MIRA
INFORM REPORT
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Report Date : |
03.10.2008 |
IDENTIFICATION
DETAILS
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Name : |
TANISHQ – DIVISION OF TITAN INDUSTRIES LIMITED |
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Registered Office : |
3, SIPCOT Industrial Complex, Hosur – 635 126, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
26.07.1984 |
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Com. Reg. No.: |
1456 |
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CIN No.: [Company
Identification No.] |
L74999TZ1984PLC001456 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHET08980G |
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PAN No.: [Permanent
Account No.] |
AAACT5131A |
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Legal Form : |
Public Limited Liability Company Company’s Shares Are Listed On The
Stock Exchange |
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Line of Business : |
Manufacturers and Sellers of Watches, Jewellery Pieces,
Table Clocks, etc. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 21000000 |
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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 and a part of Tata
group. The company is progressing well. Directors are reported as experienced
and respectable businessmen. Trade relations are reported as faire. Business
is active. Payments are usually correct and as per commitments. Fundamentals are strong and healthy. The company can be considered normal for business dealings at usual
trade terms and conditions The company can be regarded as a promising business partner in medium
to long-run. |
LOCATIONS
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Registered Office : |
3, SIPCOT Industrial Complex, Hosur – 635 126, Tamilnadu,
India. |
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Tel. No.: |
91-4344-554199 |
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Fax No.: |
91-4344-276037 |
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E-Mail : |
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Website : |
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Corporate Office1 : |
Golden Enclave, Tower A, Airport Road, Bangalore – 560 017, Karnataka |
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Tel. No.: |
91-80-66609000, 66609027, 66609028 |
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Fax No.: |
91-80-25269923, 25263001 |
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E-Mail : |
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Corporate Office2 : |
6th Floor, MMTC House, Bandra Kurla Complex, Bandra, Mumbai
– 400 051,
Maharashtra, India. |
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Mobile No.: |
91-9003210850 |
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Divisions : |
Watch Manufacturing Division 3 SIPCOT Industrial Complex, Hosur - 635 126 Jewellery Manufacturing Division 29, SIPCOT Industrial Complex, Hosur - 635 126 Retailing Services Group Mitra Towers #10/4 Kasturba Road,
Bangalore - 560 001 |
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Factories/ Plants : |
Dehradun Factory Mohabewala Industrial Area, Dehradun - 248 002 Unit – I Khasra No. 148D, 173B, 176A, 176B Unit – II Khasra No. 148B, 149B Fax: 91-135-2640958 GOA Factory L-15, Verna Elecronic City Salcette -
403 722, Goa Plant Plot No.59, EPIP, Jharmajary Phase I,
Solen District, Baddi – 173 205, Himachal Pradesh. Plot No. C1, C2, C3, Khasra No.37,
Village Bantakheri, Tehsil Roorkee, District – Haridwar, Uttaranchal. Precision
Engineering Plant: No.15 B, Bommasandra Industrial Area,
Hosur Road, Anekal Taluk, Bangalore – 562 158. Jewellery
and Clock Plants: i) 27, 28 and29, SIPCOT Industrial
Complex, Hosur – 635 126, Tamilnadu. ii) Khasra No.238, Kaunwala Dehradun
– 248 001, Uttaranchal |
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Regional Offices : |
Regional Office - South Mitra Towers #10/4 Kasturba Road
,Bangalore - 560 001 Regional Office - North No. 202, Okhla Industrial Area, Phase
3, New Delhi Regional Office - East Block 'C', 8th Floor, Apeejay House
15, Park Street Kolkata - 700 016 Regional Office - West The Metropolitan 9th Floor, Plot No.
C-26/27,Bandra-Kurla Complex Bandra East, Mumbai - 400 051 Affiliate Companies Asia-Pacific Titan Watches and Jewellery Intl.(
Asia Pacific) Pte. Limited Europe Titan International Marketing Limited
18, Grosvenor Place, Belgravia London SW1X 7HS U.K. The Middle East Titan International (Middle East) FZELOB 3 AG 30 P O BOX
61094 Jebel Ali Free Zone DUBAI ( U. A. E ) |
DIRECTORS
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Name : |
Mr. Rameshram Mishra |
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Designation : |
Chairman and Director |
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Date of Birth/Age : |
14.12.1953 |
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Qualification : |
IAS |
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Date of Appointment : |
26.07.2004 |
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Name : |
Mr. Arun Ramanathan |
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Designation : |
Director |
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Date of Birth/Age : |
25.04.1949 |
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Qualification : |
IAS |
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Date of Appointment : |
31.07.2002 |
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Name : |
Mr. Bhaskar Bhat |
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Designation : |
Managing Director |
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Date of Birth/Age : |
49 Years |
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Qualification : |
B. Tech., PGDM |
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Name : |
Mr. P. Baskaradoss |
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Designation : |
Director |
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Name : |
Mr. Ishaat Hussain |
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Designation : |
Director |
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Name : |
Mr. Farrokh Kavarana |
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Designation : |
Director |
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Name : |
Mr. N. N. Tata |
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Designation : |
Director |
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Name : |
Mr. Tirumalai. Kumar Balaji |
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Designation : |
Director |
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Date of Birth/Age : |
12.07.1948 |
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Qualification : |
B.E. |
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Date of Appointment : |
01.03.1986 |
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Name : |
Mr. Arun Charan. Mukherji |
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Designation : |
Director |
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Date of Birth/Age : |
10.12.1925 |
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Qualification : |
M.A. |
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Date of Appointment : |
01.03.1986 |
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Name : |
Mrs. Rama Bijapurkar |
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Designation : |
Director |
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Name : |
Dr. C. G. Krishnadas Nair |
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Designation : |
Director |
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Date of Birth/Age : |
17.08.1941 |
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Qualification : |
BE (Metallurgy), MSc, Engineering, PHD, Engineering |
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Date of Appointment : |
02.05.2002 |
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Name : |
Dr. R. Vijaykumar |
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Designation : |
Director |
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Date of Birth/Age : |
23.09.1955 |
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Qualification : |
Ph. D. IAS |
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Date of Appointment : |
26.06.2002 |
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Name : |
Mr. Md. Nasimuddin |
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Designation : |
Director |
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Date of Birth/Age : |
3rd December 1963 |
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Date of Appointment : |
26th July 2004 |
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Name : |
Mr. R. Vijaykumar |
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Designation : |
Director |
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Date of Birth/Age : |
20th September 1950 |
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Date of Appointment : |
29th January 2004 |
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Name : |
Mr. Shaktikanta Das |
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Designation : |
Chairman And Director (upto 05.12.2007) |
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Date of Appointment : |
05.06.2007 |
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Name : |
Mr. D. Rajendran |
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Designation : |
Chairman And Director |
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Date of Appointment : |
05.06.2007 |
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Name : |
Mr. S. Ramasundaram |
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Designation : |
Director |
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Date of Appointment : |
05.06.2007 |
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Name : |
Mr. S. Susai |
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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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Date of Appointment : |
26.06.2007 |
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Name : |
Mr. M F Farooqui |
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Designation : |
Chairman |
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Date of Birth/Age : |
28.06.1954 |
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Qualification : |
IAS, M Sc (Phy) (Electronics) |
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Date of Appointment : |
05.12.2007 |
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Name : |
Mr. Kumar Jayant |
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Designation : |
Director |
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Date of Birth/Age : |
22.12.1967 |
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Date of Appointment : |
29.10.2007 |
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Name : |
Mr. Sunil Paliwal |
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Designation : |
Director (upto 29.10.2007) |
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Name : |
Mr. Nihal Kaviratne, CBE |
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Designation : |
Director |
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Name : |
Ms. Vinita Bali |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Ms. Usha Iyenagar |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.03.2008
|
Category |
No.
of shares held |
%
of shareholding |
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Tamilnadu industrial development corporation Limited |
12373836 |
27.88 |
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Tata group companies |
11176560 |
25.17 |
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FFI / FLLs / OCBs |
5673023 |
12.78 |
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Bodies corporate |
1733583 |
3.91 |
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Unit trust india |
2456 |
0.00 |
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Mutual funds |
993316 |
2.24 |
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Nationaliesed banks |
59074 |
0.13 |
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Others |
12377460 |
27.89 |
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Total |
44389308 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers and Sellers of Watches, Jewellery Pieces,
Table Clocks, etc. |
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Products : |
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Exports : |
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Countries : |
Australia, Bahrain, France, Kuwait, Russia, Saudi Arabia, Singapore and Spain. |
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Imports : |
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Countries : |
Hong Kong, Japan and Switzerland. |
GENERAL
INFORMATION
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Suppliers : |
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No. of Employees : |
2959 |
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Bankers : |
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Facilities : |
Secured Loans
Unsecured Loan
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Deloitte Haskins and Sells (formerly A.F. Ferguson and Company) Chartered Accountants |
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Promoters : |
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Tamilnadu Industrial Development Corporation Limited -
Tata Sons Limited |
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Joint Venture :
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Titan Time Products Limited |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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80000000 |
Equity Shares |
Rs. 10/- each |
Rs. 800.000 millions |
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4000000 |
Redeemable cumulative preference |
Rs. 100/- each |
Rs. 400.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
44389308 |
Equity Shares |
Rs. 10/-
each |
Rs. 443.893
millions |
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FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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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 |
443.893 |
443.893 |
822.763 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
3917.762 |
2830.554 |
1502.957 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
4361.655 |
3274.447 |
2325.720 |
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LOAN FUNDS |
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1] Secured Loans |
1881.135 |
1726.707 |
1488.377 |
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2] Unsecured Loans |
697.802 |
743.366 |
1190.961 |
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TOTAL BORROWING |
2578.937 |
2470.073 |
2679.338 |
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DEFERRED TAX LIABILITIES |
247.117 |
174.419 |
237.548 |
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TOTAL |
7187.709 |
5918.939 |
5242.506 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2724.609 |
2511.481 |
1764.551 |
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Capital work-in-progress |
99.913 |
159.718 |
195.649 |
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INVESTMENT |
473.922 |
270.203 |
270.203 |
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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 |
10210.905
|
6774.823 |
3743.944
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Sundry Debtors |
964.531
|
920.563 |
901.193
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Cash & Bank Balances |
519.130
|
507.299 |
382.869
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Other Current Assets |
0.000
|
0.000 |
0.000
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Loans & Advances |
991.683
|
634.206 |
1439.599
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Total
Current Assets |
12686.249
|
8836.891 |
6467.605 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
8058.011
|
5368.601 |
3331.357
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Provisions |
738.973
|
532.822 |
267.198
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Total
Current Liabilities |
8796.984
|
5901.423 |
3598.555 |
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Net Current Assets |
3889.265
|
2935.468 |
2869.050
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MISCELLANEOUS EXPENSES |
0.000 |
42.069 |
143.053 |
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TOTAL |
7187.709 |
5918.939 |
5242.506 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
29937.451 |
20902.422 |
14401.850 |
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Other Income |
17.726 |
32.191 |
24.294 |
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Total Income |
29955.177 |
20934.613 |
14426.144 |
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Profit/(Loss) Before Tax |
2023.032 |
1316.549 |
868.818 |
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Provision for Taxation |
440.163 |
373.236 |
132.620 |
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Profit/(Loss) After Tax |
1582.869 |
943.313 |
736.198 |
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Earnings in Foreign Currency : |
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Export of goods on FOB basis |
1383.855 |
1156.175 |
873.553 |
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Interest |
37.082 |
45.305 |
47.294 |
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Other Earnings |
3.036 |
3.035 |
6.723 |
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Total Earnings |
1423.973 |
1204.515 |
927.570 |
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Imports : |
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Raw Materials |
11203.117 |
4299.735 |
1841.242 |
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Stores & Spares |
66.824 |
30.709 |
29.040 |
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Capital Goods |
148.822 |
70.350 |
177.887 |
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Total Imports |
11418.763 |
4400.794 |
2048.169 |
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Expenditures : |
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Interest |
201.399 |
204.226 |
248.357 |
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Depreciation & Amortization |
297.277 |
255.909 |
196.644 |
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Other Expenditure |
27433.469 |
19157.929 |
13112.325 |
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Total Expenditure |
27932.145 |
19618.064 |
13557.326 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2008 |
|
Type |
1st
Quarter |
|
Sales turnover |
8103.100 |
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Other income |
8.300 |
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Total income |
8111.400 |
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Total expenditure |
7542.500 |
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Operating profit |
568.900 |
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Interest |
52.100 |
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Gross profit |
516.800 |
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Depreciation |
77.300 |
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Tax |
105.300 |
|
Reported PAT |
322.200 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity
Ratio |
0.66 |
0.92 |
1.43 |
|
Long
Term Debt-Equity Ratio |
0.27 |
0.36 |
0.69 |
|
Current
Ratio |
1.19 |
1.17 |
1.23 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
5.77 |
4.66 |
3.68 |
|
Inventory |
3.65 |
4.15 |
4.67 |
|
Debtors |
32.87 |
23.95 |
18.06 |
|
Interest
Cover Ratio |
10.51 |
7.29 |
4.83 |
|
Operating
Profit Margin(%) |
9.05 |
9.51 |
10.77 |
|
Profit
Before Interest And Tax Margin(%) |
8.09 |
8.34 |
9.46 |
|
Cash
Profit Margin(%) |
6.44 |
6.32 |
7.63 |
|
Adjusted
Net Profit Margin(%) |
5.48 |
5.15 |
6.33 |
|
Return
On Capital Employed(%) |
39.64 |
34.44 |
29.86 |
|
Return
On Net Worth(%) |
44.48 |
43.05 |
56.29 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
As a result of joint venture between the Tata Group and Tamil
Nadu Industrial Development Corporation, the Titan Industries Limited (TIL) was
born in the year 1984 and commenced its business in the year 1986. Started as a
watch company, Titan Industries' main focus has been to increase the breadth
and depth of its portfolio of product offerings. The company has four main
business units, such as Watches, Jewellery, Eyewear and Precision Engineered
Components. International labels such as Tommy Hilfiger and Hugo Boss are now a
part of its basket; along with Fastrack a brand targeting youth and the
mid-range brand Sonata. It has manufacturing and assembly operations at Hosur,
Dehradun, Roorkee and Baddi in Himachal Pradesh and an ECB plant in Goa.
Titan's manufacturing units of the Watch and Jewellery divisions at Hosur,
Karnataka are certified under ISO 9001: 2000 Quality Management System
standards and ISO 14001 Environment System Standard.
Under in Watch Business, the company manufactures four main watch brands viz.
Titan for the premium segment, Fastrack - focused on the youth and trendy
fashion space, Sonata for the mass market and Xylys for the premium market. In
Jewellery business, Tanishq is India's largest and fastest growing jewellery
brand with a premium range of gold jewellery studded with diamonds or coloured
gems and a wide range in 22kt pure gold. Platinum also a part of the product
range and the Gold Plus' is the recent retail offering for the mass market with
plain gold jewellery. Titan Eye+ is currently on a pilot mode with 5 stores in
2 cities and has sunglasses under Fastrack brand and prescription eyewear
consisting of Frames, Lenses, Sunglasses, Accessories and Contact Lenses of
in-house brands and other premium brands. The company's Precision Engineering
Division supplies precision components to the avionics and the automotive
industry.
TIL has set up an integrated watch manufacturing facility at Hosur in Tamil
Nadu in the year 1987 with initial technical know-how from Europe and Japan.
The Company played a part in capital market with rights issue in October 1992
to the part of finance for its expansion programmes. In 1995, the company
diversified into Jewellery under the brand name of Tanishq to capitalize on a
fragmented market operating with no brands in urban cities. Apart from the
domestic market, the company started the manufacturing of watches for several
prestigious international brands during the year 1997. Sonata, the second watch
brand of the company was launched in the year 1998. The Company leveraged its
manufacturing competencies and branched into Precision Engineering Products and
Machine Building from the year 2003. The company has diversified into fashion
Eyewear by launching Fastrack Eye-Gear sunglasses, as well as Prescription
Eyewear. The company's Precision Engineering Division supplies precision
components and also manufactures dashboard clocks as OEM to car manufacturers
in Europe and America. The division also provides fully integrated Automation
solutions. PHDCII award for Corporate Social Responsibility - 2003 was surrendered
to hands of the company. The Company has implemented the Authorisation Matrix
in its ERP system in the Time Products Division by empowering various types of
transactions based on graded level of authority during the year 2004.
During 2004-05 the company has launched two brands namely Fastrack sunglasses
and Tommy Hilfiger Watches. The company has entered into the fragrance business
through launch of Evolve and these are available in UAE, OMAN and Bahrain and
in the same period of 2004-05 the company has set up a new watch assembly unit
was established at Baddi Himachal Pradesh with an assembly capacity of 2
Million watches per annum. During the year 2005, bolstered by the success of
Tanishq, a range of premium branded Jewellery, the company launched its second
Jewellery brand under the name of Gold Plus aimed at the mass market and for
capitalizing on the opportunity in small towns and rural India. The year
2005-06 saw one of the bigger 'internal' mergers, between the Retailing team
and Customer Service. Christened as the Retailing Services Group, its objective
is to have a specialized and integrated team, focused on retail strategy and
operations for all brands of the Time Products Division. The later part of the
year 2006, saw the high profile launch of XYLYS, a new brand in the fast
growing premium 'Swiss Made' market segment. This brand targets the growing
breed of young, affluent, fashionable yet discerning consumers, who seek to
make a sophisticated style statement by the watches they wear. The brand was
launched in Mumbai, Delhi, Bangalore and Hyderabad.
The Time Products Division of the company was awarded the JRD QV Award in 2006.
Titan has won the Brand Leadership award at the India Brand Summit. Both Titan
and Tanishq have been adjudged 'Most Admired Brands' as well as 'Retailer of
the Year' by Images Fashion Forum in consecutive years. TIL being named the
No.1 Brand in the Consumer Durables category in the 'Brand Equity' Survey of
The Economic Times, a leading Indian financial daily. Titan was once again
selected as the most admired watch brand in the country during 2006-07. The
premium brand, Xylys, which had been launched a year before, expanded its
footprint to 11 towns of the country in the year 2007. Titan Industries wins
SAP-ACE 2007 Awards.
In January of the year 2008, TIL launched its all-new collection of
chronograph, multifunction and retrograde watches with international styling,
Octane from Titan. The collection embodies speed, energy and power. In same
month and year, TIL made a tie-up with Sankara Nethralaya for a technical
collaboration for training optical store personnel for Titan Eye+, the optical
division of the company. TIL has set foot in Pakistan, encompass the set up of
a large World of Titan showroom in Lahore and a Titan exclusive store in
Karachi during the period of April 2008. The Company made its partnership with
the World Wildlife Fund (WWF-India) in June 2008, main aim of the tie-up is to
spread awareness about some of the most endangered species in India through a
collection of uniquely designed Titan watches.
The Company is working towards sustaining this momentum in the current and
upcoming years also. The domestic watch division is pursuing aggressive growth
through the ever-increasing strength of all its major brands. Constant
exploration of new consumer segments, introduction of innovative new products,
which would fuel consumer demand, and the rapid growth of their retail net work
would certainly drive this growth. The Jewellery division continues to set for
itself very ambitious growth targets, through various key initiatives including
launching of new collections, setting up new Tanishq and Gold Plus stores,
improving the walk-ins, and improving the merchandising at the stores. The
Precision Engineering Division of the Company will be targeting a significant
top line growth and most importantly to achieve a break even in terms of
profitability.
DIRECTOR’S REPORTS
Exports /
International Operations:
The Company achieved an export turnover of Rs.1380 Millions during the year
between Watches, Jewellery and Precision Engineered components.
The key challenge in exports of Watches and Jewellery is identification of
profitable business opportunities across the globe, given the immense
competition and clutter of brands in overseas markets. The International
Business Division achieved a sales growth of 19.70% in 2007-08 over the
previous year. While the Watch sales grew by 22%, Jewellery sales went up by
30% as compared to 2006-07. The turnover was impacted by appreciation of the
Indian Rupee against US Dollar.
Finance:
During the year, the Company raised a total of Rs.3468 Millions from
borrowings, of which Rs.3313.5 Millions were from Commercial banks and the
balance of Rs.154.5 Millions from other sources. Borrowings of Rs.3366.1
Millions were repaid during the year. The Company incurred Rs.474.5 Millions as
capital expenditure in respect of refurbishment and expansion programmes,
outlays on retail outlets, capital investment in Precision Engineering Division
and in IT Hardware systems.
The tightening of the monetary policy by RBI through successive hikes in the
CRR had an adverse effect in the borrowing rates of the Company, with the
commercial banks raising their lending rates. Given the current inflation rate,
it is expected that this high interest rate regime will continue for some more
time. As a result the average cost of borrowings for the year was 9.24% as
against 8.71% in the previous year.
As on 31st March, 2008, the Company held fixed deposits of Rs.17.3 Millions
from the public, shareholders and employees. There were no overdue deposits
other than unclaimed deposits amounting to Rs.4.1 Millions.
An amount of Rs.52.8 Millions has been transferred to the debenture redemption
reserve in accordance with statutory requirements and the terms of Rights
Issue.
During the year, the Company made payments aggregating to Rs.3692.7 Millions by
way of central, state and local taxes and duties as against Rs.3089.7 Millions
in the previous year.
Subsidiary and Associate
Companies:
The Company, at the beginning of the financial year had three overseas
subsidiaries viz. Titan International Holdings B.V, Amsterdam (TIHBV), Titan
Brand Holdings N.V, Curacao (TBHNV), Netherlands Antilles, Titan Watch Co
Limited, Hong Kong (TWC) and one wholly owned domestic subsidiary, Titan
Time-Products Limited, Goa (TTPL, Goa), India, besides six domestic and five
overseas Associate Companies.
During the year, the Company took a major step towards consolidation by sale
and mergers of the above constituent companies. The equity interest in two
overseas wholly owned subsidiaries of the Company viz., TIHBV and TBHNV were
sold during the Financial Year 2007-08 (TIHBV on 31st December, 2007 and TBHNV
on 28th March, 2008) and as a result the overseas Associate companies have
ceased to be Associate companies. Titan Watch Company, Hong Kong, which was a
subsidiary up to date of sale of TIHBV i.e. upto 31st December, 2007, became
automatically divested due to the sale as above.
As at 31st March, 2008, the Company had 7 domestic subsidiaries and no overseas
subsidiary.
The operational highlights of these Subsidiary companies are as under:
TTPL sold 8.24 million Electronic Circuit Boards in 2007-08 and made a net
profit of Rs.10.078 Millions.
Samrat Holdings Limited and Questar Investments Limited made a net profit of
Rs.17.481 Millions and Rs.1.807 Millions respectively in 2007-08.
Titan Holdings Limited made a loss of Rs.1.539 Millions.
Tanishq (India) Limited and Titan Mechatronics Limited also made a net profit
of Rs.36.656 Millions and Rs.0.238 Million respectively. Titan Properties
Limited made a small loss of Rs.0.141 Million.
None of the subsidiary companies have declared a dividend for 2007-08.
A modified Scheme of Amalgamation (u/s 391 to 394 of the Companies Act 1956),
to enable purchase of minority interest, was approved by the Board of Directors
of the Company, at their meeting held on 27th July 2007, subject to the
required sanctions of the jurisdictional High Courts, wherein three domestic
associate Companies viz., Samrat Holding Limited, Mumbai, India, Questar
Investments Limited, Mumbai, India and Titan Holdings Limited, Banglore, India
were approved for amalgamation with Subject The buy-out of the minority
interest in the three domestic associate Companies was executed on 18th
February 2008. The Scheme of Amalgamation of these three Companies shall not
result in change in the capital structure or expansion of the equity share
capital of Subject, since as per Scheme no fresh issue of equity shares is
proposed.
As per the Scheme of Amalgamation, with appointed date as 1.04.2007, the cross
holdings of the three merging Companies amongst themselves and the shareholding
by Subject in these companies, shall get cancelled and the investments held by
Samrat Holdings Limited, Titan Holdings Limited and Questar Investments Limited
shall become the investments of Subject On the said three Companies
amalgamating from the said date, three more domestic Associate Companies i.e.
Tanishq (India) Limited, Titan Properties Limited and Titan Mechatronics
Limited shall become subsidiaries of Subject These three Companies continue as
subsidiaries of Subject along with Titan Time Products Limited, Goa.
Outlook for 2008-09:
The Company's performance during last year (2007-08) was the best ever. The
Company is working towards sustaining this momentum in the current year also.
The watch division is pursuing rapid profitable growth through sharp
positioning and focus through its major brands. Constant exploration of new
consumer segments, introduction of innovative new products which would fuel
consumer demand, and the rapid growth of their retail network would certainly
drive this growth.
The Jewellery Division continues to set for itself ambitious growth targets,
through various initiatives including launching of new collections, scaling up
network strength and area, improving the walk-ins, and improving the
merchandising at the stores.
The International Business Division of the Company has now been restructured
and merged with the domestic Watch Business and domestic Jewellery Business
Divisions, which Divisions are taking over charge of oversight of exports also.
The Company will continue its efforts to explore entry into new markets besides
growing in the existing markets.
The launch of Tanishq Jewellery in the USA as a pilot project is underway and
the Company will be setting up two Tanishq stores - one in Chicago and another
in New Jersey during the current year.
The Precision Engineering Division of the Company will be targeting a
significant top line growth and achieve a break even in terms of
profitability.
The Company's new business vertical, Prescription Eyewear which was launched
last year under the brand name Titan Eye+ is planning to scale up the number of
retail outlets and currently has 14 stores which is targeted to grow to over 80
stores as per a national roll out plan in the current year.
Awards and
Recognitions:
Subject was adjudged one of the World's 50 'Domestic Dynamos' by Boston
Consulting Group in a survey of the top 50 fastest growing domestic companies
countering multi national majors in their respective domestic markets through
innovative products and marketing thus continuing to grow at an accelerated
pace despite international competition.
The Company also continued to be recognised for its product and retail brands
and its innovations as under:
- Won the Top Retailer 2007 Asia Pacific - Bronze Award
- Won Marico Erehwon Innovations for India Award for the slimmest watch -
Titan Edge
- Titan the brand won Images Fashion Award for the Most Admired Brand for
the year 2007-08 for the 7th consecutive year'.
- Subject won the Images Fashion Award for the Retailer of the Year'.
- Titan Brand was ranked first amongst the consumer durables category in a
survey by Economic Times.
Corporate
Governance:
A separate report on Corporate Governance forms part of the Annual Report along with Auditors' Certificate on Compliance.
Directors:
Mr. N.N. Tata, Mr. T.K.
Balaji and Dr. C.G. Krishnadas Nair retire by rotation and are eligible for
re-appointment.
Mr. Shaktikanta Das, IAS, Secretary to the Government of Tamilnadu, Industries
Department and a nominee of Tamilnadu Industrial Development Corporation
Limited (TIDCO) who was appointed as Chairman and Director of the Company on
5th June, 2006 resigned with effect from 5th December, 2007. The Directors wish
to record their gratitude and appreciation for the wise counsel and contribution
by Mr. Shaktikanta Das during his tenure as a Director of the Company.
Mr. M.F. Farooqui, IAS, Secretary to the Government of Tamilnadu, Industries
Department and a nominee of Tamilnadu Industrial Development Corporation
Limited (TIDCO) was appointed as Chairman and Additional Director of the
Company with effect from 5th December, 2007. Member's attention is drawn to
item no. 6 of the Notice for his appointment as a Director of the Company.
Mr. Sunil Paliwal, IAS, Executive Director, Tamilnadu Industrial Development
Corporation Limited, and nominee of TIDCO, who was appointed as a Director on
26th February, 2007, resigned with effect from 29th October, 2007. The
Directors wish to record their gratitude and appreciation for the wise counsel
and contribution by Mr. Sunil Paliwal during his tenure as a Director of the
Company.
Mr. Kumar Jayant, IAS, Executive Director, Tamilnadu Industrial Development
Corporation Limited and a nominee of TIDCO, was appointed as an Additional
Director, with effect from 29th October, 2007. Member's attention is drawn to
item no. 7 of the Notice for his appointment as a Director of the
Company.
Management Discussion
and Analysis:
An Overview of the Economy:
The Economic survey puts the growth rate as 8.7% this year as compared to 9.6%
in the year 2006-07. The decline is attributed to a general slowdown in most of
the sectors except electricity, communications, trade, hotels and transport. It
is of some concern that the already sluggish growth in agriculture was accentuated
due to a decline in the growth rate of the Rabi crop. Further, the deceleration
in the growth of public and private consumption, including consumer durables
and construction, contributed to the slowing down of the manufacturing
sector.
The fundamentals of the Indian economy, however, remain intact and with the GDP
growth exceeding 8% year on year since 2003-04, it does inspire some
confidence. In terms of sectoral contribution, transport and communication grew
the fastest, followed by financial services and construction.
Economic growth should cause a consequential improvement in public welfare.
The growth rate of per capita income in 2007-08 is at 7.2% which matches the average growth of the past 5 years. Aligned to this has been the growth in per-capita consumption at 5.5%, which is marginally higher than the previous 5 yearly average. There is, however, a concern on inflation which was projected to decline at 4.1%, but has actually significantly increased in the recent months so as to warrant the government's serious attention.
On the balance of payments front, there is a considerable uncertainty arising
out of the US sub-prime mortgage crisis though there has been a 150% increase
in net foreign direct investment.
The Indian capital market also attained greater depth and width during 2007 and
the BSE Sensex scaled a peak of 20,000 at the close of the year and the market
capitalisation also doubled. Correction in the capital markets since has
reflected a more realistic situation but, in the overall context, the situation
appears healthy.
The generally upbeat
scenario has impacted the consumer market significantly. India has emerged as
the second largest market for Nokia, ahead of the United States and just behind
China. The total number of telephone subscribers in India has crossed 250
million and wireless subscription is the highest in the world.
Business Overview:
The Company continued its journey on a significant growth path and the total
turnover crossed the Rs.30000 Millions mark, with sales income at Rs.30410
Millions, growing by 42.3% (almost the same rate as the previous year). Profit
after taxes stood at Rs.1582.9 Millions as compared to Rs.943.3 Millions in the
previous year.
Milestones and
Accolades:
The Company has now crossed a cumulative production of 100 million watches
since inception two decades ago. This is a remarkable and rare milestone for
any consumer goods company in India.
Their flagship brand Titan achieved excellent performance during 2007-08, with
a 27% growth in retail sales. Multiple watch ownership in urban India remains a
key strategic driver for this brand.
Sonata, their offering for the economy market, is also the largest watch brand
in India, in terms of volume sales.
Their youth brand, Fastrack, had a historic year, recording for the third year
in succession, a phenomenal annual growth of over 50%.
Fastrack is poised to become a cult brand for youth in the country.
To achieve such cult status amongst youth, Fastrack is present not only in
watches, but is rapidly expanding to other youth categories such as sunglasses.
Fastrack by far is the leading brand of sunglasses in India.
Their Swiss-made brand, Xylys, celebrated the second year of its existence with
a significant growth of 103%.
The Company has been constantly exploring ways and means of growing the watch
business by introducing international brands by way of licensing and
distribution of premium fashion brands, alongside its own brands of watches.
Last year, their first licensed brand, Tommy Hilfiger, registered rapid growth
of 35%, making it one of the highest selling watch brands in fashion space.
Towards the latter half of the year, the Company also signed on distribution
rights for a second fashion brand, Hugo Boss. The brand has been launched in
key markets, and has already caught the attention and interest of buyers in
this segment.
The addition of a few more select global fashion brands to their portfolio will
enable us to straddle the watches market in the country at various price points
and consumer segments.
The Titan Design Studio, which focuses on design of watches, clocks, eyewear,
trophies and a range of other products, is today one of India's finest centres
of design excellence.
The Design Studio's creative excellence and zeal are evident in new product
collections of watches launched last year, such as Titan Aviator, Heritage,
Raga Crystals, Fastrack Neondisc, Sonata Yuva - all of which have met with
critical and consumer acclaim.
Working closely with the Design Studio is a small team called Innovedge, which
targets breakthrough technology innovation in watches. During 2007-08,
Innovedge successfully commercialised the technology of using
electro-luminescent sheets in watches, launched as the Fastrack Neondisc
collection, the world's first watches with no hands.
Fixed assets:
Land – freehold
Land – leasehold
Buildings
Plant, machinery and equipment
Furniture, fixtures and equipment
Vehicles
trade terms
The company is in trade terms with: -
·
A. S. R. Packaging Private Limited
·
AAA Products Private Limited
·
Amonia Marketing Company
·
Arasu Enterprises
·
Arihant Technomac Limited
·
Art and Jewells
·
Bangalore Mechatronics Private Limited
·
Bangalore Refinary Private Limited
·
Centura Watch Cases Private Limited
·
Chakson Engineering Company
·
Classic Dials Private Limited
·
Conee Chains Private Limited
·
Cony Bands Private Limited
·
Delta Products
·
G. B. Rubber Products
·
Hirsch Watch Straps Private Limited
·
Hitech Times
·
Horological Components Private Limited
·
Huja Industries
·
Indo Plast
·
Medicon Leather Private Limited
·
P and S Galvasols
·
Peebee Enterprises
·
Perfect Engineering Works
·
Plasma Gold Coatings Private Limited
·
Plastic Moulding Service
·
Sona Band
·
Sona Horologicals Private Limited
·
Suraj Enterprises
·
Tecnicrafts Industries
·
Vardhan Banda Limited
·
Hitech Times
·
Sree Lakshmi Enterprises
WEBSITE DETAILS:
Profile
Titan Industries was established in 1984 as a joint venture between
the Tata Group and the Tamil Nadu Industrial Development Corporation. The
company brought about a paradigm shift in the Indian watch market, offering
quartz technology with international styling, manufactured in a
state-of-the-art factory at Hosur, Tamil Nadu. Leveraging its understanding of
different segments in the watch market, the company launched a second
independent watch brand-Sonata, as a value brand to those seeking to buy
functionally styled watches at affordable prices. In addition it focused on the
youth with its third brand – Fastrack. It has also premium fashion watches by
acquiring a licence for global brands such as Tommy Hilfiger and Hugo Boss,
while. It has also in its portfolio its first Swiss Made watch brand – Xylys.
In 1995, the company diversified into jewellery under the
brand – Tanishq to capitalize on a fragmented market operating with no brands
in urban cities. In 2005, the company launched its second Jewellery brand, Gold
Plus, for capitalizing on the opportunity in small towns and rural India.
The company has now diversified into fashion Eyewear by
launching Fastrack Eye-Gear sunglasses, as well as Prescription Eyewear. The
Company leveraged its manufacturing competencies and branched into Precision
Engineering Products and Machine Building from 2003.
Today Titan Industries is India's leading manufacturer of
watches and jewellery employing 3,800 people. Titan and Tanishq are among the
most admired brands in their categories.
Products
The company manufactures over 8
million watches per annum and has a customer base of over 80 million. It has
manufacturing and assembly operations at Hosur, Dehradun, Roorkee and Baddi in
Himachal Pradesh and an ECB plant in Goa. Its main products are :
- Watches : Currently
manufactures four main watch brands viz. Titan for the premium segment,
Fastrack – focused on the youth and trendy fashion space, Sonata for the
mass market and Xylys for the premium market. The Titan brand architecture
comprises several sub-brands, each of which is a leader in its segment.
Notable among them are: Titan Edge – The world's slimmest watch which
stands for the philosophy of "less is more"; Titan Raga – the
feminine and sensuous accessory for today's woman, Nebula - crafted in
solid gold and precious stones and several other collections like Wall
Street, Heritage, Regalia and the Aviator series, all of which form a part
of the Titan wardrobe. Sonata is today India's largest watch selling brand
and is priced between Rs 295/- and Rs 1200/-. The company's first Swiss Made
watch – Xylys is for the hi-end connoisseur and new age achiever. It also
markets Tommy Hilfiger watches under a licensing arrangement and is
introducing Hugo Boss. Today, the Titan portfolio has over 60% of the
domestic market share in the organised watch market.
The company has 222 exclusive showrooms christened 'World of Titan',
making it amongst the largest chains in its category. Titan watches are sold
through over 12,000 outlets in over 2,500 cities and internationally in over 30
countries, primarily in the Middle-East and Asia Pacific. Its
after-sales-service is itself a benchmarked operation with a network of 750
service centres and amongst the world's fastest turnaround times. The company
has a world-class design studio for watches and accessories.
- Jewellery : Tanishq is
India's largest and fastest growing jewellery brand with a premium range
of gold jewellery studded with diamonds or coloured gems and a wide range
in 22kt pure gold. Platinum jewellery is also a part of the product range
Tanishq is one of India's largest speciality retailers and is transforming
the jewellery market in India 102 boutiques in 72 cities
across the country. ‘Gold Plus' is the recent retail offering for the mass
market with plain gold jewellery selling through 19 stores in 19
towns. The jewellery division has its own design studio.
- Eye wear : Titan
Eye+ is currently on a pilot mode with 5 stores in 2 cities and has
sunglasses under Fastrack brand and prescription eyewear consisting of
Frames, Lenses, Sunglasses, Accessories and Contact Lenses of in-house
brands and other premium brands.
Precision Engineering
The company's Precision Engineering Division supplies
precision components to the avionics and the automotive industry. It also
manufactures dashboard clocks as OEM to car manufacturers in Europe and
America. The division also provides fully integrated Automation solutions
Recognition
The company has been awarded the following distinctions :
- Being named
the No.1 Brand in the Consumer Durables category in the "Brand
Equity" Survey of The Economic Times, a leading Indian financial
daily.
- The Titan
Design Team won the Young Design Entrepreneur of the Year award at the
design awards instituted by the National Institute of Design and Business
World, a leading Indian magazine. The team has won 7 accreditations also.
- Both Titan
and Tanishq have been adjudged "Most Admired Brands" as well as
"Retailer of the Year" by Images Fashion Forum in consecutive
years.
- Retail Asia and
Media Magazine – Singapore adjudged Titan Industries as amongst the
leading Retailing Companies in India.
- Titan has won
the Brand Leadership award at the India Brand Summit.
- The Time
Products Division of the company was awarded the JRD QV Award in 2006.
Corporate Social Responsibility
Titan Industries has a clearly defined policy on social
responsibility and believes that an organisation cannot be an island of
excellence in a sea of troubled waters. CSR initiatives include children's
education, enabling the disabled, Artisan Parks, Women's empowerment,
environment management programmes and other community initiatives. Titan is a
signatory to the Global Compact and has been awarded the Helen Keller and
Mother Teresa awards. Significantly, the President of India's Award for
employing the disabled has also been awarded to the company. The manufacturing
units of Watch and Jewellery Divisions at Hosur are certified under ISO 9001:
2000 Quality Management System standards as well as ISO 14001 Environment System
Standard.
Manufacturing
Titan's state-of-the-art watch and jewellery
manufacturing plants are located in Hosur in the southern state of Tamil Nadu.
Spread over 55,000 square meters of built-up space, Titan employs about 3000
highly skilled personnel.
This watch manufacturing facility was set up in
1987, with technical know-how from Europe and Japan. Over the years, the
Company has established highly integrated manufacturing facilities and has
grown to become the sixth largest watch manufacturer brand in the world. The
Company manufacturers watch movements, watchcases in steel and brass, and
bracelets in solid as well as sheet steel. The manufacturing processes include
micro precision operations (manufacturing of components and sub assemblies) Hot
and cold forging, stamping, injection moulding and tool making. The product
development cycle is facilitated by state-of -the-art CAD/CAM technology that
enables seamless integration from aesthetic styling and 3D and solid modeling
to engineering design, tool design, tool making and prototype making. Their
RandD initiatives, which have been recognized by the DSIR, have earned several
accolades for its design efforts. This includes a national award from the DSIR
from the Design and Development of a Slim Movement and more recently awards in
recognition of Excellence in Electronics for two successive years from the
Ministry of Information Technology. The Company has been recently short-listed
by CSIR for funding a key RandD project and has been certified under the ISO
9001 Quality System Standards. In addition, Titan also has manufacturing
facilities in Dehradun (Northern India) and in Goa.
Social Initiatives
Corporate Social Responsibility
They believe that Corporate Social
Responsibility is not an externalised activity nor is it only philanthropy. It
is an internal process reflecting the soul of the Company.
Titan's Community Development Policy -
Experiencing the joy of sharing.
"Titan's initiatives will improve the
quality of life of the communities in which it operates. Titan will build
partnerships for the social development of the communities in which it
operates. Titan will focus on initiatives, which can be sustained by the
communities in which it operates".
Titan has holistically integrated the CSR
process and has programs covering the following:
»» Employing the physically challenged.
»» Women's empowerment. Partnering with self
help groups amongst rural women for outsourcing components, bracelets - the
Meadow Project with Myrada.
»» The Titan school and the Titan Foundation for Education - a
primary school currently enrolling 300 students.
»» The Titan Scholarship - meant for students in
Dharmapuri and Krishnagiri based on the criteria of academic performance and
socio-economic background.
»» The Titan Township -building a sustainable community in Hosur
providing a home to 1300 residents.
»» Community Development Forums - Eye care
camps, Eye donation initiatives - Aids Awareness- Programs for the differently
abled - No tobacco drive, Children's programs.
»» Volunteering in Hosur, Corporate Office as
wells as Regions.
»» Partnering with NGOs like CRY, Concern India and Ashraya.
»» Improving the quality of life for children -
the TATA -TCCI -TITAN Bal Bhavan Children's park project at Cubbon Park,
Bangalore.
The community appreciated and recognized them by
awarding them:
»» The Government of Tamil Nadu's award for
being the "Largest Employer of the handicapped". This award was
conferred on them in the years 1993 and 1996.
»» The Mother Teresa award for the best
Corporate Citizen in 1998.
»» The Helen Keller Award in 1999.
»» FICCI-SEDF award in 2001-02 for Social
Responsibility.
»» The Rotary Club of Bangalore Award for the
Corporate Citizenship.
»» The Mother Teresa, Helen Keller and the
Rotary Awards for Corporate Citizenship.
»» The PHDCII Award for Good Corporate
Citizenship.
Titan and the Environment - ISO 14001 but
going beyond Compliance
Titan's products and services have very little
or marginal impact on the environment. Titan adheres to all related legal and
statutory requirements. The Company is also extremely conscious of
environmental issues and has been recognized in this regard by the Hosur
Industries Association. The Company's environment control results are
continuously monitored with respect to both TNPCB and International Finance
Corporation (World Bank) norms. The Company has been certified under ISO 14001
EMS standards.
Initiatives
taken:
·Minimizing the use of cyanides in plating by adopting non-toxic PVD technology.
·Eliminating the use of ozone-depleting substances ahead of the Montreal
Protocol deadline.
·Minimizing the use of plastic packaging with eco-friendly materials.
·Adopting Vermi-composting for the conversion of garden / vegetable waste in to
useful manure.
·Piloting the study of conversion of industrial waste into useful civil
materials.
·Promotion of rainwater harvesting at manufacturing locations.
·Waste water treatment with efficient effluent treatment and use for industrial
cleaning and gardening.
·Recycling brass scraps. · Rainwater harvesting in 3 manufacturing locations.
Results: ·Energy consumption per watch reduced
by 41%.
·Cumulative Energy savings - 26 Lac kwh.
·Water consumption per watch down by 47%.
·Daily
plant water consumption reduced by 28%.
·Brass scrap recycling back to process - saving
during 2002 - 03 Rs.6.200 Millions
·Adhering to all Statutory norms. As a
culmination of all these initiatives, they received The Golden Peacock-
Environment Management Award 2003 - at the 5th World Congress on Environment
Management.
Titan Industries is a signatory to the Global
Compact and is committed to the implementation of the 10 principles of the
Global Compact. Titan Industries is also guided by the principles of the Global
Reporting Initiative.
There is a process of continuous dialogue and
feedback with employees, respective departments and business partners, to
ensure adherence. E.g. Labour standards are complied with as per the laws of
the land and there is no evidence of any employment of child labour.
The management of Business Ethics is facilitated
by compliance of the Tata Code of Conduct.
The Company's credo towards CSR:
Social Responsibility-an
initiative today, a mandate tomorrow. Bringing a smile to the community creates
customer affection ensuring sustainability.
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 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.46.96 |
|
UK Pound |
1 |
Rs.83.91 |
|
Euro |
1 |
Rs.66.36 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|