MIRA
INFORM REPORT
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Report Date : |
22.01.2008 |
IDENTIFICATION
DETAILS
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Name : |
SPEL SEMICONDUCTOR LIMITED |
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Formerly Known As : |
SPIC ELECTRONICS & SYSTEMS LIMITED |
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Registered Office : |
MAC House, 4 Sardar Patel Road, Guindy, Chennai 600 032, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
26.12.1984 |
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Com. Reg. No.: |
18- 11434 |
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CIN No.: [Company
Identification No.] |
L32201TN1984PLC011434 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHES02438C |
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PAN No.: [Permanent
Account No.] |
AAACS8519B |
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Legal Form : |
Public limited liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing and Marketing of Integrated Circuits. |
RATING &
COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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Maximum Credit Limit : |
USD 1937244 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow and delayed |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having moderate track. Trade relations are fair. Payments are reported as correct and as per commitments. The company can be considered for small to mediocre business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
MAC House, 4 Sardar Patel Road, Guindy, Chennai 600 032 India |
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Factory 1 : |
5 CMDA Industrial Estate, MM Nagar, Chennai – 603209, Tamilnadu, India |
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Tel. No.: |
91-44-47405490 |
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Fax No.: |
91-44-47405303 |
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E-Mail : |
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Website : |
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Overseas Office : |
3120 De La Cruz Blvd., Suite #107, Santa Clara, CA 95054 |
DIRECTORS
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Name : |
Dr. A.C.
Muthiah |
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Designation : |
Chairman |
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Name : |
Mr. Ar
Rm Arun |
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Designation : |
Vice
Chairman |
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Name : |
Mr. S.R.
Vijayakar |
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Designation : |
Director |
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Name : |
Dr. T.S.
Vijayaraghavan |
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Designation : |
Director |
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Name : |
Dr. A.
Besant C Raj |
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Designation : |
Director |
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Name : |
Mr. M:G.
Thirunavukkarasu |
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Designation : |
Director |
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Name : |
Mr. R.
Venkatesh Kumar |
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Designation : |
Chief
Financial Officer |
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Name : |
Mr. Sam Varghese |
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Designation : |
Chief Financial Officer |
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Name : |
Sudhir Anand |
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Designation : |
Head Corporate Affairs & Company Secretary |
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Name : |
Mr. N.
Sivashanmugam |
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Designation : |
Chief
Financial Officer |
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Name : |
Mr. S. S. Arunachalam |
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Designation : |
Head Corporate Affairs & Company Secretary |
KEY EXECUTIVES
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Name : |
Dr. C. N. Gangadaran |
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Designation : |
Director |
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Date of Birth/Age : |
59 Years |
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Qualification : |
Chartered
Accountants |
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Other Directorships : |
·
NCS Gayatri
Sugars Limited ·
Detergent
India Limited |
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Name : |
Mr. M. G. Thirunavukkarasu |
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Designation : |
Director |
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Date of Birth/Age : |
55 Years |
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Qualification : |
Finance Director |
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Other Directorships : |
·
SPIC
Holdings & Investments Limited ·
Technip
India Limited ·
SPIC
Fertilizers & Chemicals Limited, Mauritius ·
National
Aromatics & Petrochemicals Corporation Limited |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
25811207 |
56.81 |
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Persons acting in Concert |
984300 |
2.17 |
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Financial
Institutions :- |
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IFCI |
1755000 |
3.86 |
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UTI |
5100 |
0.01 |
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UTI (Growth Fund) |
3600 |
0.01 |
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Nationalized Banks :- |
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Tamilnadu Mercantile Bank |
500 |
0.00 |
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Federal Bank |
200 |
0.00 |
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Vysya Bank |
100 |
0.00 |
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Overseas Corporate Bodies |
9000 |
0.02 |
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Non-Resident Indians |
179912 |
0.40 |
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Domestic Companies |
2876514 |
6.33 |
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Resident Individuals |
13743251 |
30.24 |
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Clearing Members |
63219 |
0.14 |
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Trusts |
4300 |
0.01 |
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Total |
45436203 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and Marketing of Integrated Circuits. |
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Products : |
Item Code No. (ITC Code) 854200 Product Description Electronic Integrated Circuits
Item Code No. (ITC Code) 852320 Product Description Floppy Diskettes
Item Code No. (ITC Code) 852319 Product Description Computer Tapes |
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Exports : |
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Countries : |
Abu Dhabi, Jordan, Kuwait and U.S.A. |
PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Integrated Circuits |
Million Nos. |
175 |
150 |
133.690 |
GENERAL
INFORMATION
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Customers : |
· Quality Semiconductor Inc. (QSI), USA · Integrated Devices Technology (IDT) |
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No. of Employees : |
455 regular Employees besides 127 Apprentices |
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Bankers : |
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Facilities : |
Note :
Note
:
Unsecured Loan from others includes Rs. 6.500 Millions received to finance
projects. |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Natarajan and Company Chartered Accountants |
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Address : |
2/342 II Street, Kandaswamy Nagar,
Palavakkam, Chennai 600 041 |
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Memberships : |
Confederation of Indian Industry |
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Associates/Subsidiaries : |
SPEL America Inc. |
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Holding Company : |
Southern Petrochemical Industries Corporation Limited (SPIC) |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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60000000 |
Equity Shares |
Rs. 10/- each |
Rs. 600.000 Millions |
Issued Capital
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No. of Shares |
Type |
Value |
Amount |
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45466373 |
Equity Shares |
Rs.10/- each |
Rs. 454.663 Millions |
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Subscribed & Paid-up Capital |
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45436203 |
Equity Shares |
Rs.10/- each |
Rs. 454.362 Millions |
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30170 |
Add : Forfeited Shares |
Rs. 5/- each |
Rs. 0.150 Millions |
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Total |
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Rs. 454.512 Millions |
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 |
454.512 |
454.512 |
454.513 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
29.799 |
1.328 |
1.328 |
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4] (Accumulated Losses) |
0.000 |
[15.428] |
(73.519) |
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NETWORTH |
484.311 |
440.412 |
382.322 |
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LOAN FUNDS |
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1] Secured Loans |
214.402 |
123.697 |
69.563 |
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2] Unsecured Loans |
76.280 |
72.500 |
71.500 |
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TOTAL BORROWING |
290.682 |
196.197 |
141.063 |
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DEFERRED TAX LIABILITIES |
22.355 |
0.000 |
0.000 |
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TOTAL |
797.348 |
636.609 |
523.385 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
589.744 |
402.269 |
406.247 |
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Capital work-in-progress |
87.035 |
188.667 |
73.038 |
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INVESTMENT |
0.004 |
0.004 |
0.000 |
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DEFERREX TAX ASSETS |
0.000 |
1.086 |
11.263 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
139.196
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126.330 |
112.574
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Sundry Debtors |
40.225
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22.037 |
18.140
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Cash & Bank Balances |
18.317
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14.213 |
17.772
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Other Current Assets |
0.000
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0.000 |
0.059
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Loans & Advances |
26.053
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9.908 |
7.789
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Total
Current Assets |
223.791
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172.488 |
156.334 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
103.226
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127.905 |
123.497 |
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Total
Current Liabilities |
103.226
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127.905 |
123.497 |
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Net Current Assets |
120.565
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44.583 |
32.837
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
797.348 |
636.609 |
523.385 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
539.293 |
463.090 |
406.808 |
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Other Income |
11.946 |
3.937 |
-- |
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Interest waiver on OTS |
0.000 |
31.468 |
-- |
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Total Income |
551.240 |
498.496 |
406.808 |
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Profit/(Loss) Before Tax |
63.666 |
73.504 |
26.774 |
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Provision for Taxation |
24.548 |
15.414 |
12.070 |
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Profit/(Loss) After Tax |
39.118 |
58.090 |
14.703 |
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Earnings in Foreign Currency : |
528.760 |
460.720 |
NA |
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Total Imports |
346.520 |
308.090 |
NA |
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Expenditures : |
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Manufacturing Expenses |
430.047 |
374.347 |
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Excise Duty |
0.326 |
0.238 |
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Interest |
14.578 |
12.258 |
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Depreciation & Amortization |
42.623 |
38.149 |
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Total Expenditure |
487.574 |
424.992 |
380.034 |
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QUARTERLY RESULTS
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PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
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Type |
1st Quarter |
2nd Quarter |
3rd Quarter |
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Sales Turnover |
149.300
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183.800
|
179.100
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Other Income |
0.900
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3.300
|
01.500
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Total Income |
150.200
|
187.100
|
180.600
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Total Expenditure |
119.400
|
135.600
|
127.900
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Operating Profit |
30.800
|
51.500
|
52.700
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Interest |
6.600
|
6.300
|
6.800
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Gross Profit |
24.200
|
45.200
|
45.900
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Depreciation |
14.200
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14.000
|
15.800
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Tax |
0.700
|
3.700
|
0.200
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Reported PAT |
6.100
|
16.800
|
19.100
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KEY RATIOS
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PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
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PAT / Total Income |
(%) |
7.09
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11.65 |
3.61 |
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Net Profit Margin (PBT/Sales) |
(%) |
11.80
|
15.87 |
6.58 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
7.82
|
12.78 |
4.75 |
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Return on Investment (ROI) (PBT/Networth) |
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0.13
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0.16 |
0.07 |
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Debt Equity Ratio (Total Liability/Networth) |
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0.81
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0.73 |
0.69 |
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Current Ratio (Current Asset/Current Liability) |
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2.16
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1.34 |
1.26 |
LOCAL AGENCY
FURTHER INFORMATION
Fixed Assets:
The company’s fixed asset of important value includes Land, Building, Plant & Machinery, Furniture & Fixtures, Office Equipments and Motor Vehicle.
Contingent Liabilities and Provisions:
|
In respect of |
31.03.2007 [Rs. In
Millions] |
31.03.2006 [Rs. In
Millions] |
|
Letter of Credit for Import Purchase |
25.680 |
50.790 |
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Bank Guarantee given for Job work |
0.010 |
--- |
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Bills Discounted |
3.690 |
4.700 |
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Guarantees given to Banks/Central Excise on
behalf of other companies with corresponding counter guarantees from them |
68.000 |
68.000 |
Ø Claims against the Company not acknowledged as debts Rs. 4.390 Millions
Ø Statement on provisions as per Accounting Standard 29
Rs. in Millions
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Administrative
expenses |
Freight and
Clearing Expenses |
Secretarial
Expenses |
Purchase
Expenses |
Gratuity |
|
Opening Balance |
0.200 |
0.060 |
0.010 |
0.020 |
7.810 |
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Addition |
0.290 |
0.010 |
0.030 |
0.040 |
2.750 |
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Utilized/Paid |
0.200 |
0.060 |
0.010 |
0.020 |
3.600 |
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Closing Balance |
0.290 |
0.010 |
0.030 |
0.040 |
6.960 |
The above provisions for expenses are made based
on estimation on account of bill not received.
For Gratuity, the provision is made based on the value indicated by LIC.
HISTORY:
Spel Semiconductor Limited (SSL) (earlier known as Spic Electronics
and Systems Limited) was incorporated as a private limited company in Dec.'84
and thereafter converted into a public limited company in Mar.'86. It was
promoted by Southern Petrochemical Industries (SPIC). SSL went public in
Aug.'88 to part-finance the cost of setting up a sophisticated electronic
project for manufacture of computer tapes, diskettes, jumbo rolls and
integrated circuits. The company entered into a technical collaboration with
Computer Resources, US, for a magnetic media project to produce computer tapes
and floppy discs. The company received the ISO 9002 certificate for integrated
circuit packing operations.
On 1st Nov'95, the company was converted into 100% EOU under Electronics
Hardware Technology Park scheme. Through this, it can concentrate more on
exporting its products to the world.
AS PER WEBSITE DETAILS
PROFILE:
Subject
is the leading one-stop turnkey Wafer Sort, IC Assembly & Test subcon
facility in India. Established in 1988 and headquartered in Chennai, SPEL had been
serving the local market from 1988 to 1994. Having established a track record
at home, SPEL turned its attention to the more demanding global market in 1995.
It has since been exclusively serving the Silicon Valley and other parts of the
world for over 12 years now. SPEL focuses on Lead frame based Packages -
both Surface mount & Through hole.
As
a specialty, SPEL offers onsite & offshore Test Engineering support to
Customers. SPEL ensures better interaction & services to Customers through
a Sales & Technical support office based at Santa Clara, USA.
Vision
To be the Natural Destination for global Customers seeking cost-effective
Offshore turnkey IC Assembly & Test services.
Mission
Subject an IC Assembly & Test
Subcontractor for over 17 years, works as one Team to achieve Zero defect,
Just-in-time, Cost-effective solutions with Service that is uncompromised.
Subject
Partners Customers, Suppliers, Employees & Shareholders are confident in
the knowledge that they are consistently meeting and exceeding their
expectations.
Directors Report
Increased sales of
the Company during the year over the previous year have yielded a contribution
of Rs. 52.79 million. The increased expenditure on manpower, power, marketing expenses,
other overheads that were necessitated due to operational growth, have
partially offset the higher contribution.
LMP, the new package which was introduced during the year, is expected
to increase the contribution in future years.
The profit of previous
year includes Interest waiver on one time settlement (OTS) of IFCI Term loan of
Rs.31.47 million. Profit for FY 2005-06 after adjusting the above OTS benefit
is Rs.26.62 million. The performance during the year has improved as compared
to previous year, which eventually improved the PAT from Rs. 26.62 million to
Rs.39.1 million.
During the year
under review, the Company has fully repaid a Customer Loan and availed a fresh
loan from a different Customer.
Global and Indian Industry scenario:
Worldwide
semiconductor revenue totaled $262.7 billion in 2006, a 10.2 percent increase
from 2005 revenue of $238.3 billion, according to final results published by
Gartner Research.
India, with fast
growing semiconductor consumption, due to acceleration in electronics
manufacturing activities and EMS shops is all set to emerge as an important
location for semiconductor manufacturing. Indian semiconductor industry, which
witnessed a 32.8 percent growth in 2006, is expected to grow to $43 billion by
2015, according to experts. The long-awaited special incentive package to boost
semiconductor manufacturing in India was finally approved by the Central
government.
Management
Discussion & Analysis:
Business
Environment:
Global Trend for SPEL's package lines:
The global volume
and revenue forecast for Integrated Circuits, is given in the chart below. As
the Company's share in the global volumes and revenues is small, there is a
good potential for increasing the volumes and revenues by widening the Customer
base and further enhancing the QCDS (Quality, Cost, Delivery & Service)
factors. The Compound Annual Growth Rate (CAGR) for volume growth is expected
around 8.97% between 2007 and 2011.
As per the
preliminary survey of Gartner Reports, the worldwide semiconductor assembly and
test services (SATS) market exhibited double-digit growth for the fifth
consecutive year in 2006 and its revenue increased by 26%.
Indian Scenario:
As per reports of
Indian Semiconductor Association and study by the analyst firm Frost & Sullivan
in Feb 2006 the Indian electronics industry will grow to $360 billion by 2015,
with the chip sector worth $35 billion to $40 billion. Better performance
during the year is due to a healthier market for electronic equipment and
stabilization in the average selling prices for chips. The strongest growth is
expected in data processing, wired communications and consumer
electronics.
The domestic
electronics market is growing rapidly. Reports suggest that about '28% of the
country's economy will be effected by this sector in future. And these digital
products will consume semiconductors (a basic component of most electronic
goods today) to the tune of $36 billion by 2015
Owing to the
nature of growth in the Semiconductor industry, Indian government announced its
long-awaited Semiconductor policy, saying it would pick up 20/25 percent of
capital expenditures for manufacturing facilities, if the minimum investment
and other criterias are complied. The incentives will be in the form of tax
concessions, interest subsidy and interest free loans for subsidizing the
capital expenditure incurred in setting up the manufacturing units for the
first 10 years of its existence. Hence, a unit set up in 2010 (the policy is
valid till then) would receive subsidies up to 2020.
SPEL
Volume & Revenue growth
During the last 5 years, the Company has been
increasing the volumes and revenues in a faster pace, as depicted below
Opportunities
& Threats
A buoyant market
is expected in the coming years. The contractor's package units which are at 44
billion units in 2006 are expected to grow to over 78 billion units in 2011
with an average CAGR of 12.3%. In terms of revenue for contractor packaging
from the present level of 10 billion in 2006, it is expected to reach $19
billion In 2011.
As the Company
presently is dependent more on the US market, it is exposed to the economic
trends of the US. However,-with enhancing of capabilities and entering into
other markets by addition of Customers from non US Countries, this threat will
be overcome by the Company shortly. However US Customers have evinced
confidence in the Company by investing into the Equipment to the extent of US$
3.6 Million, This is a strategic synergy where by a win-win situation has
shaped.
The Company
continues to be the first & only IC Assembly & Test Subcontractor in
India competing with bigger Subcons in APAC countries.
Government
incentives in these Countries have far reaching impact in the performance of
any Subcon as compared to the Company.
Round-the-clock Customs
clearance and uninterrupted cost-effective power supply are required for the
industry. The high power tariff has rendered a negative effect on the Company's
production cost. This burden is affecting the pricing edge that the Company has
over other Subcons in China.
To address this,
the Company is considering alternative sources of energy including
establishment of Wind Turbine Generators. Power tariff concessions and
subsidies for alternate sources of energy are essential for the industry to
sustain the competition with APAC countries. The Company with its process
driven Quality Management System, remains ahead of the competition to sustain
its growth. Besides, continuous supply of water to meet the needs of the
industry is also essential. The Company sincerely hopes that the Government
will extend its support in this regard.
The biggest
opportunity for the Company, as you are aware, lies in the size of the global
IC packaging market. The market is abundant for packaging of existing and newer
packages in the coming years. Globally also, India is getting recognized as a
key player in this industry. It is important to utilize the opportunity at the
earliest by raising funds from various sources, for expanding existing capacity
and more into the introduction of new packages in the Company's portfolio. The
Company has the potential to become one of the leaders very soon.
Although the industry is excited about the policy announcement, it is unlikely
that India will score immediate success if the government fails to complement
the policy with a sound follow up.
Technology trends / movement:
Many pundits are
claiming Moore's law is dead and newer technologies must replace it. The
ability to scale semiconductor processes is running into severe limits that prevent
much more progress. Alternatives getting attention include nano-technology,
bio-electronics, and bio-sensors.
Admittedly, there
is progress in these areas, but not for large-scale electronics.
Nano-technology is working on single memory bits with large memory arrays 5-10
years away. Individual circuits in nano-tubes are now working, but there is no
reproducible way to interconnect the functions and the approach is probably
10-15 years away from production.
Major companies
think that silicon CMOS is viable for at least 10 years down to around 22 nm
range, since all previous 'insurmountable' problems have been solved by the
time the process had to go into production. An alternative is to integrate
subsystems and create 3D assemblies of chips, moving towards greater
parallelism.
Longer term, other
materials and technologies will be investigated. These areas of research should
show working devices in the next 10 years, with an additional 5 years needed
for implementation. In addition, quantum computing offers a power reduction of
6 orders of magnitude compared to CMOS.
Materials
innovations will enhance performance. Next generation semiconductors will use
about half of the elements in the periodic table of elements, compared to the
half dozen used now. Innovation in design and technology will enable greater
optimizations. CMOS is likely to be the primary technology for electronics for
at least the next 10 years.
Outlook:
The worldwide semiconductor market is gradually improving and cautious
investment in incremental capacity additions will keep the market on a course
of modest growth during the next few years, according to the latest quarterly
update by Gartner.
The industry
projections for Contractors Packaging in respect of the products the Company is
presently engaged in are as shown below. The growth potential for the Company
is quite good, especially with the constant increase in the number of Customers
serviced.
The Company hopes
to improve on the global market forecast by constant improvements in
performance by adding new Customers, rejuvenating sales for the existing
packages, adding new packages and value added services. The Company has been
enhancing the thrust on the Sales & Marketing efforts, because of which the
performance and results have substantially improved and will continue in the
years to come.
The Company takes
pride in announcing that the Customer Satisfaction for the year has been
further enhanced. Many Customers qualifying the Company for direct shipments to
the end-Customers, is a clear evidence of their confidence in the Company's
Quality and Service factors. The Company also has improved its manufacturing
capabilities and facilities requirements for reducing the cost of production by
adding the required equipments.
It is highly
important to raise funds to expand capacity and widen the package portfolio to
meet the increasing demands globally. The company's Customers also have been
indicating the demand for the new packages which emphasizes the early need for
launching the same.
With the
increasing scope available for the semiconductor industry and attractive CAGR
projections for new package families such as PBGA & WLP, the Company has
drawn out necessary investment plan to address this.
Towards end of the
year, the Company has successfully raised a term loan of Rs.17 Crores from
Indian Overseas Bank (108) for expanding its product range to include TSSOP,
LMP.
Risks & Concerns:
The Company has
put in place a system of Corporate Risk Management (CRM) to mitigate the risks arising
in the process of Company's growth. CRM can give comfort, that risks are
identified, analyzed, and controlled. These solutions are targeted to satisfy
Board of Directors, Shareholders, Lenders, Customers & other Stakeholders.
Implementing a comprehensive and integrated approach to fraud, risk management
across the enterprise remains a significant challenge.
The Company has
made the risk management as a part of the corporate culture. The board, senior
management, internal audit, in fact all employees, has a role to play to ensure
that the Company is enacting and achieving ethical and responsible business
practices.
CRM in SPEL is
achieved by segmenting it into three primary objectives - prevention, detection
and response and a comprehensive and integrated approach that enables control
criteria in these three areas to work together.
Prevention covers
aspects like fraud & misconduct, risk assessment, code of conduct, employee
& third-party due diligence, communication & training.
Detection includes
issues like hotlines, audit & monitoring, and proactive forensic data
analysis. While response will have to incorporate internal investigation
protocols, enforcement & accountability protocols, disclosure protocols and
remedial action protocols.
The Subcon business
depends on the market demand for its OEM Customers products. Customers will
have the option of loading more than one Subcon to meet their requirement.
Keeping pace with technological advancement, continual improvement in process,
cost cutting measures to prune overhead expenditure, reduction in input raw
materials, elimination of waste and total people involvement will make the
Company to grow with the Customers.
The reliance on
the single market and the share of the major Customer of the Company in the
total revenue being high are some of the risks which the Company is the process
of mitigation. The projected decline in the ASP for the global industry is also
posing a risk of reducing the margin for the Company. As the Company is
relatively smaller In its capacity and has lesser expenditure levels compared
to the competitors, it could possibly withstand and sustain any decline and ASP
fall in the global market.
CRM is a
discipline for 'living with the possibility that future events may cause adverse
effects. Accordingly, it requires a detailed approach, on all business
activities embracing strategy and must be understood as the complete use of
organizational rules, tools and measures in a Company recognizing and
controlling technical as well as commercial risks.
Presently, the
Company has identified the risks and addressed suitably to the best of its
ability. The Employees at various levels know the importance of the risks,
their impact and ways and means to mitigate such risks. In this process, a 'Champion
Committee', which would champion the Risk Management process, a Risk Compliance
Officer for the purpose of reporting compliance and risk controllers, to be
associated with specific individual risks has been nominated. A regular
reporting on the CRM to the Board, Audit Committee and Management Committee of
Directors is being made In line with the Corporate Governance
requirements.
Internal Controls Systems and Adequacy:
The Company has
adequate internal Control Systems commensurate with the size and the nature of
operations. The coverage of the Internal Audit function and the review by Audit
Committee of the various operations and Internal Control measures regularly
strengthens the Internal Control Systems of the Company.
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. 39.73 |
|
UK Pound |
1 |
Rs. 77.01 |
|
Euro |
1 |
Rs. 57.34 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
4 |
|
--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 |
|
38 |
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 |
|