MIRA
INFORM REPORT
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Report Date : |
19.06.2008 |
IDENTIFICATION
DETAILS
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Name : |
LANCO INDUSTRIES LIMITED |
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Registered Office : |
Rachgunneri Village, Srikalahasthi Mandal, Chittoor District, Andhra Pradesh |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
01.11.1991 |
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Com. Reg. No.: |
13391 |
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CIN No.: [Company
Identification No.] |
L74999AP1991PLC013391 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDL00513C |
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PAN No.: [Permanent
Account No.] |
AAACL4108M |
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Legal Form : |
Public Limited Liability Company. Company's Shares are Listed on the
Stocks Exchange |
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Line of Business : |
Manufacturer and Exporters of DI Spun Pipe, Flange Pipes, Foundry
Grade Pig Iron, Portland Slag Cement, Ordinary Portland Cement |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 4500000 |
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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 and reputed company meeting its normal
commitments timeously. Trade relations are fair. Business is active. The company can be considered good for normal business dealings. |
LOCATIONS
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Registered Office/ Factory : |
Rachgunneri Village, Srikalahasthi Mandal, Chittoor District, Andhra
Pradesh, India |
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Tel. No.: |
91-8578-287650-55 |
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Fax No.: |
91-8578-287657 |
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E-Mail : |
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Website : |
DIRECTORS
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Name : |
Mr. Pradip Kumar Khaitan |
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Designation : |
Chairman cum Director |
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Name : |
Mr. Uddhav Kejriwal |
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Designation : |
Director |
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Name : |
Mr. Sanjiv Churiwal |
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Designation : |
Director |
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Name : |
Mr. G. Maruthi Rao |
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Designation : |
Director |
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Name : |
Mr. L. Madhusudhan Rao |
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Designation : |
Director |
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Name : |
Mr. G. Bhaskara Rao |
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Designation : |
Director |
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Name : |
Mr. L. Sridhar |
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Designation : |
Director |
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Name : |
Mr. Suresh Chukkapalli |
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Designation : |
Director |
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Name : |
Mrs. Vatsala Krishnakumar |
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Designation : |
Director (Nominee of IDBI) |
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Name : |
Mr. M. Balarama Krishaiah |
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Designation : |
Director (Nominee of APIDC) |
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Name : |
Mr. Mayank Kejriwal |
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Designation : |
Managing Director |
KEY EXECUTIVES
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Name : |
Mr. Shirish Kurane |
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Designation : |
Chief Operating Officer |
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Name : |
Mr. G. D. Saini |
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Designation : |
Senior General Manager – Finance and Company Secretary |
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Name : |
Khaitan and Company |
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Designation : |
Solicitors |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.03.2007
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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PROMOTER’S
HOLDING |
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Promoters |
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a) Indian Promoters |
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I.
Electrical Casting Limited |
19301270 |
48.54 |
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II.
Others |
498669 |
1.25 |
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NON – PROMOTERS
HOLDING |
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Institutional
Investors |
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a) Mutual Funds and UTI |
17400 |
0.04 |
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b) Banks, Financial Institutions, Insurance Companies (Central/ State
Government Institutions/Non Government Institutions) |
394425 |
0.99 |
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c) FIIs |
30050 |
0.08 |
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Others |
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a) Private Limited Liability Company Corporate Bodies |
1477138 |
3.72 |
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b) Indian Public |
13239089 |
33.29 |
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c) NRIs/ OCBs |
4784357 |
12.04 |
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d) Any other (Clearing Mambers) |
21197 |
0.05 |
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Grand Total |
39763595 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer and Exporters of DI Spun Pipe, Flange Pipes, Foundry
Grade Pig Iron, Portland Slag Cement, Ordinary Portland Cement |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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D. I. Spun Pipes |
MT |
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120000 |
98292 |
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Pig Iron |
MT |
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150000 |
138958 |
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Cement |
Mt |
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90000 |
61624 |
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Coke |
Mt |
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150000 |
17.865 |
GENERAL
INFORMATION
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Bankers : |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
M/S K. R. Bapuji and Company Chartered Accountant |
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Address : |
Hyderabad |
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Associates/Subsidiaries : |
M/S Electrosteel Casting Limited |
CAPITAL STRUCTURE
As on 31.03.2007
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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53000000 |
Equity Shares |
Rs. 10/- each |
Rs. 530.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
39763595 |
Equity Shares (Including 26785500 Equity Shares allotted
as fully paid up pursuant to the Scheme of Amalgamation without payment being
received in cash.) |
Rs. 100/-
each |
Rs. 397.636
Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
|
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
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397.636 |
397.636 |
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2] Share Application Money |
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0.000 |
0.000 |
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3] Reserves & Surplus |
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510.864 |
399.306 |
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4] (Accumulated Losses) |
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0.000 |
0.000 |
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NETWORTH |
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908.500 |
796.942 |
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LOAN FUNDS |
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1] Secured Loans |
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1638.292 |
924.481 |
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2] Unsecured Loans |
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1373.365 |
1506.911 |
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TOTAL BORROWING |
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3011.657 |
2431.392 |
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DEFERRED TAX LIABILITIES |
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118.479 |
61.806 |
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TOTAL |
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4038.636 |
3290.140 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
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2415.808 |
1852.570 |
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Capital work-in-progress |
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75.445 |
560.402 |
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INVESTMENT |
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0.000 |
0.000 |
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DEFERREX TAX ASSETS |
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0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
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1063.686 |
919.408 |
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Sundry Debtors |
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766.792 |
670.659 |
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Cash & Bank Balances |
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265.037 |
35.067 |
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Other Current Assets |
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0.000 |
0.000 |
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Loans & Advances |
|
524.168 |
207.042 |
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Total
Current Assets |
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2619.683 |
1832.176 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
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1018.834 |
920.211 |
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Provisions |
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53.825 |
35.442 |
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Total
Current Liabilities |
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1072.659 |
955.653 |
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Net Current Assets |
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1547.024 |
876.523 |
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MISCELLANEOUS EXPENSES |
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0.359 |
0.645 |
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TOTAL |
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4038.636 |
3290.140 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
|
31.03.2007 |
31.03.2006 |
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Sales Turnover |
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3693.665 |
3029.560 |
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Other Income |
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3.359 |
7.770 |
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Total Income |
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3697.024 |
3037.330 |
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Profit/(Loss) Before Tax |
|
216.474 |
62.684 |
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Provision for Taxation |
|
58.394 |
21.182 |
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Profit/(Loss) After Tax |
|
158.080 |
41.502 |
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Imports : |
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Raw Materials |
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949.765 |
741.175 |
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Stores & Spares |
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29.806 |
142.770 |
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Capital Goods |
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0.000 |
2.005 |
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Total Imports |
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979.571 |
885.950 |
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Expenditures : |
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Cost of Goods Sold |
|
64.445 |
27.609 |
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Manufacturing Expenses |
|
862.904 |
647.997 |
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Salaries, Wages and Other Allowances |
|
144.985 |
125.433 |
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Raw Material Consumed |
|
1923.245 |
1826.494 |
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Interest and Financial Charges |
|
183.236 |
129.723 |
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Depreciation & Amortization |
|
115.686 |
109.360 |
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Increase or Decrease in Stocks |
|
[47.121} |
[74.146] |
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Other Expenditure |
|
233.170 |
182.176 |
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Total Expenditure |
|
3480.550 |
2974.646 |
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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 |
1005.100 |
959.400 |
1302.900 |
1369.200 |
|
Other Income |
1.100 |
0.700 |
0.900 |
6.600 |
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Total Income |
1006.200 |
960.100 |
1303.800 |
1375.800 |
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Total Expenditure |
881.100 |
806.300 |
1043.900 |
1132.800 |
|
Operating Profit |
125.100 |
153.800 |
259.900 |
243.000 |
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Interest |
18.600 |
46.800 |
98.200 |
66.600 |
|
Gross Profit |
106.500 |
107.000 |
161.700 |
176.400 |
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Depreciation |
35.800 |
36.400 |
39.000 |
40.100 |
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Tax |
0.400 |
24.400 |
0.400 |
0.800 |
|
Reported PAT |
46.500 |
46.200 |
80.600 |
85.900 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
|
3.19 |
2.84 |
|
Long Term Debt-Equity Ratio |
|
1.71 |
1.28 |
|
Current Ratio |
|
0.94 |
0.80 |
|
TURNOVER RATIOS |
|
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Fixed Assets |
|
1.44 |
1.49 |
|
Inventory |
|
4.14 |
4.13 |
|
Debtors |
|
5.71 |
4.83 |
|
Interest Cover Ratio |
|
2.07 |
1.48 |
|
Operating Profit Margin(%) |
|
13.04 |
9.04 |
|
Profit Before Interest And Tax Margin(%) |
|
10.22 |
5.78 |
|
Cash Profit Margin(%) |
|
6.67 |
4.49 |
|
Adjusted Net Profit Margin(%) |
|
3.85 |
1.24 |
|
Return On Capital Employed(%) |
|
11.74 |
6.41 |
|
Return On Net Worth(%) |
|
18.54 |
5.27 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject formerly Lanco Ferro] is into manufacture of pig iron through
mini blast furnace route. The company incorporated on Nov.1, 1991 was promoted by
L Rajagopal, L Madhusudan Rao and others. Subsequently AFIC and APIDC
contributed towards the equity. But currently(as on Nov 24, 2003) Electrosteel
Castings and its associate companies holds around 51.89% in the company.
The company has an installed capacity to produce 90000 tones of pig iron
per annum. Further it also generates captive power from the waste heat of blast
furnaces. Pig iron is a very essential basic raw material for the manufacture
of grey iron castings and cast iron spun pipes. It is also used by the
integrated plants for the manufacture of steel. Iron castings are used in the
automobile industry, agricultural equipment, and in the engineering
industry.
Tata Korf Engineering Services provides technical know-how and
consultancy services for the mini blast furnace unit. For the power plant, the
company has Fichtner Consulting Engineers as its consultants and Ercom
Consultancy Engineers for its cement plant.
During April 2004,Lanco Kalahasti Castings Limited has been amalgamated
with the company.
REVIEW OF
OPERATIONS:
The Mini Blast Furnace (MBF) producing liquid metal mainly for Ductile
Iron Pipe Plant, had undergone a shutdown for a period of 24 days to repair a
portion of refractory lining in the first quarter of the year. Despite, the
production of MBF for the year was 1,38,956 MT compared with 1,11,454 MT in the
previous year, an increase of 25%.
Production of DI Pipes was also higher by 28% at 98,292 MT compared with
76,655 MT in the preceding year. The expansion of Ductile Iron Pipe Plant
increasing its capacity from 90,000 TPA to 1,20,000 TPA has been implemented.
In view of the higher volumes, the net sales of the Company increased by 22% at
Rs. 3693.665 Millions as against Rs. 3029.560 Millions in the previous year.
Power generation from the newly setup Power Plant making use of waste gas
of Coke Oven Plant commenced on 27th March, 2007.
During the year, the Company arranged long-term funds of Rs. 1100.000
Millions comprising of 9.75% Secured Redeemable Non-Convertible Debentures of
Rs 500.000 Millions and term loan of Rs. 600.000 Millions. The proceeds are
being utilized towards capital expenditure, refinancing and augmentation of
long-term funds for working capital.
CURRENT YEAR'S PROSPECTS:
With the increase in capacity of Ductile Iron Pipe Plant, the production
of DI Pipes in the current year is expected to be around 1,08,000 TPA.
Production of Liquid Metal / Pig Iron from the MBF is also expected to be
higher at 1,50,000 TPA. The benefit of the Power Plant commissioned during last
week of March, 2007 will also be available in the current year.
MANAGEMENT
DISCUSSION and ANALYSIS
BACK
GROUND:
Lanco Industries Limited (LIL) was promoted by Lanco Group in 1992 in
Chittoor District, A.P. LIL setup a Mini Blast Furnace (MBF) in 1994 with a
capacity of 90,000 TPA to manufacture and sell Pig Iron to the customers and
foundry units across India.
In 1998, LIL entered into an arrangement to supply Molten Iron and Pig
Iron to Lanco Kalahasthi Castings Limited (LKCL) a company within the same
campus engaged in the business of Iron Castings and Forging. LKCL later on
added high technology Ductile Iron Pipes (DIP) manufacturing facilities to its
portfolio.
In March 2002, India's leading DI Pipe manufacturer, Electrosteel
Castings Limited (ECL) entered into a strategic alliance with LIL and LKCL by
acquiring 46.43 and 48.89 percent stake in the companies respectively. In
addition to technological support, ECL also infused fresh funds into LIL by way
of equity participation and re-modeled the financial structure, thus reducing
interest costs.
In 2003 the capacity of MBF was increased from 90,000 TPA to 1,50,000 TPA
and the capacity of DI Pipes was increased from 60,000 TPA to 90,000 TPA at
capital outlay of approx. Rs.350.000 Millions.
In 2003 LKCL got merged with LIL (with effect from 1st April, 2003) to
take advantage of the close synergy in the business model of the two companies,
since a large part of Pig Iron in liquid form is consumed by LKCL for
manufacture of Pipes.
In 2004, a major backward integration project comprising of 1,50,000 TPA
Coke Oven Plant and 12 MW Waste Heat Recovery Based Co-Generating Captive Power
Plant at capital outlay of Rs880.000 Millions was started.
In 2005, 1,50,000 TPA Coke Oven Plant was commissioned and commercial
production was stabilized. The coke being produced is at par with international
quality of LAM coke.
In 2006, the capacity of DI Pipes was further increased from 90,000 TPA to
1,20,000 TPA. In 2007, the 12 MW Waste Heat Recovery Based Co-Generating
Captive Power Plant was commissioned and the plant started generating power
from March, 2007.
VALUE ADDITION:
LIL has a large value addition chain starting from iron ore to DI Pipes.
Setting up of its own Coke Oven Plant along with 12 MW Waste Heat Recovery
Based Co-generating Captive Power Plant has further strengthened the value
chain.
INDUSTRY
STRUCTURE:
DI Pipes are generally preferred for water supply, sewerage and
transmission applications. Superiority of DI Pipes lies in its ability to
provide trouble free service against increasing traffic load and much longer
life compared to other types of Pipes.
Considering the growing urbanization in the country and shortage of
adequate water infrastructure, which is a priority for the country, the demand
scenario for DI Pipes is positive. The Union Government in its Finance Budget -
2007 has given special emphasis on providing pure drinking water to households
and communities in the country and has extended exemption from excise duty on
certain water purification devices and pipes of dia meter exceeding 200 mm used
in water supply systems.
Operations
The production of DI Pipes increased to 98,292 MT in 2006-07 compared to
76,655 MT in the previous year, an increase of 28%. The production of pig iron
/ molten metal from MBF was also higher at 1,38,958 MT during 2006-07 as
against 1,11,454 MT in 2005-06.
OUTLOOK:
The Company is continuously moving forward to achieve operational
excellence and value addition for the stakeholders through operational synergy,
higher capacity utilization, backward integration, cost reduction and continual
improvement in shop floor operations. Backward integration by setting up Coke Oven
Plant and Captive Power Plant has further strengthened the value addition chain
of the Company. The growth in demand for DI Pipes offers positive outlook for
the Company in the coming years.
The expansion of Ductile Iron Pipe plant increasing its capacity from
90,000 TPA to 1,20,000 TPA has been implemented during the year 2006-07
RISK
MITIGATION:
The Company is committed to the conservation of environment and has
invested and is in the process of investing further in Pollution Control
Equipment. Complying with the statutory norms is considered to be the minimum
achievement by the Company.
LOCATION RISK:
Lanco's plant may be potentially in the wrong location.
RISK MITIGATION:
During the year 2006-07, the Company has arranged long-term funds of
Rs.100.000 Millions comprising of 9.75% Secured Redeemable Non-Convertible
Debentures of Rs. 500.000 Millions and term loan of Rs. 600.000 Millions. Apart
from funding the capital expenditure, a part of these funds is being utilized
for refinancing and augmentation of long-term funds for working capital. In
addition, the Company expects to generate reasonable cash flow during 2007-08
to meet the debt obligations.
Contingent
Liabilities not provided for
|
Particulars |
2006-07 Rs. In Millions |
|
a) Guarantees given by banks on behalf of the Company |
35.775 |
|
b) In respect of sales tax demands raised, which are under appeal |
16.644 |
|
c) In respect of excise duty demands raised, which are under appeal |
43.630 |
|
d) In respect of bills discounted |
-- |
|
e) Estimated amount of capital contracts not provided for (net of
advances) |
94.579 |
Segment Reporting
The Company's main business is manufacturing and selling Pipes. In
addition, the Company is also anufacturing
and selling cement, which accounts for less than 10% of Company's
turnover and does not qualify as a reportable segment as per Accounting
Standard - 17 (AS-1 7) on segment reporting issued by the Institute of
Chartered
Accountants of India. Accordingly, in the opinion of the management
Pipes is the only reportable segment.
Fixed Assets :
- Land
- Factory
Building
- Non-Factory
Buildings
- Plant and
Machinery
- Electrical
Installation
- Office
Equipments
- Furniture
- Vehicles
AS PER WEBSITE
Profile :
Lanco Industries Limited (LIL) was incorporated on 1 st
November, 1991 by Lanco Group of Companies to
anufacture Pig Iron using Korf (German) technology and Cement. The unit
is located at Rachagunneri Village on Tirupathi - /Srikalahasthi road which is
about 30 kms. from Tirupathi and 10 kms. from Srikalahasthi. The installed
capacity of Pig Iron was 90,000 TPA and with similar capacity 90,000 TPA for
cement.
Due to the poor demand and other reasons, the operations of the cement unit of
the Company was suspended and the unit was reengineered for producing a
different product mix having potential in south India.
As a measure of forward integration project for adding value to the Pig Iron
manufactured by the Company, LIL floated an another company named Lanco
Kalahasthi Castings Limited (LKCL) on 4 th March 1997 to manufacture iron
castings and spun pipes in the same campus of the Company with an annual
capacity of 40,000 TPA and 35,700 TPA respectively. Accordingly, LIL had an
arrangement with LKCL for supply of molten iron and Pig Iron to LKCL, being a
value added product, as such iron pipes manufactured by LKCL offered better
returns.
However, due to falling Pig Iron prices, increase additional capacity in the
industry, competition and the technical and financial assistance, the
operations of both LIL and LKCL were effected and the Company was exploring
financial and technical strategic alliance with Indian / Foreign Partner.
During the same time M/s. Electrosteel Castings Limited, was also looking for
additional capacities for producing spun pipes. Considering the synergies
involved, Lanco Industries Limited entered into a strategic alliance
partnership during December 2002, with M/s. Electrosteel Castings Limited
(ECL), Kolkatta a leading manufacturer of CI, Pipes and DI pipes. This was
win-win situation for both LIL and ECL. After takeover, a financial
re-engineering and re-structuring of LIL was undertaken by ECL by implementing
the following: -
- Immediately after take over an amount of Rs.220.000 Millions was
infused as share capital of the Company by M/s.ECL to strengthen the
equity base of the company.
- During 2002, the capacity of Pig Iron was increased from 90,000 TPA
to 150,000 TPA.
- With effect from 1 st April, 2003 LKCL was merged with the company
to take advantage of the close synergy in the business of the two
companies, since a large part of Molten Iron / Pig Iron is consumed by
LKCL for manufacture of DI Pipes.
- After the merger, the share capital of LIL, the paid up share value
of Rs.10/- was reduced to Rs.2.50 per share and accordingly one share of
Rs.10/- each fully paid up in LIL was issued to all the existing
shareholders for every 4 shares held by them.
- During 2003, the capacity of the DI pipes was increased to 90,000
TPA.
- During 2004, the company took the step of backward integration by
setting up 150,000 TPA coke oven plant in the same complex, which was
commissioned in June 2005.
- During 2005, the company started setting up of a Captive Power
Plant of 12 MW by using the waste heat recovered from the coke oven plant
which is expected to be commissioned by March 2006.
- An additional amount of Rs.250.000 Millions is being spent on other
capital works like revamping of bitumen coating machine, balancing
equipment and facilities for production of higher diameter DI pipes etc.
to increase the capacity of DI pipes from the present 90,000 TPA to
120,000 TPA by 2006-07.
The above has resulted in the company witnessing a
profitable years after a gap of 8 years during the years ended 31 st March,
2003, 2004 and 2005 and a dividend of 10% was declared for the years ended 31
st March 2004 and 2005 to the shareholders.
Step by Step Company's Growth
1991 Incorporation of Lanco
1994 Setting up of Mini Blast Furnace with 90,000 TPA
capacity
1995 Setting up a
250 TPD Mini Cement Plant
1997 Setting up of LKCL for manufacture of 40,000 TPA
castings and 35,700 TPA D I Pipes
2002 Strategic Alliance with Electrosteel Casting Limited
2002 Infusion of Rs.2200 Millions to the equity and
financial restructuring
2003 Merger of LKCL with LIL for synergy
2003 Capacity of Pig Iron was increased to 90,000 TPA to
150000 TPA.
2004 Capacity of DI Pipes was increased to 90,000 TPA.
2005 Commissioning of 150,000 TPA coke oven plant.
2005 Setting up of Captive Power Plant of 12 MW by using the
waste heat recovered from the coke oven plant.
- Pig Iron Project was conceived in 1992. Commercial production
started in September 1994. Capacity:- 90,000 TPA at inception.
- Cement division started commercial production in 1996.
- Spun Pipe Project conceived in March 1998 and commercial production
commenced in January 2000. Capacity:-60,000 TPA at inception.
- ECL joined as strategic partner in 2002 / LKCL Merged with LIL in
2003
- New 1,50,000 TPA Coke Oven Plant Commissioned in 2005
“ An integrated industrial complex for manufacture of DI
Pipes ”
Expansion/New Projects after Take-over: Investment Rs.
1750.000 Millions
- Spun Pipe Division Capacity
increased from 60,000 TPA to 90,000 TPA
- Pig Iron Division Capacity
increased from 90,000 TPA to 1,75,000 TPA
- Coke Oven Division New
Plant with a Capacity of 1,50,000 TPA
- 12 MW Capacity Power Plant
Expected Commissioning by End May'07
CMT REPORT (Corruption,
Money Laundering and 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 |
8 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
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 |
|