MIRA
INFORM REPORT
|
Report Date : |
28.11.2008 |
IDENTIFICATION
DETAILS
|
Name : |
GAIL
[INDIA] LIMITED |
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Registered Office : |
16, Bhikaji Cama Place, R. K. Puram, Ring Road, New Delhi
- 110066 |
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Country : |
India
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
16.08.1984 |
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Com. Reg. No.: |
55-18976 |
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CIN No.: [Company Identification No.] |
L40200DL1984PLC018976 |
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TAN No.: [Tax Deduction & Collection Account No.] |
DELG00179E |
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PAN No.: [Permanent Account No.] |
AAACG1209J |
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Legal Form : |
Subject
is a public limited liability company.
The company's shares are listed on the Stock Exchanges. Subject
is owned by Government of India. |
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Line of Business : |
Subject
is engaged in the following areas of business. v
Gas
Distribution and Marketing v
Trunk
Transmission and Distribution v
Regional
Transmission and Distribution v
Gas
Retailing v
LPG v
Petrochemicals v
Joint
Ventures |
RATING &
COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 650000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company of Government of
India. Available information
indicates high financial responsibility of the company, as it is Government
of India Company. Their trade relations
are reported as fair. Payments are
usually correct and as per commitments. Your proposed business dealings can be considered against normal trade
terms and conditions. |
LOCATIONS
|
Registered Office : |
16, Bhikaji, Cama Place, R. K. Puram, Ring Road, New
Delhi-110066, India |
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Tel. No.: |
91-11-26182955/26172580 |
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Fax No.: |
91-11-26185941 |
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E-Mail : |
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Website : |
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Zonal Office: |
GAIL (India) Limited B-21/A, Shiv Marg
Bani Park 4/257, Vivek Khand
Gomti Nagar B-1, Koh-E-Fiza
Sultania Road 809, Sakar-II Bldg. Near
Ellis Bridge Opp. Town Hall 12th Floor, Om Tower
32, Jawaharlal Nehru Road MMRDA Bldg., 3rd
Floor Bandra Kurla Complex Bandra (East) 6-3-871, 3rd Floor
Snehalata Building 21, Palace Road 4-B, Century Plaza 560-562, Anna Salai Teynampet |
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Factory : |
U P Petrochemical Complex, Pata P.O. Pata-206241 Distt. Auraiya (U.P) LPG Recovery Plant, Usar P.O. Malyan-402203 Tal. Alibagh Distt. Raigad (Maharashtra) LPG Recovery Plant, Vijaipur GAIL Complex Vijaipur-473112 . Distt. Guna (M.P.) LPG Recovery Plant, Vaghodia GIDC Industrial Estate Vaghodia-391760 Distt. Baroda (Gujarat) LPG Recovery Plant, Lakwa, Sivasagar-785688 (Assam) LPG Recovery Project, Gandhar Vill. Rozantankaria.Tal. Amod Distt. Bharucl> 392140 (Gujarat) |
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Regional
offices / Branches : |
Located
at:- ·
Baroda,
Gujarat ·
Ahmedabad,
Gujarat ·
Hazira
·
Chennai,
Tamilnadu |
DIRECTORS
|
Name : |
Mr. Mohan R. Hingnikar |
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Designation : |
Director (Human
Resources) |
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Name : |
Mr. R. K. Goel |
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Designation : |
Director (Finance) |
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Name : |
Mr. Santosh Kumar |
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Designation : |
Director (Projects) |
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Name : |
Mr. A. K. Purwaha |
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Designation : |
Director (Business Development) |
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Name : |
Mr. B. C. Tripathi |
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Designation : |
Director (Marketing) |
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Name : |
Mr. S. Sundareshan |
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Designation : |
Director |
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Name : |
Mr. D. N. Narasimha Raju |
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Designation : |
Director |
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Name : |
Dr. A. K. Kundra |
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Designation : |
Director |
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Name : |
Mr. B. C. Bora |
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Designation : |
Director |
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Name : |
Dr. Amit Mitra |
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Designation : |
Director |
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Name : |
Dr. U.D. Choubey |
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Designation : |
Chairman and Managing Director |
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Name : |
Mr. U K Sen |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. N. K. Nagpal |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 29 September, 2007
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Shareholding of Promoter and Promoter Group2 |
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Indian |
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Central Government/ State Government(s) |
484937117 |
60.3003 |
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Public shareholding |
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Mutual Funds/ UTI |
13589228 |
1.6898 |
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Financial Institutions / Banks |
545903 |
.0679 |
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Central Government/ State Government(s) |
61259323 |
7.6174 |
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Insurance Companies |
78276190 |
9.7334 |
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Foreign Institutional Investors |
144860880 |
18.013 |
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Non-institutions |
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Bodies Corporate |
3849509 |
0.4787 |
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Individuals |
15676420 |
1.9493 |
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Individual shareholders holding nominal share capital in excess of Rs. 0.100
Millions. |
826230 |
0.1027 |
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Any Other (specify) i) Trust & Foundation |
19312 |
0.0024 |
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ii) Non Resident Individual |
362954 |
0.0451 |
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Total |
804203066 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Subject
is engaged in the following areas of business. v
Gas
Distribution and Marketing v
Trunk
Transmission and Distribution v
Regional
Transmission and Distribution v
Gas
Retailing v
LPG v
Petrochemicals v
Joint
Ventures |
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Products : |
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PRODUCTION STATUS
As on 31.03.2008
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Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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Natural Gas including RLNG (MMSCMD) |
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HVJ,
GREP and DVPL |
(M/T) |
57.30 |
57.30 |
46.34 |
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Others |
(M/T) |
84.50 |
84.50 |
22.76 |
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RLNG Shipper |
(M/T) |
-- |
-- |
13.000 |
|
LPG
(M /T) |
(M/T) |
1168844 |
1110844 |
-- |
|
Propane
(M/T) |
(M/T) |
201085 |
201085 |
-- |
|
Ethylene
(M/T) |
(M/T) |
400000 |
400000 |
-- |
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HDPE/LLDPE
(M/T) |
(M/T) |
410000 |
410000 |
-- |
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Pentane |
- |
82454 |
82454 |
-- |
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SBP
Solvent/Naptha |
- |
110743 |
110743 |
-- |
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C2/C3 |
- |
-- |
400000 |
-- |
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Butene
1 |
|
10000 |
10000 |
-- |
GENERAL
INFORMATION
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No. of Employees : |
3385 |
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Bankers : |
Corporate Accounts
Group Branch Jawahar Vyapar
Bhavan, 11th and 12th Floors, Tolstoy Marg, New Delhi- 110001
9A, Phelps
Building, Connaught Place, New Delhi- 110001
1st Floor, Kailash
Building, Kasturba Gandhi Marg, New Delhi
110001 |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
statutory
auditors
Mehra
Goel and Company Chartered
Accountants New Delhi branch
auditors
SCJ
Associates Chartered
Accountants Agra Chhajer
and Company Chartered
Accountants Bhopal,
Madhya Pradesh, India Cost
auditors
R.J. Goel and Company Cost Accountants New Delhi Ramnath Iyer and Company Cost Accountants New Delhi K.G. Goyal and Company Cost Accountants Jaipur Shome and Banerjee Cost Accountants New Delhi K. Narsimhma Murthy Cost Accountants Hyderabad Bandyopadhyay and Bhowmick and Company Cost Accountants Kolkata R.M. Bansal and Company Cost Accountants Kanpur Rupa
Sekar and Associates Chartered
Accountant Bhopal |
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Associates/Subsidiaries : |
5 Shenton Way, # 23-03, UIC Building,
Singapore-068808
Hotel Brahmaputra
Ashok, M.G. Road, Guwahati, Assam-781001, India
16, Bhikaji Cama Place, R K Puram, New
Delhi-110066, India |
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Joint Venture
Companies: |
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CAPITAL STRUCTURE
As on 31.03.2008
Authorised
Capital
:
|
No.
of Shares |
Type |
Value |
Amount |
|
1000000000 |
Equity Shares |
Rs.10/- each |
Rs. 10000.000 Millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
845651600 |
Equity Shares |
Rs.10/- each |
Rs. 8456.500 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 |
8456.500 |
8456.500 |
8456.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
121592.300 |
105472.600 |
91276.500 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
130048.800 |
113929.100 |
99733.000 |
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LOAN FUNDS |
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1] Secured Loans |
11000.000 |
11000.000 |
16000.000 |
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2] Unsecured Loans |
1658.700 |
2378.500 |
3165.600 |
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TOTAL BORROWING |
12658.700 |
13378.500 |
19165.600 |
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DEFERRED TAX LIABILITIES |
13196.900 |
13186.700 |
12997.000 |
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TOTAL |
155904.400 |
140494.300 |
131895.600 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
89332.900 |
74543.700 |
75559.600 |
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Capital work-in-progress |
8166.600 |
19369.400 |
6155.900 |
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INVESTMENT |
14410.900 |
14410.500 |
9275.700 |
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Advances for Investments (Pending Allotment) |
497.900 |
227.900 |
5157.900 |
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CURRENT ASSETS, LOANS & ADVANCES |
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|
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Inventories |
5698.100
|
5523.600
|
4831.900 |
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Sundry Debtors |
10735.400
|
7907.100
|
7534.700 |
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Cash & Bank Balances |
44729.900
|
26604.100
|
44959.400 |
|
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Other Current Assets |
568.200
|
316.700
|
396.500 |
|
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Loans & Advances |
42368.600
|
37103.600
|
65163.900 |
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Total
Current Assets |
104100.200
|
77455.100
|
122886.4 |
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
33610.200
|
25855.900
|
31646.200 |
|
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Provisions |
26993.900
|
19656.400
|
55493.700 |
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Total
Current Liabilities |
60604.100
|
45512.3
|
87139.9 |
|
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Net Current Assets |
43496.100
|
31942.800
|
35746.500 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
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|
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TOTAL |
155904.400 |
140494.300 |
131895.600 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
||
|
Sales Turnover |
180380.800 |
161224.400 |
144843.400 |
||
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Other Income |
5563.500 |
5449.500 |
4555.400 |
||
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Total Income |
185944.300 |
166673.900 |
149398.800 |
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Profit/(Loss) Before Tax |
38550.000 |
28597.800 |
32766.200 |
||
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Provision for Taxation |
12535.400 |
4731.100 |
9665.500 |
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Profit/(Loss) After Tax |
26014.600 |
23866.700 |
23100.700 |
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Earnings in Foreign Currency : |
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Export Earnings |
0.000 |
219.600 |
185.800 |
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|
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Other Earnings |
68.700 |
62.900 |
40.700 |
|
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Total Earnings |
68.700 |
282.500 |
226.500 |
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Imports : |
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Stores & Spares |
784.100 |
719.300 |
640.000 |
|
|
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Capital Goods |
311.500 |
1099.000 |
382.500 |
|
|
Total Imports |
1095.600 |
1818.300 |
1022.500 |
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Expenditures : |
|
|
|
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|
|
Purchase of Gas for Trading |
94801.900 |
85370.700 |
77952.100 |
|
|
|
Gas Pool |
7204.700 |
8919.300 |
4590.500 |
|
|
|
Manufacturing, Transmission, Administration,
Selling and Distribution |
39120.900 |
37049.100 |
26587.000 |
|
|
|
Depreciation |
5710.200 |
5753.800 |
5594.900 |
|
|
|
Interest and Finance Charges |
795.800 |
1071.700 |
1173.900 |
|
|
|
Expenditure during construction period transferred to Capital Work in
progress |
[21.700] |
0.000 |
0.000 |
|
|
|
Prior period Adjustment |
[217.500] |
0.000 |
0.000 |
|
|
Total Expenditure |
147394.300 |
138164.600 |
115898.400 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 1st
Quarter |
30.09.2008 2nd
Quarter |
|
Sales Turnover |
|
57307.100 |
61292.800 |
|
Other Income |
|
1147.700 |
2289.200 |
|
Total Income |
|
58454.800 |
63582.000 |
|
Total Expenditure |
|
43312.800 |
46978.600 |
|
Operating Profit |
|
15142.000 |
16603.400 |
|
Interest |
|
190.200 |
189.000 |
|
Gross Profit |
|
14951.800 |
16414.400 |
|
Depreciation |
|
1429.600 |
1385.800 |
|
Tax |
|
4453.600 |
4909.700 |
|
Reported PAT |
|
8968.700 |
10234.500 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt Equity Ratio |
0.11 |
0.15 |
0.21 |
|
Long Term Debt Equity Ratio |
0.11 |
0.15 |
0.21 |
|
Current Ratio |
1.37 |
1.26 |
1.20 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.17 |
1.13 |
1.04 |
|
Inventory |
33.11 |
31.96 |
30.84 |
|
Debtors |
19.93 |
21.43 |
18.87 |
|
Interest Cover Ratio |
49.45 |
27.71 |
28.93 |
|
Operating Profit Margin (%) |
24.25 |
21.41 |
26.58 |
|
Profit Before Interest and Tax Margin (%) |
21.18 |
17.93 |
22.82 |
|
Cash Profit Margin (%) |
17.07 |
17.90 |
19.29 |
|
Adjusted Net Profit Margin (%) |
14.00 |
14.42 |
15.53 |
|
Return on Capital Employed (%) |
29.14 |
24.10 |
30.15 |
|
Return on Net Worth (%) |
21.33 |
22.34 |
24.84 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject is India's largest natural gas transmission company,
operating a gas pipeline network of over 4600 km across India. The company
dominates the gas sector, transporting 90% of the total piped gas. In addition,
it operates seven plants to process natural gas into LPG, apart from having a
small presence in the petrochemicals and oil and gas exploration sectors.
Natural gas is increasingly being looked at as an important source of energy in
India, primarily as it is a cheaper substitute to naphtha, currently used as
feedstock/fuel by industrial users.
Gail appears well set to optimally capitalise on the future gas transportation
potential in the country. It is currently the only player with a pipeline
network across the country, the backbone of which is the
Hazira-Vijaipur-Jagdishpur (HBJ) pipeline connecting western and northern
India. Being the nodal agency for the proposed National Gas Grid, this
dominating position is likely to continue. In the near future, revenue growth
will come from the share of regassified LNG from Petronet LNG, expansion of the
petrochemical complex and additional LPG pipelines currently being laid.
The government is inclined to phase out subsidies on LPG for domestic
customers, which will facilitate enhancement of margins in this segment.
However, the increase in natural gas prices by suppliers may lead to a negative
impact on Gail's earnings from LPG and petrochemical business. Also, the
increase in natural gas prices will lead to increase in costs, as the company
uses natural gas to power various elements of its pipeline system. However,
there is a proposal by the government to increase the transmission charge along
the HVJ pipeline, which, if approved, could partly mitigate the adverse impact
of the increase in natural gas prices.
In March 2004, the government of india has disinvested through offer for Sale
of 84565160 Equity Shares of Rs. 10 each at a price of Rs. 195. ONGC and IOC
each have 4.8% stake in Gail India, but have committed not to offload the same
within six months from the present offer.
During September 2004,the company has formed a subsidiary in the Republic of
Singapore and it is in the name of Gail Global (Singapore) Pte Limited.
Subject has 11 blocks through unicorporated joint ventures in partnerships with
various exploration operates with a total acreage of over 67000 KM square. The
company has discovered gas in Myanmar A-1 block and Oil in Cambay block. The
company a joint venture with British Gas and the Government of Maharashtra was
incorporated in May 1995 to supply gas to domestic, commercial and small
industrial consumers and CNG to the transport sector in Mumbai. IGL a joint
Venture with BPCL and Government of Delhi was formed in December 1998 to supply
gas to domestic and commercial consumers and CNG to the transport sector in NCT
of Delhi. Petronet LNG Limited company a joint venture of IOCL, ONGC, BPCL and
GAIL, was formed for setting up of LNG import and regasification facilities.
PLL has a long term LNG supply contract with Ras Gas, Qatar for import of 7.5
MMTPA. The Dahej terminal started operations in March 2004. Bhagyanagar Gas
Limited a joint venture with HPCL was incorporated in August 2003 for
distribution and marketing of Auto LPG and CNG for vehicles and natural gas for
domestic,commercial and small industrial consumers in cities of Andhra Pradesh.
Central Up Gas Limited is a Joint Venture with BPCL incorporated in February
2005 for city gas distribution in Kanpur city. Tripura Natural Gas Company
Limited is a joint venture company of Tripura Industrial Development
Corporation (TIDC), Assam Gas Company Limited (AGCL) and GAIL for distribution
of piped natural gas in the state of Tripura and the company's participating
equity is 29%. During 2005, GAIL has commissioned two pipeline projects namely
The South- Gujarat Pipeline project in May 2004 for supplying re-gasified LNG
to the consumers in South-Gujarat and the Lucknow and Kanpur Fedder Pipeline,
commissioned in March 2005 will carry gas to the cities of Lucknow and Kanpur
for city gas distributiion and Narimanam- Kuthalam pipeline project was
completed in 2005 for the supply of the gas from Cavery basin to the consumers
in Kuthalam region in Tamilnadu.
The major projects of company which are under execution are the Dahej-Uran
Pipeline Project, connecting Gujarat and Maharashtra, The Thulendi-Phulpur
Pipeline Project, the Vijaipur- Kota Pipeline Project, connecting MP and
Rajasthan, the Jagoti-Dewas-pithampur Pipeline project would cater to the gas
demand of Indore, Dewas, Ujjain and Pithampur, the Kelaras-Malanpur Pipeline
Project and the Petrochemical Expansion Project at Pata to bring up the Plant
to a Polymer Capacity of 4,40,000 TPA. The company has taken up laying of
Pipelines for supply of gas Krishna Godavari basin in Andhra Pradesh to the
power plants.
CORPORATE STRATEGY
The Company had developed a long term strategic plan which
has been reoriented during the year, keeping in view the unfolding demand and
supply scenario, entry of new competitors, and changing dynamics in the market
place. The goals set by the Company include doubling of top and bottom line in
the near future.
The strategy developed to realize the set goals is as under: 1. Tying-up
with producers and suppliers for marketing and transmission of natural gas on
long term and sustainable basis. This is likely to be realized by securing more
gas from new gas finds and pursuing early finalization of contracts with
customers and suppliers.
2. Expanding of the pipeline infrastructure from 7000 km to 12000 km with
the laying of new pipelines by 2011-12. 3. Pursuing of City Gas distribution
opportunities in the country. This requires the introduction of Compressed
Natural Gas for the automotive sector and Piped Natural Gas for commercial and
domestic use in 230 cities in a phased manner.
The Company also plans to strengthen L and P capability and resources by
participating as a major partner / operator in domestic L and P/CBM bidding.
This would help in developing L and P as a self sustainable business for
augmenting additional supplies of natural gas. These would include investment
in both domestic on-land and off shore fields, with a balanced portfolio of
developmental and exploratory projects.
The natural gas demand in India is at an inflection point and several
forces are at work that could dramatically increase the natural gas demand. The
present sources of natural gas are projected to deplete in the coming years and
therefore, there is a need to look at new sources that are coming up. The
Company is aggressively pursuing gas sourcing options both from the new
domestic sources as well as through international sources by way of pipelines
and LNG route. Collectively, such a rapid rise in expected demand and
re-alignment of sources of gas supply will interact to determine the robust
future gas industry structure.
In the area of Petrochemicals business, the Company is examining the
possibility of expansion of Petrochemical Complex at Pata and exploring green
field opportunities in this sector in India and abroad.
On the globalization front, the Company is tapping areas having synergy
with existing businesses by entering into new and emerging gas rich countries
with focus on sourcing of gas and participation in downstream
activities.
BUSINESS
PERFORMANCE
The Company has been achieving an all round 'Excellent'
rating by Government of India since MoU signing. During the year, the segment
wise business performance of the Company is as under:
Natural Gas:
The Company owns and operates a network of over 7000 km of natural gas high
pressure trunk pipeline. It supplies over 80 million cubic meters of natural
gas per day as fuel to power plants, feedstock for gas based fertilizer plants
and to over 500 small, medium and large industrial units to meet their energy
and process requirements. The Company's share of gas transmission business is
79% and it holds 70% market share in gas marketing in India.
Natural Gas continues to constitute the core business of the Company. During
the year 2007-08, Gas Sales have increased marginally to 69.10 MMSCMD from
67.83 MMSCMD in the previous financial year. The Gas Transmission during the
year was 82.10 MMSCMD compared to 77.28 MMSCMD in the previous financial
year.
The Company continues to have focus on securing gas supplies from international
markets. LNG and trans-national pipelines are the two prevalent modes of cross
border gas trade and the Company has been making all efforts to bring natural
gas in the country.
Petrochemicals:
The Company owns and operates a gas based integrated petrochemical plant at
Pata, Uttar Pradesh with a capacity of producing 4,10,000 TPA of Polymers i.e.
HDPL and LLDPL, which has been enhanced by 1,00,000 TPA from the earlier
capacity of 3,10,000 TPA. The Company is currently in the process of setting up
a 2,80,000 TPA Assam Petrochemical Complex at an investment of Rs. 54600.000
Millions. During 2007-08, the production of polymer was 3,86,000 MT and polymer
sales was 3,91,000 MT.
LPG Transmission and Other Liquid
Hydrocarbons:
The Company has 7 LPG plants in the country. In the year 2007-08, total Liquid
Hydrocarbon production was over 1.348 million MT which mainly included 1.043
million MT of LPG, 0.156 million MT of Propane and 0.074 million MT of
Pentane.
The Company is the only Company in India which owns and
operates pipelines for LPG transmission. It has a 1900 km LPG pipeline network,
1300 km of which connects the Western and Northern parts of India and 600 km of
network is in the Southern part of the country. The LPG transmission system has
a capacity to transport 3.8 MMTPA of LPG. LPG transmission throughput was 2.754
million MT in the year 2007-08.
Exploration
and Production (E and P)
In line with the Company's strategy and towards integration
along the energy chain, FandP activities have gathered momentum during the
year. The gas discovery in blocks A-1 and A-3 in Myanmar is maturing to
development stage and various studies preliminary to finalization of the
development plan and its implementation are underway.
Presently, the Company is involved in oil and gas
exploration activities over an acreage of 1.7 Lac sq. km. The Company now holds
a participating interest between 10 to 80 per cent in 27 oil and gas
exploration blocks. Of these, 9 are on-land blocks and 18 are off shore
blocks.
In India, there are 24 blocks which are in Basins such as Mahanadi, Bengal,
Gujarat Saurashtra, Mumbai, Cambay, Assam-Arakan and Cauvery. The Company has
got stake in the A-1 and A-3 blocks in Myanmar and Block No. 56 in Oman.
A beginning has been made by the Company in earning revenue from FandP
activities. One of the on-land block in Cambay basin started commercial
production from February 2008 and Rs 69.000 Millions has been generated as
revenue during Feb-Mar'08.
Coal
Bed Methane (CBM)
The Company has been participating interest in 3 Coal Bed
Methane blocks with an area of 1561 sq. km, 2 of which are in Chattisgarh and 1
in Jharkhand. These blocks were awarded to GAIL consortium in CBM-111 bidding
round.
Telecommunications:
Leveraging on its pipeline network, the Company has built up
an OFC network for leasing of bandwidth as a carriers' carrier. The Company's
telecom business unit 'GAILTEL' has approximately 13,000 km network. During the
year, 'GAILTEL' achieved profit before tax of Rs. 30.000 Millions.
BUSINESS
INITIATIVES
With changes taking place in the gas market, GAIL is
continuously evolving strategies to prepare itself for the regulated scenario. With
the enactment of Petroleum and Natural Gas Regulatory Board Act, 2006 by
Parliament and announcement of Gas Pipeline Policy by Government of India for
business of natural gas transmission, refining, processing, storage,
transportation, distribution and marketing, the Regulator will oversee and
promote the development of natural gas sector and also envisages an arms length
relationship between transmission entity and marketing/ exploration
activity.
Domestic
Initiatives:
In its efforts to reduce Green House Gas (CHIC) emissions, the Company
has signed an agreement with Apollo Tyres for sale of steam through waste heat
recovery at its Vaghodia processing plant. This project will save substantial
energy by utilizing the waste heat and will lead to emission control by
avoiding CO2 generation.
With a view to assist the National Capital in increasing power generation, the
Company has signed Gas Sales Agreement with Pragati Power for gas supply to
Bawana Power Plant. The Company has also executed Gas Supply Agreements with
major suppliers like ONGC, PMT etc., for augmentation of gas supplies.
The Company has entered into Gas Transmission Agreement (GTA) with Reliance Gas
Transportation Infrastructure Limited (RGTIL) for Transmission of natural gas from
the Krishna-Godavari (KG) basin. The Transmission Agreement provides for
transportation of natural gas from the exploration block located in the
Krishna-Godavari (KG) basin in the east coast of India through GAIL's network
and for booking of capacity by GAIL in RGTILs Fast-West pipeline.
In order to strengthen the business activities in the area of
Petrochemicals, the Company has signed a Memorandum of Understanding (MoU) with
Reliance Industries Limited (RIL) for exploring opportunities for setting up a
mega petrochemical complex outside India in one of the gas rich countries.
Further, a Petrochemical plant at Vizag is envisaged with HPCL,TOTAL, OIL and
Mittal Energy.
The Company has signed an MoU with ONGCL to work jointly for transportation, distribution
and marketing of natural gas from its new gas finds in KG basin and Mahanadi
basin.
The Company has signed a Gas Cooperation Agreement with Government of
Puducherry envisaging setting up of a coordination group to study the demand
potential of the Union Territory of Puducherry for R-LNG / CNG / PNG.
The Company has signed an agreement with the consortia of Reliance Industries,
BG Group and ONGC, partners of PMT field for buying the entire quantity of 17.3
MMCSMD and the same has been effective from 01.04.2008.
Global Presence:
The Company is continuing its efforts to build strategic alliance with
international companies to gain entry in the international market.
Apart from its equity participation in three retail gas companies in
Egypt and China Gas Holdings Limited, participating interest in off shore F and
P blocks in Myanmar and one on-land F and P block in Oman, the Company is
pursuing business opportunities in other regions of the world in its core area
of operations. The Company has set up a wholly-owned subsidiary company viz.
GAIL Global (Singapore) Pte. Limited in Singapore to facilitate overseas
investments.
The Company has recently formed a Joint Venture with China
Gas Holdings Limited for taking up the projects in various cities of China. The
Company and China Gas Holdings Limited are equal partners in the JV. This is
the first Joint Venture Company of the Company abroad.
During the year, the Company has signed a Memorandum of Understanding
(MoU) with ITFRA Oil and Gas Company of Russia for cooperation in projects such
as CNG, Gas based Petrochemicals and F and P.
PIPELINE PROJECTS
During the financial year 2007-08, the Company has completed
a major pipeline project from Dahej to Dabhol via Panvel to supply gas to RGPPL
which started supplying much needed power to the state of Maharashtra. Branch
and spur lines to consumers like Deepak Fertilizer, MSEB Uran, BPCL and other
consumers in the state of Maharashtra have also been completed.
The works for providing the connectivity to Pune city and the consumers
of Thal/Usar region is under progress. Connectivity to REL's East-West Pipeline
which will transport gas from Kakinada to Gujarat is being provided at Odum in
Andhra Pradesh, Mhaskal in Maharashtra and Ankot in Gujarat to enable the flow
of gas to consumers in various regions enabling optimum utilization of networks
on national basis. The Company has received grant of authorization for laying
new pipelines viz. Dadri-Bawana-Nangal pipeline; Chainsa Jhajjar-Hissar
pipeline; Dabhol-Bangalore pipeline; Jagdishpur-Haldia pipeline and Koch
i-Kanjirkodd-Mangalore/Bangalore pipeline.
In addition to the above, the Company will also augment the
GREP(Vijaipur-Dadri) Pipeline and Dahej-Vijaipur Pipeline (DVPL).
These projects are at various stages of implementation. The foremost
among them is the pipeline from Vijaipur to Bawana which envisages supply of
gas to Pragati Power at Bawana targeted to supply power to NCR before
commencement of Commonwealth Games 2010.
These projects will also enable the Company to maintain its dominant
position in the gas transmission and distribution business.
SUBSIDIARIES and JOINT
VENTURES:
The Company has been the pioneer for City Gas Projects in India. With natural
gas emerging as the fuel of choice in the country, the Company believes that
the next decade will belong to the city gas. The Company was the first Company
to introduce City Gas Projects in India for supplies to households, commercial
users and for the transport sector by forming Joint Venture Companies.
Subsidiaries:
GAIL Gas Limited:
The Company has formed a wholly owned subsidiary named 'GAIL Gas Limited' for
implementing City Gas Projects and CNG corridor in the country. The subsidiary
company will act as a vehicle for bidding for laying of pipeline infrastructure
in the country.
GAIL Global (Singapore) Pte.
Limited:
The Company has a wholly owned subsidiary, namely, GAIL Global (Singapore) Pte.
Limited to manage investments abroad. The Company is looking for further
business opportunities through this subsidiary company.
Brahmaputra Cracker and Polymer
Limited:
The Company has 70% equity share with Oil India Limited (OIL), Numaligarh
Refinery Limited (NRL), Govt. of Assam, each having 10% equity share. The
authorized capital of the company is Rs. 12000.000 Millions. A Feedstock Supply
Agreement has been signed between Brahmaputra Cracker and Polymer Limited
(BCPL), and all the three suppliers viz., Oil and Natural Gas Company Limited,
Oil India Limited and Numaligarh Refinery Limited. Financial closure for the
project is likely to be completed during the year 2008-09.
Joint Ventures:
Aavantika Gas Limited (AGL):
AGL is a Joint Venture of the Company and Hindustan Petroleum Corporation
Limited (HPCL) for implementation of City Gas Projects in the cities of Madhya
Pradesh. AGL has started project implementation activities in the city of
Indore. The Company has 22.5% stake in the Company along with HPCL as equal
partner.
Bhagyanagar Gas Limited
(BGL):
BGL is currently operating three Auto LPG stations in
Hyderabad and one Auto BGL LPG station in Timpathi. It is currently operating
six CNG stations in Vijayawada and three CNG stations in Hyderabad. The Company
has 22.5% stake in the company along with HPCL as equal partner.
Central U.P. Gas Limited
(CUGL):
CUGL is currently operating five CNG stations in Kanpur, one CNG station in
Barefy and one CNG station in Kanpur is under commissioning. CUGL is building
MDPF network for supply of PNG to domestic, commercial and industrial sectors
in the city of Kanpur. The Company has 22.5% stake in the company along with
BPCL as equal partner.
Green Gas Limited (GGL):
GGL is currently operating four CNG stations in Lucknow and three CNG
stations in Agra. GGL will also take up project implementation in other cities
of Western UP on the basis of gas availability and project viability. The
Company has 22.5% stake in the company along with IOC as equal partner.
Indraprastha Gas Limited
(IGL):
IGL is supplying piped gas to around 1 Lac domestic, 276 commercial, 16
small industrial consumers and CNG to over 0.135 Million vehicles through 153
CNG stations. IGL is catering to world's largest CNG bus fleet of over 11,000
buses in Delhi.
The Company has 22.5% stake in the company along with BPCL as equal
partner.
Mahanagar Gas Limited (MGL):
MGL has set up 128 CNG stations catering to over 0.185 Milion vehicles
spread over Mumbai,Thane, Mira Bhayandar and Navi-Mumbai areas besides
supplying PNG to over 0.340 Million domestic, 907 commercial and 36 small
industrial consumers. The Company has 49.75% stake in the company along with
British Gas as equal partner.
Maharashtra Natural Gas Limited
(MNGL):
MNGL is a Joint Venture of the Company and Bharat Petroleum Corporation
Limited (BPCL) for implementation of City Gas Projects in Pune city. MNGL is
developing necessary infrastructure for supply of CNG and PNG in the
city. The Company has 22.5% stake in the company along with BPCL as equal
partner.
Petronet LNG Limited (PLL):
PLL was formed for setting up of LNG import and regasification
facilities. PLL has a long term LNG supply contract with Ras Gas, Qatar for
import of 7.5 MMTPA. PLL Dahej terminal is being expanded to 10 MMTPA capacity.
The Company has 12.50 stake in the company along with BPCL, IOC and ONGC as
equal partners.
Ratnagiri Gas and Power Private
Limited (RGPPL):
RGPPL is a Joint Venture Company between the Company, NTPC, Financial
Institutions and MSEB. The Company has 28.33% stake in the company along with
NTPC as equal partner. The capacity of the Ratnagiri Gas and Power Station is
2,150 MW. The Company has made an investment of Rs. 5000.000 Millions and has
approved additional equity of Rs. 4750.000 Millions to RGPPL, out of the Rs.
4750.000 Millions, an amount of Rs. 929.000 Millions has been paid during the
month of May, 2008.
Tripura Natural Gas Company
Limited (TNGCL):
TNGCF is presently supplying gas to 6600 domestic, 104 commercial, 21
industrial consumers and has set up one CNG station in Agartala city. The
Company has 29% stake in the company.
The Company has approved formation of JV for City Gas Projects in Vadodara with
Vadodara Mahanagar Seva Sadan (VMSS) with 26 percent equity, while VMSS will
have 24 per cent equity. The balance 50 per cent equity will be held by
strategic investors and public. A JV agreement has also been signed with HPCF
for city gas projects in Rajasthan.
NEW TECHNOLOGY INITIATIVES
Some of the new technology initiatives adopted by the
Company are as follows:
In line with the President of India's suggestion to
industries to work on alternative fuel Hydrogen, the Company has taken the initiative
on Hydrogen-CNG project in collaboration with ARAI (Automotive Research
Association of India), MGL (Mahanagar Gas Limited), MNGL (Maharashtra Natural
Gas Limited) and Brehon Energy, USA.
The Company has successfully demonstrated the technology for
converting Natural Gas Liquid (NGL) to value added products like LPG rich gas,
gasoline and diesel blending stock. The technology, branded as NTGG technology,
was jointly developed by the Company and Indian Institute of Petroleum (IIP),
Dehradun.
The Company has taken up a project in collaboration with
IIP, Dehradun for converting plastic waste of PE and PP available in the form
of carry bags, container waste and automobile parts and low polymer wax in the
Company's Petrochemical complex, Pata into value added hydrocarbons.
The Company, in collaboration with IIT, Kanpur has developed
a novel process to separate the gas mixtures into their pure components using
four beds of adsorption columns. Major benefit of the developed process is that
it is highly energy efficient.
The Company has also jointly developed with IIT Kanpur, a
coke inhibitor for reducing coke formation in pyrolysis furnaces.
INITIATIVES:
The Company is an IT savvy organization and has been continuously adopting
state-of-the-art IT solutions keeping pace with fast changing industry. These
solutions are not only helping in continuous improvement in efficiency and
productivity but also ensuring 'right information to right person' by use of
latest security solutions.
Continuing with IT initiatives, the Company has launched e-tendering
portal in 2007 and a large number of domestic and international tenders are
being processed through this transparent and secured system across all
offices.
There have been a number of e-initiatives for increasing business process
efficiency and development of manpower. The Company has introduced several
other web based online applications like Online Recruitment, e-Performance
Management System (e-PMS), Grievance Redressal System, Online Vigilance
Complaint Registration System, e-Budgeting System which has led to enhancing
transparency, ready and structured availability of information, enhancing speed
of operation and facilitating efficient decision making.
Another major initiative towards IT risk management was to set up the
state-of the-art 3-way Disaster Recovery (DR) Centre at Jaipur. This will
ensure resumption of business operations in the eventuality of any disaster
like Fire, Flood, Earthquake, Cyber Attack etc. in the primary data centre at
Noida. The DR setup will ensure uninterrupted IT operation and business
continuity of the Company.
MANAGEMENT
DISCUSSION AND ANALYSIS
Management
Discussion And Analysis:
MACRO ECONOMIC DEVELOPMENTS:
Indian Gas Sector - An
Overview:
Natural Gas comprises about 8% of the total energy basket of the country
as compared to the world average of 24%. The structure of primary energy
consumption in India shows that coal dominates as the major energy source.
However, the scenario will change, largely because of the expected increase in
the availability of natural gas in the country. Considering the global trend of
shift in energy axis from oil to gas, the share of gas in consumption pattern,
in the Indian context, is also likely to increase gradually in the years to
come.
The natural gas sector in India is progressively becoming competitive in
nature due to changes in policies and also on the regulatory front. Other
causative factors are presence of multiple players in upstream, midstream and downstream
segments of the industry and alignment of customers towards a market determined
gas pricing regime.
Gas Demand Outlook:
Presently power sector consumes roughly around 36% of the total natural gas
sales in the country followed by fertilizer sector which consumes around
29%.
Due to the changes in policies, fertilizer plants are expected to shift from
other liquid fuels to natural gas. Also natural gas is expected to command a
significant share in the retail market in the form of Compressed Natural Gas
(CNG) in automotive sector and Piped Natural Gas (PNG) in domestic
households.
The demand of natural gas in the country is expected to grow from 196 MMSCMD in
2008-09 to about 279 MMSCMD by 2011-12 as per report of working group on
Petroleum and Natural Gas for XI plan.
Gas
Supply Outlook
Gas
Supply Outlook:
The average gas supply to various consumers in the country is around 103 MMSCMD
from domestic production and LNG import. As per report of working group on Petroleum
and Natural Gas for XI plan, the total gas supply is expected to increase to
more than 191 MMSCMD by 2011-12.
OPPORTUNITIES,
THREATS, RISKS and CONCERNS
The subcontinent is poised for huge growth in gas trade.
There being a huge gap between supply and demand of natural gas, several
players have entered the gas sector which will boost the economy at large. The
key to success is sound planning of the gas infrastructure, supply reliability
and reasonable price in the long term. In the new gas economy; the Company
envisages to be a major player, particularly in gas transmission and trading
segment. The Company's inter state gas grid is a step towards this goal.
The demand for gas and matching supplies along the gas grid are important to
achieve the capacity utilization in terms of gas transmission volumes to
generate cash flows. The demand in turn is driven by the gas pricing vis-a-vis
the price of the alternate fuel. Sharp increase in crude oil prices has a
ripple effect on the entire energy sector including the areas of operation of
the Company.
Gas
Sourcing
The huge gap between demand and supply is expected to be bridged by potential
gas supply from reserves being developed by RIL, GSPC and ONGC through various
NELP blocks. Gas finds in other fields from the recent NELP awards and CBM
blocks would further augment production. The Company is also a partner in 30
exploration blocks.
LNG imports are already being made at Dahej by PILL and at
Hazira by Shell LNG Terminals. Further, increase in PLLs capacity by 5 MMTPA by
way of expansion of Dahej terminal, commissioning of Dabhol terminal, supply
from Shell's LNG terminal at Hazira and setting up of Kochi terminal will boost
the LNG supplies. With increased capacity, LNG will be one of the major sources
of natural gas in the time to come.
Inter-State
Gas Grid:
The Company plans to complete seven new Gas pipelines spread over 6,200 Kms at
an estimated capex of Rs.280000.000 Millions by financial year 2011-12.This
would increase the transmission capacity to approximately 300 MMSCMD and almost
double the gas pipelines networks to over 12,000 Kms of natural gas
pipelines.
Dadri-Nangal Pipeline, augmentation of HVJ andGREP Pipeline and
Chainsa-Gurgaon-Hissar Pipeline are already under execution. The other major
pipelines planned are Jagdishpur-Haldia Pipeline, Dabhol - Bangalore Pipeline
and Kochi-Kanjirkodd-Mangalore/Bangalore Pipeline. The Company has received the
authorization from MOPandNG for laying these pipelines.
The Company currently holds participating stake in 27 FandP blocks and 3
CBM blocks with the focus on augmentation of Gas Supplies for the future
pipelines. A beginning has been made by the Company in earning revenue from
FandP activities. One of the onland blocks in Cambay basin has started
commercial production from February 2008.The Company has a stake of 50% in this
block awarded under NELP-II.
FIXED ASSETS
v Land: Freehold
Leasehold
v Building:
Office/Others
Residential
v Bunk Houses
v Plant and Machinery
v Railway Lines and Sidings
v Electrical Equipments
v Furniture, Fixtures and
v Other Equipments
v Transport Equipments
PRESS RELEASE
Press Releases
[New Delhi,
November 19th, 2008. ]
GAIL
(India) Limited
President
releases commemorative Silver Jubilee Stamp on GAIL,
Petroleum
Minister Congratulates GAIL on outstanding Q2 results
New
Delhi, November 19th, 2008:- A special commemorative postage
stamp was released on the occasion of GAIL’s silver jubilee by Her Excellency,
Smt. Pratibha Patil, President of India, here today. Present on the occasion
were Shri. Murli Deora, Hon’ble Union Minster of Petroleum and Natural Gas,
Shri A Raja, Minister of Communication and Technology, Shri Dinsha Patel,
Minister of State for Petroleum and Natural Gas, Secretary of Petroleum&
Natural Gas, and Secretary of the Department of Posts, Dr. U D Choubey,
Chairman and Managing Director, GAIL, Directors of GAIL, other senior officials
of the Government and former Chairmen and Directors of GAIL.
Speaking at the occasion, Shri Murli Deora, Minister of Petroleum and Natural
Gas said that GAIL occupies a unique position among the PSUs in India. It has
been consistently registering robust financial growth since its inception. He
specifically mentioned the 79 per cent growth in profits during Q2 and said
this was perhaps unprecedented. He congratulated GAIL and expressed his
optimism that GAIL will continue to grow exponentially in the future as well.
Dr. U. D. Choubey, Chairman and Managing Director, GAIL said, “It’s indeed and
an honour for GAIL to have received the recognition by the postal department.
The occasion was a historical event for the whole GAIL family. He further
reiterated his commitment to take the company forward and to make it a Rs. 500000.000
Millions entity in the next two years.
[Shimla, November 04th, 2008.
]
GAIL
(India) Limited
GAIL
signs Co-Operation Agreement with Himachal Pradesh
Shimla, November 04th, 2008:- GAIL (India) Limited
and Government of Himachal Pradesh today signed a Co-operation Agreement here.
The Co-operation Agreement was signed by Shri B.C. Tripathi, Director
(Marketing), GAIL and Shri Manoj Kumar, Director Industries, Government of
Himachal Pradesh in the presence of Prof. Prem Kumar Dhumal, Hon’ble Chief
Minister of Himachal Pradesh and Dr. U.D. Choubey, Chairman and Managing
Director, GAIL, Shri. Abhay Shukla, Additional Chief Secretary (Industries),
Himachal Pradesh, Shri Ajay Tyagi, Principal Resident Commissioner, Himachal
Pradesh and other senior officials of GAIL and the State Government were also
present on the occasion.
The Co-operation Agreement signed with the Department of Industries provides
for enlisting State Level Co-operation for extension of the proposed
Dadri-Bawana-Nangal natural gas pipeline up-to this region, a joint exercise
for assessment of the demand potential of natural gas and allied products in
the state of Himachal Pradesh and for looking into feasibility of extending the
proposed Dadri-Bawana-Nangal natural gas pipeline upto Himachal Pradesh. The
Gas pipeline will bring clean and environment friendly fuel to various
consumers in the region, which include Industrial, domestic and transport
sectors. The availability of gas in the region would herald the use of a more
efficient energy resource, which will increase the competitive edge of the
industries using natural gas.
Under the Co-operation Agreement, GAIL will use its technical and commercial
expertise to study the various options and collate the gas demand potential of
the state of Himachal Pradesh. In this regard, GAIL has already conducted a
sample survey of some of industrial areas in Himachal Pradesh.
On behalf of Himachal Pradesh Government, the Department of Industries, H.P.
will act as a nodal agency for
Facilitating information pertaining to Fertilizer, Power,
industrial, domestic and transport sectors in the state, which have potential
to consume Gas and CNG as fuel or feedstock.
Coordinating grant of all necessary permissions and
clearance for development of gas infrastructure in the state.
Coordinating with Government Departments for required data
supply, arrangement of meetings etc.
The Cooperation Agreement also provides for GAIL and the
nominated state agency, to identify industrial clusters for distribution of
Natural Gas as fuel and to determine modus operandi for setting up of joint
ventures by GAIL in Himachal Pradesh.
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.49.85 |
|
UK Pound |
1 |
Rs.76.60 |
|
Euro |
1 |
Rs.64.68 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
69 |
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 |
|