MIRA
INFORM REPORT
|
Report Date : |
10.03.2008 |
IDENTIFICATION
DETAILS
|
Name : |
JINDAL STAINLESS
LIMITED |
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Registered
Office : |
O. P. Jindal
Marg, Hisar – 125005, Haryana |
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Country : |
India |
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Financials (as
on) : |
31.03.2007 |
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Date of
Incorporation : |
29.09.1980 |
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Com. Reg. No.: |
55-10901 |
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CIN No.: [Company
Identification No.] |
L26922HR1980PLC010901 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
RTKJ01831E |
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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 Various Products. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
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 |
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Maximum Credit Limit : |
USD 56676512 |
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Status : |
Excellent |
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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 of Jindal Organization. Available
information indicates high financial responsibility of the company. General
financial position of the company is good. Payments are usually correct and
as per commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered
Office : |
O. P. Jindal
Marg, Hisar – 125005, Haryana, India |
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Tel. No.: |
91-1662-222471-83
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Fax No.: |
91-1662-220476/220499 |
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E-Mail : |
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Website : |
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Corporate
Office : |
Jindal Centre,
12, Bhikaji Cama Place, New Delhi – 110066, India |
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Tel. No.: |
91-11-26188345—50-60 |
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Fax No.: |
91-11-26161271 /
26170691 |
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E-Mail : |
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Factory 1 : |
6 K. M. Stone,
Delhi Road, Hisar – 125 005, Haryana Tel. No. :
91-1662-220471 – 75 Fax No. :
91-1662-220476 / 220499 58-17-1/1, Sangeevaya Nagar, Near Nad Kotha
Road Junction, Visakhapatnam – 530 009, Andhra Pradesh Tel. No. :
91-891-2558898 Fax No. :
91-891-2558996 Kalinga Nagar
Industrial Complex, P. O. Danagadi – 755026, District Jajpur, Orissa, India Phone: 91-6726-266031-32 Fax :
91-6726-266030 E-mail: info@jindalstainless.com Jindal Nagar,
Kothavalasa - 535183, District Vizianagaram, Andhra Pradesh, India Phone:
91-8966-273327/273254/273335 Fax:
91-8966-273326 E-mail: jindalkvs@sancharnet.in |
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Branches : |
Jindal Mansion,
5-A, G. Deshmukh Marg, Mumbai – 400026, Maharashtra, India Tel. No.: 91-22-23513000 Fax No.: 91-22-23526400
/ 23522600 E-Mail : jindal@bom2.vsnl.net.in 50, H. I. G, BBA,
Jaidev Vihar, Bhubaneshwar – 751013, Orissa, India Phone:
91-674-2303560/2301846 Fax :
91-674-2303147 E-mail: jslbbs@sify.com |
DIRECTORS
|
Name : |
Ms. Savitri Devi
Jindal |
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Designation : |
Chairperson |
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Name : |
Mr. Ratan Jindal |
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Designation : |
Vice-Chairman and
Managing Director |
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Name : |
Mr. V. S. Jain |
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Designation : |
Managing Director
and Chief Executive Director |
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Name : |
Mr. R. G. Garg |
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Designation : |
Joint Managing
Director and Chief Operating Officer [Orissa Division] |
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Name : |
Mr. N. C. Mathur |
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Designation : |
Director –
International Marketing |
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Name : |
Mr. Naveen Jindal |
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Designation : |
Director |
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Name : |
Ms. Suman Jyoti
Khaitan |
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Designation : |
Director |
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Name : |
Mr. Rajinder
Parkash |
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Designation : |
Executive
Director |
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Name : |
Mr. Lokesh Kumar
Singhal |
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Designation : |
Director |
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Name : |
Mr. T. R.
Sridharan |
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Designation : |
Director |
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Name : |
Mr. B. D. Gupta |
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Designation : |
Director |
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Name : |
Mr. N P Jayaswal |
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Designation : |
Executive
Director |
KEY EXECUTIVES
|
Name : |
Mr. A. P. Garg |
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Designation : |
Senior
Vice-President (Taxation) and Company Secretary |
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Name : |
Mr. Arvind Parakh |
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Designation : |
Senior
Vice-President (Corporate Finance) |
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MANAGEMENT
TEAM |
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Name : |
Mr. B P Goyal |
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Designation : |
Executive
Director – Projects |
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Name : |
Mr. R K Goyal |
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Designation : |
Director –
Commercial |
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Name : |
Mr. P S Ghose |
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Designation : |
Director –
Projects |
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Name : |
Mr. P Roy |
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Designation : |
Executive
Director – Minerals |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Shareholding of Promoter and Promoter Group |
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Indian |
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Individuals/ Hindu Undivided Family |
673572 |
0.46 |
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Bodies Corporate |
43141700 |
29.26 |
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Foreign |
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Individuals (Non-Residents
Individuals/Foreign Individuals) |
153953 |
0.10 |
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Bodies Corporate |
15799710 |
10.72 |
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Public shareholding |
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Mutual Funds/ UTI |
10246028 |
6.95 |
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Financial Institutions / Banks |
262066 |
0.18 |
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Insurance Companies |
2341624 |
1.59 |
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Foreign Institutional Investors |
16627943 |
11.28 |
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Any Other – Foreign Bank |
9997524 |
6.78 |
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Non-institutions |
|
|
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Bodies Corporate |
11438805 |
7.76 |
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Individuals |
|
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Individuals -i. Individual shareholders holding nominal
share capital up to Rs 0.100 Million |
18673678 |
12.67 |
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ii. Individual shareholders holding nominal share capital
in excess of Rs. 0.100 Million |
473995 |
0.32 |
|
Shares held by Custodians and against which Depository Receipts have been issued |
17604334 |
11.93 |
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Total |
147434932 |
100 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and
Marketing of Various Products. |
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Products : |
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Exports : |
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Countries : |
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Imports : |
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Countries : |
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Terms : |
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Purchasing : |
L/C, D/A or D/P
terms. |
PRODUCTION STATUS
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Particulars |
Unit |
Installed Capacity |
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AT HISAR: 1. Strip Mill/Tandem Mill 2. Plate/Steckel Mill 3. Steel Melting 4. Cupro Nickle Melting 5. Cold Rolling Mill i) Cold Rolled Strips ii) Cold Rolled Special Steel iii) Coin Blanks 6. Oxygen Plant: i) Oxygen Gas ii) Argon Gas 7 Industrial Machinery AT VIZAG High Carbon Ferro Chrome AT ORISSA/MINES High Carbon Ferro Chrome Chrome Ore Concentrate |
MT MT MT MT MT MT MT M. Cum. M. Cum. Nos. MT MT MT |
25000 450000 600000 6000 250000 12000 10000 55.00 1.50 209 40000 150000 72000 |
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Particulars |
Unit |
Actual Production |
|
HISAR PLANT a) Steel Melting Bloom / Slab/ Ingot |
MT. |
107693 |
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b) Strips Mill Plant Flat Hot Rolled Strips |
MT MT |
44053 1542 |
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c) Plate Stackle Mill Hot Rolled Strips / S S Plates M S Plates / Coils |
MT MT |
400903 80 |
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d) Cupro Nickel Mill Cupro Nickel Coil |
MT |
166 |
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e) Oxygen Plant Oxygen |
Cum. |
34360290 |
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f) Industrial Machinery |
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g) Cold Rolling Mill Cold Rolled Strips Cold Rolled Special Steel Coin Blanks |
MT MT MT |
108517 13030 576 |
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VIZAG PLANT H C Ferro Chrome Chrome Ore Briquities |
MT MT |
31414 -- |
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ORISSA PLANTS / MINES H C Ferro Chrome Chrome Ore Chrome Ore Concentrate |
MT MT MT |
92175 92415 25642 |
GENERAL
INFORMATION
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No. of Employees : |
54184 |
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Bankers : |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
S. S. Kothari
Mehta and Company Chartered
Accountants Lodha and Company Chartered
Accountants COST
AUDITORS
Ramanath Iyer and
Company Chartered
Accountants |
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Associates : |
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Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
274500000 |
Equity Shares |
Rs. 2/- each |
Rs. 549.000
millions |
|
100500000 |
Unclassified Shares |
Rs. 2/- each |
Rs. 201.000 millions |
|
20000000 |
Non-Cumulative Preference Shares |
Rs. 2/- each |
Rs. 200.000
millions |
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Grand Total |
|
Rs. 950.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
138221206 |
Equity Shares |
Rs. 2/- each |
Rs. 276.442 millions |
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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 |
276.442 |
261.104 |
219.820 |
|
|
2] Equity Share
Warrants |
151.410 |
0.000 |
0.000 |
|
|
3] Reserves &
Surplus |
13741.276 |
9830.997 |
7707.933 |
|
NETWORTH
|
14169.128 |
10092.101 |
7927.753 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
22289.531 |
19050.056 |
10258.838 |
|
|
2] Unsecured
Loans |
4433.752 |
3059.583 |
3393.946 |
|
TOTAL BORROWING
|
26723.283 |
22109.639 |
13652.784 |
|
|
DEFERRED TAX
LIABILITIES |
3915.769 |
2782.983 |
2252.647 |
|
|
|
|
|
|
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TOTAL
|
44808.180 |
34984.723 |
23833.184 |
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APPLICATION OF FUNDS
|
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FIXED ASSETS [Net Block]
|
27236.895 |
17770.230 |
13832.426 |
|
Capital work-in-progress
|
10570.877 |
6284.964 |
3493.414 |
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INVESTMENT
|
1885.593 |
3102.177 |
1930.034 |
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CURRENT ASSETS, LOANS & ADVANCES
|
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Inventories
|
10697.299 |
6873.584 |
5209.832 |
|
|
Sundry Debtors
|
5804.139 |
3504.255 |
3265.905 |
|
|
Cash & Bank Balances
|
1962.369 |
1970.707 |
567.709 |
|
|
Loans & Advances
|
6530.571 |
6847.468 |
4487.876 |
Total Current Assets
|
24994.378 |
19196.014 |
13531.322 |
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
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Current Liabilities
|
17789.304 |
9633.650 |
7724.270 |
|
|
Provisions
|
2113.317 |
1755.395 |
1245.818 |
Total Current Liabilities
|
19902.621
|
11389.045
|
8970.088
|
|
Net Current Assets
|
5091.757 |
7806.969 |
4561.234 |
|
|
|
|
|
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MISCELLANEOUS EXPENSES
|
23.058 |
20.383 |
16.076 |
|
|
|
|
|
|
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TOTAL
|
44808.180 |
34984.723 |
23833.184 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
Sales Turnover [including other income]
|
48964.376 |
32026.098 |
32007.191 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
5577.290 |
2402.270 |
3578.085 |
Provision for Taxation
|
2047.231 |
805.011 |
1119.607 |
Profit/(Loss) After Tax
|
3530.059 |
1597.259 |
2458.478 |
|
|
|
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|
Export Value
|
22619.515 |
11243.738 |
10212.672 |
|
|
|
|
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Import Value
|
20445.024 |
11186.244 |
10254.756 |
|
|
|
|
|
Total Expenditure
|
43387.086 |
29598.350 |
28429.106 |
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type |
1st Quarter |
2nd Quarter |
3rd Quarter |
|
Sales
Turnover |
11968.200 |
11274.900 |
13485.700
|
|
Other
Income |
46.700 |
30.600 |
177.300
|
|
Total
Income |
12014.900 |
11305.500 |
13663.000
|
|
Total
Expenditure |
9926.200 |
9656.600 |
11803.400
|
|
Operating
Profit |
2088.700 |
1648.900 |
1859.600
|
|
Interest |
188.300 |
394.400 |
484.000
|
|
Gross
Profit |
1900.400 |
1254.500 |
1375.600
|
|
Depreciation |
639.700 |
589.500 |
595.300
|
|
Tax |
144.300 |
4.000 |
2.800
|
|
Reported
PAT |
826.000 |
418.100 |
506.000
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity
Ratio |
2.03 |
1.98 |
1.59 |
|
Long
Term Debt-Equity Ratio |
1.89 |
1.82 |
1.42 |
|
Current
Ratio |
1.02 |
1.16 |
1.01 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
1.88 |
1.74 |
2.15 |
|
Inventory
|
5.91 |
5.63 |
7.03 |
|
Debtors
|
11.17 |
10.05 |
14.24 |
|
Interest
Cover Ratio |
4.54 |
3.86 |
7.24 |
|
Operating
Profit Margin (%) |
17.92 |
13.53 |
16.28 |
|
Profit
before Interest & Tax Margin (%) |
13.76 |
9.53 |
12.37 |
|
Cash
Profit Margin (%) |
10.95 |
8.69 |
11.23 |
|
Adjusted
Net Profit Margin (%) |
6.79 |
4.69 |
7.33 |
|
Return
on Capital Employed (%) |
19.62 |
12.07 |
23.77 |
|
Return
on Net Worth (%) |
29.28 |
17.73 |
36.42 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
The company was
later converted into a Public Limited Liability Company w. e. f. 05.051975.
Jindal Strips
Limited has been merged with Jindal Stainless Limited with effect from
01.04.2002.
Subject was
promoted by O. P. Jindal and Associates.
The company was incorporated to manufacture mild steel, HR plates and
coils. It started a mini steel mill at Hisar in 1971. As a strategy to counter
low margins in mild steel, the company diversified into production of stainless
steel in the late 70’s. Subject was the first company to produce stainless
steel HR coils (SAIL started with CR coils and has recently commissioned HR
production in its stainless steel plant). In 1983, the company forward
integrated with a CR plant for stainless steels at a site adjacent to its
sister company Jindal Iron’s plant at Vasind (near Mumbai). In 1990, the
company embarked upon major backward integration-cum-expansion by commencing
work on a sponge iron plant at Raigarh in Madhya Pradesh. The company has over
the years developed a number of technologically new processes to save on
capital and operational costs. The company’s indigenously designed rotary
kilns, for sponge iron, had teething problems and the setting up of the sponge
iron plants was hence considerably delayed.
The subject was
incorporated in November 1970 and became public in 1975. It was promoted by O.
P. Jindal and Associates. The company, which started with a single plant at
Hisar, has become a multi-plant, multi-location company. It manufactures
stainless steel strips at Hisar, wide strip hot and cold-rolled coils from
imported slabs at Vasind and sponge iron at Raigarh. The company is one of the
few companies in the iron and steel industry without any technical
collaboration, all its technology is developed in-house. The stainless steel
produced by the company is mostly used for utensils, while cold-rolled coils
are partially used captivity by a group concern for GP/GC sheets and the
remaining is sold to the automobile and two-wheeler industry. One of India’s
largest stainless steel producers with a market share of 40 %.
The company came
out with an issue of partly convertible debentures in April, 1992 to finance
the expansion capacity to 600000 tpa of sponge iron and 500000 tpa of pig
iron. It is also to set up a captive
power plant of 45 MVA. In 1994-95,
Brahmputra Capital and Finance Services Private Limited became a subsidiary.
The year 1998-99,
as per the scheme of arrangement between Jindal Strips and Jindal Steel and
Power Limited, the former hived off its Raigarh and Raipur divisions to the
company. In December 1999, it placed 5.75% foreign currency convertible bonds
to the international investors for an aggregate amount of US$ 30 millions. The
issue was oversubscribed to the extent of US$ 3.5 millions. The Vasind division
of the company has been hived off to subsidiary Jindal Steel and Alloy Limited,
w. e. f. from January, 2000.
The Phase II of the
stainless steel cold rolling project, wherein the cold rolling capacity is
being increased to 90000 tpa has commenced trial run production. All the value
additional lines constituting of skin pass mill, strip grinding line and bright
annealing line have already been commissioned. The company acquired a 60,000
tpa stainless steel cold rolling facility of Bethlehem Steel at Massillon, USA
at a project cost of US$ 5 millions.
Subject has decided
to incorporate a wholly-owned IT subsidiary, Cross Border IT (India), to foray
into the global IT services business.
It becomes the second company from the Rs. 40000.000 millions O. P.
Jindal Group to diversify into the high net worth IT sector after Jindal Steel
and Power.
The 2001-02 Cold
rolling units has commissioned the coin blanking facility and supply coin
blanks to GOI. The Hot Rolling division is currently extending its capacity buy
installing a new EAF.
Subject is one of
the few companies in the iron and steel industry without any technical collaboration,
all its technology is developed in-house.
It is one of the India's largest stainless steel producers with a market
share of 40%.
The company is
formed by demerging all the assets and liabilities and also the Stainless Steel
manufacturing which was undertaken by Jindal Strips Limited. The Scheme of
Arrangement & Demerger entered between Jindal Strips and Jindal Stainless
Steel was sanctioned by the Hon'ble High Court of Punjab and Haryana.
To enhance the Shareholders value after the post merger Jindal Stainless Steel
issued bonus shares to its shareholders and for this a scheme of arrangement
was also entered between both the companies. Subsequently the Share Capital
increased to Rs. 189.800 millions comprising 18982172 equity shares of Rs. 10
each.
During April, 2003 Austenitic Creations Private Limited and J-Inox Creations
Std was amalgamated with Jindal Stainless Steel Limited. Both the above
companies are into the business of Architecture, Building constriction sector.
During
February, 2004 the Equity Shares of the company has been subdivided from One
equity share of Rs. 10 each into 5 equity shares of Rs. 2 each.
The company has acquired an Indonesian company, PT. Maspion Stainless Steel,
and formalities has been completed in December 2004. Consequent of this
acquisition, PT. Maspion Stainless Steel has become the subsidiary of the
company and this Indonesian company has started commercial production.
PT Jindal Stainless, Indonesia and Jindal Stainless Steelway Limited are the
subsidiaries of the company. Further Jindal Stainless Steelway Limited is a joint venture company between the company and
Steelway S.r.l Italy and this venture would provide customized stainless steel
products, inventory management, technical value engineering, warehousing,
material testing and distribution services in stainless steel to meet specific
requirements of the customer effectively and efficiently.
The years 2004-05 the company has enhanced its installed capacity of Plate/
Steckel Mill, Steel Melting, Cold Rolled Strips and Chrome Ore Concentrate by
50000 MT, 50000 MT, 60000 MT and 30000 MT respectively. With this expansion the
total installed capacity of Plate/Steckel Mill, Steel Melting, Cold Rolled
Strips and Chrome Ore Concentrate has increased to 450000 MT, 550000 MT, 150000
MT and 72000 MT respectively.
The company has planned to expand the installed capacity of stainless steel
melting capacity at Hisar from 550000 TPA to 720000 TPA and also to increase
the wider width hot rolling capacity from 450000 TPA to 720000 TPA. Further the
company has also planned to enhance the cold rolling capacity from 150000 TPA
to 250000 TPA by September 2006.
The Company is in the process of setting up an integrated stainless steel
facility in Duburi, Orissa and for this project The Orissa State Infrastructure
Development Corporation has allotted around 678 acres of land. As part of the
project the ferro alloys facilities constituting 150000 TPA Ferro Chrome
capacities is in advanced stage of implementation and is expected to commence
commercial production during 2005-06.
The years 2004-05 the company has entered into a technical assistance with
Nisshin Company Limited, Japan to assist the company in improving quality of the
finished products. Further the company has set up a service center at Gurgaon
by way of subsidiary company in collaboration with an Italian company Steelwat
s.r.l. Italy.
Turnover of company has gone up by 50.74% at Rs.52678 millions in the current year in comparison to Rs.34946.100 millions during previous year. A profit before interest, depreciation and tax is at Rs.8441.800 millions up by 94.54% over previous year. Profits after tax is up by 121% at Rs.3530.100 million in comparison to Rs.1597.300 million during previous year.
Share
Capital:
At the end of the financial year ended 31st March, 2007, the subscribed and
paid up share capital of the company stands at Rs.276.400 million divided into
138221206 equity shares of Rs.2 each. During the year, the company has allotted
869350 equity shares of Rs.2/- each (underlying 434675 GDS) upon conversion of
80 numbers of 2.50% Euro Convertible Bonds of USD 5,000 each. Further, during
the year the company has allotted 2, 1500000 warrants to the promoters of the
company, convertible into equity shares on preferential allotment basis.
Subsequently the company has also allotted 6800000 equity shares of Rs.2/- each
upon conversion of 6800000 warrants convertible into equity shares of the
company. Consequently the paid up capital of the company enhanced from
Rs.261.100 million to Rs.276.400 million.
Dividend:
During
the year your directors have declared interim dividend @80% i.e. Re.1.60/- per
equity share in its meeting held on 26th March, 2007 on 13,82,21,206 equity
shares amounting to Rs.252.200 million, inclusive of dividend tax.
The directors are pleased to recommend final dividend of 20% i.e.
Re.0.40 per equity share of Rs.2/- each thus making a total dividend of 100%
i.e. Rs.2/- per equity share of Rs.2/- each for the financial year 2006-07. The
total dividend cost including interim dividend, to the company will be
Rs.316.900 million, inclusive of dividend tax.
Operations:
The
Company is the India's largest stainless steel manufacturer, manufacturing
different ranges of flat products in Austenitic, Ferritic and Martensitic
grades to serve domestic and international market. Presently company is having
manufacturing facilities at three locations, viz Hisar, Vizag and Orissa.
Hisar - Hot Rolling Division:
Jindal Stainless at Hisar is having melting capacity of 600,000 tonnes
per annum, which is planned to be enhanced to 720,000 tonnes per annum by
December 07. During financial year 2006-07, the hot rolling division has
produced 576,367 tonnes of hot liquid and rolled 446,498 tonnes of stainless
steel coils.
The plant is under expansion and modernization. The technology has been
upgraded to save energy cost, improve the quality of product and make
environment healthy by installing Co-jet, IRS (Intelligence Refining System)
and DOG house at melting shops. New pickling line has been commissioned to
increase the HRAP plate production to meet out the growing demand of this
segment.
Hisar - Cold Rolling Division:
The company is having the largest cold rolling facilities in India. It
consists of five subunits consisting of three cold rolling lines, a coin
blanking line & a special product division. The capacity of cold rolling
division is enhanced from 150,000 tonnes per annum to 250,000 tonnes per annum.
The capacity of coin blanking line is 10000 tonnes per annum and special
product division is 12,000 tonnes per annum. Cold rolled products are sold both
in the domestic and international markets. The major export destinations are
China, Bangladesh, Vietnam, South Africa, Russian Federation, Ukraine, Belgium,
Italy, Greece, UK, and USA. The quality of the product has been well accepted
for the uses like sink, kitchen utensils and engineering purposes.
The blanking line produces coin blanks of stainless steel and cupro nickel
material. The coin blanks produced by coin blanking line are supplied to Indian
mints as well as overseas customers.
Special product division has taken a leap forward by setting up international
quality equipments and process lines to produce a broad range of high quality
finished products to cater diverse customer requirements, globally. In special
product division, company produces razor blade stainless steel, which is a
unique import substitution. Only four manufacturers worldwide make this
difficult steel.
During the financial year, a new tension leveler was commissioned. Bright
Annealing Line and Strip Grinding Line are in advanced stage of commissioning.
The new equipments will not only augment the production but will enhance the
product quality. During financial year 2006-07, the production of Hisar cold
rolling division was at 108517 tonnes of cold rolled strips, 13030 tonnes of
cold rolled special steel and 576 tonnes of coin blanks.
Vizag Division:
Company's Vizag plant has smelting capacity of chrome ore to manufacture
40,000 tonnes per annum of high carbon ferro chrome. The division has produced
31,414 tonnes of high carbon ferro chrome during the year 2006-07 as compared
to 30,861 tonnes during the preceding year. The division is installing a metal
recovery plant to recover about 500 tonnes of high carbon ferro chrome from the
accumulated slag. The commissioning of this plant will be completed during
2007-08.
Orissa - Ferro Alloys Division and
Chromite Mines:
Ferro chrome furnaces with capacity 150,000 tonnes per annum, installed
as a facility under phase-I of Orissa project was stabilized during the year
and produced 92,176 tonnes of ferro chrome. During the year 13 MW waste gas
recovery power plant was commissioned and has started generating power from the
waste gases released by the ferro chrome furnaces.
During the financial year 2006-07, company's chromites mines division has
produced 92,415 tonnes of chrome ore and 25,642 tonnes of chrome ore
concentrate as compared to 82,201 tonnes and 34,318 tonnes respectively during
previous year.
Expansion & Mernistion of Projects
Hot Polling Division:
To increase the rolling capacity of hot rolling division, company is
planning to add one more finishing stand in Steckel Mill, which is scheduled to
be completed in December 2007. With the completion of this project, the rolling
mill capacity shall increase to 720,000 tonnes per annum.
A new 220-tpd-Oxygen plant has been commissioned in April, 2007. Existing
132-kv switchyard is being upgraded to 220-kv. With this strengthening of the
switchyard, the company gets the benefit of low cost power from the state
electricity board.
During the year a new Hot Rolled Plate Pickling Line has been commissioned
increasing the plate finishing capacity to 60,000 tonnes per annum.
Cold Rolling Division:
To enhance the capacity of cold rolling division, the company has
undertaken the following projects:
- Cold Annealing Pickling Line
- 20 Hi Cold Rolling Mill With CNC Grinders - Narrow Tension Leveling
Line
- Narrow Bright Annealing Line
- Renovation in Hot Annealing Pickling Line
Installation of Cold Annealing Pickling Line, 20 Hi Cold Rolling Mill and
Narrow Tension Leveling Line has already been completed. Others are in the
advance stage of completion.
Integrated Stainless Steel Project at
Orissa:
The company is setting up a 0.8 million tonne integrated stainless steel plant
at Orissa along with a 250 MW power plant in phases. Ferro Chrome Furnaces and
13 MW Waste Gas Recovery Power Plant of phase -I are already in commercial
operation. Other facilities of Phase -I viz. High Carbon Ferro Manganese
Furnaces with capacity of 50,000 tonnes per annum, Low Carbon Silico Manganese
Furnaces with capacity of 50,000 tonnes per annum, Coke Oven Battery with a
capacity of 4,29,800 tonnes per annum and coal based 2 x 125 mw Captive Power
Plant are under advanced stage of construction.
Phase -II of Orissa project will include, set up of 0.8 million-tonne stainless
steel plant. The main facilities to be installed in Phase-II include Slab
Caster with capacity of 900,000 tonnes per annum, Hot Rolling Mill with
capacity of 1,600,000 tonnes per annum, Hot Rolled Annealing Pickling Line with
capacity of 800,000 tonnes per annum, Cold Rolled Annealing Pickling Line with
capacity of 400,000 tonnes per annum and Bell Annealing Furnace with capacity
of 62,500 tonnes per annum. The project is scheduled to complete by the end of
financial year 2009-10.
MANAGEMENT
DISCUSSION AND ANALYSIS:
Stainless steel is crucial to the growth and development of any economy.
The importance of stainless steel is evident from the fact that the existence
of a strong stainless steel industry determines the pace of development of
major industrial economies. The growth of many of these economies has been
largely shaped by the strength of their steel industries in their initial
stages of development.
Despite high oil prices that topped up to $75 a barrel during last one year,
global GDP has registered a growth of 3.9% in 2006 compared with 3.5% in 2005.
In 2006, US economies show an acceleration of 3.3% in GDP. After several years
of weakness, European economy has shown recovery and registered a growth of
2.6%. In Asian region, China outperforms again with a growth rate of 10.7%, Japanese
economy grew by 2.2% and Indian GDP growth rate is estimated at around
9.4%.
Global GDP is growing at a healthy rate. The pace of growth is evidently
due to "Emerging Economies", which was earlier commanded by 'Advanced
Economies0. It is the continuous expansion of developing countries, which has
resulted in such a strong global performance. Developing countries have grown
by 7.0%, which is almost double of the growth rate of high-income countries
3.1%.
Among developing countries, India and China has shown robust growth in their
GDP, which is almost double of overall growth rates of developing countries,
and almost three fold of global GDP.
It is expected that despite rising oil prices and rising interest rates,
developing economies will remain the critical driver of global growth in 2007
and 2008. Global GDP is expected to grow at the rate 3.2% and 3.5% in 2007 and
2008 respectively. India and China are expected to grow at 8.4% and 10% in 2007
and at 7.8% and 9.5% in 2008 respectively.
Global Stainless Steel Scenario:
Strong GDP growth strengthens the
stainless steel demand:
Global GDP and industrial productions are growing at a healthy rate resulting
in strong demand of stainless steel in all sectors including, infrastructure,
construction and industrial applications.
On the support of strong global economic development stainless steel industry
globally has witnessed compounded growth of around 6.8% per annum during the
last four years. Global stainless steel production in 2006 is 28.49 million
tonnes against 25.05 million tonnes in 2005, registering a growth of around
13.7%, beating the estimates of 27.8 million tonnes.
The growing segment is Asia, where stainless steel production grew around 20.6%
to 15.2 million tonnes. Asia now produces more than half of stainless steel in
the world. The driving force was China, which produced 5.3 million tonnes, a
gain of around 68% from 2005.
Japan previously had been the largest stainless steel producer in Asia.
Japanese output totaled 4.1 million tonnes in 2006, up 2.3% over 2005.
All other stainless steel-producing countries in Asia showed growth rates of
between 9 to 13 percent except South Korea, where production remained
flat.
The second-largest stainless steel producing area in 2006 was Western
Europe/Africa, where stainless steel production increased by 13.4% to 10
million tonnes.
Following the strong pace of global economic development in 2006, 2007 is also
expected to be a bright year for the world economy. Global GDP is expected to
grow at the rate 3.2% in 2007. Demand for stainless steel is expected to be
firm from all key end users.
Although the new capacities are coming up all over the world, but proximity of
raw material will be the critical factor in determining the cost competitiveness
of any stainless steel manufacturer. Since Subject facilities are coming up in
ore rich state of Orissa, so Subject will have additional advantage over
others.
Indian Outlook:
Indian Economy:
Following the global trend, Indian economy has registered a growth of around
9.4% in 2006-07. The growth rate has been spurred by the manufacturing sector,
which has logged an 11.3% rise in 2006-07. The per capita income in real terms
(at 1999-2000 prices) during 2006-07 is likely to attain a level above
Rs.22,000 as compared to Rs. 20,734 for the year 2005-06. The growth rate in
per capita income is estimated at 7.9 per cent during 2006-07, as against the
previous year's estimate of 7.4 per cent.
Stainless steel is the highest growth
metal:
Following the high economic growth rate, Indian stainless steel market entered
into the high growth segment of around 11-14% which is much higher than the
world average of approximately 6%. The India's contribution to global SS
production accordingly has increased from 2% in 1998 to more than 6% in 2006.
Stainless steel production in India in 2006 was 1.7 million tonnes registering
a growth of 9.7% over 1.5 million tonnes production in 2005.
The importance of stainless steel industry is so much that the level of per
capita consumption of stainless steel is treated as one of the important
indicators of socio-economic development and living standards of the people in
any country.
In 2005 the per capita usage of stainless steel in India was around 1.1 kg,
compared to 4.1 kg that of china and 12-13 kg that of the developed nations in
Europe and western world. It is estimated that the per capita usage will grow
over the next few years due to the continued growth of the Indian economy and
rise in income levels.
Demand Forecast:
The use of stainless steel in India is essentially in two distinct categories,
utensil grade and industrial applications. According to Indian Stainless Steel
Development Association, the utensil sector market in India accounted for
approximately 70% of the stainless steel demand and the remainder was used in
industrial applications such as processing, building and construction,
transport, machinery and appliances. Railways, automobiles, architecture,
building and construction sectors are expected to be the growth sectors for the
Indian stainless steel industry in the medium term.
Rising real estate sector is creating a big market for stainless steel. The
main growth thrust is coming due to several factors, which mainly includes
consistent and sustaining GDP growth, expanding service sector, rising
purchasing power and affluence, proactive and changing government policies etc.
Indian real estate has huge potential demand in almost every sector especially
commercial, residential, retail & industrial etc. The Indian IT/ITES
(Information & Technologies Enabling Services) sector has been the primary
demand driver in the commercial segment. To scale up their operations and to
remain globally competitive, the Indian IT/ITES companies are exploring the
smaller towns and cities. Housing shortage in urban India has resulted in hugh
demand of residential units. With the growing urbanization the real estate
action is no longer limited to the large metropolises of India but has now
entered to smaller towns and cities. The construction boom fuelled by
mushrooming of malls, shopping complexes and IT parks and airports, etc provide
a big market for the stainless steel industry and particularly high quality
flat products.
Automobile sector is the high growth sector in India. Most auto majors are
setting up facility in India to cater to the growing domestic market and also
make India an export hub for fully built automobiles as well as the components.
Besides, India is the largest manufacturer of 2 wheelers with a production of
over 7 million units. With the implementation of Euro 11 and Euro Ill norms,
stainless steel is becoming de facto the material of choice for exhaust
systems. Another big opportunity comes in the form of the bus body
manufacturing which is now moving from small time fabricators to the organized
sector. With the demonstrated benefits of lightweight and savings in
maintenance costs besides the improved life, this sector will open up huge
opportunities for stainless steel demand.
Railways major modernization drive has a major focus on the use of stainless
steel whether it is light weight coaches, wagons, metro trains or even the
station infrastructure. With the advent of Delhi Metro which showcases the
benefit of stainless steel for rail body structure, interest has been generated
in the other government bodies, who appreciate the lifecycle benefits and
savings offered by lightweight and maintenance free stainless steel coaches and
wagons.
During the past few years, Railways have been evaluating the benefits of
stainless steel wagons for the transportation of coal. After extensive trials,
stainless steel has established superior performance over alternative materials
and as a result, the railways have decided for greater use of stainless steel
in the manufacturing of wagons to be used in the transportation of coal.
Modernization of major Indian Airports is under process and has high potential
for use of stainless steel which includes roofing, column cladding, building
construction, wall panels, ticket booths and counters, elevators / escalators,
trolleys and conveyor systems, etc.
Indian capital goods industry has been going through a boom for the last five
years and is expected to continue their phenomenal growth in earnings over the
next few years, which will strengthen the stainless steel demand further.
Currently, in India, about 3.5 per cent of GDP is spending on infrastructure,
which is much less than China's 10 per cent, which means we still have a long
way to go. India's current capex boom is leading to demand for different
engineering goods.
High Nikel prices-Growth Potential of Clfl Series Stainless Steel:
Nickel forms the 8% in weight but 70% in terms of value of total raw material
cost of 300 series of stainless steel like cold rolled 304 grades.
During the year nickel rose up to an all time high of more than 50,000 $
/ tonne mark compared to 17,755 $ / tonne highest in previous year. The
stainless steel market has seen a growing amount of substitution away from
nickel bearing grades in recent years. The dramatic rally in Nickel price has
really and truly attracted the market towards lower nickel austenitic grades
(200 series) and ferritic nickel free grades (400 series). Due to this trend
the Cr Mn (Chrome Manganese) stainless steel 200 series has gained market
acceptance worldwide particularly in China and more recently in certain
European market.
Jindal Stainless is a global leader in chrome manganese segment (200 series) of
stainless steel. Jindal Stainless, due to its technological capabilities,
operational efficiencies and leadership in this segment is able to meet the
increasing demand of this segment in a more competitive manner.
Plans Gong Ahead:
Subject is expanding its operations through forward and backward integration
and focusing on increased levels of productivity, quality and cost
competitiveness.
Subject is expanding the capacity of existing Hisar plant from 600000 tonnes
per annum to 720,000 tonnes per annum. This would help Subject de-bottleneck
the existing facilities, upgrade and expand its hot rolling and cold rolling
capabilities.
Subject is also setting up 0.8 million tonnes per annum integrated stainless
steel plant in the state of Orissa in phases:
- Phase I of Orissa project will consist of Ferro Alloys facilities, Coke Oven
Batteries and 250 MW coal based captive thermal power plant.
- Phase II of Orissa project envisages setting up of 0.8 million tonne
stainless steel plant. The facilities to be installed include slab caster, hot
rolling mill, hot rolled annealing pickling line, cold rolled annealing
pickling line and bell annealing furnace.
Completion of phase -II of Orissa project will place Subject among top 10
global players in the stainless steel industry. Orissa is a state, rich in all
kind of raw material including chrome ore, manganese ore and iron ore, required
to run a stainless steel plant and coal for captive power generation. For
Orissa projects all equipments have been planned to purchase from top suppliers
from all over the world. Due to proximity of raw material and port,
availability of low cost labour, low priced power from captive power plant will
make Subject highly cost competitive among all the leading players and will
help in strengthening its position in the emerging stainless steel market in
India and abroad.
Subject has initiated new businesses to reach to the end consumer in consumer
durables, automotive, lifestyle and architecture, building and construction
segments. This helps Subject to be close to consumer needs and extract maximum
value of the supply chain while promoting stainless steel in everyday use.
To further strengthen existing export market, to capture the new customers and
to improve on-time delivery and customer services; Subject is creating overseas
network of branches, warehouses and service centers.
Subject is conducting seminars in various cities within India and abroad
to create brand awareness and to educate the existing and potential new
customers about the benefits of 200 series stainless steel over 300 series in
certain applications and benefits of stainless steel over normal steel. The aim
is to create and capture new market at the same time.
Subject, being a company managed by strong team of professionals, believes in
system driven growth. To ensure efficient systems in place, organisation wide
SAP is under implementation.
The requirements of existing Environmental Legislations / Standard are complied with. Our operations continue to pursue the values of IS/IS09001: 2000: QMS, IS/ISO-14001: 2004: EMS, OHSAS: 18001: 1999 and TPM Certification towards Environment Friendly and Safe Production.
Initial Flow Control, TPM and Six Sigma are some of the important management
tools followed throughout the company. The management exercise best Industrial
Code of Practices and conduct regular QSHE Meeting, SHE Pillar Meeting, SHE
Meetings along with Internal Audits of QMS, EMS and OHSAS for system efficacy.
The company's continuous endeavors towards EHS up-gradation resulted to receive
prestigious Green Tech Environment Excellence Award 2006 & SQF (IEI) Safety
Excellence Innovation Award 2006. The Company has also initiated several
activities like Emission Control for Green House Gases, CDM Projects and
increasing Green canopy cover towards sustainable development. Subject
aims to be the best managed company in terms of environment, health and safety
measures taken.
MARKETING
Exports
The Company has recorded a growth in sales that stands at Rs. 34946.100
millions, with exports representing 34.26% of the total sales. During the year,
the quantum of exports has gone up by 14% as compared to the figures of the
previous year. Sale of Cold Rolled products have gone up by 50%. Blade Steel
Exports grew by 33% over the previous year.
Market development activities have been initiated in South Africa, Latin
America, CIS countries etc. A new office has been established in Russia for
procurement of raw material and sourcing orders. Company has also planned to
establish a warehouse in Italy.
Domestic Market
During
the year, the company was the only supplier of stainless steel to DMRC through
ROTEM for production of Metro Coaches. The company was the only company which
was approved by Ministry of Defense for supply of stainless steel coils for
Water Browser sector.
Domestic CR quantity has increased from 60167MT (2004-2005) to 77126MT
(2005-2006), showing an increase of 28%. Domestic turnover in CR has increased
by 28.26%. Sales of Special grades have also increased.
The company is in
trade terms with:
- Katni Tile Works
- Seal Jet India (Private) Limited
- Metals Aids, Haridwar
- Jalan Refractories Private Limited,
Alwar
- AMI Enterprises (Private) Limited
- Associated Jute Industries, Howrah
- Inox Air Products Limited, Vizag
- Subhodaya Enterprises, Vizag
- Vikash Iron and Steel Company, Howrah
- Advanced Reinforced Plastic Private
Limited
Fixed Assets:
- Freehold Land
- Leasehold Land
- Live Stock
- Buildings
- Plant & Machinery
- Electric Installation
- Vehicles
- Furniture, Fixtures & Equipments
Press Release:
JSL’s Q2 Results
Break all Previous Record with 120% Increase in Profit After Tax
(Dated: October 27,
2006)
v
40% increase in turnover
v
102% rise in EBITA
v
120% increase in PAT
v
67% jump in exports
Jindal Stainless Limited (JSL)
today announced its second quarter results for the fiscal 2006-07. The
unaudited financial results for the second quarter were taken on record by the
company’s Board of Directors meeting held today. The company registered a
increase of 102% in EBIDTA to Rs. 2360 millions against Rs. 1170 millions
registered during the corresponding period of the previous financial year.
Profit after tax (PAT) was at Rs 970 millions registering an increase of 120%
over the same corresponding period. The phenomenal growth in turnover, which
grew by 40%, was affected by Export sales which grew by 67% while domestic
sales grew by 24%.
“Major improvement in techno economic
parameters, higher production, increased demand in domestic and international
markets and better operational efficiencies has effected significant gains this
quarter.” said Mr. Ratan Jindal, Vice Chairman & Managing Director, Jindal
Stainless Limited
Adding further, he said “ The global demand of Stainless Steel was projected to
rise in 2006 by 8.4% in May, 2006, was revised to 14.3% in October, 2006 by
ISSF(International Stainless Steel Forum). The projected growth in the Asian
markets this year is 17.5%. Today, Jindal Stainless Limited is exporting to
over 30 countries worldwide and they are looking at opportunities across
Europe, US, China, South East Asia & CIS countries.”
Jindal Stainless will attain a production exceeding 600000 MT this year at the
Hisar plant compared to 547352 MT last year. The cold rolling capacity is also
being expanded from 150000 MT to 250000MT by the end of the financial year,
with impetus to value added stainless steel products. The new facility will
process Ferretic grades of 400 series, stainless steel which has a growing
market.
JSL is pioneer in production of high value added precision strips of razor blade
quality and other grades for critical applications. The production capacity of
the precision strip unit is also being increased from 15000 MT to 30000 MT by
the end of the financial year.
As part of JSL’s mega expansion plans, 1.6 million tonnes Greenfield project at
Orissa is underway by starting operations of 2x60 MVA Ferro-Chrome furnaces.
JSL expects to start the 250MW power plant by mid next year subsequently
followed up by setting up of other Ferro alloys units of Ferro-Manganese and
Silico - Managanese.
In 2004, JSL acquired Maspion Stainless Indonesia, which has added strength to
its reach in South East Asian markets and has also helped to build in synergies
as the Hot rolled coils manufactured at the Indian plant is being cold rolled
at Indonesia and used for servicing the South East Asian and global market. JSL
has been able to effect a turn around and expects a production of 65000 MT this
year, which is 120% of the installed capacity. JSL has further decided to
increase the installed capacity to 150000 MT considering the importance of
emerging South East Asian and other global markets by adding few balancing
equipments.
Stainless Innovation
Awards
Jindal Stainless has been striving to make stainless steel a part of everybody's life by taking a 360 degrees approach from production of raw materials to supply of architecture and lifestyle related products. Meeting this very objective, are arc and art d' inox - promoted by Jindal Stainless, uniquely supporting & promoting applications of Stainless Steel in every conceivable creative possibilities. arc (Jindal Architecture Ltd.) focuses on application of Stainless Steel products and technology solutions across architecture, building and construction segments and is involved in urban development making versatile use of Stainless Steel. art d' inox (Austenitic Creations Pvt. Ltd.) has proved to be a pioneer in the manufacture of premium lifestyle products in stainless steel, breaking new grounds with its innovations. Jindal Stainless has also instituted the O P Jindal Stainless Chair for research and product innovation in stainless steel at the prestigious National Institute of Design, Ahmedabad, to encourage innovation and creative applications of stainless steel, in design led products.
Stainless Steel is an established material in international design. It's contemporary, stylish yet its neutral look is gaining immense popularity among all kinds of users and tops as a material of choice for its excellent blending ability with any other material, viz. glass, ceramics, wood or leather. The material has been providing great opportunities and inspiration to generations of designers. Today its use is being taken to new levels of expression and technical sophistication.
Stainless Innovation Awards is a testament of our continued support to the design fraternity.
To keep encouraging creativity in the usage of the material, Jindal Stainless organized the fourth edition of "The Stainless Innovation Awards" to reward excellence in use of stainless steel. The Awards were held on 10th March, 2007 in New Delhi.
The three categories for the awards were:
Category 1 : Innovation in application of Stainless Steel in Building and Architecture
Category 2 : Creative ideas of application of Stainless Steel in Interior Design
Category 3 : Excellence in usage of Stainless Steel in Product Design
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.40.53 |
|
UK Pound |
1 |
Rs.81.54 |
|
Euro |
1 |
Rs.62.40 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--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 |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YSE |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
75 |
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 |
|