MIRA INFORM REPORT

 

 

Report Date :

10.01.2008

 

IDENTIFICATION DETAILS

 

Name :

ITD CEMENTATION INDIA LIMITED

 

 

Registered Office :

1st Floor, Dani Wooltex Compound, 158, Vidyanagari Marg, Kalina, Santacruz (East) Mumbai 400 098, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.12.2006

 

 

Date of Incorporation :

24.06.1978

 

 

Com. Reg. No.:

20435

 

 

CIN No.:

[Company Identification No.]

L61000MH1978PLC020435

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMS00123E

 

 

PAN No.:

[Permanent Account No.]

AAACT1426A

 

 

Legal Form :

Public limited liability company. Company’s Shares are listed on the Stock Exchange.

 

 

Line of Business :

Subject is engaged in providing of construction services.

 

 

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 4300000

 

 

Status :

Excellent

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established and reputed company having fine track. Available information indicates high financial responsibility of the company. Directors are reported as experienced, respectable and having satisfactory means of their own. Trade relations are reported as fair. Business is active. Fundamentals are strong and healthy. Payments are usually correct and as per commitments.

 

The company can b considered good for any normal business dealings at usual trade terms and conditions.

 

 

LOCATIONS

 

Registered Office :

1st Floor, Dani Wooltex Compound, 158, Vidyanagari Marg, Kalina, Santacruz (East) Mumbai 400 098, Maharashtra, India

Tel. No.:

91 - 22 - 6693 1600-7/8

Fax No.:

91 - 22 - 6693 1627-28

E-Mail :

rc.daga@itdcem.co.in

Website :

http://www.itdcem.co.in

 

 

Branches :

Located at

 

  • Kolkata
  • Delhi
  • Chennai

 

 

Research Laboratories :
  • Mumbai
  • Kolkata

 

 

DIRECTORS

 

Name :

Mr. Premchai Karnasuta

Designation :

Chairman

 

 

Name :

Mr. Per Hofvander

Designation :

Director

 

 

Name :

Mr. Sunil Shah Singh

Designation :

Managing Director

 

 

Name :

Mr. Srinivasan Mukundan

Designation :

Deputy Managing Director

 

 

Name :

Mr. Darius Erach Udwadia

Designation :

Director

 

 

Name :

Mr. Pathai Chakornbundit

Designation :

Director

 

 

Name :

Mr. Nasser M. Munjee

Designation :

Director

 

 

Name :

Mr. Anup Kumar Chatterjee

Designation :

Director-General Manager

 

 

KEY EXECUTIVES

 

Name :

Mr. Prasad Patwardhan

Designation :

Chief Financial Officer

 

 

Name :

Mr. R.C Daga

Designation :

Company Secretary

 

 

Audit Committee

Mr. P. Hofvander

 

Mr. D.E. Udwadia

 

Mr. P. Chakornbundit

 

 

Remuneration Committee

Mr. D. E. Udwadia

 

Mr. P. Karnasuta

 

Mr. D Chakornbundit

 

Mr. N. M. Munjee

 

 

Shareholders/Investors' Grievance Committee :

Mr. P. Chakornbundit

 

Mr. S.S. Singh

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

Names of Shareholders

No. of Shares

Percentage of Holding

Promoter – Italian Thai Development

 

 

Public Company Limited

4634047

80.48

General Public

848580

14.73

Directors and their relatives

298

0.00

Financial Institutions – UTI, GIC and its subsidiaries 

20580

0.36

Nationalised Banks

330

0.01

Mutual Funds

17311

0.30

Corporate Bodies

188142

3.27

NRI/OCB/FII

44969

0.78

NSDL Transit / Free Position

3843

0.07

Total

5758100

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Subject is engaged in providing of construction services.

 

 

Products :
  • Civil, Mining, Marine and Specialist engineering Construction
  • Foundation engineering and construction
  • Roads and Bridges Construction

 

 

GENERAL INFORMATION

 

Suppliers :
  • Mahalaxmi Engineering works
  • Popular engineering works
  • Veco Engineers & Fabricators
  • Vishwakarma Engineers Company
  • Ta-ta steel industries Limited
  • Asha Industrial Works
  • Kashmir cement Industries
  • P. K. Shaw & Company
  • Chain link wirenetting industries

 

 

Customers :
  • CIDCO, Maharashtra
  • DMRC
  • Department of Irrigation & CAD, Andhra Pradesh
  • Gujarat Adani Port Limited
  • Gujarat Chemical Port Terminal Company Limited
  • Gujarat Pipavav Port Limited
  • Hindustan Zinc Limited
  • IFFCO, Phulpur
  • Indian Farmers Fertilizers Corporation
  • Indian Molasses Company Limited
  • Jaiprakash Associates
  • Kandla Port Trust
  • Maharashtra Krishna Valley Development Corporation
  • Meghalaya State Electricity Board
  • Ministry of Defence, Department of Navy
  • Municipal Corporation of Ludhiana
  • National Highways Authority of India
  • Nhava Sheva International Container Terminal Limited
  • Northern Railway
  • P&O Ports
  • PWD, Goa
  • Sabarmati River Front Development Corporation Limited
  • Tata Power Company Limited

 

 

No. of Employees :

2634

 

 

Bankers :
  • Allahabad Bank
  • Bank of Baroda
  • ICICI Bank Limited
  • Standard Chartered Bank
  • Union Bank of India

 

 

Facilities :

SECUREDLOANS

Rs in Millions

As on 31.03.2007

From banks

 

- Working capital demand loan -repayable on demand

216.405

- Overdraft - repayable on demand

272.589

- Interest accrued and due

2.098

From Financial Institution

 

- Short term loan -repayable in one year

200.000

Plant and Vehicle Loan

40.435

 

 

 

Bank loans are secured by hypothecation of book debts, inventory, other current assets and plant and machinery, both present and future.

 

Plant and vehicle loans are secured by plant and vehicle respectively.

 

Loan from financial institution is secured by subservient charge on all plant & machinery, movable assets and current assets of the company, both present & future.

 

 

UNSECURED LOANS

 

Short term loans

 

From banks

 

- Working capital demand loan -repayable on demand

242.400

- Overdraft repayable on demand

598.145

- Interest accrued and due

1.868

From others

 

- Inter-corporate deposits

0.000

- External Commercial Borrowings

86.494

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

S.R. Batliboi and Associates

Chartered Accountants

Address :

Mumbai, Maharashtra, India

 

 

Joint Venture :

ITD Cemindia JV

 

 

Holding Company :

Italian Thai Development Public Company Limited, Thailand

 

 

Associates/Subsidiaries :

Skanska Cementation International Limited U.K

Skanska Construction UK Ltd

Cementation Foundation Skanska Ltd UK

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

1,10,00,000

Equity Shares

Rs. 10/- each

Rs. 110.000 Millions

 

Issued Capital :

No. of Shares

Type

Value

Amount

57,60,216

Equity Shares

Rs. 10/- each

Rs. 57.602 Millions

 

Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

57,58,100

Equity Shares

Rs. 10/- each

Rs. 57.581 Millions

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.12.2006

31.12.2005

31.12.2004

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

57.581

46.066

46.100

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

1022.096

453.081

415.400

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

1079.677

499.147

461.500

LOAN FUNDS

 

 

 

1] Secured Loans

731.527

468.105

372.400

2] Unsecured Loans

928.907

788.177

225.900

TOTAL BORROWING

1660.434

1256.282

598.300

DEFERRED TAX LIABILITIES

0.000

11.100

0.000

 

 

 

 

TOTAL

2740.111

1766.529

1059.800

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

646.838

449.700

488.700

Capital work-in-progress

200.944

15.650

0.000

 

 

 

 

INVESTMENT

10.843

0.000

0.000

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
964.226

637.410

1041.700

 

Sundry Debtors
2466.623

2123.718

1377.000

 

Cash & Bank Balances
187.143

63.751

35.000

 

Other Current Assets
1472.287

640.966

0.000

 

Loans & Advances
639.404

371.851

444.600

Total Current Assets
5729.683

3837.696

2898.300

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
3815.530

2506.637

2122.800

 

Provisions
32.667

29.880

204.400

Total Current Liabilities
3848.197

2536.517

2327.200

Net Current Assets
1881.486

1301.179

571.100

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

2740.111

1766.529

1059.800

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.12.2006

31.12.2005

31.12.2004

 

 

 

 

Sales Turnover

5754.994

5081.881

5574.100

Other Income

98.332

65.248

109.800

Total Income

5853.326

5147.129

5683.900

 

 

 

 

Profit/(Loss) Before Tax

25.660

5.238

[417.100]

Provision for Taxation

[1.335]

[32.211]

[1.800]

Profit/(Loss) After Tax

26.995

37.449

[415.300]

 

 

 

 

Expenditures :

 

 

 

 

Site and Administrative Expenses

5431.702

4894.283

864.300

 

Interest

267.236

159.963

127.600

 

Depreciation

98.728

78.648

89.100

 

Bad debts provided for and written off

30.000

33.000

0.000

 

Less : Prior Period Item

0.000

[24.003]

0.000

 

Other Expenses

0.000

0.000

5020.000

Total Expenditure

5827.666

5141.891

6101.000

 

QUARTERLY RESULTS

 

PARTICULARS

 

31.03.2007

30.06.2007

30.09.2007

Type

1st Quarter

2nd Quarter

3rd Quarter

Sales Turnover

1528.400

1828.400

1934.200

Other Income

57.700

46.200

12.900

Total Income

1586.100

1874.600

1947.100

Total Expenditure

1452.400

1705.400

1789.100

Operating Profit

133.700

169.200

158.000

Interest

78.200

98.300

108.400

Gross Profit

55.500

70.900

49.600

Depreciation

31.800

36.200

37.100

Tax

6.700

6.200

3.600

Reported PAT

16.400

28.500

9.500

 

KEY RATIOS

 

PARTICULARS

 

31.12.2006

31.12.2005

31.12.2004

Debt-Equity Ratio

1.85

1.93

0.72

Long Term Debt-Equity Ratio

0.16

0.09

0.05

Current Ratio

1.05

1.01

1.06

TURNOVER RATIOS

 

 

 

Fixed Assets

3.97

4.43

5.22

Inventory

2.65

4.15

5.02

Debtors

2.15

2.75

3.60

Interest Cover Ratio

1.07

1.06

[2.96]

Operating Profit Margin(%)

9.66

7.01

[5.18]

Profit Before Interest And Tax Margin(%)

7.65

5.38

[6.78]

Cash Profit Margin(%)

2.55

2.57

[7.40]

Adjusted Net Profit Margin(%)

0.55

0.94

[9.00]

Return On Capital Employed(%)

16.76

18.38

[32.94]

Return On Net Worth(%)

3.42

9.41

-74.94

 

 

LOCAL AGENCY FURTHER INFORMATION

 

 

The Registered Office of the company has been shifted from Apeejay House, Dinshaw Vachha Road, Mumbai 400 020 to the present address w.e.f. 19th March, 2007

 

REVIEW OF OPERATIONS 

 
The Company has made a profit before tax of Rs. 25.660 Millions (including its share of profit in joint ventures) for the year compared to a profit of Rs.5.238 Millions for the year 2005. Turnover for the year under report has increased by 14% compared to the year 2005. While there is an improvement in the Company's performance over last year, delays in settlement of contractual issues on completed contracts, costs incurred from delays in providing right of way coupled with increases of prices for key inputs including cement and steel have adversely impacted results of the Company for the year. 

 
The Directors have reviewed the outstanding debts and have decided to write-off Rs.34.399 Millions (2005 - Rs.43.452 Millions). 

 
Total value of new contracts secured during the year aggregated Rs.7396.700 Millions (2005 - Rs.11.848 Millions). They include- 

 

 
 During the year under report a number of contracts were completed including- 


 
(i) The management is reasonably confident of the certification and recovery of Rs.371.100 Millions included in Debtors representing interim work bills for work done, progressively, on these contracts. This is based on past experience of the Company, assessment of work done and the fact that these claims are not disputed by the customers. 
 
(ii) The Company has recognised as revenue and has included in the Turnover for the year variations / claims of Rs.143.200 Millions on two road contracts which includes Rs.141.200 Millions being under arbitration. The Company has received an arbitration award amounting to Rs.66.900 Millions in its favour which has since been challenged by the customer. Considering the contractual tenability and legal advice from Company's counsel in the matter the management is reasonably confident of recovery of the amounts awarded. 


(iii) Slight delays of 1-2 days in depositing statutory dues were due to delay in receipt of information from remote project sites. 

 
ISO 9001:2000, ISO 14001:2004 AND OHSAS-18001:1999 The Company has established at all offices, project sites and depots Quality Management System (QMS) conforming to IS0 9001:2000, Environmental Management System (EMS) conforming to ISO 14001:2004 and Occupational Health and Safety Management System (OHSMS) conforming to OHSAS 18001:1999. 


During the year the accreditation has been audited and certified by Det Norske Veritas (DNV) 

 
This places the Company amongst very few construction companies who have established Integrated Management System comprising QMS, EMS and OHSMS covering all project sites. 


OUTLOOK 
 
The Company has extended its footprint in the construction market with consolidation in highways and bridges and has successfully moved into water and irrigation projects. With the active support of Italian-Thai Development Public Company Limited, the parent, the Company plans to leverage upon its own long history of successful working on major projects and benefit from growth sectors including: 


* Marine Projects: As the country integrates into the global economy, large investments, including significant private participation, are being contemplated in the ports sector across the country. Major local and international operators are implementing their expansion plans within the country. 


* Foundation and specialist works: With high growth in infrastructure spending, this area of the Company's business sees major potential for growth. 


* Highways & bridges: After successfully completing over 200 km. of highways in the country the Company's trained personnel and construction plant and equipment have moved on to execution of the new projects that the Company has secured. 

 
The parent company has significant strength in the areas of major infrastructure growth including hydro-electric power projects, mass rapid transit systems and airports. The Company therefore looks forward with optimism to a period of growth. 

 

PARENT COMPANY 

 
Italian-Thai Development Public Company Limited (Italian-Thai Development) is engaged in the business of civil and infrastructure construction and development and is a major builder of Thailand's infrastructure for over 45 years. It has an annual revenue for the year 2005 of approximate Baht 37,985 million (about Rs.4,973.16 Crores) which puts it in the lead position amongst contractors in Thailand. Italian-Thai Development has a skilled workforce of over 30,368 employees including over 1,172 qualified engineers. An experienced in-house training division provides continuous training in safety and construction skills. Its main activities are airports and jetty, buildings, dams, tunnels and hydro-electric power highways, expressways, railways, bridges, industrial plants, mining, pipelines and utility works, marine construction services, rapid transit systems, steel structures and telecommunications. 
 
RIGHTS ISSUE 

 
The Company allotted 11,51,539 equity shares of Rs.10/- each at a premium of Rs.480/- per share on rights basis on 13th November, 2006 and raised Rs.564.254 Millions towards purchase of capital equipment, payment of security deposits for procuring capital equipment on operating lease / hire purchase, working capital, rights issue expenses and general corporate purposes. The amount remaining unutilised as on 31st December,2006 was Rs.35.159 Millions towards security deposit for procuring capital equipment on operating lease / hire purchase and rights issue expenses. 

 

Management Discussion & Analysis 

 
Indian Economy: 

 
The Indian economy is poised for growth in the coming years with Government setting a target growth in GDP of 9% per annum in the Eleventh Five Year Plan. The Central Statistical Organisation (CSO) advance estimates for financial year 2007 places GDP growth at 9.2%. While foreign exchange reserves are at record levels of over US$ 180 Billion, the Government is actively engaged in policy and fiscal measures to rein in inflationary pressures, currently over 6% per annum. 

 
Industrial Structure and Developments-Construction: 

 
This GDP growth is fuelled substantially by manufacturing and infrastructure with a decline in agriculture. Governments in the states and centre are concerned with the slowdown in agriculture and policy interventions to provide inclusive growth in all sectors are being pursued. 

 
The growth in construction has been encouraging, between 10% and 15% per annum over the last five years. Trends in allocation of public funds and increasing proportion of privately funded construction schemes point to continuing good growth and opportunities for the Company. 

 
Opportunities: 
 
There is consensus among policy planners, governments and decision makers in industry of the need to improve infrastructure spending in order to realise the growth potential of the country. 

 
This is leading to significant new planned investments, both by the government and private sector including private public partnership models for major infrastructure investment in the coming years. The projections of Compounded Annual Growth (CAGR) of 19% per annum for the next five years appears feasible. Innovative financing models with increasing emphasis on public-private partnerships are progressing and maturing to become a significant contributor to this growth. 

 
For the Company these overall economic indicators point to continuing growth in its established areas of operations as well as leveraging its parent company's expertise and experience into new areas of growth that are expected including: 

 
* Marine: As the country integrates into the global economy, large investments, including significant private participation, is being contemplated in the ports sector across the country. Major local and international operators are implementing their expansion plans within the country. The Government's rechristened National Maritime Development Plan (NMDP) for development of port infrastructure envisages investments of over Rs.50,000 crores, with major investments in the construction of new berths. 

 
* Foundation and specialist works: With high growth in infrastructure spending, this area of Company's business sees major potential for growth. 

 
* Highways & bridges: After successfully completing over 200 km. of highways in the country, our trained personnel and construction plant and equipment have moved on to execution of the new projects that the Company has secured 

 
Additionally, the parent company's proven strength allows us to build up on the Company's past experience in the following high growth areas of infrastructure business: 

 
* Hydro-electric power projects: Additions from hydro power plants are estimated at 17,000-18,000 MW over the next 5 years. The parent company's experience in civil works for major power projects as well as dams and tunnels together with the Company's intimate knowledge and experience in local conditions would enable the Company to realise growth opportunities in this area of infrastructure construction. 

 
* Mass rapid transit systems (MRTS): Arising from urbanisation and resultant transportation needs, MRT systems are now moving from planning to implementation stage in the cities of Mumbai, Hyderabad, Bangalore and others. The Company's successful experience at Delhi, having built over 11 stations and continuing to work there coupled with the parent company's experience of having built the Bangkok metro allow the Company to benefit from this growth. 


* Airports: The growth in air traffic coupled with ambitious plans for civil aviation infrastructure presents opportunities in a new and emerging area of construction. In this the Company is supported by significant international experience of the parent company. 

 
Outlook: 
 
The Company has extended its footprint in the construction market with consolidation in highway and bridges and has successfully moved into water and irrigation projects. With the support of the parent company where required, the Company plans to leverage upon its long history of successful working on major projects and benefit from growth opportunities described above. The Company therefore looks forward with optimism to a period of growth. 

 

 

CONTINGENT LI ABILITIES

 

Rs in Millions

a) Guarantees given by banks in respect of performance bonds and other contracting commitments given in the normal course of business

1137.696

b) The Company has a number of claims on customers for price escalation and / or variation in contract work. In certain cases which are currently under arbitration, the customers have raised counter-claims. The Company has received legal advice that none of the counterclaims are legally tenable. Accordingly no provision considered necessary in respect of these counter claims.

1445.824

c) Sales tax matters pending in appeals

3.175

d)Service Tax matters under dispute

7.046

e) Income Tax matters pending in appeals

58.856

 

FIXED ASSETS

 

 

AS PER WEBSITE

 

Company Philosophy

 

Subject believes that good Corporate Governance is an important constituent in ensuring stakeholders value. Subject has in place processes and systems that comply with the requirements of Clause 49 on Corporate Governance in the listing agreement issued by the Stock Exchanges. Subject is committed in its responsibility towards the community and environment in which the Company operates, towards employees and business partners and towards society in general.

 

Subject has adopted codes of Ethical Conduct  for Directors and Senior Management personnel and Executive Directors and Employees of the Company.

 

News

 

Rights Issue

 

ITDCem on July 4, 2007, has filed with SEBI letter of offer seeking to raise upto Rs 2500 Millions through a structured rights issue of equity shares.

 

Awards & Recognition

• Gujarat Pipavav Port Safety Trophy

• NSC Award for DMRC- Dwaraka Project

• NSC Award for Sabarmati Project

 

Recruitment Drive

Subject aims to double it’s manpower at all levels from Project Managers to Foremen through special recruitment drives.

 

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.39.29

UK Pound

1

Rs.77.52

Euro

1

Rs.57.85

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

9

PAID-UP CAPITAL

1~10

9

OPERATING SCALE

1~10

9

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

10

--PROFITABILIRY

1~10

8

--LIQUIDITY

1~10

9

--LEVERAGE

1~10

9

--RESERVES

1~10

9

--CREDIT LINES

1~10

9

--MARGINS

-5~5

-

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

81

 

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

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions