November 1, 2004. In the Company she heads the secretarial and legal department and is responsible for redressal of investors grievances etc. Before joining the Company she was working with Rishiroop Group of Companies and was the designated company secretary of a public limited company of that group. At the beginning of her career she was associated with an advocate and was involved in drafting of various legal documents etc. She has graduated in Commerce and Law from Mumbai University and is also an associate member of the Institute of Company Secretaries of India.
Press Releases
Bombay Rayon acquires UK- based DPJ Clothing for $ 2.90mn
MUMBAI, 23rd February 2007: Bombay Rayon
Fashions Limited, leading manufacturer of fashion fabrics and garments, has
acquired UK- based DPJ Clothing Limited at a consideration of £ 1.54 million
($2.90m). With this acquisition, DPJ Clothing Limited has become a foreign
subsidiary of Bombay Rayon Fashions Limited.
This acquisition through the purchase of 420 Ordinary Shares (70% of total capital) in DPJ Clothing was approved by the Board of Directors of Bombay Rayon Fashions.
“With this acquisition, Bombay Rayon will be able to expand its customer base in the European region for its designer garments and also get the headway for outsourcing and distributing the other related products in that region.”, said Mr. Prashant Agarwal, MD, Bombay Rayon Fashions Limited.
About Bombay Rayon Limited
Bombay Rayon Group established by Mr. Janardhan Agrawal in 1986 with a modest beginning in manufacturing of fashion fabrics at present is considered amongst India’s leading manufacturers and exporters of fashion fabrics and garments with a State-of-the-art manufacturing facilities at New Mumbai, Silvassa, Sonale and Bangalore fully backed by the facilities of product development, design studio and efficient sampling infrastructure to provide the quality service to its customers in India and abroad.
About DPJ Clothing Limited
DPJ Clothing Limited is engaged in the business of wholesale marketing and distribution of clothing products and is incorporated under English Companies Act 1985 with place of business and Registered office at Birmingham. DPJ Clothing is currently working with various retail fabric chains facilitating the outsourcing of fabrics and garment either by direct import or by import and delivery basis with a total turnover of £ 6.78 million and PAT of £ 0.3 million for the year 2005 -06,which is projected to increase by 50% in current year
Bombay Rayon unveils Mega Investment Plan in Maharashtra
MUMBAI, 13th November 2007:
Highlights
- Major expansion in Yarn dyeing, Weaving, Processing and Garment capacities. Adding Fabric processing capacity of 5 lac meters per day and garment capacity of 1,00,000 garments per day.
- Investment of Rs.11000 millions.
- Creating direct employment of about 32,000 people.
Bombay Rayon Fashions Limited (BRFL) signed a Memorandum of Understanding (MOU) today with the Government of Maharashtra towards expanding its fabric and garment making capacities by setting up new facilities at Tarapur, Islampur, Ichalkaranji and other lesser developed areas of Maharashtra like Latur, Nanded and Osmanabad.
Presently BRFL has Fabric processing capacity of 1,50,000 meters per day and garment capacity of 1,00,000 garments per day in the State of Karnataka. However, BRFL has chosen to undertake major expansion in its capacities by setting up Greenfield Units for Yarn Dyeing, Weaving, Processing and garmenting in the State of Maharashtra.
BRFL is presently employing more than 30,000 people in its various units spread over Mumbai and Bangalore. With the addition of these capacities potential direct employment generation would be exceeding an additional 32,000 people.
The MOU was signed by Mr. V.K.Jairath, Principal Secretary, Department of Industries, Government of Maharashtra (GoM) and Mr. Prashant Agarwal- Managing Director , Bombay Rayon Fashions Limited in the presence of Mr. Vilasrao Deshmukh, Hon’ble Chief Minister of Maharashtra, Mr. Ashok Chavan, Hon’ble Minister of Industries, GoM, Mr. Jayantrao Patil, Hon’ble Minister of Finance , GoM, Mr. Johny Joseph, Chief Secretary , GoM , Mr. Aman Agarwal – Vice Chairman BRFL, Mr. Naseer Ahmed – Jt. Vice Chairman BRFL and Mr. Uday Mogre – Executive Director BRFL.
Speaking on this occasion the Chief Minister Mr. Vilasrao Deshmukh said “BRFL is a fast growing company and has grown to its present level of turnover of Rs.10000 millions p.a. especially posting phenomenal growth in the last three years. I am happy to note that BRFL has decided to establish fabric and garment manufacturing units in the lesser developed areas of Maharashtra, thereby creating major employment opportunity for the local people”
Minister of Industries, GoM Mr. Ashok Chavan said, “State of Maharashtra have been in the fore front in attracting investment and providing all the infrastructure for setting up industries. The proposed investment by BRFL proves that Maharashtra enjoys the confidence of entrepreneurs.
Mr. Jayantrao Patil, Hon’ble Minister of Finance, GoM, said “I have had the occasion of visiting BRFL units in Bangalore and I was extremely impressed with the facilities set up by BRFL in the State of Karnataka. Since BRFL started its operation in and around Maharashtra, it was my objective to bring BRFL back to Maharashtra and facilitate setting up of their major expansion plans in the State of Maharashtra”.
Mr. Prashant Agarwal, Managing Director of Bombay Rayon Fashions Limited said “our decision to invest in the State of Maharashtra was owing to the tremendous support and comfort offered by Government of Maharashtra. We are also very grateful to Government of Maharashtra for promising all necessary help and assistance in speedy implementation of this Project”.
Mr. V. K. Jairath, Principal Secretary, Department of Industries, GoM, while welcoming the guests assured BRFL, of all assistance and help in setting up this project and reiterated full support of its agencies like MIDC for providing excellent infrastructure and Single Window Clearance for this Project.
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 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.49.90 |
|
UK Pound |
1 |
Rs.74.30 |
|
Euro |
1 |
Rs.63.42 |
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 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
|
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
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 |
|