MIRA
INFORM REPORT
|
Report Date : |
19.06.2008 |
IDENTIFICATION
DETAILS
|
Name : |
ELGITREAD (INDIA)
LIMITED |
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Formerly
Known as : |
ELGI TYRES AND TREADS |
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Registered Office : |
2000, Trichy
Road, Singanallur, Coimbatore – 641005, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
13.05.1981 |
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Com. Reg. No.: |
18-10010 |
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CIN No.: [Company
Identification No.] |
L02511TZ1981PLC010010 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CMBE03058G |
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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 Retreading Raw Materials, Retreading Machinery, Precure Tyre
Treads, Cold Curing Cushion, Cold Curing Cement and Cold Curing Envelopes. |
RATING &
COMMENTS
|
MIRA’s Rating : |
A |
|
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 7500000 |
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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 of Elgi Group, a well-established and reputed industrial
house of Coimbatore. Available
information indicates high financial responsibility of the company. Financial position is good. Payments are always correct and as per
commitments. The company can
be considered good for normal business dealings at usual trade terms and
conditions. It can be
regarded as a promising business partner in a medium to long-run. |
LOCATIONS
|
Registered Office / Head Office : |
2000, Trichy
Road, Singanallur, Coimbatore – 641005, Tamilnadu, India |
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Tel. No.: |
91-422-2319909 /
4321000 |
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Fax No.: |
91-422-2574178 |
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E-Mail : |
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Website : |
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Administrative
Office : |
Elgi House, 1789,
Trichy Road, Coimbatore - 641 045, Tamilnadu, India |
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Tel. No.: |
91-422-319909 |
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Fax No.: |
91-422-574178 |
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E-Mail : |
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Plants : |
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Branches : |
“Surya”, 35, May Flower Avenue Behind Senthil Nagar, Sowripalayam, Coimbatore
– 641028, Tamilnadu, India |
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Tel. No.: |
91-422-2314792 / 2316755 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. L. G. Varadarajulu |
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Designation : |
Chairman |
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Qualification : |
Diploma in Automobile Engineering |
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Name : |
Mr. Sudarsan Varadaraj |
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Designation : |
Managing Director |
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Date of Birth/Age : |
48 Years |
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Qualification : |
B.E. (Hons.), M.S. (M.E.) |
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Date of Appointment : |
12.03.1988 |
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Previous
Employment : |
LSA Engineers Inc, Houston, USA |
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Name : |
Mr. M. John Edward |
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Designation : |
Director ( Sales and Marketing) |
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Name : |
Mr. T. Ashok Anand |
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Designation : |
Director (Manufacturing) |
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Name : |
Mr. C. Thiagarajan |
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Designation : |
Director |
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Name : |
Mr. Jairam Varadaraj |
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Designation : |
Director |
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Name : |
Mr. K. Jayaraman |
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Designation : |
Director |
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Name : |
Mr. Suresh Jagannathan |
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Designation : |
Director |
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Name : |
Mr. M. D. Selvaraj |
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Designation : |
Director |
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Name : |
Mr. Vijay Raghunath |
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Designation : |
Director |
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Name : |
Mr. C. N. Srivatsan |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. L. G.
Varadarajulu |
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Designation : |
Chairman |
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Name : |
Mr. Sudrasan
Varadaraj |
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Designation : |
President |
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Name : |
Mr. T. Ashok
Anand |
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Designation : |
Director
(Manufacturing) |
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Name : |
Mr. S. R.
Venkatachalam |
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Designation : |
Chief Finance
Officer |
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Name : |
Mr. V. M. Vennila
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Designation : |
Company Secretary
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SHAREHOLDING
PATTERN
|
Names of Shareholders (As on 31.03.2007 ) :- |
No. of Shares |
Percentage of
Holding |
|
Directors and
their relatives |
9543654 |
22.32 |
|
Domestic
Companies |
12149526 |
28.43 |
|
Non Domestic
Companies |
1964116 |
4.59 |
|
Mutual Funds |
4450 |
0.01 |
|
Commercial Banks |
5750 |
0.01 |
|
Non Resident
Indians |
182364 |
0.43 |
|
Public Financial
Institutions |
569390 |
1.33 |
|
Resident
Individuals |
18330750 |
42.88 |
|
Total |
42750000 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing and
Marketing of Retreading Raw Materials, Retreading Machinery, Precure Tyre
Treads, Cold Curing Cushion, Cold Curing Cement and Cold Curing Envelopes. |
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Products : |
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Exports : |
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Countries : |
Australia,
Bahrain, Bangladesh, Brazil, Jordan, Kenya, Madagascar, Mauritius, Myanmar, Oman,
Qatar, Sri Lanka, Tanzania, Turkey and UAE |
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Imports : |
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Countries : |
Australia,
Austria, Belgium, Brazil, China, France, Hong Kong, Indonesia, Japan, South
Africa, Singapore, Switzerland, Thailand, The Netherlands, UK and USA |
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Terms : |
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Purchasing : |
L/C terms, D/A or
D/P terms |
PRODUCTION STATUS (As on 31.03.2007) :-
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
Retreading Raw
Material |
MT |
18000 |
15000 |
10772 |
|
Retreading
Machinery |
Nos |
--- |
--- |
14 |
GENERAL
INFORMATION
|
Customers : |
·
Elgi Rubber
Products Limited ·
Elgitreade
(Kenya) Limited ·
Elgitreade
(Mauritius) Limited ·
Elgitread
Lanka (Private) Limited ·
Elgitread
(Tanzania) Limited ·
Elgitread (Bangladesh)
Limited ·
Elgitread Do
Brasil Industria E Comercio De Artefatos De Borracha Limited ·
Elgitread
(USA) LLC ·
Rayalaseema
Technologies Limited ·
LRG
Technologies Limited ·
Sri
Sarasvana Industries ·
Royal
Industries ·
The Standard
Chemical Company Private Limited |
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No. of Employees : |
450 |
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Bankers : |
· State Bank of India, Commercial Branch, Coimbatore, Tamilnadu, India |
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Auditors : |
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Name : |
Reddy Goud & Janardhan Chartered Accountants Bangalore, Karnataka,
India. External Internal Auditors Delloitte Haskins
and Sells Chartered
Accountants Coimbatore,
Tamilnadu , India |
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Collaboration : |
Oliver Rubber
Company, USA. |
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Memberships
: |
Confederation of
Indian Industry |
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Associates : |
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Subsidiaries : |
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CAPITAL STRUCTURE
(As on 31.03.2007)
:-
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
135300000 |
Equity Shares |
Rs. 1/- |
Rs. 135.300 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
42750000 |
Equity Shares |
Rs. 1/- |
Rs. 42.750 millions |
Notes:-
(Of the above 23750000 Equity Shares were
alloted as fully paid up bonus shares by way of capitalisation of general
reserve).
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
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SHAREHOLDERS
FUNDS |
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|
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|
1] Share Capital |
42.751 |
42.750 |
42.750 |
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2] Share Application
Money |
0.000 |
1389.948 |
0.000 |
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3] Reserves &
Surplus |
1456.069 |
0.000 |
1307.627 |
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4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
|
NETWORTH
|
1498.820 |
1432.698 |
1350.377 |
|
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LOAN FUNDS |
|
|
|
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|
1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured
Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING
|
0.000 |
0.000 |
0.000 |
|
|
DEFERRED TAX
LIABILITIES |
13.739 |
0.000 |
29.681 |
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TOTAL
|
1512.559 |
1432.698 |
1380.058 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
381.056 |
350.504 |
310.259 |
|
Capital work-in-progress
|
0.000 |
300.941 |
0.000 |
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INVESTMENT
|
263.858 |
1.261 |
403.904 |
|
DEFERREX TAX ASSETS
|
0.000 |
0.000 |
21.729 |
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CURRENT ASSETS, LOANS &
ADVANCES
|
|
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|
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Inventories
|
328.904
|
383.184
|
233.050
|
|
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Sundry Debtors
|
316.394
|
241.967
|
208.375
|
|
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Cash & Bank Balances
|
201.252
|
133.244
|
203.773
|
|
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Other Current Assets
|
5.536
|
7.366
|
11.331
|
|
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Loans & Advances
|
280.389
|
299.635
|
246.205
|
Total Current Assets
|
1132.475
|
1065.396
|
902.734
|
|
Less :
CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
132.689
|
127.258
|
131.601
|
|
|
Provisions
|
132.141
|
158.146
|
126.967
|
Total Current Liabilities
|
264.830
|
285.404
|
258.568
|
|
Net Current Assets
|
867.645
|
779.992
|
644.166
|
|
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|
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|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
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|
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TOTAL
|
1512.559 |
1432.698 |
1380.058 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
1418.784 |
1200.113 |
1168.915 |
|
|
Other Income |
47.149 |
69.627 |
109.681 |
|
|
Total Income |
1465.933 |
1269.740 |
1278.596 |
|
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|
|
|
|
|
|
Profit/(Loss) Before Tax |
127.087 |
134.019 |
207.344 |
|
|
Provision for Taxation |
40.755 |
29.294 |
72.196 |
|
|
Profit/(Loss) After Tax |
86.332 |
104.725 |
135.148 |
|
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Earnings in Foreign Currency : |
|
|
|
|
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|
Export Earnings |
497.420 |
425.319 |
219.061 |
|
|
Dividend |
3.378 |
6.587 |
2.583 |
|
|
Other Earnings |
24.270 |
27.792 |
10.422 |
|
Total Earnings |
525.068 |
459.698 |
232.066 |
|
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Imports : |
|
|
|
|
|
|
Raw Materials |
168.726 |
72.970 |
31.854 |
|
|
Stores & Spares |
7.965 |
1.453 |
1.066 |
|
|
Capital Goods |
0.000 |
6.222 |
9.468 |
|
Total Imports |
176.691 |
80.645 |
42.388 |
|
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Expenditures : |
|
|
|
|
|
|
Raw Material Consumed |
1297.429 |
1090.217 |
1030.360 |
|
|
Depreciation & Amortization |
41.417 |
45.504 |
40.891 |
|
Total Expenditure |
1338.846 |
1135.721 |
1071.251 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
31.03.2008 |
|
Type
|
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
|
Sales Turnover |
312.200
|
378.600
|
361.000
|
131.700
|
|
Other Income |
4.300
|
3.100
|
9.900
|
6.300
|
|
Total Income |
316.500
|
381.700
|
370.900
|
138.000
|
|
Total Expenditure |
283.600
|
341.000
|
333.200
|
110.600
|
|
Operating Profit |
32.900
|
40.700
|
37.700
|
27.400
|
|
Interest |
0.400
|
0.300
|
0.300
|
0.300
|
|
Gross Profit |
32.500
|
40.400
|
37.400
|
27.100
|
|
Depreciation |
14.300
|
14.000
|
14.000
|
7.200
|
|
Tax |
6.500
|
7.800
|
7.200
|
16.100
|
|
Reported PAT |
11.600
|
18.600
|
16.200
|
28.900
|
KEY RATIOS
|
Year |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current Ratio |
3.72 |
3.40 |
3.14 |
|
TURNOVER RATIOS |
|||
|
Fixed Assets |
2.00 |
1.81 |
2.05 |
|
Inventory |
4.35 |
4.31 |
5.49 |
|
Debtors |
5.57 |
5.92 |
6.49 |
|
Interest Cover Ratio |
198.60 |
144.14 |
343.50 |
|
Operating Profit Margin(%) |
9.04 |
10.98 |
13.74 |
|
Profit Before Interest And Tax Margin(%) |
6.38 |
7.57 |
10.59 |
|
Cash Profit Margin(%) |
6.96 |
9.46 |
10.03 |
|
Adjusted Net Profit Margin(%) |
4.30 |
6.05 |
6.87 |
|
Return On Capital Employed(%) |
6.77 |
7.25 |
10.59 |
|
Return On Net Worth(%) |
4.56 |
5.79 |
6.87 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject was started in 1984, and was formerly Elgi Tyres and
Treads, was promoted by the Elgi group of Coimbatore in technical and financial
collaboration with Oliver Rubber Company, US. The company has factories at
Palghat, Pondicherry, Coimbatore and Hindupur.
The company manufactures pre-cured tyre treads, tyre inspection spreaders and
retreading systems which are widely used in trucks, buses and light commercial
vehicles. The company has diversified into the related areas of retreading
aircraft and tractor tyres.
The company acquired the know-how of the cold retreading process, acclaimed as
the greatest revolution in tyre retreading technology, from Oliver Rubber
Company of Oakland, US, the largest manufacturer of tyre retreads in the world.
The EIL-procured retreading system is being marketed in India through a network
of franchisees, appointed in potential areas. Every franchisee retreads tyres
on a licensed production arrangement with EIL to cater to the demands
area-wise. Subject provides a single source retread manufacturing package to
its franchisees.
Subject is planning to establish operations in Nepal and Bangladesh. In order
to rationalise the operating costs and to bring in better focus in operations,
it is planning to combine all overseas operations into a wholly owned
subsidiary.
In 2000-2001, the Company offered a Voluntary Retirement Scheme at Hindpur
Factory and the total cost was Rs.8.45 million. The company is not having any
plans to diversify into other business and to focus more on core competency
area.
Review
of operations and future outlook:
The Company closed the financial year with a turnover of Rs 1.56 billion as against 1.33 billion during the previous year. Other income amounted to Rs.47.15 million, compared to Rs.69.02 million last year. Cash profit was Rs.165.80 million as against Rs.179.10 million. Segment wise, exports increased by 22.10% while sales to franchisees and State transport undertaking registered negative growths. The electric power generated through the wind mills was 4.50 million units compared to 3.77 million units during the previous year During the year 1.5 MW wind turbine was installed near Coimbatore. The company continues to be debt free.
VAT was introduced in Tamilnadu and Pondicherry on 1st January 2007 and 1st
July 2007. With this all the manufacturing units are covered by VAT. The full
benefit on account of this will be seen during the financial year 2007-8.
The erratic implementation of Service Tax and the confusion prevailing among
the enforcing authorities is a hindrance to the growth of manufacturers in the
organized sector. Unless a level playing field is created, the organized sector
will continues to suffer due to unhealthy competition from the unorganized
sector.
The completion of the Golden Quadrilateral and Highway Corridor system will result
in rapid radialization. Another very encouraging factor is the growth in
radialization in the Bus segment, from 2% to 4%. The Company works very closely
with radial tyre manufacturers in promoting the retreading of radial tyres. The
tyre manufacturers see the extensive and well trained franchisee network as a
strong launch platform for their tyres.
Risks and Concerns
The primary concern in the industry is the high volatility
in raw material prices and the inability to pass on cost increases coupled with
unhealthy competition by manufacturers in the unorganized sector. Currently,
over 39% of sales, in quantitative terms, is from exports. The strong
appreciation of the Indian Rupee is also a major cause for concern.
As a part of overall risk management strategy, all assets are appropriately
insured. Foreign exchange fluctuation risk is minimized through proper
hedging.
Internal Control
Systems
Internal Audit is being done every quarter by an independent firm of Chartered Accountants and observations are reported to the management.
Immediate steps are taken to rectify any discrepancies. All significant audit observations were discussed in the audit committee meetings.
Subsidiaries:
The company has made an investment of Rs. 8.77 Million in Elgitread Do Brasil
Industria E Commercio De Artefatos De Borracha Limiteda towards capital for
expansion of operations.
As Per Website :-
Subject are
committed to understanding the needs as a retreader and providing the appropriate
solution through a comprehensive range of services.
Very
few companies in the industry offer such a complete range of services in
retreading. This concept has made us one of the largest suppliers of retreading
materials worldwide, having supplied over 600 retreading plants in 35
countries. Their manufacturing facilities include 8 plants in 6 countries
to manufacture over 25 million kilograms of retreading material and a very
modern facility to manufacture retreading equipment. These are backed by a
state-of-the-art training facility and laboratories for research and testing of
metals and polymers.
About Retreading
· For most fleets, tyres represent either the second or the third largest item in their operating budget, right after labor and fuel costs.
· The lowest possible cost-per-mile is achieved with a good tyre management program that includes the use of quality retreads.
· Retreads are the replacement tyre of choice for most truckers.
· Retreads are not only cost effective, but they are also dependable, reliable and safe. Retreads are used by truckers with scheduled delivery times, small package delivery companies with guaranteed delivery times, on commercial and military jets and by most school bus operators.
· Retreads are also environmentally friendly. tyres are basically petro-chemical products. It takes almost 100 ltrs. of oil to manufacture one new truck tyre. Most of the oil is found in the casing, which is reused in the retreading process. As a result, it takes only 30 ltrs. of oil to produce a retread.
· Retreaders, like trucking companies, have experienced considerable consolidation. Today, the most successful retreaders are those with the highest quality products, delivering the best possible return on investment to the fleets. Because of the competitive nature of the retreading industry, truckers can expect to see continuous improvement in quality, durability and reliability, as the major retread suppliers annually invest millions of dollars in research and development.
Product
The company
has joint venture with the following :
·
Elgitread (Kenya)
Limited, Kenya
·
Elgitread
(Mauritius) Limited, Mauritius
·
Elgitread
(Tanzania) Limited, Thailand
·
Elgitread
Lanka (Private) Limited, Sri Lanka
FIXED ASSETS :-
- Land
- Building
- Plant and
Machinery
- Furniture and
Fixture
- Vehicles
- Intangible
Assets
OTHER INFORMATION:-
|
Contingent
Liabilities Not Provided For |
31.03.2007
(Rs.
In millions) |
|
Excise duty |
0.088 |
|
Sales tax |
0.961 |
|
Provident Fund |
0.085 |
|
Income tax |
--- |
OTHER DETAILS:-
Secured loan (State Bank of India) :-
i. Cash Credit and Bills Discounting
Secured
by the hypothecation of raw materials, semi-finished products, components,
finished goods, book debts, other current assets and by creation of equitable
mortgage by way of deposit of title deeds of immovable properties located at
Palakkad, Pondicherry and Kurichi and secured by charge on fixed assets.
ii. Packing Credit
Secured by lien on goods meant for export and collaterally
secured by securities offered for Cash Credit Account
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 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.42.90 |
|
UK Pound |
1 |
Rs.83.74 |
|
Euro |
1 |
Rs.66.46 |
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 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
70 |
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 |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|