MIRA
INFORM REPORT
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Report Date : |
05.12.2008 |
IDENTIFICATION
DETAILS
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Name : |
GUJARAT
NRE COKE LIMITED |
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Registered Office : |
22, Camac Street, Block - C, 5th Floor, Kolkata – 700016, West Bengal. |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
29.01.1986 |
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Com. Reg. No.: |
21-40098 |
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CIN No.: [Company
Identification No.] |
L51909WB1986PLC040098 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CALM01769F |
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PAN No.: [Permanent
Account No.] |
AABCG6225H |
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Legal Form : |
A
public limited liability company. The company's shares are listed on the
Stock Exchange. |
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Line of Business : |
Subject
is engaged in the business of coal processing, manufactures low-ash
metallurgical coke (LAMC). LAMC mainly used in soda-ash plants, cast, iron
and brass foundries and the best furnaces of steel plants is largely imported
into India. |
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 20000000 |
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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 fine track. Directors are reported as experienced,
respectable and having satisfactory means of their own. Their trade relations
are reported as fair. Business is active. Payments are usually correct and as
per commitments. The company can
be considered good for normal business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered Office : |
22, Camac Street, Block - C, 5th Floor, Kolkata - 700016, West Bengal, India |
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Tel. No.: |
91 - 33 - 22891471-75 |
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Fax No.: |
91 - 33 - 22891470 |
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E-Mail : |
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Website : |
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Corporate Office : |
73, New York
Tower, “A”, Thaltej, Gandhinagar Highway, Ahmedabad - 380054 |
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Tel. No.: |
91-79-26843438 /
26852068 |
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Fax No.: |
91-79-26843437 |
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E-Mail : |
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Factory 1 : |
Dharampur, Khambhalia, Jamnagar, Gujarat - 370140, India |
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Factory 2 : |
Lunva, Bhachau, Kutch, Gujarat – 370140, India |
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Factory 3 : |
Road No.16, 1st Cross, KIADB, Belur Industrial Area,
Dharwad, Karnataka – 580011, India. |
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Branch Office : |
225 C, A J C Bose Road, Kolkata – 700020, West Bengal, India |
DIRECTORS
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Name : |
Mr. Gulshan Lai Tandon |
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Designation : |
Chairman Emeritus |
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Name : |
Mr. Girdharilal Jagatramka |
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Designation : |
Chairman |
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Name : |
Mr. Arun Kumar Jagatramka |
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Designation : |
Vice Chairman & Managing Director |
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Name : |
Mr. Subodh Kumar Agarwal |
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Designation : |
Director |
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Name : |
Mr. Chinubhai R. Shah |
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Designation : |
Director |
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Date of Birth
: |
04.06.1937 |
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Qualification : |
M.A., LL.M. (Gold Medalist), PCS, DLP, DTP |
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Directorship in other companies : |
1. Adani Power Limited 2. Apollo Hospitals International Limited 3. Arman Lease & Finance Limited 4. Cadila Pharmaceuticals Limited 5. Cadila Pharmaceuticals (Ethiopia) PLC 6. Doshion Limited. 7. G.S.E.CLimited. 8. Gulmahor Greens-Golf & Country Club Limited. 9. H.K.Finchem Limited. 10. India Renal Foundation 1 1 . Meghamani Organics Limited 12. Nirma Limited. 1 3. The Tinplate Co. of India Limited |
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Chairmanship/
membership of Committees in other companies : |
1 . Arman Lease and Finance Limited - Audit Committee - Member, Shareholders Grievance Committee - Chairman. 2. Cadila Pharmaceuticals Limited. - Audit Committee - Chairman 3. H.K.Finchem Limited -Audit Committee - Member 4. Meghamani Organics Limited - Audit Committee - Member 5. The Tinplate Co. of India Limited - Audit Committee- Member, Shareholders Grievance Committee – Member |
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Expertise in
specific functional areas : |
Management Expert with vast experience in Corporate Laws, Direct Taxes, Business Management etc. |
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Date of Appointment : |
18.12.2003 |
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Name : |
Dr. Basudeb Sen |
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Designation : |
Director |
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Date of Birth : |
16.06.1948 |
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Qualification : |
M.A (Economics),
Ph. D (Indian Statistical Institute) |
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Directorship in other companies : |
1. ITC Limited. 2. South Asian Petrochem Limited. 3. Srei Venture Capital Ltd. 4. Synergy Insurance Broking Services Private . Limited 5. Sumedha Fiscal Services Limited 6. Mahanagar Gas Limited 7. Ispat Industries Limited |
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Chairmanship/ membership of Committees in
other companies : |
1 . ITC Limited - Compensation Committee — Chairman, Investor Services Committee - Chairman. 2. Mahanagar Gas Limited - Remuneration Committee- Chairman, Audit Committee Chairman. 3. Srei Venture Capital Limited - Remuneration Committee - Member. 4. South Asian Petrochem Limited - Audit Committee - Member, Shareholders Grievance Committee - Member, Remuneration Committee- Member |
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Expertise in
specific functional areas : |
Professional Experience in commercial banking. development banking and investment management etc. |
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Date of Appointment : |
18.12.2003 |
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Name : |
Dr. Mahendra Kumar Loyalka |
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Designation : |
Director |
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Name : |
Mr. Murari Sananguly |
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Designation : |
Director |
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Name : |
Mrs. Mona
Jagatramka |
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Designation : |
Director |
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Name : |
Mr. Rajendra P.
Jain |
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Designation : |
Executive
Director |
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Date of Birth : |
11.08.1949 |
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Qualification : |
B. Com, FCA |
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Directorship in other companies : |
1. Bharat NRE Coke Ltd. 2. Maa Kali Metcoke Industries Private Limited 3. Jharia Coke Private Limited 4. Shree Salasar Coke (Gujarat) Private Limited |
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Chairmanship/ membership of Committees in
other companies : |
1. Bharat NRE Coke Ltd. - Audit Committee - Member |
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Expertise in
specific functional areas : |
Executive Experience of 34 years in organizational management, business planning. project management etc. |
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Date of Appointment : |
11.08.2006 |
KEY EXECUTIVES
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Name : |
Mr.
Sumit Kumar Khetan |
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Designation : |
President
and Company Secretary |
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Name : |
Mr.
Manish Lohia |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Manoj K. Shah |
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Designation : |
Company Secretary |
SHAREHOLDING
PATTERN
AS ON 31.03.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters &
Persons Acting in Concert |
137185674 |
40.71 |
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Financial Institutions,
Banks, Mutual Funds, etc. |
21363415 |
6.34 |
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FIIs ' |
118211845 |
35.07 |
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Indian Public
(Including Private Corporate Bodies) |
56614400 |
16.80 |
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NRIs |
1705605 |
0.51 |
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Clearing Members |
1936237 |
0.57 |
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Total |
337017176 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Subject
is engaged in the business of coal processing, manufactures low-ash
metallurgical coke (LAMC). LAMC mainly used in soda-ash plants, cast, iron and
brass foundries and the best furnaces of steel plants is largely imported
into India. |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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Low-Ash Metallurgical Coke |
M.T. |
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682000.000 |
583842.005 |
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Rolled & Alloy Steel Products |
M.T. |
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311000.00 |
3353.687 |
GENERAL
INFORMATION
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No. of Employees : |
600 |
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Bankers : |
v State
Bank of India v Bank
of Baroda v State
Bank of Saurashtra v Punjab
National Bank v Development
Credit Bank Limited v ING
Vysya Bank Limited v The
Hongkong and Shanghai Banking Corporation Limited v Yes
Bank Limited v
State Bank of Hyderabad |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
N. C.
Banerjee & Company Chartered
Accountants |
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Address : |
2, Ganesh Chandra Avenue, Room No. 9,1st Floor, Kolkata 700 013 |
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Group Company : |
Gujarat
NRE Power Limited |
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Associates: |
Ř Madhur Coal
Mining Private Limited Ř Critical Mass
Multilink Private Limited Ř Gujarat NRE
Energy Resources Limited Ř Fast Capital
Securities Limited Ř Bulli Coke
Private Limited Ř Bellambi Coke
Private Limited Ř
Vartika Traders Private Limited |
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Subsidiaries |
Ř Gujarat NRE
Australia Pty Limited NRE No. 1 Colliery, Princess Highway, Cnr Bellambi Lane, Russell Vale 2517
NSW, Australia. Ř Gujarat NRE FCGL
Pty Limited NRE No. 1 Colliery, Princess Highway, Cnr Bellambi Lane, Russell Vale
2517 NSW, Australia. Ř Bharat NRE Coke
Limited 22, Camac Street, Block 'C, 5th Floor, Kolkata-700 016, India. Ř Manor Dealcom Private Limited 22, Camac Street, Block C, 5th Floor, Kolkata 700 016 Ř Huntervalley Coal Private Limited 22, Camac Street, Block C, 5th Floor, Kolkata 700 016 Ř Gujarat NRE Limited (Formerly known as Gujarat NRE Pty Limited ) Lot No. 1, Princes Highway, Cnr Bellambi Lane, Russel Vale 2517.NSW, Australia Ř Gujarat NRE Minerals Limited (Formerly known as India NRE Minerals Limited ) Lot No. 1, Princes Highway, Cnr Bellambi Lane, Russel Vale 2517.NSW, Australia Ř Gujarat NRE Coal (NSW) Pty Limited Lot No. 1, Princes Highway, Cnr Bellambi Lane, Russel Vale 2517.NSW, Australia Ř Gujarat NRE Resources NL Lot No. 1, Princes Highway, Cnr Bellambi Lane, Russel Vale 2517.NSW, Australia Ř Wonga Coal Pty Limited Lot No. 1, Princes Highway, Cnr Bellambi Lane, Russel Vale 2517.NSW, Australia Ř Southbulli Holdings Pty Limited Lot No. 1, Princes Highway, Cnr Bellambi Lane, Russel Vale 2517,NSW, Australia Ř Southvest Pty Limited Lot No. 1, Princes Highway, Cnr Bellambi Lane, Russel Vale 2517.NSW, Australia |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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1500000000 |
Equity Shares |
Rs. 10/- each |
Rs. 15000.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
337017176 |
Equity Shares |
Rs. 10/- each |
Rs. 3370.171 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 (18 Months) |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
3370.200 |
2439.100 |
1199.530 |
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2] Deposit against
Share Warrants |
390.000 |
52.500 |
101.000 |
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3] Reserves & Surplus |
7710.200 |
3051.700 |
3936.412 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
11470.400 |
5543.300 |
5236.942 |
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LOAN FUNDS |
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1] Secured Loans |
5311.800 |
2575.900 |
2707.217 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
5311.800 |
2575.900 |
2707.217 |
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DEFERRED TAX LIABILITIES |
990.100 |
775.600 |
582.498 |
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Foreign Currency Convertible Bonds |
1014.700 |
5079.300 |
2399.650 |
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TOTAL |
18787.000 |
13974.100 |
10926.307 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
5307.000 |
4113.800 |
3694.477 |
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Capital work-in-progress |
891.800 |
101.300 |
15.545 |
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INVESTMENT |
6571.700 |
6116.800 |
4947.508 |
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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 |
2276.700
|
1724.700 |
1492.210 |
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Sundry Debtors |
2459.500
|
1664.700 |
829.076 |
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Cash & Bank Balances |
2173.100
|
662.700 |
482.107 |
|
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Other Current Assets |
0.000
|
0.000 |
0.000 |
|
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Loans & Advances |
3343.200
|
2047.900 |
1210.508 |
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Total Current Assets |
10252.500
|
6100.000 |
4013.901 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
2447.000
|
1471.400 |
1172.758 |
|
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Provisions |
1875.100
|
1108.100 |
631.877 |
|
Total Current Liabilities |
4322.100
|
2579.500 |
1804.635 |
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Net Current Assets |
5930.400
|
3520.500 |
2209.266
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MISCELLANEOUS EXPENSES |
86.100 |
121.700 |
59.511 |
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TOTAL |
18787.000 |
13974.100 |
10926.307 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 (18 Months) |
|
Sales Turnover |
8721.500 |
5133.200 |
8382.937 |
|
Other income |
380.400 |
88.800 |
NA |
|
Total
Income |
9101.900 |
5222.000 |
NA |
|
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|
|
|
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Profit/(Loss)
Before Tax |
2267.300 |
747.600 |
3862.762 |
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Provision for
Taxation |
538.500 |
190.300 |
742.843 |
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Profit/(Loss)
After Tax |
1728.800 |
557.300 |
3119.919 |
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CIF Value of Imports – Raw Materials |
|
|
|
|
Coking coal |
2709.100 |
2030.700 |
NA |
|
M.S.Scrap |
23.100 |
140.500 |
NA |
|
Capital Goods |
51.700 |
19.200 |
NA |
|
Others |
37.100 |
33.200 |
NA |
|
Total |
2821.000 |
2223.600 |
NA |
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Earning in Foreign Exchange |
|
|
|
|
FOB Value of Export |
693.700 |
302.000 |
1199.218 |
|
Interest on fixed deposits with foreign
banks |
08.200 |
39.800 |
NA |
|
Interest on loan from subsidiaries |
07.500 |
30.300 |
NA |
|
Total |
709.400 |
372.100 |
1199.218 |
|
|
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|
|
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Import Value |
NA |
NA |
3318.345 |
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Expenditures : |
|
|
|
|
Cost of Goods Sold |
5088.600 |
3383.000 |
|
|
Manufacturing Expenses |
669.500 |
297.900 |
|
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Administrative Expenses |
214.600 |
224.800 |
|
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Interest |
329.100 |
235.800 |
|
|
Depreciation & Amortization |
233.500 |
206.800 |
|
|
Other Expenditure |
299.300 |
126.100 |
|
|
Total Expenditure |
6834.600 |
4474.400 |
4087.671 |
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 |
30.09.2008 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
3776.400 |
4960.500 |
|
Other Income |
|
44.800 |
26.500 |
|
Total Income |
|
3821.200 |
4987.000 |
|
Total Expenditure |
|
2511.600 |
3496.900 |
|
Operating Profit |
|
1309.600 |
1490.100 |
|
Interest |
|
97.300 |
175.100 |
|
Gross Profit |
|
1212.300 |
1315.000 |
|
Depreciation |
|
75.400 |
86.700 |
|
Tax |
|
125.300 |
125.400 |
|
Reported PAT |
|
944.000 |
1027.500 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 (18 Months) |
|
Debt
Equity Ratio |
0.84 |
1.20 |
0.88 |
|
Long
Term Debt Equity Ratio |
0.83 |
1.19 |
0.90 |
|
Current
Ratio |
1.75 |
1.63 |
1.53 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
1.77 |
1.21 |
1.54 |
|
Inventory
|
4.36 |
3.19 |
2.82 |
|
Debtors |
4.23 |
4.12 |
5.56 |
|
Interest
Cover Ratio |
7.89 |
3.76 |
10.60 |
|
Operating
Profit Margin (%) |
32.45 |
23.86 |
32.29 |
|
Profit
Before Interest and Tax Margin (%) |
29.77 |
19.83 |
30.54 |
|
Cash
Profit Margin (%) |
22.50 |
14.89 |
24.07 |
|
Adjusted
Net Profit Margin (%) |
19.82 |
10.86 |
22.32 |
|
Return
on Capital Employed (%) |
17.11 |
8.77 |
18.83 |
|
Return on Net Worth (%) |
20.87 |
10.70 |
26.58 |
LOCAL AGENCY
FURTHER INFORMATION
History
Gujarat NRE Coke, engaged in the business of coal
processing, manufactures low-ash metallurgical coke (LAMC). LAMC, mainly used in
soda-ash plants, cast iron and brass foundries and the blast furnaces of steel
plants, is largely imported into India.
It came out with a public issue in May.'94 to part-finance its low-ash
metallurgical coke-manufacturing project (inst cap: 13000.0 Millions tpa till
30 September, 2001) at Jamnagar, Gujarat. The delay of eight months in the
commencement of the project in Mar.'95 was attributed to the unprecedented
rains in Saurashtra and the plague epidemic that struck Gujarat.
The company meets its requirements of low-ash content coking coal (yield is
around 78-80%) through imports from Australia and New Zealand. The ash content
in coking coal in these countries is very low, ranging from 8-12% as against
the high ash content (22%) in India.
The company has expanded the installed capacity of Low Ash Metallurgical Coke
(LAMC) during the year 2003-04 by 258000 MT and with this expansion, the total
capacity has risen to 502000 MT.
The company has amalgamating Aparna Project Private Limited with itself during
August 2004 and according to the scheme of arrangement, Two Equity Shares of
Rs.10/- each of Gujarat NRE Coke have been issued for every
Three Equity Shares of Rs.10/- each held by the shareholders of Aparna Project Private Limited
BUSINESS
Subject
manufacturers of low-ash metallurgical coke, is considering merger of group
company. Gujarat NRE Power Limited into itself after the current accounting
year, which will end on September 30, 2002.
At
present, the company holds 4% in Gujarat NRE Power. The company's promoters are
holding about 60% and the rest mostly by the shareholders of the company. The
company may carry out a corporate merger of these two companies by issuing
shares of the company to the shareholders of the other company
The
company has its manufacturing facility at Jamnagar in Gujarat and its total
capacity is 0.208 million tonnes per annum. Of this total capacity, Gujarat NRE
Power Limited owns about 78000 tonnes per annum.
A part
of the total manufacturing facility is owned by the Gujarat NRE Power
Limited. Hence to integrate the
existing infrastructure the company can merge the two companies.
REVIEW OF
OPERATIONS:
The year was an exceptional year for coke industry with surge in global prices
on account of export tax levied twice by China, the largest supplier of coke,
resulting in dwindling of global supplies as well as spurt in demand
particularly from steel sector. The year also witnessed a chronic
scarcity of basic raw material for the industry i.e. coking coal due to disruption
in the supply chain as a result of floods in many of the Australian mines which
has led to its price jumping up threefold over last one year. the Company, with
its foresight could withstand this scarcity due to assured supplies from its
subsidiaries owning coking coal mines and on account of strategic investments
made in Australia. Consequently, the Company has reported a stellar performance
for the year under review.
The Company's Net Sales stood at Rs. 8721.5000 millions in the financial year
ended March 31, 2008 as compared to Rs. 5133.200 millions during the previous
financial year going up by 1.70 times. Net profit after tax was up by 3.10
times to Rs 1728.800 millions (Previous Year - Rs. 557.300 millions).
EXPANDING HORIZONS:
The Directors believe that growth can be achieved through integrating and
expanding capacities as well as going for forward and backward integration.
A Coke oven project has been undertaken at Dharwad in Karnataka which would be commissioned by the year 2008-09 increasing the capacity by further 0.248 Million TPA. The Company has also acquired 220 acres of land at Nellore District of Andhra Pradesh for setting up 1 Million TPA Coke oven plant. A new Coal Washery is also under implementation at Bhachau.
Keeping with its commitment for providing safe and healthy environment, the
Company has executed a project for installation of 12 Windmills having combined
capacity of 18 MW during the year under review and has further undertaken a
project for another 28 Windmills having combined capacity of 42 MW in the State
of Gujarat taking the total wind power capacity in the company to 87.50 MW. The
Company has further forayed into the another environment friendly Captive Power
Plant project generating power from waste heat emanating from coke plants. Two
such power plants are under construction at Khambhalia and Bachau having
capacity of 15MW each and one at Dharwad with capacity of 30 MW.
The Company's apprehension about industry going to face a severe resource crunch
came true this year with industry witnessing immense shortage of coking coal. A
third mine in Australia named Elouera was acquired by an Australian Subsidiary
and the same was consolidated with the second mine, NRE Avondale which are now
collectively known as NRE Wongawilli. Six vessels have been taken on time
charter by the Company to ferry the requirements of coking coal to ensure
supply beyond 2010. The steel plant at Bhachau is fully operational, and plans
are also in place to foray into various other avenues of forward integration.
SUBSIDIARIES:
During the year under review, the Company has consolidated overseas operation
under its wholly owned subsidiary Gujarat NRE Limited (GNL) formerly known as
Gujarat NRE Pty Limited
Further the Australian subsidiary Gujarat NRE Minerals Limited (formerly known
as India NRE Minerals Limited ) listed on Australian Securities Exchange on
July 10, 2007 subsequent to completion of an IPO. Thereafter, this Company
successfully acquired all shares of another Australian subsidiary Gujarat NRE
Resources NL in order to consolidate coal operations in Australia. This
consolidation would immensely help in increasing the efficiency of operations,
reap the benefits of economies of scale.
Bharat NRE Coke Limited (BNCL), an Indian subsidiary, posted a turnover of
Rs.1456.300 millions and PBIDT of Rs. 79.900 millions in the third year of its
operations as compared to Rs. 644.300 millions of turnover and PBIDT of
Rs.16.900 millions in the previous year.
MANAGEMENT DISCUSSION AND ANALYSIS
Industry Structure
and developments:
Economy:
India's economy is on the fulcrum of an ever increasing growth curve. With
positive indicators such as a stable 8-9 per cent annual growth, rising foreign
exchange reserves, a booming capital market and rapidly expanding FDI inflows,
India has emerged as the second fastest growing major economy in the
world.
The growth process continues apace. On the back of 9.6% growth April-December
2005-06, GDP grew by 8.9% during April-December 2006. According to the third
advance estimates of crop production by the agriculture ministry, food grain
output grew by 4.6% in 2007-08, nearly four times the average annual growth of
1.2% between 1990 and 2007. Overall industrial production grew by 8.3% during
2007-08. Significantly, manufacturing sector grew at the rate of 8.7% in
2007-08 on the back of 12.5% during 2006-07. Services grew by 10.4% in
April-December 2007, on the back of 11.4% during the corresponding period in
2006-07. Core infrastructure sector continued its growth rate recording 5.6%
growth in 2007-08. While exports grew by 23.02% during 2007-08, imports
increased by 27.01% in the same period. Money Supply has grown by a robust
20.7% growth (year-on-year) as of end-March 2008, compared to 21.5% last year.
Fiscal and revenue deficit decreased by 13.5% and 33.3% respectively, during
April-February 2007-08 over corresponding period last year.
With such a robust growth rates, the revised estimates of the Central
Statistical Organisation (CSO) expects the economy to grow by 9% in 2007-08,
higher than the earlier projection of 8.7%. This is in tune with the high
average real GDP growth of 8.7% per annum during the five-year period, 2003-04
to 2007-08. Further, this would be the third consecutive year, when the economy
has grown by 9% and above.
During April-December 2007, gross fixed capital formation has accelerated to
32.6% of GDP, from 30.5% of GDP in the corresponding period in 2006.
World Coke Industry:
China dominates the global coke market as it is not only the largest steel
manufacturer and consumer but is also by far the largest producer, consumer and
exporter of coke. Last year, it imposed export tax thereby restricting its
global supplies to meet higher domestic consumption by local steel industry.
This had a spiraling effect on coke prices. With surge in global demand of coke
due to higher demand from rapid increase in capacities by global steel players,
the prices of coke are expected to remain firm in the near future.
Domestic Coke Industry:
Metallurgical Coke in India is mostly manufactured by Steel Plants primarily
for captive consumption. Foundries, Ferro Alloys and Chemical industries add to
the demand of the product which is hardly matched by domestic supplies
resulting in imports. With rapid industrialization, and manifold increase in
domestic steel capacities, the demand is expected to go up in leaps and bounds.
Production of coke is totally dependent on availability of good quality coking
coal and any increase in production is consequently dependent on imported coal
as domestic coal is found to be of inferior quality.
A significant trend that is bound to gather steam in the near future will
also be based out of India's desperate efforts to contain coal criticality.
This will be overseas acquisition of coal blocks. The need to secure supplies will only become more and more critical in the years to come and the industry is bound to look beyond the shores of India for accessing the vital raw material to feed on its gnawing hunger. It will not be out of place to mention here that the first such foray out of India was pioneered by GNCL and their's is a case study that is still being studied by a number of corporate head quarters.
Steel Industry:
Riding high on the resurgent economy and rising demand, the Indian steel
industry has entered into a new development stage from 2005-06, with an average
growth rate of 12 per cent per annum in steel output, for the last two years.
According to the Minister for Steel and Chemicals and Fertlisers, the likely
capacity achievable by 2019-20 will be over 300 million tonnes.
The total investment in the sector is expected to be Rs. 2,76,8800.000 Millions by 2012.
While the demand for steel will continue to grow in traditional sectors such as
infrastructure, construction, housing automotive, steel tubes and pipes,
consumer durables, packaging, and ground transportation, specialized steel will
be increasingly used in hi-tech engineering industries such as power generation,
petrochemicals, fertilizers, etc. Presently, the government plans to increase
production from the present 53 MT to 124 MT by 2011 and 300 MT by 2020, so as
to narrow the gap between supply and demand.
However, access to Coking coal will be the key to the success of this strategy.
Opportunities and Threats:
The demand for steel in the Indian domestic market is likely to be buoyant as a
result of sustained growth of major steel-consuming sectors like infrastructure
and automobile and overall industrial growth.
Also important is the fact that the domestic per capita steel consumption
currently stands at 39 kg, whereas the global average is 150 kg and that of
developed countries is 400-650 kg. Even if they take a conservative estimate of
reaching the world average by 2020, India's demand must burgeon to 300 million
tonnes at a CAGR of 10% over the same period on a higher production base.
This will ensure a sustained demand for coke.
The fortunes of the company are linked to the international pricing of coke.
Hence, in the eventuality of a sustained dumping of coke by China, the results
of the company may be adversely affected. On the other hand, sustained good
realization / profit margins may entice sharp increase of capacities leading to
competition.
Company's Performance:
The total income of the Company stood at Rs. 9188.900 millions in the year
under review as compared to Rs.5336.000 millions during the previous year
(i.e., an increase by 72%). The net profit stood at Rs.1728.800 millions as
compared to Rs.557.300 millions during the previous year (i.e. an increase by
210%). The Basic and Diluted earnings per share of the Company was up from
previous year figure of Rs.3.16 and Rs.2.38 to Rs.5.93 and Rs.5.04 respectively
during the year. The Company's EBITDA increased from 23% in 2006-07 to 31% in
2007-08.
Segment wise Performance and
Outlook:
Coke Operations:
Coke has been at the core of the operations of the Company with this
segment contributing around 73% to the total turnover during the year under
review. It achieved a turnover of Rs.638.28 crores during the year as compared
to Rs.3855.100 millions during the previous year resulting in an increase by
65% on an annualized basis.
Steel Operations:
Although the Company is relatively a new entrant in this segment but steel now
contributes 27% to the total turnover in the very second year of its commercial
operations. It achieved a turnover of Rs.2378.000 millions during the year
under review as compared to Rs.1244.100 millions during previous year.
The steel plant is also enjoying various benefits like tax and duty exemptions.
The Company is generating power through its Wind Turbines and is in the process
of setting up co-generation power plant as well as add to its Wind Turbines to
reduce its power costs and ensure regular supply of cheap clean power
particularly to its steel plant.
Outlook:
During the current year, both the prices of cooking coal as well as coke is
expected to firm up for different reasons. The coking coal price is expected to
be pegged around US$300, mainly due to a mismatch between the demand and supply
for coking coal coming out of Australia witnessed since January 2007. Due to
various restrictions imposed by the Chinese Government by way of export taxes
and other measures, coke price is expected to look up further from the current
level of US$700 in the short to medium term.
Global steel production is estimated to grow unitl 2015 at a rate of
approximately 4% per year. It was a mere 1.6% per annum between 1990 and 2000.
In the next seven years, iron and steel production is expected to expand by
around 446 million tonnes, a rise of 57% corresponding to an average annual
growth rate of 6.6%.
This would ensure a sustained growth and demand for coke.
Fixed
Assets
Ř Land and Buildings
Ř Plant and
Machineries
Ř Office Equipment
Ř Furniture and
Fixture
Ř Material Handling
Ř Equipments /
Vehicles
Ř Weighing Machine
Ř Electrical
Installations
Ř Wind Turbine
Generator
Press Release
Gujarat
NRE Coke Limited successfully completes the USD 50 million Foreign Currency
Convertible Bonds issue
28th March
2006
Gujarat NRE Coke Limited (“GNC”)
announces that the terms for its USD 50 million unsubordinated unsecured
foreign currency convertible bonds due 2011 (the “Bonds”) have been fixed as
follows:
Ř
Initial
conversion price has been set to INR 125 per share, which represents a 24.1927%
premium over the BSE closing price of INR 100.65 on 27.03.2006
Ř
The
yield to maturity has been set at 6.75% semi-annually
Ř
The
bonds will be redeemed at 139.36% of par on or about 12 April 2011 (5 years and
1 day after closing price)
Due to
strong investor demand, the over-allotment option of US$ 10 million has been
fully exercised, increasing the total issue amount to US$ 60 million.
Application
will be made for the Bonds to be listed on the Euro MTF Stock Exchange of
Luxembourg.
KBC
Financial Products UK Limited and Silverdale Services Limited are Joint-Lead
Managers for the offering while UTI Bank Limitedis the Indian Financial Advisor
to the issue.
Gujarat
NRE Coke Moots 4th Consecutive Bonus
Kolkata,
June 4th 2006. The Board of Directors of Gujarat NRE Coke Limited
today created corporate history when they recommended, subject to the approval
of shareholders at the Annual General Meeting on 03.07.2006, a 4th
Consecutive bonus issue in the ratio of 1 : 1.The Board also recommended a
final dividend of 5 %, which together with the interim dividend of 45 % paid
earlier, makes the dividend paid during the 18 months period ended 31.03.2006,
50 % (last year 40 %). The total dividend payments has gone up from Rs. 168.900
Millions in the previous year to Rs. 449.600 Millions in the current period.
The total
income of the company increased from Rs. 2860 millions in the previous year to
Rs. 8020 millions during the 18 month period ended on 31.03.2006, an increase
of 87% (annualised). The Net Profit increased from Rs. 910 millions to Rs. 3120
millions, chalking an impressive growth of 193 % annualised, while the Book value
of the Equity Shares of Rs. 10/- each increased from Rs. 29.93 to Rs. 42.23, a
growth of 57 %. The Earnings Per Shares of the company stood at Rs. 27.02 (up
from Rs. 11.17 in the previous year).
The Board
also approved the allotment of shares to the erstwhile shareholders of FCGL
Industries as per the Scheme of Amalgamation approved by the Hon’ble High Court
of Calcutta vide its Order dated 19.04.2006.
“They are
happy” said Sri Arun Kumar Jagatramka, vice Chairman and Managing Director of
the company “in having maintained the bonus and increasing the dividend form
what was paid out last year.” The impressive figures are even more commendable
when seen in the backdrop of the dark clouds that loomed over the industry
during a good part of the period under consideration, with falling global
prices and demand on a downward spiral.
“The
steps that they have taken in the past have all contributed to the good
results. Their moves towards consolidation, towards backwards integration into
mine ownership in Australia, there by giving us not only a hedge against price
fluctuations but also ensuring a free
flow of raw materials.
Gujarat NRE Coke rides the wave of Coke Market upswing
(Mumbai April 9th, 2007)
The
Calcutta head quartered producer of Low Ash Metallurgical Coke (LAMC),
Gujarat NRE Coke is looking forward in anticipation to the new financial year
2007-08. The optimism stems from the fact that Chinese coke prices have
been moving up sharply in the last few months after languishing for more
than a year. Such price rises have a natural and direct effect on the
bottom line of Gujarat NRE Coke, which happens to be the largest
producer of the commodity in the non captive sector in the country. This
time too, the effect is expected to be very positive on the company's
performance, which has been bolstered by various other facts in the immediate
past.
The
impact of the Central Governments Budget of 2007, which did away with customs
duty on imported coking coal too will benefit the company in the coming years.
This coupled with the steady forays on the production front - Gujarat NRE Coke,
the only Indian company to be owning and operating coal mines in Australia
has consolidated its supply sources having streamlined the production process
of its 1st Coal Mine in NSW, Australia, NRE No.1. Thus, with a steady
supply of excellent grade raw material providing the company with the twin
edges of steady supply and hedge against global price fluctuations, the company
is all set to scale up and bask in the glories as the prices firm up.
The
net import demand of equivalent coal, which stood at 21 million tonnes in
2004-5, is currently pegged at 27 million tonnes and is expected to zoom up to
75 million tonnes by the year 2011-12 as the energy hungry nation will seek to
convert its Vision 2020 to a reality. This will mean a hundred plus million
tonnes of steel by the year 2020 and with the blast furnace route of steel
making still being the most favoured, the demand for Gujarat NRE Coke products
is expected to go only one way - up. In keeping with this projected demand
supply imbalance, the company has drawn up extended plans which include among
others :
* Doubling of coke making capacities at Dharwad in
Karnataka.
* Setting up of Coal Washery in Bachau, Gujarat.
* Setting up of power generation facility from waste heat in its
plants
* Consolidating the Australian and New Zealand operations spread over mining
and resource prospecting
Gujarat NRE Coke today, is a beehive of activities and more and more investors are flocking to the company, the only listed company in the segment. The shareholders interest is not unwarranted, considering the fact that Gujarat NRE is known for its investor friendly ways and has in the past among many deeds given 4 consecutive bonuses and steady dividends. The promoters of the company too are holding firm having acquired a further 3.76 % of the stock in the last financial year through the creeping acquisition mode
Gujarat
NRE Coke: Half Yearly Profit jumps more than 3. 5 times
Kolkata, November 1st 2008.
Gujarat NRE Coke, the country’s largest independent producer of met coke, today posted results that not only stood out amidst the current pall of gloom, but also refurbished the company's image as an achiever, a perennial performer. In the current half year, the company has continued with its dream run and has posted substantially improved figures on all counts - Total Income has gone up by 3. 48 times from Rs.2509.600 millions in the six months ended 30.09.07 to Rs.8736.900 millions in 30.09.08, while the Net Profit after Tax has moved up from Rs.553.700 millions to Rs.1971.500 millions, posting a jump of 3.56 times.
On a quarterly basis, the results are even more impressive : quarter on quarter, the Total Income has shown a jump of 4.86 times from Rs.1020.700 millions to Rs.4960.500 millions, resulting in a surge of 8.19 times in the Net Profit, from Rs.125.500 millions to Rs.1027.500 millions.
"They have had another satisfying quarter" said Mr. Arun Kumar Jagatramka, Vice Chairman and Managing Director of Gujarat NRE Coke Limited. "Fundamentals are not driven by market sentiments. Globally, there is a shortage of good quality Hard Coking coal and met coke and they as an entity, are extremely well integrated, enjoying efficiencies across the entire gamut of their workings - from the mines in Australia to the production of coke in their plants in India. Naturally, they continue to out perform their own expectations and the results are a mute testimony to these facts."
The company is in the process of increasing its metcoke capacity to 2.5 MTPA by December 2010 which includes the setting up of a Greenfield 1 million tpa plant in Southern India for which the necessary land has already been acquired and initial work has started. The company's mining operations in Australia are doing extremely well with one million tons of premium hard coking coal expected to be shipped to India in the current fiscal. It is also developing its mines in Australia to further increase its production to seven million tons within the next four years.
Gujarat NRE Coke is also in the process of setting up co-generation facilities in all its plants which will provide the company with 60 MW of free power. This power will be in addition to the 87.5 MW of green power it generates from wind mills located in Gujarat.
The future outlook? "From where they stand, the long
term outlook is positive" said Mr Jagatramka. The current downturn
provides an excellent platform for further growth of the company. The tough
indeed gets going, when the going gets tough.
Gujarat
NRE Coke operations on track to deliver record performance
Kolkata, October 15th 2008.
The Company has been receiving number of enquiries from shareholders and investors seeking explanation about the recent fall in market price of shares and also about the Company’s performance during the second quarter of 2008-09.
The Company wishes to assure that the working of the company continues to be on expected lines and the order book of the Company continues to remain full. The mines in Australia are also producing coking coal at planned levels and there is no cause for concern about the working of the Company.
The Consolidated financial results for the quarter /
half-year ending September 2008 will be considered at the Board meeting
scheduled in the last week of October 2008. The salient features of the metcoke
operations of the company during April-September 2008 are given below
|
|
For the quarter
ended |
For the six
month period ended |
||
|
|
Sep2008 |
Sep2007 |
Sep2008 |
Sep2007 |
|
Indian operation (Coke Division) |
|
|
|
|
|
|
|
|
|
|
|
Production (MT) |
*165127 |
79280 |
*319530 |
202626 |
|
|
|
|
|
|
|
*Excludes
production for KSL |
|
|
||
|
|
|
|
|
|
|
Sales (MT) |
154667 |
63869 |
353969 |
165966 |
|
|
|
|
|
|
|
Income from operations/ (*Rs. In Million ) |
4060.000 |
620.000 |
7160.000 |
1720.000 |
|
|
|
|
|
|
|
Advance tax paid (Rs. In Million ) |
150.000 |
40.000 |
225.000 |
95.000 |
|
|
|
|
|
|
|
Australian operations (Gujarat NRE Minerals
Limited) |
|
|
|
|
|
|
|
|
|
|
|
Coking coal production (MT) |
213000 |
127000 |
404000 |
229000 |
|
|
|
|
|
|
|
Export sales (Aus $ millions) (US $
converted into Aus $) |
53.86 |
7.32 |
82.24 |
11.70 |
The Company had installed 12 wind mills (18 MW; Rs 105 crs) in March'08 and further 26 wind mills (39 MW; Rs 2275.000 millions) have been installed by September '08 and further 2 windmill (3 MW, 175.000 millions ) are expected to be installed by November 08. No windmills were installed during Apr-sep'07.
The Promoters of the Company have acquired more than 8.200 millions shares during September and October, 2008 (till 14th Oct) as part of the creeping acquisition from the stock market.
Gujarat NRE Coke capacity in India to double and in Australia to be 7 times
Kolkata, September 17th 2008.
The Board of Directors of Gujarat NRE Coke Limited met in the city today and discussed various matters regarding the performance and future plans of the company. Armed with shareholders approval at its AGM held today, for the issue of bonus shares in the ratio of two shares for every five held, the Board set the record date for same as 20th October 2008. Also the Board has decided to approach its shareholders seeking their approval for re-classification of the Authorised Capital and amendment of relevant clauses of the Memorandum and Articles of Association of the Company for issue of Equity Shares of Rs.10/- each with differential rights (differential rights as to dividend, voting or otherwise), upto an amount not exceeding 25% of the total issued Equity Share Capital of the Company, with power to the Board to decide on the extent of variation in such rights and to classify and re-classify from time to time such shares into any class of shares.
After obtaining shareholders approval for the same the company proposes to issue rights shares with differential voting rights (DVR) to the existing shareholders of the company in the ratio of 1 DVR share for 450 existing equity shares at a price of Rs 1000 per DVR share. The shares will carry higher voting rights while pari pasu in all other respects to the existing equity capital of the company. .The issue proceeds will be utilised to part finance the company's future expansion plans.
Explaining the rationale behind the move, Sri Arun Kumar Jagatramka, Vice Chairman and Managing Director said," Currently, issue of DVR shares appears to be a better option for raising promoter’s voting rights in the company than the conventional preferential issue route, which is generally considered unfair to the interest of the minority shareholders. The higher premium and lower dilution will help enhance the book value and benefit the non promoter shareholders. From where I see it, it is a win win situation."
Gujarat NRE Coke, the country's largest independent coke producer is currently riding the crest of a global price upsurge which is being consistently reflected in its performance over the last few quarters. Coke prices, which were hovering at around Rs 6000 - 8000 in December 2006, has since gone up to a historic high of Rs 30,000 to 35,000 in the current quarter. Moreover, China, which dominates the global market in the commodity and benchmarks its price around the world, is steadily moving towards a regime of curtailed, tax controlled regime and has raised the export duty from 25 % to 40 % in July this year, which has lead to a further supply crunch and consequent price rise. The company has also declared plans to set up a Greenfield 1 million ton coke plant in the Nellore district of Andhra Pradesh. The Company’s present coke production capacity of 1.006 million tonne is being expanded in a phased manner to 1.254 million tonne and 2.254 million by 31st March 2009 and 31st December 2010.
The Company is the only company owning and operating coking coal mines in Australia and both mines are now in production. During the current fiscal the ROM coking coal production from its two mines is expected to be in excess of 1million tonne and brownfield developments are underway to ramp up the production to beyond 7 million tones by 2012/13. Hard coking coal prices are also rising very rapidly as is evident in annual contract prices rising form USD 96 per MT in 2007 to USD 300 per MT in 2008, and as against annual contracted rates of USD 300 per MT, the current spot rates range between USD 380 – 400 per MT; and even at this price the availability is scarce.
Economic Times News on Gujarat NRE Australian Operations Unfounded – no hurdles to coal mining in Australia
Kolkata, August 22nd 2008.
Gujarat NRE Minerals does operate two underground coal mines in the Southern Coalfields of New South Wales. There exist very strict guidelines and operating conditions for mining in this region, and any other region of Australia for all coal mines. Detailed approvals must be obtained from the government prior to mining, and ongoing analysis and studies of impacts are monitored during mining. Gujarat NRE takes very seriously it’s responsibilities and in all instances meets it’s obligations in this regard. The matter of the case is that mining in the Southern Coalfields, wherein Gujarat NRE mine leases are located, have been practiced within the land managed by the Sydney Catchment Authority for over 100 years and is continuing even now by various companies, including BHP Billton, Xstrata, Peabody and Gujarat NRE, who are owning and operating coal mines in the region. The operations have been without adversely affecting the water supply to Sydney.
A recent study undertaken by the New South Wales government reviewing the concerns about the impacts of mining has just been conducted. The study was entitled the “Impacts of Underground Mining on Natural Features in the Southern Coalfield”, the findings of which were released in July 2008. This very comprehensive study took submission from all stakeholders, including environmental groups. In the report it was stated “that no evidence was presented to the Panel to support the view that subsidence impacts on rivers and significant stream, valley infill or headland swamps, or shallow or deep aquifers have resulted in any measurable reduction in runoff to the water supply system operated by the Sydney Catchment Authority or to otherwise represent a threat to the water supply of Sydney… ”. Thus the apprehension indicated by the news is not well founded and has been published in a careless manner without seeking any clarification from the company.
Gujarat NRE Minerals has existing government approvals to operate both its coking coal mines in the southern coalfields of the New South Wales. The company is undertaking all the necessary studies and meeting with other requirements in preparation of its development applications for both its coal mines in full compliance of the recent changes in NSW Planning legislation and is confident of obtaining ongoing approvals from the state government for all its mining operations. Coal mining provides jobs in the community and royalties and taxes for the Government and as such, the coal mining industry is fully regulated and well supported by the Government. Gujarat NRE is happy to acknowledge the overwhelming support it has received from the local community as well as all departments of the NSW Government in its endeavour to expand its coal mining operations. The chairman Mr Arun Kumar Jagatramka was recently bestowed with the title of Sydney Ambassador to India by the NSW Govt. in recognition of Gujarat NRE’s contribution in NSW.
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.49.79 |
|
UK Pound |
1 |
Rs.73.37 |
|
Euro |
1 |
Rs.63.08 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
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 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
62 |
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 |
|