MIRA
INFORM REPORT
|
Report Date : |
03.01.2008 |
IDENTIFICATION
DETAILS
|
Name : |
TAMILNADU PETRO
PRODUCTS LIMITED |
|
|
|
|
Registered Office : |
Manali Express
Highway, Manali, Chennai - 600 068, Tamilnadu |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.03.2007 |
|
|
|
|
Date of Incorporation : |
22.06.1984 |
|
|
|
|
Com. Reg. No.: |
18-10931 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L23200TN1984PLC010931 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
DHET00247C |
|
|
|
|
Legal Form : |
Subject is a
public limited liability company. The company's shares are listed on the
Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturing of
Linear Alkyl Benzene, Epichlorohydrin and Caustic Soda. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD 15000000 |
|
|
|
|
Status : |
Very good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well
established company having satisfactory track. Directors are reported as
experienced, respectable and having satisfactory track records. Their trade
relations are fair. Payments are correct and as per commitments. The company can
be considered good for normal business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered Office / Factory : |
Manali Express
Highway, Manali, Chennai - 600 068, Tamilnadu, India |
|
Tel. No.: |
91-44-25941501-10
/ 28254545 |
|
Fax No.: |
91-44-25941139 /
28255798 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate
Office : |
"TPL"
House", 3rd Floor, No. 3, Cenotaph Road, Teynampet, Chennai -
600018, Tamilnadu, India |
|
Tel. No.: |
91-44-24311035 |
|
Fax No.: |
91-44-24311033 |
|
|
|
|
Factory : |
Manali Express
Highway, Manali, Chennai - 600 068, Tamilnadu, India |
|
Tel. No.: |
91-44-25941501-10 |
|
Fax No.: |
91-44-25941139 |
|
E-Mail : |
|
|
|
|
|
Regional
Office : |
C/o. SPIC Limited, II Floor, A-2/35, Safdarjung Enclave, Chaudhry
Jhandu Singh Marg, New Delhi - 110 029 |
|
Tel. No.: |
91-11-26178348 |
|
Fax No.: |
91-11-26178018 |
|
|
|
|
Branches : |
Located at:
|
DIRECTORS
|
Name : |
Mr. Shaktikanta Das, IAS |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Dr. A. C. Muthiah |
|
Designation : |
Vice Chairman |
|
|
|
|
Name : |
Mr. S. Ramasundaram, IAS |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sunil Paliwal, IAS |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. T.S. Surendranath |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. S. Susai |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ashwin C. Muthiah |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Babu K. Verghese |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. C. Ramachandran |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Dhananjay N. Mungale |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. N. R. Krishnan |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. K. U. Mada |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. V. Ramani |
|
Designation : |
Director and Chief Financial Officer |
|
|
|
|
Name : |
Mr. R M. Muthukaruppan |
|
Designation : |
Managing Director and Chief Operating Officer |
KEY EXECUTIVES
|
Name : |
Mr. M. B. Ganesh |
|
Designation : |
Secretary |
|
|
|
|
AUDIT COMMITTEE : |
|
|
Name : |
Mr. C. Ramachandran |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. S. Susai |
|
Designation : |
Member |
|
|
|
|
Name : |
Mr. Dhananjay N. Mungale |
|
Designation : |
Member |
|
|
|
|
Name : |
Mr. N. R. Krishnan |
|
Designation : |
Member |
|
|
|
|
Name : |
Dr. K. U. MADA |
|
Designation : |
Member |
SHAREHOLDING
PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoters :- |
|
|
|
Tamilnadu
Industrial Development Corporation Limited |
15843751 |
17.61 |
|
Southern
Petrochemical Industries Corporation Limited |
15234375 |
16.93 |
|
Other Corporate
Bodies |
8779950 |
9.76 |
|
General Public |
38618100 |
42.92 |
|
Non Resident
Individuals |
3214176 |
3.57 |
|
Foreign
Institutional Investors & OCBs |
2523495 |
2.80 |
|
Indian Financial
Institutions |
5646229 |
6.28 |
|
Mutual Funds
& Banks |
22825 |
0.03 |
|
Shares in Transit
[clearing Member account] |
88573 |
0.10 |
|
Total |
89971474 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing of
Linear Alkyl Benzene, Epichlorohydrin and Caustic Soda. |
||||||||
|
|
|
||||||||
|
Products : |
|
||||||||
|
|
|
||||||||
|
Imports : |
|
||||||||
|
Countries : |
Europe, Far East
Asia and U.S.A |
PRODUCTION STATUS
|
Particulars |
Unit |
Installed Capacity |
Actual Production |
|
Linear Alkyl Benzene |
MT |
95,000 |
85,270 |
|
Heavy Normal Paraffin |
MT |
15,000 |
639 |
|
Heavy Alkylate |
MT |
N.A. |
3,969 |
|
Epichlorohydrin |
MT |
10,000 |
9,753 |
|
Wind Power |
KW/Units |
12,000 KW |
17268865 Units |
|
Caustic Soda |
M.T |
56,100 |
58,840 |
|
Chlorine |
M.T. |
40,000 |
47,338 |
|
Hydrochloric Acid |
MT |
39,600 |
34,050 |
|
Ammonium Chloride |
MT |
21,000 |
1,257 |
GENERAL
INFORMATION
|
No. of Employees : |
604 |
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Bankers : |
|
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Facilities : |
|
||||||||||||||||||||
|
|
|
|
Banking
Relations : |
Satisfactory |
|
|
|
|
Auditors : |
|
|
Name : |
A.
F. Ferguson
and Company Chartered
Accountants |
|
Address : |
No. 5, Nandanam
Extension, 1st Street, Nandanam, Chennai – 600035, Tamilnadu,
India |
|
|
|
|
Memberships : |
Confederation of
Indian Industries |
|
|
|
|
Collaborators : |
|
|
|
|
|
Promoters : |
|
|
|
|
|
Joint Venture : |
|
|
|
|
|
Associates : |
|
|
|
|
|
Subsidiaries :
|
|
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
20,00,00,000 |
Equity Shares |
Rs.10/- |
Rs.2000.000 millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
89,976,899 |
Equity Shares |
Rs.10/- |
Rs. 899.769 millions |
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
89,971,474 |
Equity Shares |
Rs.10/- |
Rs. 899.715 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
899.715 |
899.715 |
899.700 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
2877.534 |
3068.938 |
3334.100 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
3777.249 |
3968.653 |
4233.800 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
1962.647 |
2290.175 |
2754.700 |
|
|
2] Unsecured Loans |
182.176 |
161.160 |
188.600 |
|
|
TOTAL BORROWING |
2144.823 |
2451.335 |
2943.300 |
|
|
DEFERRED TAX LIABILITIES |
838.645 |
882.377 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
6760.717 |
7302.365 |
7177.100 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3928.678 |
4280.422 |
4825.600 |
|
|
Capital work-in-progress |
867.452 |
733.424 |
645.800 |
|
|
|
|
|
|
|
|
INVESTMENT |
1798.008 |
1798.008 |
1812.700 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
989.140
|
1089.774 |
1035.200
|
|
|
Sundry Debtors |
570.582
|
729.767 |
539.700
|
|
|
Cash & Bank Balances |
91.949
|
149.249 |
130.000
|
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
441.933
|
529.218 |
557.000
|
|
Total
Current Assets |
2093.604
|
2498.008 |
2261.900 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
1879.941
|
1828.080 |
2242.900
|
|
|
Provisions |
47.084
|
179.417 |
126.000
|
|
Total
Current Liabilities |
1927.025
|
2007.497 |
2368.900 |
|
|
Net Current Assets |
166.579
|
490.511 |
(107.000)
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000
|
|
|
|
|
|
|
|
|
TOTAL |
6760.717 |
7302.365 |
7177.100 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
|
|
|
|
|
|
Sales Turnover |
8285.946 |
8105.820 |
8770.900 |
|
|
Other Income |
89.141 |
77.634 |
0.000 |
|
|
Total Income |
8375.087 |
8183.454 |
8770.900 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
[152.728] |
14.544 |
69.000 |
|
|
Provision for Taxation |
[42.132] |
[5.832] |
(49.200) |
|
|
Profit/(Loss) After Tax |
[110.596] |
20.376 |
118.200 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
Total Earnings |
607.659 |
950.455 |
NA |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
170.630 |
141.498 |
NA |
|
|
Stores & Spares |
86.975 |
142.850 |
NA |
|
|
Capital Goods |
14.068 |
24.051 |
NA |
|
|
Others |
276.737 |
29.612 |
NA |
|
Total Imports |
548.410 |
338.011 |
NA |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
7949.292 |
7567.271 |
|
|
|
Interest |
247.369 |
218.843 |
8701.900 |
|
|
Depreciation & Amortization |
331.154 |
386.815 |
|
|
|
Exceptional Items |
0.000 |
[4.019] |
|
|
Total Expenditure |
8527.815 |
8168.910 |
8701.900 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
2007.500
|
1625.400
|
|
Other Income |
|
21.700
|
30.600
|
|
Total Income |
|
2029.200
|
1656.000
|
|
Total Expenditure |
|
1932.900
|
1610.700
|
|
Operating Profit |
|
96.300
|
45.300
|
|
Interest |
|
67.900
|
57.000
|
|
Gross Profit |
|
28.400
|
[11.700]
|
|
Depreciation |
|
84.400
|
78..500
|
|
Tax |
|
0.300
|
00.400
|
|
Reported PAT |
|
[83.700]
|
[90.000]
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.63 |
0.73 |
0.82 |
|
Long Term Debt-Equity Ratio |
0.48 |
0.55 |
0.62 |
|
Current Ratio |
0.68 |
0.72 |
0.78 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed Assets |
0.80 |
0.79 |
0.73 |
|
Inventory |
9.09 |
8.69 |
9.05 |
|
Debtors |
14.54 |
14.54 |
15.86 |
|
Interest Cover Ratio |
0.39 |
1.05 |
1.24 |
|
Operating Profit Margin(%) |
4.54 |
6.78 |
10.23 |
|
Profit Before Interest And Tax
Margin(%) |
1.04 |
2.59 |
4.22 |
|
Cash Profit Margin(%) |
2.33 |
4.55 |
7.43 |
|
Adjusted Net Profit Margin(%) |
-1.17 |
0.36 |
1.42 |
|
Return On Capital Employed(%) |
1.65 |
3.73 |
5.10 |
|
Return On Net Worth(%) |
-3.06 |
0.90 |
3.12 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject was
incorporated on 22nd June, 1984 at Chennai in Tamilnadu having
Company Registration Number 10931.
The company was originally
promoted by the Tamilnadu Industrial Development Corporation (TIDCO) but was
later converted into a joint-sector company in association with Southern
Petrochemical Industries Corporation (SPIC). In December, 1993 the company came
out with a public issue to part-finance a project to manufacture
epichlorohydrin (ECH)
The company is one
of the leading manufacturers of linear alkyl benzene (LAB) used in the soap and
detergents industry and ECH which is used to manufacture epoxy resins and plant
pesticides. The company's client list includes HLL, Godrej, Nirma and P &
G, etc. It had a technical collaboration with Conser S. P. A., Italy for the
manufacture of ECH. The company is the largest exporter of LAB in the country
with exports to Europe, West Asia and South East Asia.
The company entered
into a joint venture with Henkel, Germany a detergent manufacturer for a
detergent project to be implemented. SPIC Fine Chemicals was incorporated for
this purpose. Further the company diversified by forming a 24:76 joint venture
with Ciba Geigy, Switzerland and had set up a project to manufacture 25000 tpa
of epoxy resin used in epichlorohydrin. The company had entered into a MoU with
Indian Oil Corporation for setting up a refinery project with a capacity of 6
mtpa at Minjur, Manali.
The company had
obtained the ISO 9002 quality certification. It had won the Visveswaraya Award
and many other awards for safety and exports.
The company
initiated action with UOP for expansion of Lab Plant with Temperature Controlled
Reactor (TCR) was commissioned during the year 2000. Additional 6MW DG set was
commissioned at Lab Plant. The propylene storage capacity at Cuddalore had been
enhanced to 1000 MT. In order to meet the increase in capacity of LAB, Normal
Paraffin expansion to a capacity of 94000 MTs had been planned and action had
been initiated. TPL plans to source the main feedstock, benzene, from Haldia
Petrochemicals and kerosene through imports.
The company also
acquiring a controlling stake in a LAB (liner alkyl benzene) facility in
Vietnam at a Cost of $ 35 million. The plant had a capacity of 80000 tpa. It
also had a downstream unit that makes 60000 tonne per annum of LAB Sulphonate
(LAS), using LAB as a feedstock. The proposed 525-MW coal fired plant in Tamilnadu,
being set up by SPIC Electric Power Corporation Private Limited (a joint
venture with PowerGen) is expected to commence operations in 2004.
During the year
2000-01, the company acquired the Heavy Chemicals Division of SPIC. The company had also installed a 18.6% MW
captive power plant in 2002-03 at the Chlor Alkali Unit to reduce high cost of
power incurred for production of caustic soda and chlorine. For setting up a
Liquid Cargo Marine Terminal at Ennore Port, Vopak Sical Terminal Limited
(VSTL) a joint venture, has submitted the Expression of Interest. The
investment made so far is around Rs. 9.800 millions. The company is having
wholly owned subsidiary of "Certus Investment and Trading Limited."
The company
conceived in the early 1980's, the genesis of Linear Alkyl Benzene (LAB)
project by Tamilnadu Petroproducts Limited (TPL) could be traced back to the
Promoter's vision to propel the growth of environmental friendly and
biodegradable detergents in India serving as an import substitution product.
The emerging economic environment in India offered a very high potential for
newer petrochemical business, especially in the area of business focussed on
consumer requirements in the country.
The company as part
of its initial pre-project activities, worked towards identifying suitable
location, obtaining necessary governmental clearances, sourcing of right
technology, typing up of feedstock and other raw materials and further
executing necessary technology / feedstock agreements. The company commissioned
the LAB Project successfully in April 1988 in a record 22 months from the time
of financial closure.
In 1989 a Modern
Define Unit, the first of its kind in Asia with UOP know-how was installed to
improve the quality to adhere to global standards.
In the year 1990, a 15,000 MTPA Heavy Normal Paraffin unit was commissioned to
cater to the requirements of Chlorinated Paraffin Wax (CPW) manufacturers. CPW
finds extensive application in Synthesizing Plasticisers.
In a couple of years time in 1992, TPL'S LAB Plant was the first in the world
to implement Advanced Process Control in association with M/s. Setpoint, USA.,
increasing the LAB capacity level to 85,000 MTPA. The company’s LAB plant has
since evolved itself as a role model plant in the LAB industry.
During the year 1995, TPL diversified into manufacture of Epichlorohydrin
(ECH), a key raw material for producing Epoxy Resins. Further during year 2000,
TPL as part of consolidation of ECH business acquired a 150 MTPD Caustic Soda /
Chlorine a plant which uses the latest Membrane, cell process.
In line with the
changes required to envision and remain with the time, the company has
committed itself to adopting the state of the art technology. During the year
2001, the company achieved a capacity of 100,000 MTPA of LAB and further is in
an advanced stage of enhance the LAB capacity to 120,000 MTPA in the year
2003-04. The vision to grow and maintain leadership in this business is a
silver lining to its business philosophy.
OPERATIONAL
HIGHLIGHTS:
During the year, Linear Alkyl Benzene (LAB) plant was run at 90% capacity
utilization matching with expected sales in order to minimise inventory
accumulation. The Epichlorohydrin (ECH) plant and Chlor Alkali Plant achieved
capacity utilisation of 97% and 105% respectively.
In LAB business, margins continued to be under pressure due to excess domestic
production, continued buoyancy in oil price and reduction in import duty of LAB
from 12.5% to 7.5%. Export of LAB was continued to have their presence in international
market. Continued political disturbances in oil producing countries and the
widening gap in demand and supply kept the oil prices at higher levels, leading
to the increase in Power & Fuel Costs.
As a cost management measure, the Company has entered into a pact with M/s.
Shell Global for hedging to counter the risks involved in key Raw material
procurement on account of volatile oil prices. As an energy conservation
measure, the Company has embarked on upgrading the Advanced Process Control System
in the LAB Plant aimed at reduction in energy costs through process
optimisation. The Company continues to enjoy the status of being the sole
supplier of LAB to M/s. Procter & Gamble, India and M/s.
Henkel India Limited
Sale of ECH matched the production quantity. ECH was sold mainly in domestic
market though a small quantity of 48 MTs was exported to Middle East. The
market has seen increased demand due to the products versatility in usage and
the price was buoyant throughout the financial year. To reduce water costs
associated with water consumption, the Company has embarked upon a water
conservation activity by re-using waste water from a neighbouring company in
Manali belt, sourced free of cost.
During the year under review the quantity of Caustic Soda sold was higher than the previous year. The market has been almost stable during the year due to additional demand. There was no supply to NALCO, a major customer of Caustic Soda from December 2006 and yet the gap has been supplemented by the increase in sale of flakes to other customers. The captive consumption of chlorine has added strength to the business of caustic lye production.
Effective energy monitoring coupled with a study to evolve steps for reduction of electrical energy have been planned to be taken up during 2007-08.
FINANCE:
During the year, the Company had not availed any major loans from
Institutions/Banks. Consequent to the increase in input cost, the Company had
to utilize the sanctioned Working Capital limits in full. Due to macro-economic
factors, there have been continuous changes in the interest regime and hence
the interest cost has increased from Rs.218.800 Millions to Rs.247.400 Millions
during the year 2006-07. The interest cost would have gone up further had the
company not taken up the debt swap exercise in the previous years.
EXPANSION / PROJECT ACTIVITIES:
The Company had completed expansion of LAB capacity to 1,20,000 MT per annum
during April 2007.
SUBSIDIARIES:
SPIC Electric Power Corporation (Private) Limited (SEPC) SEPC has necessary approvals in place for implementation of the Power Project. The Company along with SEPC is in discussion with a domestic investor who is willing to contribute upto 74% of the Equity. The domestic investor is very keen to infuse the required funds and implement the project on a fast track basis.
SEPC has also written to Tuticorin Port Trust to restore the original land expressing its willingness to pay the overdue lease rentals without arrears.
Leo Utility and Power Limited (LUPL): The Board of Directors of LUPL decided to wind up the Company during April 2006, as progress could not be achieved to go ahead with the business objectives. Necessary application as per the provisions of the Companies Act, 1956 was filed with Registrar of Companies, Chennai during May 2006.
A provision has already been made in the accounts of the Company to the extent
of Rs.0.475 Millions, being the investment in equity for this project.
Certus Investment and Trading Limited (CITL) and its Wholly Owned Subsidiaries
(WoS):
SINGAPORE N-PARAFFIN
PROJECT:
The Normal Paraffin (NP) plant is proposed as a green field project with a Capacity of 100,000 Metric tonnes per annum (MTPA), along with the associated utilities and off-sites. The total Project Cost is estimated at around 110 Million USD to be financed on a Debt Equity ratio of 70:30. CITL has signed Joint Venture Terms with Development Enterprises Holding (DEH), a wholly owned subsidiary of Kuwait Finance House for 44% of the equity requirements of the project.
The Project Company, TPL India Singapore Private Limited, a WoS of CITL, Mauritius, is in discussion with Economic Development Board, Singapore for Preference Share tie-up for the Project. The debt portion will be largely financed by Project Finance for which Ernst & Young have been appointed as Financial Advisor.
A Memorandum of Understanding (MOU) has already been entered into with the shareholders of Singapore Refining Company (SRC), for supply of feedstock for the proposed Project and for taking back the return streams. Discussions are on for entering into a formal feedstock supply agreement with the Shareholders of SRC. The Plant will be located adjacent to SRC at Jurong Island in Singapore. An in-principle clearance from National Environment Agency (NEA) of Singapore has also been obtained for setting up the proposed project.
Technip India Limited has completed the Capital Cost estimates. M/s. Colin A. Houston Associates (CAHA), USA, has completed the Market Study work.
Universal Oil Products (UOP), USA has been chosen as the Licensor and discussions have already been initiated with UOP in this regard. Financial closure is targeted for July'07. Engineering activities are scheduled to start by August'07 and the commercial operation is expected to commence by third quarter of 2009.
MIDDLE EAST LAB
PROJECT:
The project is to establish an 80,000 TPA of LAB plant in the Yanbu Industrial
City, Kingdom of Saudi Arabia. The Saudi Arabian General Investment Authority
(SAGIA) has issued license for the project. Royal Commission of Jubail and
Yanbu has allotted the required land in Yanbu Industrial City on the western
coast of Saudi Arabia. The project is being planned to begin its commercial
production during the 3rd Quarter of 2009.
M/s. Shell's GTL (Gas to Liquid) plant in Qatar is expected to commence its
commercial production during the year 2009. CITL's JV Company, Gulf
Petroproducts Company (GPC), Bahrain, is negotiating with M/s. Shell for long
term supply of Normal Paraffin from their proposed GTL plant in Qatar.
A Statement pursuant to Section 212 of the Companies Act, 1956 giving
information about the subsidiary companies is attached hereto. The consolidated
financial statements presented by the Company include the financial information
of its subsidiaries, as per Accounting Standard AS-21 issued by the Institute
of Chartered Accountants of India.
In terms of the exemption granted to the Company by the Central Government under Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies that are required to be attached to the Balance Sheet of the Company have not been attached. The Annual Accounts of the subsidiary companies and the related detailed information will be made available to the Shareholders and the subsidiary company investors who seek such information. The Annual Accounts of the subsidiary companies will also be kept for inspection by any investor in the Registered Office and that of the subsidiary company concerned.
STATUS OF ACTIVE INVESTMENTS:
Henkel India Limited (HIL):
Henkel India Limited (HIL) achieved a turnover of Rs.3570 Millions for the year
ended 31st December 2006 compared to Rs.3040 Millions in the previous year. HIL
posted a Net Profit of Rs.97.800 Millions (audited) as against Net Profit of
Rs.72.300 Millions in the previous year and achieved a cash profit of
Rs.117.800 Millions. Rural demand and the increasing presence of large format
retail stores in urban markets spurred the sales to a large extent. The laundry
and homecare segment posted growth between 12 to 15%. Henko and Mr. White, the
main Laundry Care has done well. Pril Dish wash liquid maintained its
leadership position by achieving 72% value market share.
Margo launched a new variant to attract young consumers and strong media support is planned to be provided during 2007 for this brand. This was the first full year after the launch of retail Hair-coloration brands, Silkience and Palette and the brands have shown modest growth.
The Schwarzkopf Professional Hair-Care division registered a growth of 49% over
the previous year, with the brand Igora Royal' being received very well by the
market. The overall outlook for 2007 is extremely robust and the plan is to
strengthen the brands across all accounts during the year.
Petro Araldite Private Limited
(PAPL):
During the year 2006-07, PAPL produced 11,901 MT Basic Liquid Resin, 9022 MT Basic
Solid Resin and 2421 MT of formulated product aggregating 23,344 MT
representing a capacity utilisation of about 63.1%, which is marginally lower
than that of 64% during last year. Total sales increased marginally to Rs.2161
Millions compared to last year's Rs.2117.600 Millions. To meet the domestic
demand, exports were reduced from 4024 MTs to 3036 MTs. The profit for the 12
months' period upto 31st March 2007 (unaudited) is Rs.141.700 Millions and the
accumulated loss as on the above date is Rs.9.000 Millions. All the leading
Global Epoxy players are very active in the domestic market and the competition
is very high which is affecting PAPL's sales and margin.
MANAGEMENT DISCUSSION
AND ANALYSIS REPORT:
INDUSTRY STRUCTURE:
Tamilnadu Petroproducts Limited (TPL) is engaged in the manufacture and
marketing of Petrochemicals and Chemical intermediates such as Linear Alkyl
Benzene (LAB), Epichlorohydrin (ECH), Caustic Soda and Chlorine. These products
cater to the needs of the industries as basic chemicals and also serve as
intermediates for manufacture of several household materials.
Chlorine, a co-product of caustic soda, finds variety of applications as a bleaching and chlorinating agent.
LINEAR ALKYL BENZENE (LAB):
LAB continues to be the main ingredient in the formulation of synthetic
detergents. Revolution in the retail market segments has led to creation of
vast shelf space for fast moving consumer goods segment with the result, many
new brands have come up in the detergent segment. This aided by reduced import
of alternative surfactants like Alpha Olefin Sulphonate shall result in more
consumption of LAB in the domestic segment. The industry is also witnessing
severe competition by way of imports from the recently commissioned units in Middle
East. These units have a competitive edge due to lower energy and feedstock
costs. Further, the customs duty reduction on LAB imports in the recent Union
budget is also an added advantage to these units.
Despite these adverse factors, the Company maintained a near to normal supplies of LAB, due to robust growth rate in consumption and dynamic customer support adopted by the Company. In order to mitigate the situation, they have commenced sourcing their energy inputs on international terms in bulk supply as well as sourcing N-Paraffin and Benzene on term offers. They have also taken up with Government of India to address the inverted duty anomaly on Normal Paraffin.
EPICHLOROHYDRIN (ECH):
TPL continues to be the sole manufacturer of ECH in India. A variety of
application of Epichlorohydrin (ECH) in Epoxy resins, Pesticides and
Pharmaceutical makes it a multi-facet product. During the year, the plant
achieved, a capacity utilization of 97%. M/s. PAPL, the joint venture company
of TPL is continuing its off-take of ECH for its requirements.
The buoyant economy with focused attention to corrosion in industries and the growth in infrastructure sector has increased the demand for ECH consumption. The gap in supply to meet the domestic market is filled through imports from Europe, Russia and also from China recently. The domestic market throughout the year was active, as the international prices had stabilized at high level. However, the hardening of raw material prices i.e., Propylene and Fuel oil prices had considerably reduced the margins.
CHLOR ALKALI:
TPL continued its supplies of Caustic Soda, Chlorine to a wide variety of
industries viz., Paper, Pharmaceuticals, Chemical, Petrochemicals and Refinery
both in and around Manali and other destinations. Caustic Soda, a key economic
driver finds extensive use in many industries. The demand from basic metal
industries is increasing. The Company is continuing its supply of chlorine, a
co-product to bulk customers in the neighborhood. This chlorine tie-up gives
strength to this division to enable optimize on caustic soda production. The
market situation is encouraging with stabilized rates for the finished product.
Fuel Oil, used in the manufacture of Captive power however continues to erode
the margins on and off due to price volatility. The salt prices were marginally
higher despite its availability.
THREATS AND
OPPORTUNITIES:
Linear Alkyl
Benzene:
Oversupply situation in LAB domestic market is a potential threat affecting
company's realizations. This is expected to continue for the next 3-4 years
despite a robust LAB growth rate forecast of 4-5% per annum. TPL's major
competitors for LAB in the Indian market have greater control over raw
materials and are better integrated. They also have diversified product lines,
which balances the portfolio of products and profits. Volatile oil prices and
cheaper imports from Middle East, facilitated by reduced import duty also pose
a serious threat. Consumers of LAB have grown substantially over the years and
the resistance to accept cost-push increases are evident.
However there are opportunities available for reducing operating costs to
remain competitive. As everyone is aware, energy costs in India are higher than
other countries. Even across India, energy costs cannot be bench marked as
every state electricity undertaking charge different rates. In order to reduce
the energy cost and to compete globally, the company is actively considering a
proposal for installing a coal-based power plant.
Customer retention and customer satisfaction are given prime importance in their marketing activities, which has given us the status of a preferred supplier.
India is one of the biggest consumers of LAB in the world with promising growth
outlook. Liberalization of economy, robust GDP growth, rise in disposable
personal income levels and purchasing power has led to revolution in the field
of shopping experience. With hygiene and personal health care segments being
given importance, the Indian per capita detergent consumption is soon expected
to move or reach that of developed countries.
Epichlorohydrin:
Free trade Agreements with ASEAN countries have facilitated import of
Epichlorohydrin (ECH) as well as Epoxy Resins at almost negligible import
duties. While the process of ECH manufacture by TPL is based on propylene and
chlorine as raw materials, a new process based on Glycerine, a by-product of
the Bio-Diesel / Detergent Alcohols Industry, has been developed by a Process
licensor in Europe. This new process stated to be cost-effective compared to
the conventional Propylene route, coupled with higher economic scale of
manufacture will further entice imports at reduced cost.
The above said factors are expected to pose a threat which could affect
company's realization in the future. However, with infrastructure projects
getting a fillip in India, application of ECH is bound to grow multi-fold &
this coupled with a long term supply contract with PAPL, the company is
confident of continuing its higher volumes of production and sales in the
coming years.
Caustic Soda:
The replacement of chlorine in some industries, necessitated due to environmental factors, could pose a limitation to Caustic manufacture and affect the performance of this division. The buoyant economy, expansion proposals in metal industries is an opportunity for TPL. The company by virtue of its over design capacity vailable with most equipments, has a definite advantage of carrying out de-bottlenecking at a comparatively lesser cost to meet the growing requirements of Caustic soda. Further captive consumption of Chlorine and potential consumption needs of group companies is a definite advantage compared to other manufacturers.
RISKS & CONCERNS:
Linear Alkyl Benzene:
Oil prices have been volatile with no signs of stabilizing at a particular level. This is a matter of serious concern for long term pricing of LAB, as LAB producers are unable to pass on the increase due to raw-material prices to the Detergent manufactures, in view of stiff competition in LAB domestic market. Also continued customs duty reduction in every Budget only emphasizes the need for further cost reduction. As the Company had already peaked its plant efficiency any further increase has to be done with caution.
Epichlorohydrin:
It is not out of place, to indicate that already the customs duty for
Epichlorohydrin (ECH) is at a very minimal level as compared to its raw
materials, which are at relatively higher levels. Also considerable amount of
Epoxy Resin is coming into India from the FTA countries, thus causing concern
for ECH domestic sales. The variations in customs duty structure for import of
ECH for Resins and Pharma sector also pose a risk of reduced off-take.
Increasing trend in global prices of Propylene, the key raw material for ECH,
and sustained high price of fuel oil is another cause of concern. The new
technology for production of ECH from Glycerin is a matter of concern and
business risk, which is expected to make imports economical and attractive to
the customers as compared to the cost and pricing of TPL.
Caustic Soda:
The demand for caustic soda is always cyclical. The success of this industry
specifically lies in business cycle of end use industries. The imports on
regular basis by large volume consumers will trigger price war in domestic
market which is a matter of concern. Increasing energy cost is continuing to be
a major concern for TPL. This division, being a power intensive one, any
further increases in Power and Fuel costs can further affect the
competitiveness.
OUTLOOK:
Domestic market segment of LAB is expected to grow at around 4 to 5% per annum.
In line with the expected demand growth and to leverage on the economics of
scale of operation, the company had completed expansion of LAB capacity to
1,20,000 MTs per annum during April 2007. With the recent commissioning of LAB
plants in Middle East, LAB supply is in surplus for the time being. With steady
growth taking place in developing economies globally, and with no new plant
being planned, the surplus capacity is expected to be absorbed in the next 3 to
4 years. The proposed Normal Paraffin plant of TPL in Singapore, when
commissioned, will provide a definite edge for the company on the feed stock
front.
ECH demand is expected to witness a positive growth in line with the growing
economy. While the growth rate is expected to be positive, the margins are
likely to fall due to Inverted duty structure, Unique raw material pricing
scenario, FTA agreements, and higher economic scales of production using
alternate technology proposed by global manufacturers.
However, the Epoxy demand in the country is bullish, growing at the rate of 15% to 20% due to surge in demand for white goods, robust growth in Infrastructure development, Wind Energy and Automobiles sector etc. The company will leverage on these growth areas in the next few years. Epoxy demand is the clear sign of India's GDP growth coupled with MNCs' setting up their shops in India.
The business outlook for Caustic soda is one of steady prices, reduced margins
due to increased Fuel costs and with increased demand due to buoyant economy.
The company has proposed to address the impact due to higher energy costs by
its plans to set up a Coal based power plant in Manali.
The continued hardening of the interest rates in the money market due to the
credit policy of the Reserve Bank has resulted in the Banks/Institutions hiking
their benchmark interest rates (Bank Prime Lending Rates) during the current
financial year 2006-07. It is expected that the interest rates will continue to
climb upwards in 2007-08 as well.
The appreciation of rupee vis a vis dollar will have both positive and negative impact for the operations. The imports in rupee terms will come down partly neutralizing the increase in cost of raw materials on account of hardening prices of crude and other derivatives. Exports are likely to show a downward realization.
CONTINGENT
LIABILITIES
All liabilities
have been provided for in the accounts except liabilities of a contingent
nature, which have been
disclosed at their
estimated value in the Notes to the Accounts.
In December 1993,
the company came out with Rights cum Public Issue of Equity Shares. The
difference between issued and subscribed capital of 5,425 shares is due to said
shares kept in abeyance under Section 206 A of the Companies Act, 1956.
Research and
development expenses incurred on revenue account is Rs.9.63.
a) Fixed Assets
(other than furniture and fixtures, office and other equipment, vehicles,
ships-barges, certain land
and plant and
machinery) have been revalued as on 31st March 1996 on the basis of
"Existing Use value" by independent professional valuers. The
resultant surplus on such revaluation over the written down value of these
assets amounting to Rs. 2140.920 Millions has been credited to revaluation reserve as
on 31st March 1996.
b) The
depreciation charge for the year shown in the profit and loss account is after
deducting an amount of Rs.80.808 Millions representing extra depreciation arising on
revaluation of fixed assets withdrawn from revaluation reserve.
Estimated value of
contracts remaining to be executed on capital account and not provided for (net
of advances) : Rs. 2.983 Millions
Contingent
Liabilities
a) Bills
discounted : Rs. 51.314 Millions
b) Other claims
not acknowledged as debts
i) Sales tax : Rs. 879.818 Millions
a) The Commercial Tax Department, based on certain observation of the
records, disallowed the claim for exemption of turnover arising on account of
stock transfers to branches effected by the Company during the years 1993-94 to
1996-97. The Company has preferred an appeal against the Order contesting the
generalisation of the observation. The aggregate demand in this regard is Rs.
778.101 Millions. During the year, for assessment years 1994-95 and 1995-96, the matter
has been remanded back to the Assessing Officer, for reverification of the
records. The order of the Assessing Officer is awaited. There is no possibility
of reimbursements from the customers, etc. as these demands relate to stock
transfers.
b) The Commercial Tax Department, while completing the assessment under
the Tamilnadu General Sales Tax Act for 1994-95 & 1995-96, has questioned
the genuineness of the declarations filed by certain customers for availing
concessional rate of tax. The Company has disputed the claims and has preferred
an appeal against the Order of the Department before the Tribunal. The
aggregate demand in this regard is Rs. 97.815 Millions. During the year,
the Tribunal has remanded the matter back to the Assessing Officer to verify
the correctness and completeness of the transactions. The order of the
Assessing Officer is awaited. In case the declarations are found to be not
genuine the Company has recourse to only the existing customers for
reimbursement.
ii) Excise duty : Rs. 56.692 Millions
iii) Service Tax : Rs. 6.785
Millions
iv) Income Tax : 115.001 Millions
The above amounts are based on demands raised which the company is
contesting with the concerned authorities. Outflows, if any, arising out of
these claims would depend on the outcome of the decision of the appellate
authorities and the company's rights for future appeals. No reimbursements are
expected.
It is in trade terms with:-
- Abasi Engineering
Works
- Canle Valves
Private Limited
- Joseph
Leslie & Company
- Vasu
Chemical Industries
- Madras
Industrial Products
- R. V.
Refractories
- Vircap
Scalingtech Private Limited
- General Instrument Consortium
Fixed Assets
- Freehold Land
- Buildings
- Plant & Machinery
- Furniture & Fixtures
- Office and Other Equipment
- Vehicles
- Ships - Barges
As Per Web Details
Profile
Tamilnadu Petroproducts Limited (TPL), a corporate star, was born in the
year 1984 with the objective of setting up a 50,000 MTA Linear Alkyl Benzene
(LAB) project. TPL has since imprinted winning hall marks successively over the
years in Corporate India and the Petrochemical Industry in particular.
Over more than a decade, TPL grew in strength, thinking differently, harnessing
the resources by laying a fundamental platform for financial strength and
responding to customers innovatively by bringing in new products and services.
TPL has surged ahead with laurels for a challenging & promising
future, carrying the business commitment of the promoters, M/s. SPIC Limited,
who have diverse interest in fertilizers, petrochemicals and other services and
Tamilnadu Industrial Development Corporation Limited (TIDCO), a State Govt.
enterprise, with prime interest in promoting industries in the State of Tamilnadu.
SPIC its boasts of a turnover close to US $ 800 million and has been the
principal force in TPL achieving corporate leadership in detergent business.
The LAB plant is located in the Manali Industrial Belt, 25 KMs away from
Chennai City. The various infrastructure facility at Manali, the advantages of
a Metropolitan city, hi-tech communication interface and cosmopolitan culture,
synergise with the vision of promoters business plans.
TPL continues to march ahead excellent track record and its achievements
in a short time frame stand out distinctly, propelled by continuous upgradation
of technology, quality human resource and utmost customer satisfaction.
05/06/2007
Singapore
in 3 way petrochem tie up with Kuwait and India
TPL's Subsidiary Company
in Singapore is to set up US $ 110 Million Petrochemical Plant in Singapore to
manufacture 1,00.000 MT of Normal Paraffin. TPL's investment through its
subsidiary will be 51 % of the Equity while Kuwait Finance House and
Singapore's Economic Development Board will hold 44% and 5% respectively. A
Deal has been signed to this effect on 4th June 2007 in Singapore and the
signing ceremony was witnessed by Singapore's Prime Minister, Mr. Lee Hsien
Loong and Kuwaiti Prime Minister, Mr. Sheikh Nasser AI-Mohammed AI-Ahmed
AI-Jaber AI-Sabah.
Singapore has been chosen in view of -
availability of a
long term supply of Kerosene and
reliability of
services such as Electricity which is costly in India.
Negotiations are in advanced stage with the Singapore Refining Company for a
deal to supply Kerosene. Half of the Normal Paraffin to be produced will be
exported to TPL's Plant in India while rest will be sold in the open market.
The demand for Normal Paraffin is expected to increase considerably and Industry
sources estimate that there will be a shortage of 2,00,000 MT each year till
2010 in South-east Asia and Asia-Pacific.
02/02/2005
TN
PETRO PLANS TO STEP UP LAB EXPORTS
Tamilnadu Petroproducts (TPL)
plans to boost its global business of Linear Alkyl Benzene (LAB), a feed-stock
used in the manufacture of detergents, by stepping up exports and setting up
plants in Singapore and Saudi Arabia.
With Indian Oil entering the already surplus LAB market, which is growing at a
steady 6% per annum (8% in the south), TPL wants to aggressively penetrate the
global market in order to increase its share from the current 3% to 10% by
2010, said Mr. RM Muthukaruppan, MD & COO.
He said LAB capacity has touched five lakh tones following the commissioning of
IOC’s 1.2 lakh tones in August last as against the domestic demand of 3.5 lakh
tones. At the present growth rate, it will take five years to clear the glut,
he pointed out.
TPL played a major role in the growth of regional detergent manufacturers. Four
of them now lift about 35,000 to 45,000 tonnes, Mr. Muthukaruppan said. It has
scaled up its capacity from one lakh to 1.1 lakh tonnes in the first stage. By
March, the next stage of 1.2 lakh tonnes will be achieved. However, it expects
IOC’s entry to reduce its market share to 25% from the current 38%. The
company’s MD said, the year exports have already touched 13,000 tonnes and in
the full year, it is expected to be 22% of the capcity against 14,523 tonnes it
exported last year to markets like West Asia, Far East and Europe. TPL is
likely to emerge a sourcing hub for Henkel KGaA, Germany.
Mr. Muthukaruppan said “in response to our proposal for sourcing LAB, Henkel
had lifted 2000 tonnes for its Saudi plant. This is big order though we have
been supplying in a small way to P & G plant there. We expect Henkel to
step up sourcing”.
It is hopeful of implementing two overseas LAB projects through an investment
firm floated in Mauritius. The Singapore project, estimated to cost $ 250
million, is expected to take off by the middle of this year with the support of
the Economic Development Board. It is also pursuing the second project in Saudi
Arabia.
Mr.V. Ramani, Director & CFO, said a turnaround performance is expected in
the last quarter with the continued focus on cost cutting and better
performance of ECH and caustic soda businesses. Of the Rs.2000 Millions high-cost debt, the company had earlier
raised a Rs.1000 Millions loan
from Rabo carrying 9.1% interest. During the third quarter, another Rs.1000
Millions debt in the form of 12%
interest bearing debentures was retired.
As part of the debt swap, TPL raised a fresh loan of Rs.750 Millions from IDBI and another Rs.500 Millions from a nationalized bank. Both carried an
interest of 8.5% with one year moratorium on interest and repayable in six
years. The interest will be reset after three years in case of IDBI and after
one year in the case of the bank.
By way of this recast, Mr. Ramani said, TPL has slashed average cost of
interest from 13.53% in April 2003 to 10.6% in April 2004 and further to 8.9%
in December 2004.
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.39.45 |
|
UK Pound |
1 |
Rs.78.14 |
|
Euro |
1 |
Rs.58.04 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|