MIRA
INFORM REPORT
|
Report Date : |
11.03.2008 |
IDENTIFICATION
DETAILS
|
Name : |
GVK INDUSTRIES LIMITED |
|
|
|
|
Registered Office : |
503-504, Pragati Towers, 26, Rajendra Place, New Delhi – 11008 |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.03.2007 |
|
|
|
|
Date of Incorporation : |
18.06.1992 |
|
|
|
|
Com. Reg. No.: |
014388 |
|
|
|
|
CIN No.: [Company
Identification No.] |
U74999AP1992PLC014388 |
|
|
|
|
Legal Form : |
A Closely Held Public Limited Liability Company |
|
|
|
|
Line of Business : |
Not Available |
RATING &
COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD 23679892 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well – established and reputed company and a part of GVK
Group. Trade relations are fair. Business is active. Payments are reported as
usually correct and as per commitments. The company can be considered good for normal business dealings at
usual trade terms and conditions. |
LOCATIONS
|
Registered Office : |
503-504, Pragati Towers, 26, Rajendra Place, New Delhi – 11008, India |
|
|
|
|
Corporate Office 1 : |
Paigah House, 156-159, Sardar Patel Road, Secunderabad – 500003, India |
|
Email : |
|
|
|
|
|
Corporate Office 2 : |
Toll Plaza, At KM 286, Ajmer Road, NH-8, Village Tshekaria, Teh.
Sanganer, Jaipur – 303007, Rajasthan, India |
|
E-Mail : |
DIRECTORS
|
Name : |
Mr. G V Krishna Reddy |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. G Indira Krishna Reddy |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. G V Sanjay Reddy |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Somanadri Bhupal |
|
Designation : |
Managing Director |
|
Date of Birth/ Age. : |
50 years |
|
Qualification : |
B. Sc., MBA (USA) |
|
Experience : |
26 years |
|
Date of Appointment : |
03.07.2000 |
|
|
|
|
Name : |
Mr. A Ramakrishna |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. K N Shenoy |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Abid Hussain |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. P Abraham |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ajay Lal |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sanjay Narayan |
|
Designation : |
Director ( Co-opted on 28.01.2007) |
|
|
|
|
Name : |
Mr. Pradip Baijal |
|
Designation : |
Director ( Co-opted on 24.07.2007) |
|
|
|
|
Name : |
Mr. Ch G Krishna Murthy |
|
Designation : |
Director ( Co-opted on 24.07.2007) |
|
Name : |
Mr. G V Krishna Reddy |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Other Directorship Company: |
|
KEY EXECUTIVES
|
Name : |
Mr. A Lssac George |
|
Designation : |
Chief Financial Officer |
|
Date of Birth/ Age. : |
51 years |
|
Qualification : |
FCA |
|
Experience : |
27 years |
|
Date of Appointment : |
01.03.1999 |
|
|
|
|
Name : |
Mr. P V Rama Seshu |
|
Designation : |
Company Secretary |
BUSINESS DETAILS
|
Line of Business : |
Not Available |
PRODUCTION STATUS 31.03.2007
|
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
|
|
|
|
400.00 MW |
216.82 MW |
1157.472Kwh |
GENERAL
INFORMATION
|
Bankers : |
|
||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Facilities : |
Above Loans are secured by: i) Pari passu legal mortgage of Company's land situated at
Nasik, ii) Pari passu first charge in the form of equitable
mortgage by deposit of title deeds in respect of land and all buildings and
movable plant and machinery, tools and accessories present and future
situated at Jegurupadu, East Godavari District, A.P iii) Pari passu first charge in the form of hypothecation
of the Company's movable (save and except six weeks book debts) plant and
machinery and accessories present and
future subject to prior charges of bankers for securing the borrowings for
working capital requirements.
This Loan is secured by exclusive first charge on all
unused spares and inventory Amounts falling due for repayment in the next one
year A) Rupee Term Loans Rs.50.000 Millions B) Foreign Currency Loans Rs.40.998 Millions
Both Rupee and Foreign currency Loans are secured by: (i) Pari passu first mortagage and charge on all the
immovable and moveable properties (both tangible and intangible), both
present and future of the expansion project and assets common for both Phase
1 and expansion project. (ii) Pari passu second mortgage and second charge on all
the immovable and moveable properties (both tangible and intangible), both present
and future, pertaining to Phase I (including all receivables). (Ill) Pari passu first charge/assignment/security interest
on all the revenues/receivables of the company pertaining to expansion
project. (iv) Pari passu first charge/assignment/security interest
on company's rights under the expansion Project Agreements, in respect of all
clearances, licences. Permits. Approvals and consents in respect of the
expansion project, and letters of credit, guarantee or performance bond that
may be provided in favourof Company by any party to any project agreement or
contract pertaining to the expansion project. (v) Pledge of the shares of the company held by promoters
representing GVK Group to be created after the loans of Phase I is fully
repaid.
Unsecured Loans
|
|
|
|
|
Banking Relations
: |
- |
|
|
|
|
Auditors : |
|
|
Name : |
Statutory
Auditor S R Batiboi and Associates Chartered Accountant |
|
Address: |
205, 2nd Foor, Ashok Bhoopal Chambers, S P Road,
Secunderabad - 500003 |
|
|
|
|
Holding Company
: |
|
|
|
|
|
Subsidiaries : |
|
|
|
|
|
Associates : |
|
CAPITAL STRUCTURE
Authorised Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
350000000 |
Equity Share |
Rs.10/- each |
Rs.3500.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
262000000 |
Equity Share |
Rs.10/- each |
Rs.2620.000
Millions |
|
|
|
|
|
[141383800 shares were held by GVK Power and Infrastructure
Limited, Holding Company. (Previous year 141383800)]
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
|
31.03.2007 |
31.03.2006 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
|
2620.000 |
2620.000 |
|
|
2] Share Application Money |
|
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
|
3299.973 |
2930.895 |
|
|
4] (Accumulated Losses) |
|
0.000 |
0.000 |
|
|
NETWORTH |
|
5919.973 |
5550.895 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
|
7556.778 |
7401.459 |
|
|
2] Unsecured Loans |
|
350.000 |
564.675 |
|
|
TOTAL BORROWING |
|
7906.778 |
7966.134 |
|
|
DEFERRED TAX LIABILITIES |
|
269.399 |
230.029 |
|
|
|
|
|
|
|
|
TOTAL |
|
14096.150 |
13747.058 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
|
5002.807 |
5508.640 |
|
|
Capital work-in-progress |
|
7723.179 |
7092.446 |
|
|
|
|
|
|
|
|
INVESTMENT |
|
0.000 |
6.016 |
|
|
DEFERREX TAX ASSETS |
|
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
|
275.743 |
230.513 |
|
|
Sundry Debtors |
|
828.328 |
769.363 |
|
|
Cash & Bank Balances |
|
277.200 |
519.458 |
|
|
Other Current Assets |
|
0.000 |
0.000 |
|
|
Loans & Advances |
|
332.729 |
281.709 |
|
Total
Current Assets |
|
1714.000 |
1801.043 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
|
260.287 |
635.052 |
|
|
Provisions |
|
83.549 |
27.489 |
|
Total
Current Liabilities |
|
343.836 |
662.541 |
|
|
Net Current Assets |
|
1370.164 |
1138.502 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
|
0.000 |
1.454 |
|
|
|
|
|
|
|
|
TOTAL |
|
14096.150 |
13747.058 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
|
2668.687 |
2759.951 |
|
|
Other Income |
|
243.672 |
26.521 |
|
|
Total Income |
|
2912.359 |
2786.472 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
|
654.710 |
108.097 |
|
|
Provision for Taxation |
|
136.259 |
(1046.231) |
|
|
Profit/(Loss) After Tax |
|
518.451 |
1154.328 |
|
|
|
|
|
|
|
|
Total Earnings |
|
1.637 |
1.366 |
|
|
|
|
|
|
|
|
Total Imports |
|
89.210 |
78.651 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Cost of Fuel |
|
1227.953 |
1358.342 |
|
|
Generation, Administration Expenses |
|
436.869 |
441.164 |
|
|
Interests and Financial Charges |
|
81.153 |
110.894 |
|
|
Depreciation & Amortization |
|
511.674 |
511.879 |
|
|
Other Expenditure |
|
0.000 |
256.096 |
|
Total Expenditure |
|
2257.649 |
2678.375 |
|
KEY RATIOS
|
PARTICULARS |
|
|
31.03.2007 |
31.03.2006 |
|
PAT / Total Income |
(%) |
|
17.80 |
41.43 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
|
24.53 |
3.92 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
|
9.75 |
1.48 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
|
0.11 |
0.02 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
|
1.39 |
1.55 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
|
4.98 |
2.72 |
LOCAL AGENCY
FURTHER INFORMATION
Review of Operations:
The Company has achieved a Plant Load Factor (PLF) of 61.023
% as compared to 68.515% of the previous year. The reduction in PLF is mainly
attributable to the restricted gas supply from GAIL, AP Transco's order not to
use naphtha as a supplementary fuel and also dispatch instructions to limit the
daily generation to synchronize with their day to day demand. However, the
Plant Availability Factor (PAF) for the year has gone upto 97.65 % when
compared to 95.70% of the previous year.
Due to heavy shortage of power in the State, the Government
of Andhra Pradesh has asked Andhra Pradesh Power Coordination Committee (APPCC)
to purchase power from IPPs on naphtha fuel also giving subsidy to meet the
demand and accordingly one Gas Turbine was put into operation on naphtha from
30th December, 2007 to 31st March, 2007 (30th Dec. 06 to 2nd Jan. 07
and 27th March, 07 to 31st March, 07).
Environment and Safety:
In tune with its philosophy, the company has been
maintaining the highest environment standards with the best safety record at
the Plant and also a socially responsible corporate entity with a thrust on
environment protection. The Company has achieved yet another full year of
accident free operations, which is a clear reflection on the result of the
safety practices being followed at the plant. The Company is committed to achieving
global standards of environment and safety.
The Company's Health, Environment and Safety policy has
become a respected reference in power and related sectors. This policy is being
scrutinized and evaluated every year.
Expansion Project:
The directors wish to inform that in view of non allocation
of gas for the Phase-ll the plant was shutdown from 22.01.2006 after completion
of the performance tests and also the EPC contractor M/s. Alstom had completed
the critical punch list item. The plant has been taken over from Alstom on
12.05.2006 and was kept under preserved condition as per the OEM recommendation
till AP Transco agrees to declare COD and GAIL supply the natural gas for
operation of the plant.
The statutory inspection of 400 KV Switchyard and other
electrical equipment was done by the Chief Electrical Inspector to Government
(CEIG) on 29.03.2007 and approval accorded. The company has requested Andhra
Pradesh Power Coordination Committee (APPCC) to back charge the 400 KV
Switchyard on permanent basis as per the provisions of the Power Purchase
Agreement.
Scheme of Arrangement:
The Directors wish to inform that subsequent to the approval
of the shareholders for the Scheme of Arrangement, the company has filed
necessary petitions with the relevant High Courts for their confirmation. The
scheme is presently under consideration by there levant High Courts. Once the
approval is received and the scheme of arrangement is fully implemented, the
company would become 100% subsidiary to GVK Power and Infrastructure Limited.
A. Conservation of Energy:
a) Energy Conservation Measures
An Energy Conservation Committee has been formed at the
plant to periodically review the conservation measures being implemented. The
following measures are being followed at the Jegurupadu Power Plant to reduce
the energy consumption by adopting energy conservation measures.
- Lighting
The minimum required number of lights is being put ON during
normal hours. From 10:00 PM until dawn, most of the lights inside the plant and
street lights are being switched OFF.
- Pumps
Only the required number of cooling water pumps for the
generator and lube oil coolers are being operated.
- DM Water
Whenever Naphtha is not used, the DM and raw water capacity
is being reduced which will in turn reduce the electricity and chemical
consumption etc.
b) Additional investments and proposals,
if any, being implemented for reduction of consumption of energy: None.
c) Impact of the measures at (a) and (b) above
for reduction of energy consumption and consequent impact on the cost of
production of goods: Not relevant as the Company itself is engaged in
generation of electric power.
B. Technology absorption
Efforts made in technology absorption as per Form B of the
Annexure:
The Erection, Procurement and Construction Contract of the
Power Plant were done by a consortium of ABB Germany and ABB India. As a part
of the EPC Contract, ABB had trained the operation and maintenance staff at its
works in Germany. Presently, the entire operating and maintenance team
comprises of Indians without any expatriate staff. The skilled and experienced
O and M staffs are involved with routine maintenance and inspection of the
power plant, apart from operating the same.
Notes on Accountants:
- The Company is entitled to receive incentive for every percentage
point generated in excess of Plant Load Factor (PLF) of 68.50% during the
tariff year of 20th June of each year to 19th June of next year. However
incentive for the period from 20.06.2006 to 31.03.2007 has not been
considered since PLF so far has not reached minimum PLF of 68.50%.
- APTRANSCO during the year 2003-04 made a claim against the company
for Rs.204.800 Millions (up to 19-06-03), stating that CAG has pointed out
that the effective Return on Equity (ROE) paid to the company on monthly
basis, works out to 17.17%, as against 16% as per Power Purchase Agreement
(PPA). Aggrieved of the said claim, company preferred a writ petition
before hon'ble High Court of A.P and the hon'ble High Court directed
APTRANSCO not to take any action pending disposal of the case.Meanwhile on
appeal by APTRANSCO in this regard, Andhra Pradesh Electricity Regulatory
Commission (APERC) admitted the case and issued notice to the company. The
company challenged the said notices before the High court of Andhra
Pradesh, on the ground that the amended and restated PPA between the
company and APTRANSCO provides referral of all disputes to arbitration.
The High court of Andhra Pradesh issued interim directions to APERC not to
proceed with the above case until the writ petition is disposed off.
Pending disposal of the same, probable liability on this account up to 31st
March, 2007 would be Rs. 334.000 Millions. (Previous year Rs.300.700
Millions)
- The company has recognized Deferred Tax Liability as per AS - 22
only for the period after the expiry of the present power purchase
agreement with AP Transco in 2015 since up to that time, AP Transco has to
reimburse income tax payable by the Company.
- There are no overdue amounts payable to small-scale industries as
of March 3, 2007 as per the information available with the Company.
- Contingent
Liabilities not provided for:
(Rs. In Millions as on 31.03.2007)
|
On account of Guarantees issued by banks. |
67.545 |
|
On account of Inland Letters of Credit. |
70.000 |
|
Service Tax reimbursable to GVK Power and Infrastructure
Limited (GVKPIL) (erstwhile Jegurupadu Operating and Maintenance Company,) for
the period 1.4.97 to 31.03.2007 as the matter is disputed by GVKPIL and
pending in Appeals |
67.342 |
|
Income tax demand pending in appeals |
1.545 |
- February 2004, AP Transco has filed petitions before the Andhra Pradesh
Electricity Regulatory Commission (APERC) for adjudication of certain
matters relating to tariff provisions under the Power Purchase Agreement
(PPA) without specifying any amount aggrieved of which the Company has
filed a Writ petition before the Hon'ble High Court of Andhra Pradesh
questioning the jurisdiction of APERC for adjudication of the matters
under the PPA. The Hon'ble High Court of AP has issued interim directions
to APERC not to proceed with the subject notice until further orders. Sundry
Debtors includes Rs. 7.600 Millions due from APTRANSCO being the amount
withheld towards excess charging of interest on working capital by the
company. The matter is pending in arbitration before Hon'ble High Court of
Andhra Pradesh.
- As per the terms of contract with Bharat Petroleum Corporation
Limited (BPCL) for supply of Naphtha, the Company has to pay for 80000 MT
@ 38.45 as 'Minimum off Take charges' in the year of no purchases. The
Company is negotiating with BPCL to reduce the Minimum off Take quantity
from 80000 MT to 40000 MT, which is under consideration by BPCL. Pending
receipt of acceptance from BPCL, no provision is made in the books for the
requested reductions of 40000 MT, which worked out to Rs.1.538 Million for
the year and the liability on this account up to 31st March, 2007 is
Rs.3.076 Millions
- Foreign currency Loans in respect of Phase I have been stated at
the exchange rates at which the said loans were drawn as the said Foreign
Exchange variation is reimbursable to the company by Transmission
Corporation of Andhra Pradesh Limited as per power purchase agreement.
Liability on this account would have been higher by Rs.9.193 Millions
(previous year Rs.60.339 Millions) had the outstanding Foreign Currency
Loans were translated as on 31st March 2007.
Fixed Assets:
- Land and Site development
- Buildings and Roads
- Factory Building
- Factory Building
- Plant and Machinery
- Data Processing equipment
- Vehicles
- Furniture and Fixtures
- Electrical Equipment
- Office Equipment
- Air
Conditioners
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.67 |
|
UK Pound |
1 |
Rs.82.03 |
|
Euro |
1 |
Rs.62.54 |
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 |
NO |
|
--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 |
|