MIRA INFORM
REPORT
|
Report
Date : |
16.01.2008 |
IDENTIFICATION DETAILS
|
Name : |
GOKALDAS EXPORTS LIMITED |
|
|
|
|
Registered
Office : |
70,
Mission Road, P B No. 2717, Bangalore-560027, Karnataka |
|
|
|
|
Country
: |
India |
|
|
|
|
Financials
(as on) : |
31.03.2007 |
|
|
|
|
Date
of Incorporation : |
01.03.2004 |
|
|
|
|
Com.
Reg. No.: |
08-33475 |
|
|
|
|
CIN
No.: [Company
Identification No.] |
U18101KA2004PTC033475 |
|
|
|
|
TAN
No.: (Tax
Deduction & Collection Account No.) |
BLRG03671D |
|
|
|
|
PAN
No.: (Permanent
Account No.) |
AACCG0890N |
|
|
|
|
Legal
Form : |
A public limited liability company. The company’s shares
are listed on the Stock Exchange. |
|
|
|
|
Line
of Business : |
Manufacturers, importers & exporters of textiles,
readymade garments, knitwears, etc. |
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
16300000 |
|
|
|
|
Status
: |
Excellent
|
|
|
|
|
Payment
Behaviour : |
Regular |
|
|
|
|
Litigation
: |
Clear |
|
|
|
|
Comments
: |
Subject is a well established company having fine track.
Several member companies of Gokaldas Group merged into the subject and now it
is listed on the Stock Exchanges. Trade relations are fair. Payments are
usually correct and as per commitments. The company can be considered good
for any normal business dealings at usual trade terms. |
LOCATIONS
|
Registered
Office : |
70, Mission
Road, P B No. 2717, Bangalore-560027, Karnataka, India |
|
Tel.
No.: |
91-80-51272200/22223600-1-2/22237654/6984/51272215 |
|
Fax
No.: |
91-80-22274869/22277497 |
|
Telefax
: |
91-80-845-8100 |
|
Email: |
|
|
Website
: |
|
|
|
|
|
Factory
1 : |
·
No
38/41, Industrial Suburb, II Stage, Yeswantpur, Bangalore-22; Area: 120000
sq.ft. ·
Dodddaballapur,
Area:100000 sq.ft. ·
Hongasandra
Vill, 7th Mile, Hosur Road, Bangalore. Area: 70000 sq.ft. ·
MEPZ
Special Economic Zone, Chennai, Area: 210000 sft |
|
|
|
|
Factory
2 : |
Godown
25/26, Industrial Suburb, 2nd Stage, Yeshwanthpur, Bangalore,
Karnataka, India |
DIRECTORS
|
Name : |
Mr. Madanlal J Hinduja |
|
Designation
: |
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. Rajendra J Hinduja |
|
Designation
: |
Executive Director- Administration & Finance |
|
|
|
|
Name : |
Mr. Dinesh J Hinduja |
|
Designation
: |
Executive Director – Production and Marketing |
|
|
|
|
Name : |
Mr. H S Nagraj |
|
Designation
: |
Independent Director |
|
|
|
|
Name : |
Mr. K P Kumar |
|
Designation
: |
Independent Director |
|
|
|
|
Name : |
Mr. Pradip P Shah |
|
Designation
: |
Independent Director |
|
|
|
|
Name : |
Mr. Dinesh J Hinduja |
|
Designation
: |
Executive Director - Production & Marketing |
|
|
|
|
Name : |
Mr. Ashwin R Hinduja |
|
Designation
: |
Chief Operating Officer Production |
|
|
|
|
Name : |
Mr. Vivek M Hinduja |
|
Designation
: |
Chief Operating Officer - Marketing |
|
|
|
|
Name : |
Mr. Gaurav D Hinduja |
|
Designation
: |
Production Officer |
KEY EXECUTIVES
|
Name : |
Mr. K B
Shyam Kumar |
|
Designation
: |
Company
Secretary |
MAJOR SHAREHOLDERS
As on 31.12.2007
|
Category of Shareholders |
No of Shares |
Percentage of Holding |
|
Shareholding of Promoter and
Promoter Group[2] |
|
|
|
Indian |
|
|
|
Individuals/
Hindu Undivided Family |
23796440 |
69.22 |
|
Central
Government/ State Government(s) |
-- |
-- |
|
Bodies
Corporate |
300000 |
0.87 |
|
Financial
Institutions/ Banks |
-- |
-- |
|
Any Other
(specify) |
-- |
-- |
|
Sub-Total
(A)(1) |
24096440 |
70.10 |
|
Foreign |
|
|
|
Individuals
(Non-Resident Individuals/ Foreign Individuals) |
-- |
-- |
|
Bodies
Corporate |
-- |
-- |
|
Institutions |
-- |
-- |
|
Any Other
(specify) |
-- |
-- |
|
Sub-Total
(A)(2) |
-- |
-- |
|
Total
Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2) |
24096440 |
70.10 |
|
Category of Shareholders |
No of Shares |
Percentage of Holding |
|
Public shareholding[3] |
|
|
|
Institutions |
|
|
|
Mutual
Funds/ UTI |
902039 |
2.62 |
|
Financial
Institutions/ Banks |
639724 |
1.86 |
|
Central
Government/ State Government(s) |
-- |
-- |
|
Venture
Capital Funds |
-- |
-- |
|
Insurance
Companies |
-- |
-- |
|
Foreign
Institutional Investors |
1890818 |
5.50 |
|
Foreign
Venture Capital Investors |
-- |
-- |
|
Any Other
(specify) |
-- |
-- |
|
Sub-Total
(B)(1) |
3432581 |
9.99 |
|
Non-institutions |
|
|
|
Bodies
Corporate |
4622819 |
13.45 |
|
Individuals
- |
|
4.02 |
|
i.
Individual shareholders holding nominal share capital up to Rs. 1 lakh. |
1380765 |
2.34 |
|
ii.
Individual shareholders holding nominal share capital in excess of Rs. 1
lakh. |
804344 |
0.00 |
|
Any Other
(specify) |
-- |
-- |
|
Non Resident
Indians |
28615 |
0.08 |
|
Trust |
515 |
0.00 |
|
Clearing
Members |
9921 |
0.03 |
|
Sub-Total
(B)(2) |
6846979 |
19.92 |
|
Total
Public Shareholding (B)= (B)(1)+(B)(2) |
10279560 |
29.90 |
|
TOTAL
(A)+(B) |
34376000 |
100.00 |
|
Shares
held by Custodians and against which Depository Receipts have been issued |
-- |
0.00 |
|
GRAND
TOTAL (A)+(B)+(C) |
37346000 |
100.00 |
BUSINESS DETAILS
|
Line
of Business : |
Manufacturers, importers & exporters of textiles, readymade
garments, knitwears, etc. |
||||||||
|
|
|
||||||||
|
Product: |
|
PRODUCTION
STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
|
Readymade garments |
PCS |
-- |
-- |
24525418 |
GENERAL INFORMATION
|
Suppliers
: |
* Appu Paper Products * Arjun Plastics * Elegant Rocks Private Limited * Guru Grafix * Jayjay Polymers * Kengeri Packers Private Limited * Kumar Elastics * Maagra Associates * Mangal Plastic Udyog * Mascot Prints * Poorna Graphics * Reflex Printers * Royal Graphics * Sree Devi Prints * Sri Ram Industries * Sri Ram Packaging * The Printing House * Trimurti Polychem Private Limited * Vidhura Polypack * Wadpack Private Limited |
||||||||||||||||||
|
|
|
||||||||||||||||||
|
Customer
: |
v Nike v Mustang Jeans v Mexx v Arnold Palmer v Pierre Cardin v Polo Sport v Mustang v Greg Norman v Joop Jeans v Adidas v Ralph Lauren v Tommy Hilfiger v Reebok v Mothercare v Rueh v Hollister v Oxbow v New Yorker v Paris Saint German v Old Navy v London Fog v Gap v Tom Tailor Banana Republic v O'Neill v Abercrombie &
Fitch v Champion v Sears,Canada v The Children’s Place v Macy’s Merchandising
Group v Lebek v Oilily v George Asda v VF Asia v Decathlon v Vetir v M & S v Diesel v Sag Harbor v Izod v Replay v H & M v Tiffany v Dewhirst v Spykar v The Metro Group |
||||||||||||||||||
|
|
|
||||||||||||||||||
|
No. of
Employees : |
About 52000 |
||||||||||||||||||
|
|
|
||||||||||||||||||
|
Bankers
: |
Ř Canara Bank, Avenue Road Br.,
Bangalore-560002; Ph:2215925 Ř Citi Bank, M G Road, Bangalore Ř HDFC Bank, Bangalore Ř Standard Chartered Bank, Bangalore |
||||||||||||||||||
|
|
|
||||||||||||||||||
|
Facilities : |
|
|
|
|
|
Banking Relations : |
Satisfactory |
|
|
|
|
Auditors
1: |
Girish Murthy & Kumar Chartered Accountants 4502, High Point, 45 Palace Road, Bangalore-560001,
Karnataka, India |
|
Tel.
No.: |
91-80-22265202 |
|
|
|
|
Auditors
2: |
RSM and
Company Chartered
Accountants "Ambit
RSM House" 449, Senapati Bapat Marg, Lower PareI, Mumbai-400013,
Maharashtra, India |
|
|
|
|
Associates
/Subsidiaries: |
Ř All Colour Garments Private
Limited Ř Deejay Trading Private Limited Ř Glamourwear Apparels Private
Limited Ř Madhin Trading Private Limited Ř Magenta Trading Private Limited Ř Rafter Trading Private Limited Ř Rajdin Apparels Private Limited Ř Reflexion Trading Private Limited Ř Rishikesh Apparels Private Limited Ř Seven Hills Clothing Private
Limited Ř SNS Clothing Private Limited and Ř Vignesh Apparels Private Limited. Ř Dazzle Trading Private Limited Ř Dice Trading Private Limited Ř Hinduja Exports Private Limited Ř J.V.N. Exports Private Limited Ř Maze Trading Private Limited Ř Parichay Investments Limited Ř Polyproducts Private Limited Ř Rapple Trading Private Limited Ř Vag Exports Private Limited Ř Asiatic Exports Ř Carnival Clothing Company Ř Central Wearhouse Ř Euro Clothing Company Ř Global Garments Ř Hinduja Fashions Ř Hinduja Sportswear Ř Hinduja Trading Company Ř International Clothing Company Ř J.D. Clothing Company Ř New Generation Apparels Ř Sunshine Enterprises Ř Thelntex Ř Wear Craft Apparels Ř Indev Warehouse and Container
Services Private Limited Ř The Unique Creations (Bangalore)
Limited Ř Universal Exports (Bangalore) Limited |
|
|
|
|
Membership:
|
Apparel & Leather Promotion Council |
CAPITAL STRUCTURE
Authorised
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
40,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 400.000 millions |
Issued,
Subscribed & Paid-up Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
34,376,000 |
Equity Shares |
Rs. 5/- each |
Rs. 171.880 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 |
171.880 |
171.880 |
140.630 |
|
|
2] Share
Application Money |
0.000 |
0.000 |
0.000 |
|
|
3]
Reserves & Surplus |
3905.699 |
3283.307 |
1522.364 |
|
|
4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
|
NETWORTH
|
4077.579 |
3455.187 |
1662.994 |
|
|
LOAN
FUNDS |
|
|
|
|
|
1]
Secured Loans |
2668.306 |
1547.759 |
1261.819 |
|
|
2]
Unsecured Loans |
358.815 |
642.348 |
643.585 |
|
TOTAL
BORROWING
|
3027.121 |
2190.107 |
1905.404 |
|
|
DEFERRED
TAX LIABILITIES |
99.946 |
53.233 |
38.780 |
|
|
|
|
|
|
|
TOTAL
|
7204.646 |
5698.527 |
3607.178 |
|
|
|
|
|
|
|
APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
2078.230 |
1465.381 |
895.114 |
|
Capital work-in-progress
|
343.209 |
137.101 |
21.263 |
|
|
|
|
|
|
|
INVESTMENT
|
712.377 |
931.847 |
309.899 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
3360.331
|
2674.788
|
1775.938
|
|
|
Sundry Debtors
|
789.729
|
561.568
|
576.650
|
|
|
Cash & Bank Balances
|
65.179
|
70.440
|
204.124
|
|
|
Other Current Assets
|
183.860
|
63.531
|
26.581
|
|
|
Loans & Advances
|
479.393
|
399.719
|
324.940
|
Total Current Assets
|
4878.492
|
3770.046
|
2908.233
|
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
651.941
|
484.232
|
465.088
|
|
|
Provisions
|
156.118
|
122.079
|
62.773
|
Total Current Liabilities
|
808.059
|
606.311
|
527.861
|
|
Net
Current Assets
|
4070.433
|
3163.735
|
2380.372
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
0.397 |
0.463 |
0.530 |
|
|
|
|
|
|
|
TOTAL
|
7204.646 |
5698.527 |
3607.178 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
Sales Turnover [including other income]
|
10395.064 |
8888.158 |
7300.345 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
779.911 |
679.404 |
436.966 |
Provision for Taxation
|
77.084 |
70.570 |
44.123 |
Profit/(Loss) After Tax
|
702.827 |
608.834 |
392.843 |
|
|
|
|
|
Export Value
|
9967.952 |
8599.318 |
7083.367 |
|
|
|
|
|
Import Value
|
3641.858 |
4343.577 |
3471.443 |
|
|
|
|
|
Expenditures:
|
|
|
|
|
Purchase
of Finished Goods |
0.000 |
48.100 |
|
|
Manufacturing
Expenses |
8320.258 |
7340.509 |
|
|
Administrative
Expenses |
456.917 |
407.703 |
|
|
Personnel
Costs |
556.896 |
443.808 |
|
|
Finance
charges |
219.688 |
142.926 |
6863.379 |
|
Increase/(Decrease)
in Finished Goods |
(188.264) |
(307.439) |
|
|
Depreciation
& Amortization |
249.658 |
180.767 |
|
|
Other
Expenditure |
9365.495 |
8027.987 |
|
|
Total Expenditure |
9615.153 |
8208.754 |
6863.379 |
QUARTERLY
RESULTS
|
PARTICULARS |
|
30-09-2007 2nd Quarter |
30.06.2007 1st Quarter |
|
Sales Turnover |
|
2499.200 |
2618.900 |
|
Other Income |
|
43.000 |
50.500 |
|
Total Income |
|
2542.200 |
2669.400 |
|
Total Expenditure |
|
2274.200 |
2409.800 |
|
Operating Profit |
|
268.000 |
259.600 |
|
Interest |
|
72.500 |
71.200 |
|
Gross Profit |
|
195.500 |
188.400 |
|
Depreciation |
|
75.200 |
72.300 |
|
Tax |
|
(2.900) |
13.800 |
|
Reported PAT |
|
112.600 |
105.300 |
KEY
RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.69 |
0.80 |
1.76 |
|
Long Term Debt-Equity Ratio |
0.19 |
0.29 |
0.63 |
|
Current Ratio |
1.60 |
1.73 |
1.36 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
4.06 |
5.18 |
7.58 |
|
Inventory |
3.31 |
3.87 |
4.94 |
|
Debtors |
14.80 |
15.14 |
17.76 |
|
Interest Cover Ratio |
4.55 |
5.75 |
4.70 |
|
Operating Profit Margin(%) |
12.50 |
11.64 |
9.46 |
|
Profit Before Interest And Tax
Margin(%) |
10.00 |
9.54 |
7.83 |
|
Cash Profit Margin(%) |
9.53 |
9.16 |
7.21 |
|
Adjusted Net Profit Margin(%) |
7.03 |
7.06 |
5.58 |
|
Return On Capital Employed(%) |
15.68 |
17.85 |
22.48 |
|
Return On Net Worth(%) |
18.66 |
23.79 |
44.18 |
LOCAL AGENCY FURTHER
INFORMATION
HISTORY
The subject company was initially incorporated as
“Gokaldas India Private Limited and the name has been changed as GOKALDAS
EXPORT PRIVATE LIMITED, with effect from 1412.2004.
The subject company has converted as public
limited company, with effect from 7th January 2005.
The company has gone for public Issue of
3,125,000 equity shares of Rs.10/= each with a Price band of Rs.375-425, under
book building basis.
Gokaldas Exports Limited (GEL) was incorporated
in 1979. GEL is a major player in the readymade garment industry across the
globe. The company which is an ISO 9001:2000 Certified Company is one of the
largest manufacturer/exporter of Outerwear, Blazers and Pants (Formal and
Casuals), Shorts, Shirts, Blouses, Denim Wear, Swim Wear, Active and Sports
Wear.
The subsidiaries of the company are Madhin Trading Private Limited, Magenta
Trading Private Limited, Rafter Trading Private Limited, Reflection Trading
Private Limited, Deejay Trading Private Limited, Rishikesh Apparels Limited,
Vignesh Apparels Private Limited, SNS Clothing Private Limited, Seven Hills
Clothing Private Limited, Glamourwear Apparels Private Limited, Rajdin Apparels
and All Colour Garments Private Limited
Gokaldas Exports Private Limited and Unique Creations (Bangalore) Private
Limited was merged with the company with effect from 01.04.2004.
During 2004-05 the company has set up three new factories each at Bommasandra
Industrial Area, Bangalore: at Yeshwanthpur, Bangalore and one at Doddaballapur
Bangalore. Further the company has also planning to set up a unit at Madras
Export Processing Zone (MEPZ), Chennai.
During March 2005 the company made a madien public offer of 31,25,000 equity
shares with a price brand of Rs.375/- to Rs.425/- and with this issue the paid
up capital of the company has raised to Rs.171.880 Millions
The new state-of-the-art laundry facility at Bangalore had been commissioned in
June'06. The company also commissioned knit wear unit at Bangalore during
2005-2006
The expansion programme at Chennai, Hyderabad, Mysore and Bangalore is also
under progress during the year
The company has also initiated the process of buying the machinery for
manufacture of structured suits and the company intends to set up suit plant in
Bangalore very shortly.
FIXED ASSETS
v Freehold Land
v Buildings
v Leasehold Improvements
v Plant and Machinery
v Electrical Equipments
v Office Equipments
v Furniture and Fixtures
v Computers
v Vehicles
The
subject company is professionally managed and seems to be financially sound.
OPERATIONS REVIEW
During the financial
year 2006-07, the company has surpassed Rs.10000 millions turnover. This is
mainly due to the increase in demand for the company's products and addition of
new customers. Opening of new factories also added to the increase in business
volumes.
The year 2006-07 is seen as a big investment year in the Textile and Clothing
Industry. Approximately Rs.160000 millions' loans have been availed by the
industry under the TUF Scheme (Technology Upgradation Scheme) and this value of
capex has been installed across India.
The export growth rate of 2006-07 when compared to 2005-06 has been a little
subdued, and among the main reasons for this has been the strengthening of the
Rupee against the US Dollar and the fierce competition from neighbouring
countries like Bangladesh, Vietnam and Indonesia.
The company has exceeded the national rate of growth and annual sales (top
line) has increased by 16%. They have achieved a sales turnover of Rs.10050
millions. This is a milestone for any Indian Apparel Company to achieve.
The Company has installed the highest capex of Rs.1050 millions in the year
2006-07 and following are the new plants which were commissioned.
a) Suit plant at Peenya, Bangalore.
b)
Trouserunit at Yelahanka.
c) Trouser
unit at Yeshwanthpur, Bangalore.
d) Knitwear
unit at Hosur Road, Bangalore.
e) Apparel
Unit at SEZ, Chennai (MEPZ Tambaram)
In these 5 units, about 8000 workers have been employed, thereby increasing our
headcount to about 52,000.
Three other units are being commissioned, and they are:
a) New factory at Tumkur.
b) New
factory at Mysore.
c) New
factory at Hyderabad.
However, since these are commissioned after April, 2007, they will find a place
in next year's annual report.
The customer base has been expanded and a few major players have been added to
customer list. top 10 customers now constitute about 85% of export sales, and
dependence on the big buyers has thereby been reduced.
They are happy to inform that the following Awards have been won by the company
this year.
* Largest Exporter of India award, given by Clothing Manufacturers' Association
of India.
* Most Admired Clothing Company of the year award, given by Clothing
Manufacturers' Association of India.
* Outstanding Apparel Company award, given by the Government of
Karnataka.
* Highest Export Award, given by Apparel Export Promotion Council (AEPC)
(Sponsored by Government of India)
* Highest Employment Provider Award, given by AEPC.
CAPITAL STRUCTURE
During the year,
company sub-divided the face value of equity share of Rs.10/- to 2 shares of
Rs.5/- each after obtaining the due approvals from the shareholders at the
Extra Ordinary General Meeting held on December 11, 2006 mainly to enhance the
liquidity to the Company's shares in the Stock Exchanges in the secondary
market. The company has completed the necessary formalities with the National
Securities Depository Limited (NSDL), Central Depository Services India Limited
(CDSL), Bombay Stock Exchange Limited (BSE) and National Stock Exchange of
India Limited (NSE) to credit the sub-divided shares to their respective de-mat
accounts of the shareholders and list on BSE & NSE from February 08,
2007.
SUBSIDIARY COMPANIES
In line with the requirements of Accounting
Standard AS-21 issued by the Institute of Chartered Accountants of India,
consolidated financial statements presented by the Company include the
financial information of its subsidiaries, which were acquired by the Company
on 1st December 2004. The Company has received approval from the
Ministry of Company Affairs, Delhi vide order dated 16th January 2006 exempting
the Company from attaching the annual accounts of the subsidiary Companies as
required under section 212 of the Companies Act 1956. Accordingly, this annual
report does not contain the annual accounts and other information of the
following subsidiary companies:
- All Colour
Garments Private Limited
- Deejay Trading
Private Limited
- Glamourwear
Apparels Private Limited
- Madhin Trading
Private Limited
- Magenta
Trading Private Limited
- Rafter Trading
Private Limited
- Rajdin
Apparels Private Limited
- Reflexion
Trading Private Limited
- Rishikesh
Apparels Private Limited
- Seven Hills
Clothing Private Limited
- SNS Clothing
Private Limited
- Vignesh
Apparels Private Limited
Any shareholder interested in obtaining a copy
of accounts and other information pertaining to any/all subsidiaries may write
to the Company Secretary at the registered office of the Company and the same
will be sent by post.
Utilisation of IPO Proceeds:
The company has utilized the entire amount of Rs.1328.125 millions for setting
up of new factories / units, modernisation / expansion of existing factories /
units and towards issue expenses.
A quick overview :
- Incorporated
in 1979, based in Bangalore, India.
- One
of India's largest manufacturer /exporters and recipients of highest
awards since 1980.
- 48
fully equipped, modern, manufacturing factories, all based in Bangalore.
- Specialized
in manufacture of Outerwear, Blazers and Pants (Formal and Casuals),
Shorts, Shirts, Blouses, Denim Wear, Swim Wear, Active and Sports Wear.
- An
ISO 9001:2000 Certified Company
- Capacity
to produce and export 2 million garments a month.
- 39,000
employees.
- A
full fledged in-house design team creating and developing exciting
collections each season.
- In
House Facilities
- A
state-of-the-art Laundry fully equipped with automatic machinery and a
processing capacity of over 100,000 garments a day.
- Polyfill
manufacturing plant with a production capacity of over 30,000 meters of
polyfill per day ranging between 40-360gsm
- Highly
sophisticated quilting unit equipped with computerized quilting machines
processing over 30.000 meters a day.
- Printing
unit installed with spider printing machines and printing tables having a capacity
to print upto 375,000 pieces per month.
- Embroidery
unit installed with 42 multi-head embroidery machines producing appliquesm
badges, simple and complex embroideries fulfilling a requirement a more
than 50,000 pieces per day.
- Label
manufacturing unit - capacity of over 1, 00,000 labels a day.
- Elastic
manufacturing unit - capacity of over 50,000 meters a day.
- Woven
and Bungee Cord making unit capacity of 40,000 meters per day.
- Carton
manufacturing unit.
The recognition gained by Gokaldas Exports is
epitomized by each and every single award bestowed on it - the highest in Asia.
The company has the distinction of winning the top export awards, since 1980.
MANAGEMENT DISCUSSION
AND ANALYSIS:
Introduction:
Gokaldas Exports Limited (GEL) is the largest and one of the leading exporters
of apparels in India having worldwide presence with established manufacturing,
marketing and research capabilities and is a ISO 9001:2002 certified company.
GEL is vertically integrated with a presence across the apparel and textile
products. GEL has more than 46 factories spreading in 45 locations in Bangalore
and Chennai, manufacturing more than 2.5 million garments per month.
The principal products that GEL produces are outer wear and bottom wear.
Outerwear includes both sports wear and winter wear and
bottom wear include casual pants, chinos, linen trousers, denim jeans etc. The
following pie graph depicts the product mix for the year 2006-07:
More than 95% of revenues come from export activity. GEL has
big plans to enhance the production capacity to3 million garments per month by
the end of current fiscal. Towards this objective, their are investing more that Rs.1000 million in
the next two years, which would make us to further consolidate lead in the
apparel and textile industry.
Industry Structure and
Developments:
The Textile and
Clothing Sector has witnessed unprecedented investment trend in the last few
years, so much so that for the last 5 years the CAGR of investment has been
around 100%. It is more encouraging to see that weak sectors like processing
have drawn significant investment in the last 2 years.
The growth figures of the last few years have made the entire textile industry
brim with unprecedented confidence and optimism. These growth targets envisaged
a fundamental shift in the textile scenario and has taken a trajectory of a
very rapid growth. There has been a boost in the Indian Domestic Textile
Sector. The increasing GDP per capita has led to greater disposable income with
the Indian people. There have been more working female population, leading to
increasing purchases and a major portion of the purchases is among the textile
and clothing items.
The growth penetration of organized retail (the percentage is expected to
increase from the present 3% to 10% by 2010) will increase the availability and
hence the purchase of textile and clothing by the Indian consumer.
In the export sector, removal of MFA has given a boost to the Indian textile
entrepreneurs, a trend which has only been augmented by the progressive
dismantling of spinning and weaving from the developed world.
Added to this, the quota limitations to China till 2008 are
another incentive to the Indian industry to strengthen itself in the
meantime.
The Indian textile industry plays a vital role in the Indian economy by
contributing to GDP, generating employment and earning foreign exchange. An
estimated 38 million people are directly employed in the textile industry in
India and contributes to 4% of GDP and 20% of total export earnings.
India currently exports more than one hundred garment
product categories and out of this, cotton apparel exports dominate,
contributing nearly 76% by value and synthetic constitutes 12%. Indian textile
exports are expected to grow from the current levels to US$ 50 billion by 2010,
consequent to quota removal, apparel being US$25 billion.
Opportunities and Threats:
After dismantling
of quotas, India seems to benefit due to raw material, design skills and
skilled labour advantages. India is the world's third largest producer of
cotton, second largest producer of cotton yarn, third largest exporter of
cotton fabric and fourth largest exporter of synthetic fabric. With the
establishment of training institutions like National Institute of Fashion
Technology (NIFT), many high quality designers, who are able to create modern
designs and interact with the buyers, are emerging. This is a distinctive
advantage that Indian companies have, and not yet exploited.
Inspite of above advantages that India has, there would be pricing pressures in
view of dismantling of quotas as new small and medium manufacturers would crop
in not only within India but also from other countries where similar quotas
were imposed earlier. Also India has geographical disadvantage which take
little longer time to reach its products to the key markets. It seems the price
has been, more or less, stabilized and the buyers are looking for quality
manufactures, even it costs little more. Appreciation of Rupee is also a major
concern for the growth of the industry.
Operating Results / Financial
Highlights:
The financial
statements have been prepared in compliance with the requirements of the
Companies Act, 1956 and Generally Accepted Accounting Principles (GAAP) in
India. The management accepts the responsibility for the integrity and
objectivity of these financial statements and the basis for the various
estimates and judgments used in preparing the financial statements.
During the year, the Company has achieved a net turnover of Rs.9998.133
millions, out of which 99.70% is in the form of foreign exchange. The Company
posted a strong top line performance due to good order book. Profit before tax
was at Rs.779.911 millions and net profit after tax stood at Rs.702.827
millions.
The higher net profit is due to our most of sales are to the foreign buyers,
which enjoys higher margins. During 2006-07, USA & Canada dominated with a
share of 53% of total turnover and Europe stood in the second with 39%.
Graphical representation of revenues
from various geographical locations / countries:
Europe 39%
India 2%
USA and
Canada 53%
Other
Countries 6%
Earnings per equity share (face value Rs.5/-) was also significantly higher
from Rs.17.88 to Rs.20.45 on
year on year basis.
Some of the key performance indications are given below:
Risks and Concerns:
They are exposed to foreign currency risk. The company is an export oriented
apparel manufacturer and approx. 95% of its revenue comes as foreign currency.
Since the buyers compare our products with that of competitors in USD
denominated rate, appreciation of Indian rupee vis-a-vis USD would weaken our
competitive position and similarly, our profits would depend on the Indian
rupee appreciation/depreciation. Since the Company is Bangalore based and most
of the factories/units are located in and around Bangalore, if there is any
localized social unrest, break down of services and utilities, it may affect
the business and consequently its revenues. To minimize the locational risks,
the Company set up factories / units in Chennai, Mysore and Tumkur.
The Government of India has instituted several policies to promote the growth
and these include interest rate subsidies, duty/tax reimbursement schemes etc.
Withdrawal / termination of any of these policies / schemes may adversely
impact the profitability of the Company. Also wage costs in India have been
significantly lower than the wage costs in the developed countries for skilled
professionals in the textile industry, which has been our competitive strength.
Wage increase in India may prevent us from sustaining this competitive
advantage and may negatively affect our profit margins.
However, the Company has put in place a Risk Management Document which has the
objective to create awareness about various risks associated with the business
of the Company. It defines the risk policies, lays out the risk strategies and
methodology to decide on the risk taking ability of the Company. The risk
management process involves risk identification, risk measurement, risk
prioritization, risk monitoring, risk escalation and risk mitigation.
The Audit Committee and Board have approved this risk management document
during last fiscal.
Internal Control Systems and their
adequacy:
The Company is
committed to maintaining an effective system of internal control for
facilitating accurate, reliable and speedy compilation of financial
information, safeguarding the assets and interests of the Company and ensuring
compliance with all laws and regulations. The Company has an internal control
department to monitor, review and update internal controls on an ongoing basis.
The Company has put in place a well defined organization structure, authority
levels and internal guidelines for conducting business transactions.
The Company appointed Independent Internal Auditors, who would monitor and
review all transactions independently to get higher level of efficiency and
would report directly to the Audit Committee, which consists of entirely
independent directors, on quarterly basis. The Internal Auditors conduct audit
in all key business areas as per the pre-drawn audit plan. All significant
audit observations and follow up actions are reported to the Audit Committee
along Internal Audit reports and management's responses/replies. The minutes of
Audit Committee would be reviewed by the Board for its
suggestions/recommendations to further improve the internal control systems.
The Audit Committee periodically reviews audit plans, observations and
recommendations of the Internal Auditors as well as external auditors with
reference to significant risk areas and adequacy of internal controls.
Human Resources / Industrial
Relations:
The Company
believes that its people are a key differentiator, especially in knowledge
driven, competitive and global business environment. Adapting work culture to
suit the dynamic balancing of people requirements and employee needs is an
ongoing process. Fundamental HR processes which enable higher performance
orientation, speed, skill and competency development, talent management and
human asset refreshal are corner stones for the success of any organization.
As in the past, the industrial relations continued to remain cordial at all
factories / units of the Company. The Company has about 52,000 employees as on
March 31, 2007 as against 42,979 employees as on March 31, 2006.
Contingent Liabilities
(Rs. In millions)
|
Particulars |
As at 31.03.2007 |
As at 31.03.2006 |
|
Claims
against the Company not acknowledged as debts |
1.502 |
1.502 |
|
Guarantees
given by banks |
2.971 |
3.375 |
|
Outstanding
letters of credit |
184.981 |
299.770 |
|
Bills
discounted with banks |
1211.045 |
734.803 |
|
Estimated
amount of contracts remaining to be executed on capital accounts and not provided
for (net of advances) |
123.539 |
93.129 |
During the
year, the Company has imported capital goods without payment of duty under the
Export Promotion Capital Goods Scheme. Under the scheme, the Company has export
obligations of Rs. 439.251 millions (Previous Year Rs. 376.452 millions) to be
fulfilled before June 27, 2014.
The Company
had raised Rs. 1328.125 through a public issue of shares during the year
2005-2006. As at March 31, 2007, the Company has fully utilized the proceeds of
the issue as follows:
(Rs. In millions)
|
Particulars |
Upto 31.03.2007 |
Upto 31.03.2006 |
|
Capital
Expenditure for setting up of new factories / modernization and expansion of
existing factories (including capital advances |
1219.819 |
774.819 |
|
Meeting
issue expenses |
108.306 |
108.306 |
|
Unutilized
funds invested in Mutual Funds as at balance sheet date |
0.000 |
445.000 |
|
Year |
Award |
Awarded By Govt. And Other Indian Institutions |
|
1980-81 |
Outstanding Export Award for Cotton Handloom Readymade garments |
The Handloom Export Promotion Council Madras |
|
1981 |
Award for Highest Global Exports. |
Clothing Manufacturers Association Of India , Mumbai |
|
1981-82 |
Top Exporter Award |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
Gold Trophy - for Highest Exports. |
Garments Exporters Association, New Delhi |
|
|
1982 |
Award for Highest Global Exports. |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
1983 |
Award for Second Highest Exports |
Clothing Manufacturers Association Of India - For Global
Exports., Mumbai |
|
1984 |
Award for General Currency Area |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
1985 |
Award for Global Exports and General Currency Area |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
1986 |
Award for Second Highest Exports |
Clothing Manufacturers Association Of India - For Global
Exports. Mumbai |
|
Export Performance Award - Global Exports |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
|
1988 |
Silver Trophy - for Global Exports |
The Clothing Manufacturers Association Of India, Mumbai |
|
Gold Trophy for outstanding export performance |
Apparel Export Promotion Council, Ministry Of Textiles - For Global
Exports. Ministry Of Textiles, Government Of India, New Delhi |
|
|
1990-91 |
Silver Trophy - for Global Exports |
Apparel Export Promotion Council, Ministry Of Textiles,
Government Of India, New Delhi |
|
Silver Trophy - for Global Exports |
Clothing Manufacturers Association Of India , Mumbai |
|
|
1991 |
Award for Highest Global Exports |
Apparel Export Promotion Council, Ministry Of Textiles,
Government Of India, New Delhi |
|
1992-93 |
Award for Top Performer |
Government Of Karnataka - Readymade Garments Exports |
|
1992 |
Gold Trophy for Highest Global Exports & Silver Trophy for
Second Highest Exports of Woven Garments |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
1993-94 |
Top Award for Apparel Exports. |
Government Of Karnataka |
|
Award for Highest Global Exports |
Clothing Manufacturers Association Of India, Mumbai |
|
|
Highest Export Award - Woven Garments and for Global Exports |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
|
1994-95 |
Award for Highest Exports - Global Exports |
Clothing Manufacturers Association Of India, Mumbai |
|
Award for Highest Exports - to quota countries and non-quota
items to quota countries |
Clothing Manufacturers Association Of India, Mumbai |
|
|
Best Manufacturer Export Award - Gold |
Government Of Karnataka |
|
|
1994 |
Highest Export Award - Woven Garments |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
1995-96 |
Gold Trophy for Highest Global Exports |
Clothing Manufacturers Association Of India, Mumbai |
|
Gold Trophy for Exports to Non-quota countries and Non-quota
items to Quota countries |
Clothing Manufacturers Association Of India, Mumbai |
|
|
Best Manufacturer Export Award - Gold |
Government Of Karnataka |
|
|
1996-97 |
Award for Highest Exports to Non-Quota Countries & Award for
Second Largest Exporter in Global Exports |
Clothing Manufacturers Association Of India, Mumbai |
|
Award for Highest Exports in Global Exports and Award for
Highest Exports to Non-quota Countries |
Clothing Manufacturers Association Of India, Mumbai |
|
|
Silver Trophy for Second Highest Exports in Global Exports &
Gold Trophy for Highest Exports to Non-Quota Countries |
Clothing Manufacturers Association Of India, Mumbai |
|
|
1996 |
Award for Second Highest Exports in Global Exports & Award
for Highest Exports in Woven Garments Exports |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
Top Exports Award - Global Exports & Gold Trophy for Exports
to Non-Quota Markets |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
|
1997 |
Highest Exports Award |
Clothing Manufacturers Association Of India, Mumbai |
|
1998-99 |
Award for Highest Exports - for Group Turnover |
Confederation Of Indian Apparel Exporters, Mumbai |
|
Highest Exporter Award for Woven Garments |
Confederation Of Indian Apparel Exporters, Mumbai |
|
|
Highest Exporter Award |
Clothing Manufacturers Association Of India, Mumbai |
|
|
1998 |
Silver Trophy for Largest Exports in Woven Garments |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
1999-2000 |
Gold Trophy for highest exports for Global Exports |
Clothing Manufacturers Association Of India, Mumbai |
|
Award for Highest Export Performance Readymade Garments
Government of India. (FIEO) |
Federation Of Indian Exporters Associations, |
|
|
Award for Highest Exports to Non-Quota Countries |
Clothing Manufacturers Association Of India, Mumbai |
|
|
1999 |
Award for Second Highest in Non-Quota |
Apparel Export Promotion Council |
|
Exports & Award for Highest Exports to Non-Quota Countries |
Ministry Of Textiles, Government Of India, New Delhi |
|
|
2000 |
Award for Second Largest Exports in Woven Garments |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
Silver Trophy for Highest Exports in Global Exports |
Apparel Export Promotion Council Ministry Of Textiles,
Government Of India, New Delhi |
|
|
2000-01 |
Award for Top Exporter |
Cochin Export Promotion Council Govt. Of India, Cochin |
|
Certificate of merit for Outstanding Export Performance |
The Clothing Manufacturers Association Of India, Mumbai |
|
|
Award for highest Exporter in Non-Quota Markets |
Confederation Of Indian Apparel Exporters, Mumbai |
|
|
2001-02 |
Award for Highest Exporter in Non-Quota Market |
Confederation Of Indian Apparel Exporters, Mumbai |
|
Silver Trophy for Second Largest Global Exports |
Clothing Manufacturers Association Of India, Mumbai |
|
|
Highest Exports Award for Non-Quota Countries |
Clothing Manufacturers Association Of India, Mumbai |
|
|
Award for Top Exporter |
Cochin Export Promotion Council Govt. Of India, Cochin |
|
|
Export Award - 2002 |
Federation Of Karnataka Chamber Of Commerce And Industries,
Bagnalore |
|
|
2002 |
Highest Award for Non-Quota Exports & Silver Trophy for
Global Exports |
Clothing Manufacturers Association Of India, Mumbai |
|
2002-03 |
Highest Award for Exports - Non-Quota Exports |
Confederation Of Indian Apparel Exporters, Mumbai |
|
Highest Exports Award for Non-Quota Market |
Confederation Of Indian Apparel Exporters, Mumbai |
|
|
Best Performance Award |
Council Of International Awards |
|
|
1996-2000 |
Best Export Award - Gold (4 years continuous award) |
Government Of Karnataka |
|
2004 |
Highest Exports Award for Non-Quota Market |
Confederation Of Indian Apparel Exporters, Mumbai (Fifth
International Fashion Awards) |
|
2004 |
Exporter of the year - Golden Scale Trophy |
Clothing Manufacturers Association Of India |
Website Details :
Gokaldas Exports is a major player in the readymade
garment industry across the globe. They have a heritage of leadership to honor
and preserve.
Clients:
They have developed strategic alliances with
some of the world’s premier fashion brands. The trust bestowed by these global giants
over the years has led them to the path of growth and prosperity both in
revenue and stature. Their clientele includes names like: -
- Nike
- Mustang
Jeans
- Mexx
- Arnold
Palmer
- Pierre
Cardin
- Polo
Sport
- Mustang
- Greg
Norman
- Joop
Jeans
- Adidas
- Ralph
Lauren
- Tommy
Hilfiger
- Reebok
- Mothercare
- Rueh
- Hollister
- Oxbow
- New
Yorker
- Paris
Saint German
- Old
Navy
- London
Fog
- Gap
- Tom
Tailor Banana Republic
- O'Neill
- Abercrombie
& Fitch
- Champion
- Sears,
Canada
- The
Children’s Place
- Macy’s
Merchandising Group
- Lebek
- Oilily
- George
Asda
- VF
Asia
- Decathlon
- Vetir
- M
& S
- Diesel
- Sag
Harbor
- Izod
- Replay
- H
& M
- Tiffany
- Dewhirst
- Spykar
- The
Metro Group
Mens Wear
They showcase a wide range of trendy readymade garments
for men, that is customized to meet the requirements of their clients.
Ladies
Wear
They are engaged in the export of high fashion
garments that are specially designed using finest quality fabric.
Kids Wear
Their kids wears are available in different
designs and colors to cater to the specific requirements of their clients.
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.77.17 |
|
Euro |
1 |
Rs.57.60 |
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 |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER
MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
54 |
This
score serves as a reference to assess SC’s credit risk and to set the amount of
credit to be extended. It is calculated from a composite of weighted scores
obtained from each of the major sections of this report. The assessed factors
and their relative weights (as indicated through %) are as follows:
Financial condition (40%) Ownership background
(20%) Payment record (10%)
Credit history (10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the
strongest capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy.
General unfavourable factors will not cause fatal effect. Satisfactory capability
for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet
normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight
in credit consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and
principal sums in default or expected to be in default upon maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be
exercised |
Credit not recommended |