MIRA
INFORM REPORT
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Report Date : |
17.11.2008 |
IDENTIFICATION
DETAILS
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Name : |
TAMILNADU PETRO
PRODUCTS LIMITED |
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Registered Office : |
Manali Express
Highway, Manali, Chennai - 600 068, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
22.06.1984 |
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Com. Reg. No.: |
18-10931 |
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CIN No.: [Company
Identification No.] |
L23200TN1984PLC010931 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DHET00247C |
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Legal Form : |
Subject is a
public limited liability company. The company's shares are listed on the
Stock Exchanges. |
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Line of Business : |
Manufacturing of Linear
Alkyl Benzene, Epichlorohydrin and Caustic Soda. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 18270000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established company having satisfactory track. Directors are reported as
experienced, respectable and having satisfactory track records. Their trade
relations are fair. Subject current
year and future performance is expected to be seriously affected due to
global meltdown and recession in industry. It may ultimately affect the
payment behavior of the subject resulting in to delay. The company can
be considered good for normal business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered Office / Factory : |
Manali Express
Highway, Manali, Chennai - 600 068, Tamilnadu, India |
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Tel. No.: |
91-44-25941501-10
/ 28254545/ 25941350/ 60/ 70/ 80/ 90 |
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Fax No.: |
91-44-25941139 /
28255798 |
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E-Mail : |
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Website : |
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Corporate
Office : |
"TPL"
House", 3rd Floor, No. 3, Cenotaph Road, Teynampet, Chennai -
600018, Tamilnadu, India |
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Tel. No.: |
91-44-24311035 |
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Fax No.: |
91-44-24311033 |
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Factory : |
Manali Express
Highway, Manali, Chennai - 600 068, Tamilnadu, India |
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Tel. No.: |
91-44-25941501-10 |
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Fax No.: |
91-44-25941139 |
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E-Mail : |
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Regional
Office 1 : |
C/o. SPIC Limited, II Floor, A-2/35, Safdarjung Enclave, Chaudhry
Jhandu Singh Marg, New Delhi - 110 029 |
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Tel. No.: |
91-11-26178348 |
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Fax No.: |
91-11-26178018 |
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Regional
Office 2 : |
C/o. SPIC Limited, 1201, 12th Floor, 16, Vikram Tower,
Rajendra Place, New Delhi – 110003 |
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Tel. No.: |
91-11- 25868018 |
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Fax No.: |
91-11- 25868019 |
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Secretarial Department : |
Manali Express Highway, Manali, Chennai – 600068 |
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Tel No.: |
91-44- 25940761 (Direct) : 91-44- 25941501- 10 Ext. (2388) |
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Registrar and
Share Transfer Agents : |
Cameo Corporate Services Limited, “Subramanian Building”, 1, Club
House Road, Chennai – 600002 |
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Tel No.: |
91-44- 28460084/ 28460395 |
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Fax No.: |
91-44- 28460129 |
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Branches : |
Located at:
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DIRECTORS
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Name : |
Mr. Shaktikanta Das, IAS |
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Designation : |
Chairman |
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Name : |
Mr. M. F. Farooque, IAS |
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Designation : |
Chairman |
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Name : |
Dr. A. C. Muthiah |
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Designation : |
Vice Chairman |
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Name : |
Mr. S. Ramasundaram, IAS |
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Designation : |
Director |
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Name : |
Mr. Sunil Paliwal, IAS |
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Designation : |
Director |
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Name : |
Mr. Kumar Jayant, IAS |
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Designation : |
Director |
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Name : |
Mr. T.S. Surendranath |
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Designation : |
Director |
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Name : |
Mr. S. Susai |
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Designation : |
Director |
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Name : |
Mr. Ashwin C. Muthiah |
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Designation : |
Director |
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Name : |
Mr. Babu K. Verghese |
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Designation : |
Director |
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Name : |
Mr. C. Ramachandran |
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Designation : |
Director |
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Name : |
Mr. Dhananjay N. Mungale |
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Designation : |
Director |
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Name : |
Mr. N. R. Krishnan |
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Designation : |
Director |
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Name : |
Dr. K. U. Mada |
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Designation : |
Director |
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Name : |
Mr. V. Ramani |
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Designation : |
Director and Chief Financial Officer |
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Name : |
Mr. R M. Muthukaruppan |
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Designation : |
Managing Director and Chief Operating Officer |
KEY EXECUTIVES
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Name : |
Mr. M. B. Ganesh |
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Designation : |
Secretary |
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AUDIT COMMITTEE : |
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Name : |
Mr. C. Ramachandran |
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Designation : |
Chairman |
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Name : |
Mr. S. Susai |
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Designation : |
Member |
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Name : |
Mr. Dhananjay N. Mungale |
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Designation : |
Member |
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Name : |
Mr. N. R. Krishnan |
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Designation : |
Member |
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Name : |
Dr. K. U. MADA |
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Designation : |
Member |
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Name : |
Mr. T. Raghavan |
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Designation : |
Legal Advisor |
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Address : |
New No.41, Kasturi Ranga Road, Chennai – 600018 |
SHAREHOLDING
PATTERN
AS ON 31.03.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters :- |
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Tamilnadu
Industrial Development Corporation Limited |
15843751 |
17.61 |
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Southern
Petrochemical Industries Corporation Limited |
15234375 |
16.93 |
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Other Corporate
Bodies |
9681614 |
10.76 |
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General Public |
39433556 |
43.83 |
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Non Resident
Individuals |
3091113 |
3.44 |
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Foreign
Institutional Investors & OCBs |
1911325 |
2.12 |
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Indian Financial
Institutions |
4670929 |
5.19 |
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Mutual Funds
& Banks |
22925 |
0.03 |
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Shares in Transit
[clearing Member account] |
81886 |
0.09 |
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Total |
89971474 |
100.00 |
Dematerialization of Shares: Over 73.32% of the
89971474 outstanding shares have been dematerialized up to 31st
March 2008.
Liquidity: The company equity shares are traded in MSE,
BSE AND NSE in compulsory form.
BUSINESS DETAILS
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Line of Business : |
Manufacturing of
Linear Alkyl Benzene, Epichlorohydrin and Caustic Soda. |
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Products : |
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Imports : |
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Countries : |
Europe, Far East
Asia and U.S.A |
PRODUCTION STATUS (AS ON 31.03.2008)
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Particulars |
Unit |
Installed Capacity |
Actual Production |
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Linear Alkyl Benzene |
MT |
120000 |
78630 |
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Heavy Normal Paraffin |
MT |
15000 |
612 |
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Heavy Alkylate |
MT |
NA |
2749 |
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Epichlorohydrin |
MT |
10000 |
8967 |
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Wind Power |
KW/Units |
12000 KW |
15988837 Units |
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Caustic Soda |
M.T |
56100 |
55844 |
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Chlorine |
M.T. |
40000 |
44313 |
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Hydrochloric Acid |
MT |
39600 |
37642 |
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Ammonium Chloride |
MT |
21000 |
350 |
GENERAL
INFORMATION
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No. of Employees : |
604 |
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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 : |
A.
F. Ferguson
and Company Chartered
Accountants |
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Address : |
No. 5, Nandanam
Extension, 1st Street, Nandanam, Chennai – 600035, Tamilnadu,
India |
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Name : |
Deloitte Haskins and Sells Chartered Accountant |
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Address : |
Old No.37, New No.52, ASV Ramana Towers, Venkatanarayana Road, T.
Nagar, Chennai - 600017 |
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Memberships : |
Confederation of
Indian Industries |
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Collaborators : |
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Promoters : |
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Joint Venture : |
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Associates : |
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Subsidiaries :
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CAPITAL STRUCTURE
AS ON 31.03.2008
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
20,00,00,000 |
Equity Shares |
Rs.10/- |
Rs.2000.000 millions |
Issued Capital :
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No. of Shares |
Type |
Value |
Amount |
|
89,976,899 |
Equity Shares |
Rs.10/- |
Rs. 899.769 millions |
Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
89,971,474 |
Equity Shares |
Rs.10/- |
Rs. 899.715 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
899.715 |
899.715 |
899.715 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
2754.847 |
2877.534 |
3068.938 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
3654.562 |
3777.249 |
3968.653 |
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LOAN FUNDS |
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1] Secured Loans |
1690.861 |
1962.647 |
2290.175 |
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2] Unsecured Loans |
211.667 |
182.176 |
161.160 |
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TOTAL BORROWING |
1902.528 |
2144.823 |
2451.335 |
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DEFERRED TAX LIABILITIES |
772.364 |
838.645 |
882.377 |
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TOTAL |
6329.454 |
6760.717 |
7302.365 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
4107.121 |
3928.678 |
4280.422 |
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Capital work-in-progress |
389.361 |
867.452 |
733.424 |
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INVESTMENT |
1798.008 |
1798.008 |
1798.008 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
554.167
|
989.140
|
1089.774 |
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Sundry Debtors |
523.328
|
570.582
|
729.767 |
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Cash & Bank Balances |
90.252
|
91.949
|
149.249 |
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Other Current Assets |
0.000
|
0.000
|
0.000 |
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Loans & Advances |
575.456
|
441.933
|
529.218 |
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Total
Current Assets |
1743.203
|
2093.604
|
2498.008 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1650.913
|
1879.941
|
1828.080 |
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Provisions |
57.326
|
47.084
|
179.417 |
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Total
Current Liabilities |
1708.239
|
1927.025
|
2007.497 |
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Net Current Assets |
34.964
|
166.579
|
490.511 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
6329.454 |
6760.717 |
7302.365 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
7779.057 |
8285.946 |
8105.820 |
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Other Income |
245.060 |
89.141 |
77.634 |
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Total Income |
8024.117 |
8375.087 |
8183.454 |
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Profit/(Loss) Before Tax |
[183.862] |
[152.728] |
14.544 |
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Provision for Taxation |
[64.781] |
[42.132] |
[5.832] |
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Profit/(Loss) After Tax |
[119.081] |
[110.596] |
20.376 |
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Earnings in Foreign Currency : |
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Total Earnings |
455.240 |
607.659 |
950.455 |
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Imports : |
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Raw Materials |
26.090 |
170.630 |
141.498 |
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Stores & Spares |
13.729 |
86.975 |
142.850 |
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Capital Goods |
Nil |
14.068 |
24.051 |
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Others |
97.030 |
276.737 |
29.612 |
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Total Imports |
136.849 |
548.410 |
338.011 |
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Expenditures : |
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Manufacturing Expenses |
7640.356 |
7949.292 |
7567.271 |
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Interest |
239.376 |
247.369 |
218.843 |
|
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Depreciation & Amortization |
328.247 |
331.154 |
386.815 |
|
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Exceptional Items |
0.000 |
0.000 |
[4.019] |
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Total Expenditure |
8207.979 |
8527.815 |
8168.910 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.09.2008 |
|
Type |
|
|
1st
Quarter |
|
Sales Turnover |
|
|
2760.100 |
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Other Income |
|
|
62.100 |
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Total Income |
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|
2822.200 |
|
Total Expenditure |
|
|
2640.200 |
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Operating Profit |
|
|
182.000 |
|
Interest |
|
|
63.300 |
|
Gross Profit |
|
|
118.700 |
|
Depreciation |
|
|
80.100 |
|
Tax |
|
|
0.300 |
|
Reported PAT |
|
|
91.500 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
0.58 |
0.63 |
0.73 |
|
Long Term Debt-Equity Ratio |
0.41 |
0.48 |
0.55 |
|
Current Ratio |
0.61 |
0.68 |
0.72 |
|
TURNOVER
RATIOS |
|
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|
Fixed Assets |
0.74 |
0.80 |
0.79 |
|
Inventory |
11.50 |
9.09 |
8.69 |
|
Debtors |
16.22 |
14.54 |
14.54 |
|
Interest Cover Ratio |
0.02 |
0.39 |
1.05 |
|
Operating Profit Margin(%) |
3.76 |
4.54 |
6.78 |
|
Profit Before Interest And Tax
Margin(%) |
0.06 |
1.04 |
2.59 |
|
Cash Profit Margin(%) |
1.70 |
2.33 |
4.55 |
|
Adjusted Net Profit Margin(%) |
(2.00) |
(1.17) |
0.36 |
|
Return On Capital Employed(%) |
0.09 |
1.65 |
3.73 |
|
Return On Net Worth(%) |
(5.07) |
(3.06) |
0.90 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject was
incorporated on 22nd June, 1984 at Chennai in Tamilnadu having Company
Registration Number 10931.
The company was
originally promoted by the Tamilnadu Industrial Development Corporation (TIDCO)
but was later converted into a joint-sector company in association with
Southern Petrochemical Industries Corporation (SPIC). In December, 1993 the
company came out with a public issue to part-finance a project to manufacture
epichlorohydrin (ECH)
The company is one
of the leading manufacturers of linear alkyl benzene (LAB) used in the soap and
detergents industry and ECH which is used to manufacture epoxy resins and plant
pesticides. The company's client list includes HLL, Godrej, Nirma and P and G,
etc. It had a technical collaboration with Conser S. P. A., Italy for the
manufacture of ECH. The company is the largest exporter of LAB in the country
with exports to Europe, West Asia and South East Asia.
The company entered
into a joint venture with Henkel, Germany a detergent manufacturer for a
detergent project to be implemented. SPIC Fine Chemicals was incorporated for
this purpose. Further the company diversified by forming a 24:76 joint venture
with Ciba Geigy, Switzerland and had set up a project to manufacture 25000 tpa
of epoxy resin used in epichlorohydrin. The company had entered into a MoU with
Indian Oil Corporation for setting up a refinery project with a capacity of 6
mtpa at Minjur, Manali.
The company had
obtained the ISO 9002 quality certification. It had won the Visveswaraya Award
and many other awards for safety and exports.
The company
initiated action with UOP for expansion of Lab Plant with Temperature
Controlled Reactor (TCR) was commissioned during the year 2000. Additional 6MW
DG set was commissioned at Lab Plant. The propylene storage capacity at
Cuddalore had been enhanced to 1000 MT. In order to meet the increase in
capacity of LAB, Normal Paraffin expansion to a capacity of 94000 MTs had been
planned and action had been initiated. TPL plans to source the main feedstock,
benzene, from Haldia Petrochemicals and kerosene through imports.
The company also
acquiring a controlling stake in a LAB (liner alkyl benzene) facility in
Vietnam at a Cost of $ 35 million. The plant had a capacity of 80000 tpa. It
also had a downstream unit that makes 60000 tonne per annum of LAB Sulphonate
(LAS), using LAB as a feedstock. The proposed 525-MW coal fired plant in
Tamilnadu, being set up by SPIC Electric Power Corporation Private Limited (a
joint venture with PowerGen) is expected to commence operations in 2004.
During the year
2000-01, the company acquired the Heavy Chemicals Division of SPIC. The company had also installed a 18.6% MW
captive power plant in 2002-03 at the Chlor Alkali Unit to reduce high cost of
power incurred for production of caustic soda and chlorine. For setting up a
Liquid Cargo Marine Terminal at Ennore Port, Vopak Sical Terminal Limited
(VSTL) a joint venture, has submitted the Expression of Interest. The
investment made so far is around Rs. 9.800 millions. The company is having
wholly owned subsidiary of "Certus Investment and Trading Limited."
The company
conceived in the early 1980's, the genesis of Linear Alkyl Benzene (LAB)
project by Tamilnadu Petroproducts Limited (TPL) could be traced back to the
Promoter's vision to propel the growth of environmental friendly and
biodegradable detergents in India serving as an import substitution product.
The emerging economic environment in India offered a very high potential for
newer petrochemical business, especially in the area of business focussed on
consumer requirements in the country.
The company as part
of its initial pre-project activities, worked towards identifying suitable
location, obtaining necessary governmental clearances, sourcing of right
technology, typing up of feedstock and other raw materials and further
executing necessary technology / feedstock agreements. The company commissioned
the LAB Project successfully in April 1988 in a record 22 months from the time
of financial closure.
In 1989 a Modern
Define Unit, the first of its kind in Asia with UOP know-how was installed to improve
the quality to adhere to global standards.
In the year 1990, a 15,000 MTPA Heavy Normal Paraffin unit was commissioned to
cater to the requirements of Chlorinated Paraffin Wax (CPW) manufacturers. CPW
finds extensive application in Synthesizing Plasticisers.
In a couple of years time in 1992, TPL'S LAB Plant was the first in the world
to implement Advanced Process Control in association with M/s. Setpoint, USA.,
increasing the LAB capacity level to 85,000 MTPA. The company’s LAB plant has
since evolved itself as a role model plant in the LAB industry.
During the year 1995, TPL diversified into manufacture of Epichlorohydrin
(ECH), a key raw material for producing Epoxy Resins. Further during year 2000,
TPL as part of consolidation of ECH business acquired a 150 MTPD Caustic Soda /
Chlorine a plant which uses the latest Membrane, cell process.
In line with the
changes required to envision and remain with the time, the company has
committed itself to adopting the state of the art technology. During the year
2001, the company achieved a capacity of 100,000 MTPA of LAB and further is in
an advanced stage of enhance the LAB capacity to 120,000 MTPA in the year
2003-04. The vision to grow and maintain leadership in this business is a
silver lining to its business philosophy.
OPERATIONAL
HIGHLIGHTS:
The capacity utilisation of LAB plant was largely governed by the demand for
and availability of LAB in the market place. The domestic production of LAB
coupled with imports resulted in excessive supply of the product. Hence, the
Company had to so adjust its production programme that its. operations could be
reasonably remunerative. That meant utilisation of the plant capacity was at
65.58% with an output of 78,630 MTs. As it was not a paying proposition, export
of LAB was meant to continue their presence in the international market. The
plant on stream factor was over 95% for the year. Despite the low throughput,
the specific consumptions of raw materials were maintained well within the
norms by adopting stringent operational standards. Simultaneously, as the fuel
oil costs were soaring high; energy conservation measures were taken to reduce
fuel oil consumption.
In LAB business, margins shrank with unabated rise in prices of raw materials
consequent to rise in crude prices and excessive availability of the product.
Continued political disturbances in oil producing nations and the rising demand
for crude resulted in mis-match between demand and supply which drove the
prices of petroleum products to record levels.
The Company continued to hedge raw materials for the volume covered under
export contracts. With a view to contain the increase in energy costs, the
Company upgraded the advanced process control system for optimising the process
and energy inputs in the LAB plant.
Epichlorphydrin:
ECH plant achieved a capacity utilisation of 83.6% during the year. To overcome
the interruptions faced in the plant operations during the first and second
quarters of the year, appropriate remedial measures were undertaken by
replacing few distillation columns and equipment so as to ensure an
un-interrupted operation, of the plant.
While the energy costs were on steadily rising trend, the full pass through in
domestic prices did not happen due to global ECH prices. The import price is
lesser than the production cost. Also, because of the rupee appreciation,
reduced customs duty and Free Trade Agreement Import, there was preference to
import. However, the Company was not affected severely as bulk of supplies was
made to the adjacent company in which TPL has a stake holding.
Caustic Soda / Chlor Alkali:
Chlor Alkali plant achieved a capacity utilisation of 99.5%. During the year,
plant operation was run partly on TNEB power because of difference in comparative
rates. However, due to lack of quality power, the operations were to a certain
extent affected. Production levels of Caustic Flakes and Caustic Soda Lye were
at 78.3% and 93.9% of the respective targets.
The Company continued its strategy of producing to meet the changing market
requirements of caustic lye and caustic flakes. Despite additional capacities
being installed in parts of South India, the market for caustic soda lye and
caustic soda flakes did not witness any major variations in price through out
the year.
FINANCE:
Some of the Financial Institutions / Banks have re-set the interest rates
resulting in additional interest burden. The Company has been working its
programme to infuse long term funds to meet the rising working capital requirements,
especially because of the increase in raw material prices. These 'measures
embarked' during the year include sale of some of the non-core assets. In the
Arbitration proceedings initiated by the Company in respect of claims towards
damage to the Pacol Charge Heater in 2004-05, an award for a sum of Rs.77.9
millions had been passed in favour of the Company. This amount will help in
shoring up the working capital requirements.
As part of its efforts to meet the funds requirement the Company has initiated
action for sale of Windfarm. The sale proceeds would be used partly for
settling long-term debt and partly for meeting working capital requirements.
These efforts should improve the financial ratios of the Company.
EXPANSION / PROJECT ACTIVITIES:
The Company had completed expansion of LAB capacity to 1,20,000 MT per annum
during April 2007.
SUBSIDIARIES:
SPIC Electric Power Corporation
(Private) Limited (SEPC):
SEPC has necessary approvals in place for implementation: of the Power Project
at Tuticorin. The Company along with SEPC has executed a Memorandum of
Understanding with an Indian Investor, M/s. Goldstone Exports Ltd. (GEXL), on
14th June 2007. GEXL evinced keen interest to bring in 74% equity for the 525
MW power project and develop the project. GEXL is meeting the funding
requirements of SEPC. SEPC is taking necessary action to amend the Power
Purchase Agreement to incorporate the revised norms under the Electricity Act,
2003. As there was no response from the Tuticorin Port Trust for restoration of
long-term lease of land for the Project, SEPC has taken legal recourse to
ensure that the same land allotted to them is entrusted to them for its
effective use.
Certus investment and Trading Limited
(CITL):
TPL has been actively pursuing NP/ LAB projects both in Middle East and South
East Asia, as these areas are identified for the future growth of LAB business.
M/s. Certus Investment and Trading Limited (CITL) Mauritius, the Wholly Owned
Subsidiary Company of TPL, serves as an overseas investment arm of TPL in these
overseas projects.
CITL has a wholly-owned subsidiary Certus Investmentand Trading(S) Pte. Ltd.
(CITPL), as Company's procurement anti marketing service provider for its
current business outside India.
SINGAPORE N-PARAFFIN PROJECT:
This project is to establish a Normal Paraffin (NP) plant as a green-field
project with its associated utilities and off-sites for a proposed capacity of
100,000 metric tonnes per annum. at Jurong Island, Singapore. This has now
gained momentum. The Project Company - TPL India Singapore Private Limited has
signed Joint Venture Terms with Singapore's Economic Development Board (EDB)
for preference share investment to the extent of 5% of Equity in the Project.
Out of the balance 95% of the Equity, CITL will contribute 51% and 44% by the
Joint Venture Partner. The Project is to be funded on a Debt : Equity basis of
70:30.
The debt portion to the extent of USD 80 Million has been underwritten by
Kuwait Finance House (KFH), Kuwait, mandated to arrange syndication of the
loan. KFH has completed the legal, marketing and technical due diligence. The
Term Sheet, indicating the terms and conditions, has been signed on 8th May
2008.
An Agreement has been entered into with the shareholders of Singapore Refining
Co. (SRC) in December 2007 for supply of feedstock for the proposed Project and
for taking back the return streams from the proposed project. Jurong Town
Corporation, the governmental agency in Singapore, has formally reserved a Site
for the proposed NP Project and a Right of First Refusal (ROFR) has been
accorded to the Project company. An in-principle clearance from National
Environment Agency (NEA) of Singapore has also been obtained for setting up the
proposed project. Discussions are under way with UOP for entering into
Licensing and Engineering Agreements. Engineering activities are scheduled to
start by June 2008. The NP project is expected to commence its commercial
operation by fourth quarter of 2009.
MIDDLE EAST LAB PROJECT:
This project proposes to construct a 80,000 TPA of LAB plant in the Yanbu
Industrial City, Kingdom of Saudi Arabia. The Saudi Arabian General Investment
Authority (SAGIA) had issued licence for the project. The Royal Commission of
Jubail and Yanbu had allotted the required land in Yanbu Industrial City on the
western coast of Saudi Arabia. The project is being planned to commence its
commercial production in the 3rd Quarter of 2010, in line with the
commissioning of Shell's Gas to Liquid (GTL) Project. Shell's GTL plant in
Qatar is expected to commence its commercial production in the year 2009.
CITL's JV Company in Bahrain, Gulf Petroproduct Co. (GPC) is negotiating with
M/s Shell for long-term supply of Normal Paraffin from its proposed GTL plant
in Qatar.
A statement pursuant to Section 212 of the Companies Act, 1956, giving
information about the subsidiary companies is attached hereto. The consolidated
financial statements presented by the Company include the financial information
of its subsidiaries, as required under Accounting Standard AS-21, issued by the
Institute of Chartered Accountants of India.
In terms of the exemption granted to the Company by the Central Government
under Section 212(8) of the. Companies Act, 1956, copies of the Balance Sheet,
Profit and Loss Account and other documents of the subsidiary companies that
are required to be attached to the Balance Sheet of the Company have not been
attached. The Annual Accounts of the subsidiary companies and the related
detailed information will be made available to the Shareholders and the
subsidiary company investors who seek such information. The Annual Accounts of
the subsidiary companies will also be kept for inspection by any investor in
the Registered Office and that of the subsidiary company concerned.
STATUS OF ACTIVE INVESTMENTS:
Henkel India Limited (HIL):
Henkel India Limited (HIL) achieved a turnover of Rs. 4300 millions for the
year ended 31st December 2007 compared to Rs. 3570 millions in the previous
year. HIL posted a Net Profit of Rs. 145.2 millions (audited) as against Net
Profit of Rs. 98.0 millions in the previous year and achieved a cash profit of
Rs. 214.4 millions. It has been a good year for the sector in which the Company
has a presence. Henko and Mr. White, the main Laundry Care, have done well.
Pril Dish wash liquid maintained its leadership position by achieving 73% value
market share. Margo launched a new variant to attract young consumers and
strong media support is planned to be provided during 2008 for this brand. This
was the first full year after the launch of retain Hair-colouration brands
Silkience and Palette and the brands have shown modest growth. The Schwarzkopf
Professional Hair-Care Division registered a growth of 27% over the previous
year, with the brand 'Igora Royal' being received very well by the market.
Overall, the outlook for 2008 is robust and the plan is to strengthen the
brands across all accounts during the year.
Petro Araldite Private Limited
(PAPL):
During the Financial Year 2007-08, PAPL produced 14,303 MT Basic Liquid Resin.
11,435 MT Basic Solid Resin arid 3,083 MT of formulated product aggregating
28,821 MT representing a capacity utilisation of about 78%, which compared to
63% capacity utilisation achieved during the last year. Total sales increased
to Rs. 2463.5 millions compared to last year's Rs.2161.0 millions. Exports
during the year was 4,040.77 MTs as against 3,036 MTs during the last year. The
profit for the 12 months' period up to 31st March 2008 (unaudited) is Rs.67.6
millions and the accumulated loss / Profit as on the above date is Rs.6.0
millions.
MANAGEMENT DISCUSSION AND ANALYSIS
REPORT:
INDUSTRY STRUCTURE:
Tamilnadu Petroproducts Limited (TPL) is manufacturing and marketing
Petrochemicals viz. Linear ANP Benzene (LAB), Epichlorohydrin (ECH) and
Chemical intermediates Caustiar Soda and Chlorine. These products meet the
basic needs of the various industries manufacturing detergents and cleaning
products, epoxy resins and textiles. Chlorine is also used in bleaching and
water treatment application.
LINEAR ALKYL BENZENE (LAB):
LAB plays a dominant role in the formulation of synthetic detergents. The LAB
industry in India has been facing intense competition over the last two years
in view of over-supply, consequent to entry of a new major domestic
manufacturer. The excess supply, had forced the domestic, LAB manufacturers to
curtail capacities, resulting in increased operating costs. Apart from the
impact due to sub-optimal economies of scale of operation, the realizations of
domestic LAB manufactures were further strained by the steep and steady
increase ire global Crude Oil prices, the burden of which could not be entirely
passed on to the LAB consumers because of the over-supply situation. Further, the
industry has been facing severe competition from cheaper imports from the
Middle East countries; the overseas manufacturers lave a distinct cost
advantage arising from subsidized prices of energy and feed stock. As a
consequence, the Company's bottom line has been more severely affected than the
other major domestic LAB manufacturers. This is particularly so because the
competitors have either their own backward or forward integration facility.
However, of late, the global LAB demand looks promising, especially owing to
unprecedented growth foreseen in the developing Asian and African
economies.
This has teen evident from the fact that the last quarter of the year has shown
signs of consolidation with the narrowing of the supply-demand gap. Also, the
industry has been witnessing a gradual reduction in consumption of alternate
Surfactants due to uncompetitive prices ass well as its non-eco-friendly
nature, which, in turn has been a contributing factor for gradual rise in
demand for LAB.
Despite the stiff competition from domestic and international players, the
Company has been able to maintain near-normal supplies to retain its major
customers of LAB. As a strategic cost conservation measure, the Company has
started sourcing energy inputs on international terms in bulk supply and has
also been sourcing Normal Paraffin and Benzene on term offers. The Company has
also taken up with the Government of India the anomalous situation created by
the inverted duty on Normal Paraffin. Further, it has approached the Government
of Tamilnadu for availing input tax credit charged on Kerosene, as is being
permitted in a few other states so that on this score ail competitors would be
at par.
EPICHLOROHYDRIN (ECH):
TPL continues to be the only manufacturer of ECH in India. ECH has wide
applications in Epoxy resins, Pesticides and Pharmaceuticals. The demand for
ECH is buoyant and steadily increasing. The gap in domestic market requirements
is met by imports from Europe, Russia and other countries which' are facilitated
by the rupee appreciation till recently. The pricing pattern for India adopted
by overseas manufacturers has been aggressive due to lower energy and raw
material cost advantages. M/s. Petro Araldite Pvt. Limited (PAPL), the joint
venture of TPL, continues to source its major requirements of ECH from the
Company.
The year under review witnessed severe price fluctuations on account of
increase in crude prices and resultant impact thereof. This resulted in margin
erosions, as the cost increases on account of increases in raw material prices
could not be simultaneously passed on to customers on account of competitive
international prices of ECH and the rupee appreciation till recently. Further,
with certain mechanical interruptions in the Plant, the budgeted specific
consumption norms could not be achieved. Remedial actions have already been
taken in the plant in this regard.
CHLOR ALKALI:
The capacity additions to the caustic soda industry especially in the southern
parts of India during the last two years, has led to severe competition amongst
the manufacturers to grab the existing markets. Despite this, the Company is
maintaining its leadership position in the southern markets.
The Company is taking active steps to market the hydrogen from the plant to
various users of the gas in and around Chennai, apart from utilizing it in
boilers to reduce the cost of manufacture. Hydrogen as a fuel will be an
exciting venture as it is considered to be a fuel for the future. Unlike other
Caustic soda manufacturers who have to scout around markets for Chlorine, the
Company continues to supply the toxic gas through pipelines to adjoining
industries in the Manali belt. Hydrochloric acid is produced by both the plants
viz. ECH and CAD and the Company continues to market the acid produced in-both
the plants. In fact, the acid from CAD plant is mercury-free and has a niche
market.
THREATS AND
OPPORTUNITIES:
Linear Alkyl
Benzene:
Oversupply situation in LAB domestic market is a potential threat affecting company's
realizations. This is expected to continue for the next 3-4 years despite a
robust LAB growth rate forecast of 4-5% per annum. TPL's major competitors for
LAB in the Indian market have greater control over raw materials and are better
integrated. They also have diversified product lines, which balances the
portfolio of products and profits. Volatile oil prices and cheaper imports from
Middle East, facilitated by reduced import duty also pose a serious threat.
Consumers of LAB have grown substantially over the years and the resistance to
accept cost-push increases are evident.
However there are opportunities available for reducing operating costs to
remain competitive. As everyone is aware, energy costs in India are higher than
other countries. Even across India, energy costs cannot be bench marked as
every state electricity undertaking charge different rates. In order to reduce
the energy cost and to compete globally, the company is actively considering a
proposal for installing a coal-based power plant.
Customer retention and customer satisfaction are given prime importance in their marketing activities, which has given us the status of a preferred supplier.
India is one of the biggest consumers of LAB in the world with promising growth
outlook. Liberalization of economy, robust GDP growth, rise in disposable
personal income levels and purchasing power has led to revolution in the field
of shopping experience. With hygiene and personal health care segments being
given importance, the Indian per capita detergent consumption is soon expected
to move or reach that of developed countries.
Epichlorohydrin:
Free trade Agreements with ASEAN countries have facilitated import of
Epichlorohydrin (ECH) as well as Epoxy Resins at almost negligible import
duties. While the process of ECH manufacture by TPL is based on propylene and
chlorine as raw materials, a new process based on Glycerine, a by-product of
the Bio-Diesel / Detergent Alcohols Industry, has been developed by a Process
licensor in Europe. This new process stated to be cost-effective compared to
the conventional Propylene route, coupled with higher economic scale of
manufacture will further entice imports at reduced cost.
The above said factors are expected to pose a threat which could affect
company's realization in the future. However, with infrastructure projects
getting a fillip in India, application of ECH is bound to grow multi-fold &
this coupled with a long term supply contract with PAPL, the company is
confident of continuing its higher volumes of production and sales in the
coming years.
Caustic Soda:
The replacement of chlorine in some industries, necessitated due to environmental factors, could pose a limitation to Caustic manufacture and affect the performance of this division. The buoyant economy, expansion proposals in metal industries is an opportunity for TPL. The company by virtue of its over design capacity vailable with most equipments, has a definite advantage of carrying out de-bottlenecking at a comparatively lesser cost to meet the growing requirements of Caustic soda. Further captive consumption of Chlorine and potential consumption needs of group companies is a definite advantage compared to other manufacturers.
RISKS & CONCERNS:
Linear Alkyl Benzene:
Oil prices have been volatile with no signs of stabilizing at a particular level. This is a matter of serious concern for long term pricing of LAB, as LAB producers are unable to pass on the increase due to raw-material prices to the Detergent manufactures, in view of stiff competition in LAB domestic market. Also continued customs duty reduction in every Budget only emphasizes the need for further cost reduction. As the Company had already peaked its plant efficiency any further increase has to be done with caution.
Epichlorohydrin:
It is not out of place, to indicate that already the customs duty for
Epichlorohydrin (ECH) is at a very minimal level as compared to its raw
materials, which are at relatively higher levels. Also considerable amount of
Epoxy Resin is coming into India from the FTA countries, thus causing concern
for ECH domestic sales. The variations in customs duty structure for import of
ECH for Resins and Pharma sector also pose a risk of reduced off-take.
Increasing trend in global prices of Propylene, the key raw material for ECH,
and sustained high price of fuel oil is another cause of concern. The new
technology for production of ECH from Glycerin is a matter of concern and
business risk, which is expected to make imports economical and attractive to
the customers as compared to the cost and pricing of TPL.
Caustic Soda:
The demand for caustic soda is always cyclical. The success of this industry
specifically lies in business cycle of end use industries. The imports on regular
basis by large volume consumers will trigger price war in domestic market which
is a matter of concern. Increasing energy cost is continuing to be a major
concern for TPL. This division, being a power intensive one, any further
increases in Power and Fuel costs can further affect the competitiveness.
OUTLOOK:
Domestic market segment of LAB is expected to grow at around 4 to 5% per annum.
In line with the expected demand growth and to leverage on the economics of
scale of operation, the company had completed expansion of LAB capacity to
1,20,000 MTs per annum during April 2007. With the recent commissioning of LAB
plants in Middle East, LAB supply is in surplus for the time being. With steady
growth taking place in developing economies globally, and with no new plant
being planned, the surplus capacity is expected to be absorbed in the next 3 to
4 years. The proposed Normal Paraffin plant of TPL in Singapore, when
commissioned, will provide a definite edge for the company on the feed stock
front.
ECH demand is expected to witness a positive growth in line with the growing
economy. While the growth rate is expected to be positive, the margins are
likely to fall due to Inverted duty structure, Unique raw material pricing
scenario, FTA agreements, and higher economic scales of production using
alternate technology proposed by global manufacturers.
However, the Epoxy demand in the country is bullish, growing at the rate of 15% to 20% due to surge in demand for white goods, robust growth in Infrastructure development, Wind Energy and Automobiles sector etc. The company will leverage on these growth areas in the next few years. Epoxy demand is the clear sign of India's GDP growth coupled with MNCs' setting up their shops in India.
The business outlook for Caustic soda is one of steady prices, reduced margins
due to increased Fuel costs and with increased demand due to buoyant economy.
The company has proposed to address the impact due to higher energy costs by
its plans to set up a Coal based power plant in Manali.
The continued hardening of the interest rates in the money market due to the
credit policy of the Reserve Bank has resulted in the Banks/Institutions hiking
their benchmark interest rates (Bank Prime Lending Rates) during the current
financial year 2006-07. It is expected that the interest rates will continue to
climb upwards in 2007-08 as well.
The appreciation of rupee vis a vis dollar will have both positive and negative impact for the operations. The imports in rupee terms will come down partly neutralizing the increase in cost of raw materials on account of hardening prices of crude and other derivatives. Exports are likely to show a downward realization.
It is in trade terms with:-
- Abasi
Engineering Works
- Canle Valves
Private Limited
- Joseph
Leslie & Company
- Vasu
Chemical Industries
- Madras
Industrial Products
- R. V.
Refractories
- Vircap
Scalingtech Private Limited
- General Instrument Consortium
Fixed Assets
- Freehold Land
- Buildings
- Plant & Machinery
- Furniture & Fixtures
- Office and Other Equipment
- Vehicles
- Ships - Barges
As Per Web Details
Profile
Tamilnadu Petroproducts Limited (TPL), a corporate star, was born in the
year 1984 with the objective of setting up a 50,000 MTA Linear Alkyl Benzene
(LAB) project. TPL has since imprinted winning hall marks successively over the
years in Corporate India and the Petrochemical Industry in particular.
Over more than a decade, TPL grew in strength, thinking differently, harnessing
the resources by laying a fundamental platform for financial strength and
responding to customers innovatively by bringing in new products and services.
TPL has surged ahead with laurels for a challenging & promising
future, carrying the business commitment of the promoters, M/s. SPIC Limited,
who have diverse interest in fertilizers, petrochemicals and other services and
Tamilnadu Industrial Development Corporation Limited (TIDCO), a State Govt.
enterprise, with prime interest in promoting industries in the State of
Tamilnadu. SPIC its boasts of a turnover close to US $ 800 million and has been
the principal force in TPL achieving corporate leadership in detergent
business.
The LAB plant is located in the Manali Industrial Belt, 25 KMs away from
Chennai City. The various infrastructure facility at Manali, the advantages of
a Metropolitan city, hi-tech communication interface and cosmopolitan culture,
synergise with the vision of promoters business plans.
TPL continues to march ahead excellent track record and its achievements
in a short time frame stand out distinctly, propelled by continuous upgradation
of technology, quality human resource and utmost customer satisfaction.
05/06/2007
Singapore
in 3 way petrochem tie up with Kuwait and India
TPL's Subsidiary Company
in Singapore is to set up US $ 110 Million Petrochemical Plant in Singapore to
manufacture 1,00.000 MT of Normal Paraffin. TPL's investment through its
subsidiary will be 51 % of the Equity while Kuwait Finance House and
Singapore's Economic Development Board will hold 44% and 5% respectively. A
Deal has been signed to this effect on 4th June 2007 in Singapore and the
signing ceremony was witnessed by Singapore's Prime Minister, Mr. Lee Hsien
Loong and Kuwaiti Prime Minister, Mr. Sheikh Nasser AI-Mohammed AI-Ahmed
AI-Jaber AI-Sabah.
Singapore has been chosen in view of -
availability of a
long term supply of Kerosene and
reliability of
services such as Electricity which is costly in India.
Negotiations are in advanced stage with the Singapore Refining Company for a
deal to supply Kerosene. Half of the Normal Paraffin to be produced will be
exported to TPL's Plant in India while rest will be sold in the open market.
The demand for Normal Paraffin is expected to increase considerably and Industry
sources estimate that there will be a shortage of 2,00,000 MT each year till
2010 in South-east Asia and Asia-Pacific.
02/02/2005
TN
PETRO PLANS TO STEP UP LAB EXPORTS
Tamilnadu Petroproducts (TPL)
plans to boost its global business of Linear Alkyl Benzene (LAB), a feed-stock
used in the manufacture of detergents, by stepping up exports and setting up
plants in Singapore and Saudi Arabia.
With Indian Oil entering the already surplus LAB market, which is growing at a
steady 6% per annum (8% in the south), TPL wants to aggressively penetrate the
global market in order to increase its share from the current 3% to 10% by
2010, said Mr. RM Muthukaruppan, MD & COO.
He said LAB capacity has touched five lakh tones following the commissioning of
IOC’s 1.2 lakh tones in August last as against the domestic demand of 3.5 lakh
tones. At the present growth rate, it will take five years to clear the glut,
he pointed out.
TPL played a major role in the growth of regional detergent manufacturers. Four
of them now lift about 35,000 to 45,000 tonnes, Mr. Muthukaruppan said. It has
scaled up its capacity from one lakh to 1.1 lakh tonnes in the first stage. By
March, the next stage of 1.2 lakh tonnes will be achieved. However, it expects
IOC’s entry to reduce its market share to 25% from the current 38%. The
company’s MD said, the year exports have already touched 13,000 tonnes and in
the full year, it is expected to be 22% of the capcity against 14,523 tonnes it
exported last year to markets like West Asia, Far East and Europe. TPL is
likely to emerge a sourcing hub for Henkel KGaA, Germany.
Mr. Muthukaruppan said “in response to our proposal for sourcing LAB, Henkel
had lifted 2000 tonnes for its Saudi plant. This is big order though we have
been supplying in a small way to P & G plant there. We expect Henkel to
step up sourcing”.
It is hopeful of implementing two overseas LAB projects through an investment
firm floated in Mauritius. The Singapore project, estimated to cost $ 250
million, is expected to take off by the middle of this year with the support of
the Economic Development Board. It is also pursuing the second project in Saudi
Arabia.
Mr.V. Ramani, Director & CFO, said a turnaround performance is expected in
the last quarter with the continued focus on cost cutting and better
performance of ECH and caustic soda businesses. Of the Rs.2000 Millions high-cost debt, the company had earlier
raised a Rs.1000 Millions loan
from Rabo carrying 9.1% interest. During the third quarter, another Rs.1000
Millions debt in the form of 12%
interest bearing debentures was retired.
As part of the debt swap, TPL raised a fresh loan of Rs.750 Millions from IDBI and another Rs.500 Millions from a nationalized bank. Both carried an
interest of 8.5% with one year moratorium on interest and repayable in six
years. The interest will be reset after three years in case of IDBI and after
one year in the case of the bank.
By way of this recast, Mr. Ramani said, TPL has slashed average cost of
interest from 13.53% in April 2003 to 10.6% in April 2004 and further to 8.9%
in December 2004.
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.49.46 |
|
UK Pound |
1 |
Rs.73.17 |
|
Euro |
1 |
Rs.62.96 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
54 |
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 |
|