MIRA INFORM REPORT
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Report Date : |
17.01.2008 |
IDENTIFICATION DETAILS
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Name : |
RATNAMANI METALS AND TUBES LIMITED |
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Formerly Known As : |
RATNAMANI ENGINEERING LIMITED |
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Registered Office : |
17 Rajmugat Society, Naranpura Char Rasta, Ahmedabad
– 380 013, Gujarat |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
15.09.1983 |
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Com. Reg. No.: |
04-6460 |
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CIN No.: [Company Identification No.] |
L70109GJ1983PLC006460 |
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TAN No.: [Tax Deduction & Collection Account
No.] |
AHMR01519A |
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Legal Form : |
Public Limited Liability company. The company’s shares are
listed on the Stock Exchange. |
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Line of Business : |
The company is engaged in manufacturing and marketing of Stainless
Steel Tubes & Pipes, Saw Pipes and Carbon Steel Tubes & Pipes. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial
& operational base are regarded healthy. General unfavourable factors
will not cause fatal effect. Satisfactory capability for payment of interest
and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD
5600000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject
is a well established company having satisfactory track. Financial position
is good. 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
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Registered Office/ Sales Office : |
17 Rajmugat Society, Naranpura Char Rasta, Ahmedabad
– 380 013, Gujarat, India |
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Tel. No.: |
91-79-741 5501 / 741 5502 / 741 5503 / 741 5504 |
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Fax No.: |
91-79-748 0999 |
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E-Mail : |
ratnamani.ahd@gnahd.globalnet.ems.vsnl.net.in / info@ratnamani.com |
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Website : |
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Factory
1 : |
STAINLESS STEEL TUBES AND PIPES DIVISION Ahmedabad Mehsana Highway, Village – Indrad, Near Chhatral GIDC,
Taluka – Kadi, Dist. – Mehsana, Gujarat, India |
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Factory
2 : |
SAW PIPE DIVISION Plot No. 3306, 3308 & 3309, GIDC – Chhatral, Taluka – Kalol,
Dist. – Mehsana, Gujarat, India |
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Factory
3 : |
KUTCH DIVISION Survey No. 474, Village – Bhimasar, Taluka – Anjar, Dist. – Kutch,
Gujarat, India |
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Branches
: |
44, C. P. Tank Road, Mumbai – 400 004, Maharashtra, India |
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Tel.
No.: |
91-22-23802591 / 2 / 3 / 4 |
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Fax
No.: |
91-22-23876464 |
DIRECTORS
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Name : |
Mr. Prakash M. Sanghvi |
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Designation : |
Chairman and Managing Director |
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Date of Birth/Age : |
49 years |
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Qualification : |
Matriculation |
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Experience : |
28 years |
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Date of Appointment : |
12th June, 1989 |
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Previous Employment |
Ratnamani Tube Industries
Limited – Director |
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Name : |
Mr. Jayantilal M. Sanghvi |
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Designation : |
Whole-time Director |
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Date of Birth/Age : |
47 years |
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Qualification : |
1st B.Com. |
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Experience : |
25 years |
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Date of Appointment : |
12th June, 1989 |
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Previous Employment |
Ratnamani Tube Industries Limited – Director |
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Name : |
Mrs. Shantilal M. Sanghvi |
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Designation : |
Director |
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Date of Birth/Age : |
43
years |
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Qualification : |
Under
graduate |
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Experience : |
23
years |
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Date of Appointment : |
01.11.1998 |
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Previous Employment |
Ratnamani
Engineering Limited and Ratnamani Fine Tube Private Limited |
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Name : |
Mr. D. C. Anjaria |
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Designation : |
Director |
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Name
: |
Dr. Vinodkumar M. Agarwal |
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Designation
: |
Director |
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Name
: |
Mr. P. M. Merita |
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Designation
: |
Director |
MAJOR SHAREHOLDERS
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Names
of Shareholders |
No. of Shares |
Percentage of Holding |
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Indian Promoters and Group |
5289897 |
58.78 |
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Mutual Fund and UTI |
6942 |
0.08 |
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Banks, Financial Institutions |
66 |
0.00 |
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Corporate Bodies |
251530 |
2.79 |
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Flls |
824224 |
9.16 |
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NRI |
101171 |
1.12 |
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Indian Republic |
2526170 |
28.07 |
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Grand Total |
9000000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
The company is engaged in manufacturing and marketing of
Stainless Steel Tubes & Pipes, Saw Pipes and Carbon Steel Tubes &
Pipes. |
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Products : |
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PRODUCTION
STATUS
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Particulars |
Unit |
Licensed Capacity |
Installed
Capacity |
Actual Production |
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Stainless Steel Tubes &
Pipes (Own) |
MT |
NA |
18900 |
7430 |
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Carbon Steel Pipes |
MT |
NA |
300000 |
61423 |
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Generation
of Power using Windmills (other than for captive consumption) |
‘000 Units |
10.50 |
27300 |
6 |
GENERAL INFORMATION
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No. of Employees : |
2000 |
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Bankers : |
Ř
Dena Bank Ř
Punjab National Bank Ř
State Bank of India Ř
IDBI Limited Ř
ICICI Bank Limited |
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Facilities : |
Note No. 1 (a) Term Loans from ICICI Bank UK Limited, Syndicate Bank, Bank of
Maharashtra and Axis Bank Limited (Rs. 200 millions) are secured by first charge
on the Company's entire immovable and movable properties situated at Survey
Nos. 769, 780 and 787, Village Indrad, Chhatral, Taluka, Kadi, District
Mehsana and Survey No. 474, Village Bhimasar, Taluka Anjar, District Kutch.
The said loans are further secured by second charge on Inventories and Book
debts and personal guarantee of some of the Directors of the Company. (b) Term Loan from Axis Bank Limited (Rs. 100 millions) is secured by
first charge on the Company's entire immovable and movable properties
situated at Plot Nos. 3306 to 3309 GIDC, Chhatral, Taluka Kalol, District
Gandhinagar. The said loan is further secured by second charge on Inventories
and Book debts and personal guarantee of some of the Directors of the
Company. (c) Term Loan from
ICICI Bank Limited, Hong Kong is to be secured by an exclusive charge over
all the 8 windmills alongwith related equipments/ machinery situated at (Moti
Sindholi) Kutch, Gujarat and personal guarantee of some of the Directors of
the Company. Note No. 2 Working Capital Facilities from State Bank of India, Punjab National
Bank, Dena Bank and IDBI Limited are secured by hypothecation of Inventories,
Book debts and by second charge on Fixed Assets of the Company and personal
guarantee of some of the Directors of the Company. Working Capital Facilities
are further secured by joint equitable mortgage of all immovable properties
held as free-hold and lease-hold lands of the Company.
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Banking Relations : |
Satisfactory
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Auditors : |
Mehta Lodha and Company Chartered Accountants 63 Hirabhai Market, Diwan Ballubhai Road, Ahmedabad – 380 022,
Gujarat, India |
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Subsidiaries : |
-
Ratnamani Food Products Private Limited -
Ratnamani Marketing Private
Limited |
CAPITAL STRUCTURE
Authorised
Capital :
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No.
of Shares |
Type |
Value |
Amount |
|
15,000,000 |
Equity Shares |
Rs.10/- each |
Rs.150.000 millions |
Issued,
Subscribed & Paid-up Capital :
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No.
of Shares |
Type |
Value |
Amount |
|
90,00,000 |
Equity Shares |
Rs.10/- each |
Rs. 90.000 millions |
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Out of the above shares 3070200 (3070200)
Equity Shares were allotted as fully paid up by way of bonus shares. Out of
the above shares, 2460133 (2460133) Equity Shares were allotted as fully paid
up for consideration other than cash, on amalgamation. |
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FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED BALANCE SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
90.000 |
90.000 |
90.000 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1315.666 |
726.533 |
416.762 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1405.666 |
816.533 |
506.762 |
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LOAN FUNDS |
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1] Secured Loans |
1293.733 |
766.200 |
425.896 |
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2] Unsecured Loans |
549.587 |
294.480 |
78.454 |
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TOTAL BORROWING |
1843.320 |
1060.680 |
504.350 |
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DEFERRED TAX LIABILITIES |
319.636 |
202.815 |
143.558 |
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TOTAL |
3568.622 |
2080.028 |
1154.670 |
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APPLICATION
OF FUNDS |
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FIXED
ASSETS [Net Block] |
2504.871 |
1605.931 |
819.915 |
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Capital
work-in-progress |
83.691 |
1.792 |
247.613 |
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INVESTMENT |
0.066 |
0.064 |
0.384 |
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DEFERREX
TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT
ASSETS, LOANS & ADVANCES |
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Inventories |
1648.719
|
587.977 |
234.935
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Sundry
Debtors |
607.535
|
346.667 |
215.968
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Cash
& Bank Balances |
113.030
|
101.389 |
79.572
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Other
Current Assets |
0.000
|
0.000 |
0.000
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Loans
& Advances |
198.086
|
89.816 |
68.148
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Total Current
Assets |
2567.370
|
1125.849 |
598.623
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Less : CURRENT LIABILITIES &
PROVISIONS |
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Current
Liabilities |
1468.125
|
611.263 |
491.340
|
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Provisions |
119.251
|
42.345 |
20.525
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Total Current
Liabilities |
1587.376
|
653.608 |
511.865
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Net Current Assets |
979.994
|
472.241 |
86.758
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MISCELLANEOUS
EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
3568.622 |
2080.028 |
1154.670 |
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PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales
Turnover |
5654.928 |
3160.293 |
1089.952 |
|
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Other Income |
633.272 |
216.009 |
0.000 |
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Total
Income |
6288.200 |
3376.302 |
1089.952 |
|
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Profit/(Loss) Before Tax |
1007.113 |
471.030 |
210.293 |
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Provision for Taxation |
365.332 |
135.876 |
77.772 |
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Profit/(Loss) After Tax |
641.781 |
335.427 |
132.521 |
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Earnings
in Foreign Currency : |
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Export Earnings |
721.356 |
544.093 |
239.806 |
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Commission Earnings |
0.000 |
0.000 |
0.000 |
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Other Earnings |
0.000 |
0.000 |
0.000 |
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Total
Earnings |
721.356 |
544.093 |
239.806 |
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Imports
: |
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Raw Materials |
1848.868 |
493.442 |
389.107 |
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Stores & Spares |
8.602 |
3.300 |
0.000 |
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Capital Goods |
174.962 |
118.246 |
0.000 |
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Others |
0.000 |
0.000 |
0.000 |
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Total
Imports |
2032.432 |
614.988 |
389.107 |
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Expenditures : |
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Raw Material Consumed |
4142.166 |
2143.469 |
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Salaries, Wages, Bonus, etc. |
158.750 |
96.017 |
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Financial Expenses |
164.384 |
89.019 |
1599.659 |
|
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Depreciation & Amortization |
155.894 |
73.896 |
|
|
|
Other Expenditure |
659.893 |
502.871 |
|
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Total
Expenditure |
5281.087 |
2905.272 |
1599.659 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1st Quarter |
2nd Quarter |
|
Sales Turnover |
|
1900.100 |
2091.300 |
|
Other Income |
|
31.200 |
59.700 |
|
Total Income |
|
1931.300 |
2151.000 |
|
Total Expenditure |
|
1476.900 |
1642.500 |
|
Operating Profit |
|
454.400 |
508.500 |
|
Interest |
|
51.600 |
54.100 |
|
Gross Profit |
|
402.800 |
454.400 |
|
Depreciation |
|
53.200 |
59.500 |
|
Tax |
|
123.700 |
107.600 |
|
Reported PAT |
|
225.900 |
268.200 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
1.31 |
1.18 |
0.70 |
|
Long Term Debt Equity Ratio |
1.15 |
1.04 |
0.55 |
|
Current Ratio |
1.17 |
1.01 |
0.91 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
2.47 |
2.27 |
2.32 |
|
Inventory |
5.50 |
8.50 |
8.39 |
|
Debtors |
12.88 |
12.44 |
11.13 |
|
Interest Cover Ratio |
6.84 |
5.81 |
5.79 |
|
Operating Profit Margin (%) |
21.72 |
18.37 |
14.40 |
|
Profit Before Interest and Tax Margin (%) |
19.19 |
16.26 |
12.29 |
|
Cash Profit Margin (%) |
12.98 |
11.70 |
8.52 |
|
Adjusted Net Profit Margin (%) |
10.44 |
9.59 |
6.41 |
|
Return on Capital Employed (%) |
46.02 |
39.40 |
33.09 |
|
Return on Net Worth (%) |
57.76 |
50.69 |
29.39 |
LOCAL AGENCY FURTHER INFORMATION
FIXED
ASSETS
Ř
Goodwill
Ř
Lease Hold Land
Ř
Freehold Land
Ř
Buildings
Ř
Plant & Machinery
Ř
Furniture & Fixtures
Ř
Vehicles
Ř
Equipments
HISTORY
Ratnamani Metals & Tubes (RMTL), incorporated in Sep.'83 as a
small scale industrial undertaking as Ratnamani Metals & Tubes Pvt Ltd,
became a deemed public limited company in Jul.'89. Another small-scale unit,
Ratnamani Tube Industries Pvt Ltd was set up by the same promoters in 1985,
which too became a public limited company in Jul.'90. Both the companies were
converted into medium-scale units through expansion within 2-3 years of
establishment. Ratnamani Tube Industries was amalgamated with Ratnamani Metals
& Tubes in Apr.'91.
RMTL manufactures stainless steel seamless and welded pipes and tubes of
various diameters upto 16" (cap.: 3000 tpa). In addition, it undertakes
job-work for drawing of pipes.
In Mar.'93, the company came out with a public issue to part-finance its Rs
6.57-cr project to upgrade its manufacturing facilities and augment its working
capital. Under this project, in 1993-94, it installed four pilger machines
imported from Intertec, Germany.
It is having a separate divisions for S S Instrumentation Tubes and S S Heat
Exchanger Tubes with additional capacity of 10 MT and 100 MT per month
respectively. It has also undertaken modernisation of Weilded Tubes
manufacturing facilities which was successfully developed in the year
1999-2000.
During 1997-98, it installed the Saw Pipes and Carbon Steel Tubes & Pipes
with a capacity of 10,000 MT and 1,200 MT.
During 1998-99, As per the scheme of amalgamation Ratnamani Engineering Ltd was
amalgamated with Ratnamani Metals & Tubes Limited.
The company is planning to develop capability of tape coating and cement mortar
gunniting on pipes.The company has also been issued license for using the API
monogram for API 2B products.
ISO 9002:1994
The company has already been awarded BSEN ISO 9002:1994, a
prestigious certification. This puts
The Company at par with other International Companies in respect of globally
accepted Quality Management Systems.
AD 2000 – Merkblatt W 0
The company had received AD 2000 – Merkblatt W 0 Certificate
issued by TUV Germany, whereby the marketability of S. S. Tubular products is
expected to increase, particularly for exports to Germany and other European
countries.
REVIEW OF OPERATIONS:
The year
2006-07 ended much better than expected. The Board of Directors is very much
delighted to affirm that the year 2006-07 has been the best year so far in
Company's history. Since 2001-02, turnover and profitability have grown consistently,
year on year, each year proving to be historical for the
Company.
During the year under review, the Net Income increased by 79% to reach the
level of Rs. 5712.500 million from Rs. 3191.900 million in 2005-06, where as
the Net Profit after tax stood at Rs. 641.800 million which represents a 91 %
growth over the previous year figures. Company has achieved export sales of Rs.
3030 million that amounts to 54 % of Net Sales.
STATUS OF EXPORT HOUSE
The Board of Directors is pleased to inform that the Company has been awarded
Trading House Status for a period of two years by the Joint Director General of
Foreign Trade, Ahmedabad for having export turnover in excess of Rs. 5000
million.
FUTURE PROSPECT:
In
the last three years, there has been a shift in the mindset of India's
entrepreneurs. The change in thinking has been because of a confidence that
India is making its presence felt firmly in World Economy. The word
'multinational' no longer means a foreign company. There are a sizable number
of 'Indian Multinationals' now and the number seem to be growing.
The globally competitive assertion of India is visible as even larger
amounts are being invested in ventures located worldwide.
The pipes and tubes industry is no exception to this change. There is a huge
potential demand for pipes and tubes manufactured in India, or manufactured by
Indian entrepreneurs in plants located outside India. There would be ample
opportunities and the key to unlock those would be the competitiveness and servicing
of the customers'requirements.
The two major Industry segments in which the Company has strong presence are
Oil & Gas and Power.
Oil & Gas Industry uses the pipes for a variety of applications in:
* On shore and Offshore drilling platforms
* For transporting crude oil/gas to refineries and user industries,
including cross country pipelines
* Refineries themselves have various applications of pipes
* Down stream petrochemical projects use pipelines
The majority of the applications need SAW pipes.
Simdex (May 2007 update) data suggest there are 511 pipeline projects
for 246,473 kms. of these, 90 projects for 81,736 kms are being planned in
Asia.
India is considered to have a low penetration of the pipelines at 15,000 km or
25% of the required volume as against the world average of 75%.
According to an estimate of CRIS INFAI, project for 23,643 km of
pipelines have been planned till 2010.
Such expansion in the pipelines both by the public as well as private sector
companies would generate a sizable demand for the Company's products.
GAS:
Today, gas is considered as a clean form of energy. The transportation of gas
through pipelines is becoming the standard means of transport and distribution
world over as it is the cheapest mode. At present, country is in the process of
laying down trunk lines as a part of the national grid. Also in select cities,
the gas is now being distributed through pipelines. This penetration is going
to be increasing in the coming days.
Their
ERW pipes are being used for the purpose. There will be a sizable market both
locally as well as globally for this product.
Thus, the Company's Carbon Steel products would find adequate market from
increased demand due to investment lined up spanning over 10 years in gas and
oil exploration, oil and gas transportation, etc. The Company's increased
capacity would be handily available to take advantage of the increased
demand.
The Stainless Steel products would also have global opportunities from
refineries, power plants and other industrial sectors like paper,
pharmaceuticals, etc.
POWER:
The other important sector is power. The Company's products find application in
power plants - be it thermal, or nuclear. It is expected that during the 11th
plan period (2007-12), a tentative capacity addition of 66,643 MW is planned
comprising of 17,189 MW of hydro, 46,114 MW of thermal (44,000 MW coal/lignite,
2,114 MW gas/LNG) and 3,200 MW of nuclear capacity. This addition coupled with a
potential of approximately 58000 MW from renewable energy sector, mainly wind
energy would also be opening sizable demand for the Company's products.
(Source: Central Electricity Authority/In WEA)
The backward integration in extrusion capacity would come handy to ensure the
ready availability of the raw material for Stainless Steel division with some
cost savings.
The Company is also in the process of removing equipment capacity imbalances,
upgrading the equipment for better efficiency and closer tolerances. It is also
in process of diversifying its product range and intends to add four to five
new products during 2007-08.
The Company's 23 Wind mills are working satisfactorily. One more wind mill that
was planned to be commissioned last year will be commissioned during 2007-08,
thus taking the total installed capacity of Wind mills to 24 nos. with 20.54
MW.
THE KUTCH PROJECT
In its first full year of commercial operation, the Kutch plant has contributed
to the Company's growth as per expectations. The backward integration project
for the production of Hot Extruded Mother Pipes also stabilised in the last
quarter of the year and their look forward to an increasing supply of all
critical raw materials for the seamless tubes.
FUTURE PLANS
The current year would see full scale production on the hot extrusion plant.
The current year would also see higher capacity utilisation of both Kutch and
Chhatral plants in both SSTP and SP divisions.
As part of its philosophy of continuous innovation and growth, the Company is
planning to move higher in the product chain in stainless steel. There are
plans to take up production of tubes using higher grade raw materials such as
super duplex and titanium, etc. The Company is also in the process of
evaluating the possibilities of newer products having synergy with its current
product line like the wind mill towers.
WIND POWER
During the fiscal year 2006-07, further investment of Rs. 610 million has been
made and seven wind mills having combined capacity of 10.5 MW have been added.
During the year under report, total power generation for captive consumption
has been 12,703 MW. The Company continues to meet its almost 100% power
requirement through 'Green Energy Generation' and contributes in a small way to
a greener and cleaner earth.
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. 39.27 |
|
UK
Pound |
1 |
Rs. 77.33 |
|
Euro |
1 |
Rs. 57.51 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
|
66 |
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 |