MIRA INFORM REPORT

 

 

 

Report Date :

28.07.2008

 

IDENTIFICATION DETAILS

 

Name :

SMRUTHI ORGANICS LIMITED

 

 

Registered Office :

165-A Balaji Bhavan, 1st Floor, Railway Lines, Solapur-413001, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

11.07.1989

 

 

Com. Reg. No.:

11-52562

 

 

CIN No.:

[Company Identification No.]

L24119MH1989SGC052562

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

PNES10689A

 

 

PAN No.:

[Permanent Account No.]

AACCS5562Q

 

 

Legal Form :

A public limited liability company. The company’s shares are listed on Stock Exchanges

 

 

Line of Business :

Manufacturer of Bulk Drugs and Drug Intermediates and Marketing the same in the Domestic as well as International markets since last ten years.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 520000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Slow but Correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well – established company having satisfactory track. The company has a mediocre performance. Trade relations are fair. Payments are reported as slow but correct.

 

The company can be considered normal for business dealings at usual trade terms and conditions.

 

 

LOCATIONS

 

Registered Office :

165-A Balaji Bhavan, 1st Floor, Railway Lines, Solapur-413001, Maharashtra, India

Tel. No.:

91-217-2310268 / 2620367/2310267

Fax No.:

91-217-2601112 / 2620268/2310268

E-Mail :

info@smruthiorganics.com , spr-smruthi2@sancharnet.in

Website :

http://www.smruthiorganics.com

 

 

Head Office :

108, Shivshakti Apartments, B-Wing, G. D. Ambedkar Road, Mumbai – 400 012, Maharashtra

Tel. No.:

91-22-2412 9211 / 2412 9442

Fax No.:

91-22-2415 5452

E-Mail :

solbby@bom5.vsnl.net.in

 

 

Factory  :

Plot No. 273/274, M.I.D.C., Akkalkot Road, Solapur – 413 006, Maharashtra, India

Tel. No.:

91-217-2651264 / 2653016

 

 

Factory  :

Plot No. A-27, M.I.D.C. Area, Chincholi, Post Kondi, Taluka Mohol, District Solapur, Maharashtra, INDIA

Tel. No.:

91-217-2257491 /92 / 93 / 94

 

 

DIRECTORS

 

Name :

Mr. E. Purushotham

Designation :

Chairman and Managing Director

Date of Birth/Age :

50 Years

Qualification :

M. Sc (Org)

Experience :

26Years

Previous Employment :
  • Standard Organics Limited (as a Senior Chemist R and D)
  • Someswara Organics Private Limited ( as a Director, Technical)

 

 

Name :

Mrs. E. Vaishnavi

Designation :

Director

 

 

Name :

Mr. E.Niranjan Rao

Designation :

Director

 

 

Name :

Mr. Nagender Yerram

Designation :

Director

 

 

Name :

Mr. P. K. Kumaran

Designation :

Director

 

 

Name :

Mr. R. Ramaswaamy

Designation :

Director

 

 

Name :

Mr. J. H. Ranade

Designation :

Director

 

 

Name :

Mr. E. Umamaheswar

Designation :

Director

 

 

Name :

Mr. S. R. Myakal

Designation :

Director

 

 

Name :

Mr. N. R.  Errabelli

Designation :

Director

 

 

Name :

Mr. U. Eaga

Designation :

Director

 

 

Name :

Mr. S. R. Yerram

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mr. A. G. Shrigondekar

Designation :

Company Secretary 

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 31.03.2007

 

Names of Shareholders

No. of Shares

Percentage of Holding

NRI

73933

1.94

Corporate Body

266374

6.98

Directors and Relatives

2323375

60.89

Indian Public

1151748

30.19

Total

3815430

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer of Bulk Drugs and Drug Intermediates and Marketing the same in the Domestic as well as International markets since last ten years.

 

 

Products :

Product Description

ITC Code

Diloxanide Furoate

2942.00

Norfloxacin

2942.00

6 MNA

2942.00

Ciprofloxacin

2942.00

Pefloxacin

2942.00

Metformin HCL

2942.00

Amlodipine

2942.00

Chlorhexidine Base

2942.00

 

The company’s products range include :

 

Bulk Drugs:

 

v      Norfloxacin USP

v      Ciprofloxacin USP

v      Naproxen BP/USP

v      Pefloxacin Mesylate

v      Metronidazole Benzoate

v      Diloxanide Furoate IP/BP

v      Nimesulide

v      Enrofloxacin

v      Norfloxacin 22 (Veterinary)

v      Norfloxacin Nicotinate

v      Metformin Hydrochloride IP/BP

v      Clarithromycin

 

Drug Intermediates:

 

v      Metol Sulphate

v      Phenidone-A

v      Furoyl Chloride

v      Furoic Acid

 

 

Exports :

 

Countries :
  • U.K
  • Germany
  • Japan
  • Israel
  • Spain
  • Singapore
  • Hong Kong
  • Brazil
  • Mexico
  • Bangladesh
  • Pakistan
  • Iran

 

PRODUCTION STATUS

 

Particulars

Unit

 

 

Licensed Capacity

Diloxanide Furoate

Kgs.

 

 

54075

Norfloxacin

Kgs.

 

 

61275

Ciprofloxacin

Kgs.

 

 

50437

Pefloxacin Mesylate

Kgs.

 

 

16470

Metformin Hcl.

Kgs.

 

 

287025

Enrofloxacin

Kgs.

 

 

13450

Adipic acid Dhy.

Kgs.

 

 

31480

Ch-Base

Kgs.

 

 

31550

Others

Kgs.

 

 

23846

 

 

GENERAL INFORMATION

 

Customers :

v      Cimpla Limited, Mumbai, Maharashtra

v      Knoll Pharmaceuticals

v      Rhone Poulenc

v      Wockhardt Limited

v      Ranbaxy Laboratories

v      Sun Pharmaceuticals Limited

v      J.B. Pharmaceuticals Limited

v      Alkem Laboratories

v      Biostar Pharmaceuticals

v      Searle India Limited

v      Laboratories Griffon

v      Gujarat Themis Biosyn Limited

v      Syncom Formulations (India) Limited

v      Siemglass Iberica

v      Teva Pharmaceuticals, Israel

 

 

No. of Employees :

50

 

 

Bankers :
  • State Bank of India, Industrial Finance Branch, World Trade Centre, Mumbai-400005, Maharashtra, India
  • State Bank of India, Station Road Branch, Solapur-413001, Maharashtra, India
  • State Bank of India, Churchgate Branch, Mumbai, Maharashtra, India
  •  

 

 

Facilities :

SECURED LOANS

31.03.2007

Rs. In Millions

FCNR Term Loan S. B. I. I. F Branch, Mumbai

90.168

Working Capital Loan From S. B. I, IFB Mumbai and SBI, Solapur

178.750

SBI Factors and Commercial Services Private Limited, Mumbai

17.003

Total

285.921

Notes:

 

Term Loan of Rs. 90.168 Millions from State Bank of India is secured by equitable mortgage created on all immovable properties located at Plot No. 273 and 274, M. I. D. C Akkalkot Road, Solapur-413006 and Plot No. A-27, MIDC. Chincholi, Solapur-413255 Flat No. 5, Rahul Apartment located at Plot No. 217/B, Solapur and also hypothecated of all movable properties both present and future charge created in favour of bank of stock of raw materials stores and spares, work in process finished goods and book debts for working capital requirements.

 

Deposit of title deeds for the equitable mortgage created with State Bank of India. For working capital by hypothecation of raw materials, finished and semi-finished goods, stores.

UNSECURED LOANS

31.03.2007

Rs. In Millions

Deferral Sales Tax Loan availed from WMDC Limited, Pune Under Package Scheme of Incentive of 1988

0.673

Deferral Sales Tax Loan availed from SICOM Limited, Mumbai, Under Package Scheme of Incentive of 1993

48.823

Deferral Sales Tax Loan availed from SICOM Limited, Under Package Scheme of Incentive of 1993 under Expansion

26.570

Other Loans

7.829

Total

83.894

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

Ashok Madgundi and Company

Chartered Accountant

Address :

210/ A/ 1, Sakhar Peth, Near Kanya Prashala, Solapur-413005, Maharashtra, India

Tel. No.:

91-217-626540 / 620403

 

 

Memberships :

Basic Chemicals, Pharmaceuticals & Cosmetics Export Promotion Council

 

 

Associates/Subsidiaries :
  • Smruthi Chemicals and Intermediates
  • Smruthi Fotochem

 

 

CAPITAL STRUCTURE

 

As on 31.03.2007

 

Authorised Capital :

No. of Shares

Type

Value

Amount

5000000

Equity Shares

Rs. 10/- each

Rs. 50.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

3815430

Equity Shares

Rs. 10/- each

Rs. 38.154 Millions

 

Less: Calls Unpaid

 

Rs. 0.044

 

Total

 

Total Rs.  38.110 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

38.110

38.110

38.102

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

67.847

53.269

42.077

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

105.957

91.379

80.179

LOAN FUNDS

 

 

 

1] Secured Loans

285.921

188.015

123.019

2] Unsecured Loans

83.894

68.908

66.608

TOTAL BORROWING

369.815

256.923

189.627

DEFERRED TAX LIABILITIES

21.031

17.584

15.436

 

 

 

 

TOTAL

496.803

365.886

285.242

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

249.932

218.115

151.109

Capital work-in-progress

2.666

0.670

7.776

 

 

 

 

INVESTMENT

0.000

0.000

0.000

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
259.918

169.765

128.998

 

Sundry Debtors
103.350

89.618

66.107

 

Cash & Bank Balances
20.005

20.477

13.315

 

Other Current Assets
0.000

0.000

0.000

 

Loans & Advances
30.054

17.047

9.803

Total Current Assets
413.327

296.907

218.223

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
171.522

149.806

72.949

 

Provisions
0.000

0.000

19.207

Total Current Liabilities
171.522

149.806

92.156

Net Current Assets
241.805

147.101

126.067

 

 

 

 

MISCELLANEOUS EXPENSES

2.400

0.000

0.290

 

 

 

 

TOTAL

496.803

365.886

285.242

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

 

 

 

 

Sales Turnover

545.644

494.046

320.057

Other Income

0.000

0.000

0.000

Total Income

545.644

494.046

320.057

 

 

 

 

Profit/(Loss) Before Tax

31.051

34.574

17.383

Provision for Taxation

7.664

12.505

6.270

Profit/(Loss) After Tax

23.387

22.069

11.113

 

 

 

 

Earnings in Foreign Currency :

 

 

 

 

Export Earnings

247.892

194.598

129.277

Total Earnings

247.892

194.598

129.277

 

 

 

 

Imports :

 

 

 

 

Raw Materials

173.400

121.400

80.905

Total Imports

173.400

121.400

80.905

 

 

 

 

Expenditures :

 

 

 

 

Manufacturing Expenses

80.016

58.952

 

Administrative Expenses

52.910

53.724

 

 

Increase or Decrease in Stock

[5.111]

[8.288]

302.674

 

Raw Material Consumed

334.166

303.110

 

 

Interest

23.389

12.773

 

 

Depreciation & Amortization

29.223

22.625

 

Total Expenditure

514.593

459.472

302.674

 

QUARTERLY / SUMMARISED RESULTS

 

PARTICULARS

 

30.06.2007

1st Quarter

30.09.2007

2nd Quarter

31.12.2007

3rd Quarter

31.03.2008

4th Quarter

Sales Turnover

128.400

134.700

106.800

138.700

Other Income

0.800

2.600

1.100

7.500

Total Income

129.200

137.300

107.900

146.200

Total Expenditure

104.00

113.400

87.900

130.100

Operating Profit

25.200

23.900

20.000

16.100

Interest

7.800

8.900

8.600

9.200

Gross Profit

17.400

15.000

11.400

6.900

Depreciation

8.400

8.400

8.200

4.800

Tax

1.100

0.100

0.100

0.400

Reported PAT

7.400

6.000

5.100

1.600

 

KEY RATIOS

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Debt Equity Ratio

3.18

2.60

2.13

Long Term Debt Equity Ratio

1.60

1.52

1.37

Current Ratio

1.06

1.12

1.29

TURNOVER RATIOS

 

 

 

Fixed Assets

1.48

1.71

1.40

Inventory

2.51

3.30

2.69

Debtors

5.59

6.33

5.71

Interest Cover Ratio

2.12

3.21

3.02

Operating Profit Margin (%)

16.31

14.75

14.19

Profit Before Interest and Tax Margin (%)

10.90

10.16

8.27

Cash Profit Margin (%)

9.75

9.07

9.45

Adjusted Net Profit Margin (%)

4.34

4.48

3.53

Return on Capital Employed (%)

14.31

16.22

10.49

Return on Net Worth (%)

23.72

25.76

13.98

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

History:

 

Smruthi Organics was incorporated in Jul.'89 as a private limited company and was subsequently converted into a public limited company in Feb.'95. It was promoted by E Purushotham and Shankarrao R Myakal. 

 
 The company set up a plant at Solapur, Maharashtra, to manufacture bulk drugs like diloxanide furoate (inst. cap. : 24 tpa) and sulphadiazine (inst. cap. : 36 tpa). It expanded its activities and product range in 1993-94 by manufacturing metronidazole benzoate, tinidazole, paracetamol and norfloxacin.

 
 
 The company exports furoic acid to the UK market. In 1995, it proposed to expnd its product range and set up an additional plant at Chincholi, Maharashtra, for the manufacture of additional bulk drugs like ciprofloxacin and ranitidine HCl. The company issued shares to the public in Dec.'95, to part-finance the project. 

 
 In 1993, the company received the district award as the Best Small Scale Entrepreneur in Solapur in the Year 1993, from the Government of Maharashtra.

 

Sales:


 The Gross Revenue for the year amounted to Rs. 539.507 Millions as against Rs.492.927 Millions for the previous year, showing increase of 9.45%. The turnover in terms of quantity was 876 MTs as against 774 MTs in the previous year showing an increase of 13.18% in the year.

  
 In spite of increase in Sales, profitability has been lower on account of higher manufacturing expenses, interest and depreciation which have cumulatively offset savings in raw material cost. Sharp rise in aforesaid cost has been primarily due to substantial expenditure incurred by the company for securing USFDA and European GMP approvals for Chincholi, Solapur Plant.

 
 Directors are pleased to inform you that Company's Plant at MIDC Chincholi, Solapur has been awarded recognition by US FDA authorities and GMP by European authorities. These approvals being important milestones in the history of the Company shall greatly help to cater to the highly regulated and developed markets like USA, Europe and Japan. 

 
Exports:

  
 
 Exports for the year ended on 31st March 2007 stood at 247.892 Millions as compared to Rs. 194.598 Millions for the year ended on 31st March 2006. The Company has registered healthy growth of 27.39% in Exports compared to the previous year. 

 

MANAGEMENT DISCUSSION AND ANALYSIS: 

 
 Business of the Company an overview: 


 The Company is mainly engaged in the manufacture of Bulk Drugs, Drug Intermediates, Photography Developing Chemicals, Specialities Chemicals with manufacturing facilities at Chincholi MIDC, Solapur and Akkalkot Road MIDC, Solapur. 

 The Company reached to highest quality standards by obtaining USFDA & cGMP-WHO certificates during the year. This is most important achievement and is the success of several years continuous efforts of the staff and workers. 

 
 Now, the Company is focusing maintally in developing business for Regulatory Market like U.S.A., Europe, Japan etc. 

 
 Future Plans: 

 
 The business strategy has been that of long term contract manufacturing, which involves optimal use of resources, planned investments, lower risk and certain returns over a long term. However, currently they are pursuing a three pronged strategy for the future growth: 

 
 1. Contract manufacturing for innovator pharma companies

2. Growth through development or acquisition of intellectual property

3. Vertical integration into finished dosage forms 

 
 Over the years, they have moved from generic companies to global pharmaceutical companies in the area of contract manufacturing. They are working with innovator companies for manufacturing their proprietary molecules using the facilities. This involves technology transfer, protection of intellectual property and regulatory support under confidentiality agreements. Such engagements further reduce the risk as the innovator company has an established market for the product. The quanta of business are huge compared to a similar project with a generic house catapulting the revenues and profits. 

 
 The second arena of growth they target through generation of the own intellectual property. This route of business has more risk exposure but can be highly rewarding. Several products that will be off patent in the coming years will still be out of reach of generic manufacturers due to process patent issues. The expertise in process development and expansion of the R&D activities will boost the presence in this market, which was previously dominated by multinationals and big pharma companies.

 
 Eventually, they would like to have the own formulation marketing. Building brands and establishing a marketing network will be one of the primary goals. They do not intend to invest on manufacturing at this moment of time. They want to use the funds effectively in marketing and not manufacturing for both operational as well as financial viability reasons. This way they can spend more on marketing and development of a distribution network. 

 
 They hope these areas will spread the risks substantially and give us good returns eventually. They cannot put all the eggs in one basket. They see that the value of the whole is much more than the sum of its parts. 

 
 Opportunities and Threats & Risks and Concerns: 

 
 With qualification of USFDA & cGMP-WHO certificates the Company has got great advantage of fast growth in Regulatory Market, where the margins are higher. Once the Company engage in Regulatory business, there will not be any kind of threat or risk from competitors. The major risk Company is facing the devaluation of Dollar with the result the export margins are reduced. If the same trend continues there will be a great threat to the Company on its profits generated out of exports. 

 

NOTES TO ACCOUNTS:

 

(A)    The Company has drawn Foreign L/c Rs. 151.200 Millions towards import of raw materials to various parties and outstanding of L/c. at closing day is Rs. 81.100 Millions (Previous Year Rs. 82.000 Millions)

(B)    The Bank Guarantees of Rs. 2.000 Millions are issued to various Government Authorities. (Previous Year Rs. 0.890 Million)

The State Bank of India, Industrial Finance Branch, Mumbai has sanctioned Foreign Currency Demand Loan of US$ 3506000 value in INR Rs. 153.500 Millions

(C)    The accounts of certain sundry debtors, sundry creditors, advances are subject to confirmation / reconciliation and adjustments if any. The management does not expect any material difference affecting the current year’s financial statements.

 

Fixed Assets:

 

 

AS PER WEBSITE

 

Profile:

 

The core competency is multi-step organic synthesis and large scale manufacturing of organic molecules. The focus has always been API for the regulated markets. They have been part of successful contract manufacturing and custom synthesis agreements with leading European, American and Japanese customers. They are currently expanding the R&D to become a one-stop solution provider from concept to execution for all API including, but not restricted to, the following:

 

  1. Process Development
  2. Process Optimization
  3. Process Validation
  4. Analytical Methods Validation
  5. Regulatory Support and DMF Registrations
  6. Commercial Manufacturing

 

 

The constant endeavor to improve operations and systems has contributed to the growth. The quality systems and facilities are approved by USFDA, EU – GMP and ISO 9001:2000.
They encourage operational transparency with customers, which complements to confidence building for stronger relationships. Customer satisfaction is the highest priority and they constantly strive on optimizing delivery times of all the services

 

Business Development

 

Contract Research and Manufacturing Services (CRAMS):


Smruthi can manage a potential molecule's entire development life cycle up to commercialization through rigorous planning and proper execution. Smruthi can independently or in conjunction with the customer develop optimized synthesis process, perform scale-up and process validations, compile DMF and provide the customer with regulatory support for finished formulation dossier registration. The engagement can be either on an FTE or deliverables basis. They respect absolute confidentiality in such sensitive relationships enhancing smooth exchange of information.

 

Contract Research:


Although a subset of the CRAMS model, contract research for synthesis process development has been very rewarding engagement for Smruthi and the customers. Just like the CRAMS model, it could be on FTE or deliverables basis.

 

Contract Manufacturing:


Again as a subset of the CRAMS model, Smruthi's strength in large volume manufacturing has enabled us to become a strong player in the contract manufacturing space. Smruthi's low cost manufacturing capability, marketing authorizations in regulated markets and strong regulatory support, make us an ideal partner for the contract manufacturing requirement.

 

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.42.30

UK Pound

1

Rs.84.03

Euro

1

Rs.66.42

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

4

OPERATING SCALE

1~10

4

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

5

--PROFITABILIRY

1~10

4

--LIQUIDITY

1~10

6

--LEVERAGE

1~10

5

--RESERVES

1~10

5

--CREDIT LINES

1~10

5

--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

 

43

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

 

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