MIRA
INFORM REPORT
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Report Date : |
03.01.2008 |
IDENTIFICATION
DETAILS
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Name : |
CAMLIN LIMITED |
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Registered Office : |
9-B, Nanddeep Industrial Estate, Kondivita Lane, J. B. Nagar, Andheri (East), Mumbai - 400 059, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
24.12.1946 |
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Com. Reg. No.: |
005434 |
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CIN No.: [Company
Identification No.] |
L24223MH1946PLC005434 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMC11127E |
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PAN No.: [Permanent
Account No.] |
AAACC1647E |
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Legal Form : |
It is a public limited liability company. The company's shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing, Marketing and Trading of stationary
articles and related consumer products |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 1035000 |
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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. Available information
indicates high financial responsibility of the Company. Trade relations are fair. Fundamentals are strong and healthy. Payments are reported as correct and as
per commitments. The Company can be considered good for any normal business dealings. |
LOCATIONS
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Registered Office : |
9-B, Nanddeep Industrial Estate, Kondivita Lane, J. B. Nagar, Andheri (East), Mumbai - 400 059, Maharashtra, India |
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Tel. No.: |
91-22-28360302 / 28366011 / 28327983 |
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Fax No.: |
91-22-28366579 / 28368477 / 28211491 |
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E-Mail : |
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Website : |
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Corporate Office : |
Hilton House, 48/2, Central Road, MIDC, Andheri [East], Mumbai 400093,
Maharashtra, India |
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Tel. No.: |
91-22-28360302 / 28366011/28216687 |
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Fax No.: |
91-22-28366579 |
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Factory 1 : |
M.I.D.C. Boisar, Tarapur, District Thane 401 506 |
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Factory 2 : |
M.I.D.C. Taloja, Navi Mumbai 410208 |
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Factory 3 : |
101, Gangyal Industrial Area, Phase II, Jammu 180004 |
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Factory 4 : |
Rajprabha Udyog Nagar, Walive, Vasai [East], District Thane 401 308 |
DIRECTORS
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Name : |
Mr. Dilip D. Dandekar |
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Designation : |
Chairman & Managing Director |
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Name : |
Mr. Rajiv M. Dandekar |
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Designation : |
Joint Managing Director |
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Name : |
Mr. Shriram S. Dandekar |
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Designation : |
Executive Director |
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Name : |
Mr. Deepak M. Dandekar |
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Designation : |
Executive Director |
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Name : |
Mr. Ashish S. Dandekar |
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Designation : |
Director |
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Name : |
Mr. Govind G. Desai |
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Designation : |
Director |
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Name : |
Mr. Shrikrishna E. Godbole |
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Designation : |
Director |
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Name : |
Mr. Madhukar P. Khedkar |
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Designation : |
Director |
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Name : |
Mr. Premanand A. Narvekar |
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Designation : |
Director |
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Name : |
Mr. Shishir S. Shirgaokar |
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Designation : |
Director |
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Name : |
Mr. Pramod M. Sapre |
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Designation : |
Director |
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Name : |
Mr. Dhananjay N. Mungale |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Ravindra V. Damle |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Individuals/Hindu Undivided Family |
1554764 |
32.39 |
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Bodies Corporate |
636246 |
13.26 |
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Individuals |
135500 |
2.82 |
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Mutual Funds/UTI |
11725 |
0.24 |
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Financial Institutions |
430 |
0.01 |
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Foreign Institutional Investors |
38304 |
0.80 |
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Non Institutional |
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Bodies Corporate |
323279 |
6.73 |
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Individuals |
1278960 |
26.65 |
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Individuals Shareholders |
818228 |
17.05 |
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Non Resident [Non Rep.] |
1390 |
0.03 |
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Non Resident [Rep.] |
1174 |
0.02 |
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Total |
4800000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing, Marketing and Trading of stationary
articles and related consumer products |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Chemical and Chemical Products |
Ltrs./Kgs. |
60.98 |
65.22 |
25.45 |
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Stationary items |
Ltrs. |
6.36 |
45.20 |
9.94 |
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Stationary items |
Nos./Pks. |
2074.06 |
1474.20 |
421.16 |
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Buik drugs |
Kgs. |
3.37 |
0.70 |
0.09 |
GENERAL
INFORMATION
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Suppliers : |
Ø Anuroop
Packaging Ø Asian Pen and
Plastic Industries Ø Beekay
Industries Ø Bombay Plastic
Works Ø Century Caps
Industry Ø Mayur Colours Limited Ø P. P. Industries
Ø Global Plastics Ø Galaxy
Industrial Corporation Ø Excella Pencils
Limited Ø Shreeji
Industries Ø Pratibha Pens
Private Limited Ø Sagar
Enterprises Ø Sethia Printers Ø Sushart Art
Products Ø Sahara Plastic
Industries Ø Uday
Manufacturing Company Ø Uday Multi Print
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No. of Employees : |
About 2500 |
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Bankers : |
Ø Bank of
Maharashtra Ø IDBI Bank
Limited Ø The United Western Bank Limited |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
B. K. Khare and Company Chartered Accountants |
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Address : |
Mumbai |
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Associates/Subsidiaries : |
Ø Camlin North
America, Inc, USA Ø Camlin
International Limited Ø CAFCO
Consultants Limited Ø Camart
Industries Limited Ø Camlink Agencies
Limited Ø Camlink
Consultants Private Limited Ø Dandekar
Investments and Consultants Private Limited Ø Dandekar Print
Pack Private Limited Ø Camlidhan
Investments Private Limited Ø DDI Consultants
Private Limited Ø Nilmac Packaging
Industries Limited Ø Vibha Agencies
Private Limited Ø Triveni Pencils
Limited Ø Excella Pencils
Limited Ø Col Art Camlin
Canvas Private Limited Ø Camelia
Management Services Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
5000000 |
Equity Shares |
Rs. 10/- each |
Rs. 50.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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4800000 |
Equity Shares |
Rs. 10/- each |
Rs. 48.000 Millions |
Out of these
shares:
[i] 6000 Equity Shares allotted to vendors as
fully paid up shares pursuant to contract without payment thereof being received
in cash.
[ii] 3634500 Equity Shares allotted as fully
paid up by way of Bonus Shares by capitalization of General Reserve and Share
Premium.
[iii] 500000
Equity Shares issued by way of Conversion of Debentures.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
48.000 |
48.000 |
48.000 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
210.841 |
104.654 |
120.600 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
258.841 |
152.654 |
168.600 |
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LOAN FUNDS |
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1] Secured Loans |
125.444 |
502.089 |
380.600 |
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2] Unsecured Loans |
27.791 |
95.639 |
116.400 |
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TOTAL BORROWING |
153.235 |
597.728 |
497.000 |
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DEFERRED TAX LIABILITIES |
3.737 |
11.367 |
0.000 |
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TOTAL |
415.813 |
761.749 |
665.600 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
180.497 |
411.566 |
406.300 |
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Capital work-in-progress |
14.775 |
78.792 |
10.600 |
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INVESTMENT |
9.891 |
11.394 |
6.100 |
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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 |
300.958
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379.904 |
356.700 |
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Sundry Debtors |
187.471
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289.042 |
265.800 |
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Cash & Bank Balances |
23.738
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18.664 |
25.900 |
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Other Current Assets |
1.144
|
0.843 |
0.000 |
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Loans & Advances |
75.174
|
115.341 |
115.000 |
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Total
Current Assets |
588.485
|
803.794 |
763.400 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
400.298
|
582.634 |
502.100 |
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Provisions |
27.841
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20.220 |
93.000 |
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Total
Current Liabilities |
428.139
|
602.854 |
595.100 |
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Net Current Assets |
160.346
|
200.940 |
168.300 |
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MISCELLANEOUS EXPENSES |
50.304 |
59.057 |
74.300 |
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TOTAL |
415.813 |
761.749 |
665.600 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
1963.300 |
2011.300 |
2084.700 |
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Other Income |
470.200 |
55.600 |
17.200 |
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Total Income |
2433.500 |
2066.900 |
2101.900 |
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Profit/(Loss) Before Tax |
456.600 |
[17.500] |
[73.100] |
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Provision for Taxation |
95.900 |
2.200 |
24.300 |
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Profit/(Loss) After Tax |
360.700 |
[15.300] |
[48.800] |
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Earnings in Foreign Currency : |
166.656 |
397.783 |
--- |
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Total Imports |
49.903 |
211.427 |
--- |
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Expenditures : |
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Raw materials |
1011.600 |
1090.400 |
1022.600 |
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Excise Duty |
75.800 |
86.600 |
75.200 |
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Power and Fuel |
23.700 |
35.900 |
37.300 |
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Other Manufacturing Expenses |
259.400 |
229.400 |
222.800 |
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Employee Cost |
152.700 |
174.100 |
229.100 |
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Selling Expenses |
269.500 |
250.600 |
355.800 |
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Miscellaneous Expenses |
111.700 |
100.800 |
102.600 |
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Depreciation |
38.500 |
51.900 |
45.600 |
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Interest and Financial charges |
37.200 |
67.000 |
58.500 |
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Stock Adjustment |
[3.200] |
[2.300] |
25.500 |
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Total Expenditure |
1976.900 |
2084.400 |
2175.000 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
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1st
Quarter |
2nd
Quarter |
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Sales Turnover |
|
632.600 |
460.900 |
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Other Income |
|
0.700 |
0.400 |
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Total Income |
|
633.300 |
461.300 |
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Total Expenditure |
|
579.400 |
442.700 |
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Operating Profit |
|
53.900 |
18.600 |
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Interest |
|
07.300 |
07.100 |
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Gross Profit |
|
46.600 |
11.500 |
|
Depreciation |
|
10.400 |
10.400 |
|
Tax |
|
13.400 |
01.000 |
|
Reported PAT |
|
22.800 |
00.100 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
1.93 |
3.99 |
2.74 |
|
Long Term Debt-Equity Ratio |
1.09 |
1.93 |
0.97 |
|
Current Ratio |
1.01 |
0.88 |
0.91 |
|
Fixed Assets |
3.37 |
2.84 |
3.29 |
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Inventory |
5.77 |
5.46 |
5.77 |
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Debtors |
8.24 |
7.25 |
7.74 |
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Interest Cover Ratio |
1.88 |
0.99 |
-0.25 |
|
Operating Profit Margin(%) |
5.53 |
5.89 |
1.49 |
|
Profit Before Interest And Tax Margin(%) |
3.57 |
3.31 |
-0.70 |
|
Cash Profit Margin(%) |
2.95 |
2.66 |
-0.15 |
|
Adjusted Net Profit Margin(%) |
0.99 |
0.08 |
-2.34 |
|
Return On Capital Employed(%) |
13.59 |
10.76 |
-2.45 |
|
Return On Net Worth(%) |
9.99 |
1.24 |
-28.84 |
LOCAL AGENCY
FURTHER INFORMATION
Fixed Assets
Ø
Freehold Land
Ø
Leasehold Land
Ø
Site Development
Ø
Building
Ø
Plant and Machinery
Ø
Vehicles
Ø
ERP Hardware/ Software Cost
HISTORY
The company was incorporated on 24th December 1946 at Mumbai in Maharashtra having Company Registration Number 5434.
Mr. Dandekar originally incorporated Camlin in 1931 as Dandekar & Company, it got its present name in 1988. It started operations with the launch of Horse brand Ink, followed by Camel Ink.
The company later on expanded product range to several consumer and stationery products like pain balms, chalks, rubber stamp pads, gums, adhesives, etc. Art materials were launched in 1962 and pencils in 1974.
The company diversified into fine chemicals and pharmaceuticals in 1984. The company made its IPO in 1987.
The company's industrial adhesive division started its operations in March 1995.
The company started commercial production of high polymer lead in March 1990, in technical collaboration with Pilot Corporations, Japan and has become one of the few companies in the world manufacturing the product.
The company has collaboration with Canson, France for marketing of their artist papers. It also has a marketing collaboration with world leaders in Artists' Colours: Winsor & Newton, UK.
The plant for manufacturing bulk drugs/chemicals, commenced commercial production in 1995-96. Camlin International became a wholly owned subsidiary of the company.
During 1998-99 the company has raised a sum of Rs. 75 millions from IDBI through private placement of 16.5% Non Convertible Secured Redeemable Debentures of financing capital expenditure and long term working capital. The Erstwhile Stationery & Art Material Divisions have been merged into Consumer Products Division with effect from 1st April, 1999.
The company undertook major expansion in production of anti-oxidant range of products.
SCHEME OF
ARRANGEMENT FOR DEMERGER
During the year under review, the Directors had initiated restructuring of its
business by way of demerging its Fine Chemicals Division into a separate
Company, with a view to enable the management to focus on respective
businesses, provide scope for independent collaborations and expansions and
also to help unlock value for members. The scheme was approved by the members
and thereafter sanctioned by the Hon'ble Bombay High Court on 17th November,
2006. The process of demerger was completed on 19th December, 2006, that being
the effective date under the Scheme of Arrangement. The Fine Chemicals Division
has been now demerged as a going concern into a separate Company named Camlin
Fine Chemicals Limited w.e.f. 1st July, 2006 (appointed date). The members of
Camlin Limited were allotted equity shares by Camlin Fine Chemicals Limited, in
terms of the Scheme. The said shares were listed on the Bombay Stock Exchange
Limited on 30th March, 2007.
The current financial accounts of the Company for the year ended 31st March,
2007 take into account the effect of the said demerger. In view of this,
current years financial results are not comparable with the previous year,
appearing in the Annual Accounts.
REVIEW OF
OPERATIONS:
The various restructuring initiatives taken by the management over the
last couple of years are now yielding results. These are well reflected in the
Company's performance under review which has resulted into operating profit
before tax of Rs. 38.079 Millions as against a loss of Rs. 2.214 Millions in
the previous year.
The Company has achieved net sales of Rs. 1876.466 Millions for the year
under review as compared to Rs. 1923.494 Millions in the previous year. The
marginal decline of 2.44% in sales is on account of the Demerger of Company's
Fine Chemicals Division w.e.f. 1st July, 2006. The net sales of Fine Chemical
Division were Rs. 1 50.530 Millions being sales for first quarter (i.e. till
demerger of the Fine Chemicals Division) as against net sales of Rs. 432.709
Millions for the previous year. In other words, excluding this demerged
division, net sales of Consumer Products have increased from Rs. 1486.409
Millions to Rs. 1725.936 Millions, which represents a healthy growth of
16.11%.
The Company is taking initiatives to ensure sustainability of growth and
profitability in the coming years. The Company is now focusing on topline
increase supported by aggressive advertisement and marketing to reposition its
existing brands and by reducing operating costs in the business.
MANAGEMENT DISCUSSION AND ANALYSIS:
INDUSTRY STRUCTURE & DEVELOPMENT AND SEGMENTWISE
PERFORMANCE:
The Company offers a wide
range of products such as Artist Materials, Hobby Colours, Scholastic Colours,
Scholastic Stationery Products, Office Products and Writing Instruments under
the Camel and Camlin brands and caters to a vast consumer segment for their
Fine Art, Scholastic and Office Stationery needs.
The large portfolio of
products, well-known brands, and wide distribution network have helped the
Company to retain its market leadership position in many product groups, in
spite of competition not only from Indian Companies but also from cheap imports
from China and South East Asian countries. It has been possible to maintain
this position by their continuous efforts for product development and up
gradation by the inhouse R&D team and continuous brand building activities,
which has made the Company's brands household names.
In addition to the business
restructuring dealt with earlier in the report, the Company has taken certain
initiatives to improve its value creation potential. Some of these initiatives
are:
Ø
Focus
on products, which are at the higher end of the value chain.
Ø
Portfolio
review of businesses to aggressively support business with profitable growth
potential.
Ø
Aggressive
T. V. campaign for Markers.
Ø
Promotion
of Art in India by Sponsoring 'Euro Art Tour' by the Camel Art Foundation which
has gained recognition and popularity from Artists Fraternity and
Ø
Proactive
alliance with technology partners in domains where the Company foresees future
business opportunities. As a part of this Company entered into a distribution
agreement with ColArt Fine Art & Graphics Ltd. U. K. for exclusive
distribution of their products in India, Nepal and Bangladesh.
Consumer Products
contributed to 92% of the total sales of the Company and has achieved net sales
of Rs. 1725.936 Millions as compared to Rs. 1486.409 Millions in the previous
year.
OUTLOOK, OPPORTUNITIES AND THREATS, RISKS AND
CONCERNS:
Continuous positive
development on the economic front, rapid changes in the retail environment and
an increasing demand for FMCG products are all favorable indicators for the
Company. The growing and young population, rising middle class incomes,
changing lifestyles and aspirations present a unique opportunity for a Company
like yours. Series of strategic initiatives will henceforth help the Company in
mitigating the risks of squeeze on margins and paucity of funds for business
development.
Macro economic factors like
economic and political developments, natural calamities may affect the Company
and industry at large.
Nevertheless increasing
competitive pressures, dumping of imported products at extremely low prices,
rising prices of input material continue to be a cause of concern for the
Company.
INFORMATION TECHNOLOGY:
The Company has been
investing on technology to harness its power towards improving both process and
employees productivity. As a part of this the process of implementation of SAP
has already started and is expected to go live by July, 2007. The system will
connect factory locations, offices and depots all over India. On successful
implementation the project would entail standardization of the business process
and systems with state of the art technology and would substantially help in
reducing operating costs.
CONTINGENT LIABILITIES
Ø
In respect of
Bills of Exchange/cheque discounted with the Bankers Rs. Nil
Ø
In respect of
Guarantees issued on behalf of the Company by its bankers to the extent of Rs.
0.310 Millions
Ø
Corporate
Guarantees given to ColArt Camlin Canvas Private Limited Rs. 15.000 Millions
Ø
Demands against
the Company, either disputed or not acknowledged as debts and not provided for
:
|
|
Year 2006-2007 [Rs. In Millions] |
|
Income Tax |
9.788 |
|
Sales Tax |
4.632 |
|
Excise Duty |
20.102 |
|
Provident Fund |
0.067 |
|
Modvat |
0.910 |
|
Service Tax |
0.189 |
|
Labour Matter |
1.280 |
|
Others |
0.063 |
The unchanged exposure of foreign currency transactions as on 31.03.2007
is as follows :
|
On account of |
Currency |
2006-2007 |
|
Sundry Debtors |
USD |
0.345 |
|
|
EUR |
0.006 |
|
Advances |
USD |
0.050 |
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. 39.43 |
|
UK Pound |
1 |
Rs. 78.34 |
|
Euro |
1 |
Rs. 57.76 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|