MIRA INFORM REPORT
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Report Date : |
11.10.2012 |
IDENTIFICATION DETAILS
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Name : |
GTN INDUSTRIES LIMITED |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.03.2009 |
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Date of Incorporation : |
02.08.1962 |
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Com. Reg. No.: |
01-54323 |
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Capital
Investment / Paid-up Capital : |
Rs.115.496 millions |
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CIN No.: [Company
Identification No.] |
l18101AP1962PLC054323 |
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Legal Form : |
A Public Limited Liability Company. The Company's shares are listed on
the Stock Exchange. |
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Line of Business : |
Manufacturer of Cotton Yarn, Processed Yarn and Knitted Fabrics |
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No. of Employees
: |
Not Available |
RATING & COMMENTS
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MIRA’s Rating : |
B ( 28 ) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Maximum Credit Limit : |
USD 1600000 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow but Correct |
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Litigation : |
Clear |
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Comments : |
Subject is a well – established company having moderate track. Trade relations
are reported as fair. Business is active. There appears some accumulated
losses made by the company. Payments are reported to be slow but correct. The company can be considered for business dealings with some caution.
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NOTES :
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30, 2012
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Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
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India |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
India is developing into an open-market economy, yet traces
of its past autarkic policies remain. Economic liberalization, including
industrial deregulation, privatization of state-owned enterprises, and reduced controls
on foreign trade and investment, began in the early 1990s and has served to
accelerate the country's growth, which has averaged more than 7% per year since
1997. India's diverse economy encompasses traditional village farming, modern
agriculture, handicrafts, a wide range of modern industries, and a multitude of
services. Slightly more than half of the work force is in agriculture, but
services are the major source of economic growth, accounting for more than half
of India's output, with only one-third of its labor force. India has
capitalized on its large educated English-speaking population to become a major
exporter of information technology services and software workers. In 2010, the
Indian economy rebounded robustly from the global financial crisis - in large
part because of strong domestic demand - and growth exceeded 8% year-on-year in
real terms. However, India's economic growth in 2011 slowed because of
persistently high inflation and interest rates and little progress on economic
reforms. High international crude prices have exacerbated the government's fuel
subsidy expenditures contributing to a higher fiscal deficit, and a worsening
current account deficit. Little economic reform took place in 2011 largely due
to corruption scandals that have slowed legislative work. India's medium-term
growth outlook is positive due to a young population and corresponding low
dependency ratio, healthy savings and investment rates, and increasing
integration into the global economy. India has many long-term challenges that
it has not yet fully addressed, including widespread poverty, inadequate
physical and social infrastructure, limited non-agricultural employment
opportunities, scarce access to quality basic and higher education, and
accommodating rural-to-urban migration.
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Source
: CIA |
LOCATIONS
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Registered Office : |
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Tel. No.: |
Not Available |
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Fax No.: |
Not Available |
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E-Mail : |
sharedept@gtnindustries.com |
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Corporate
Office : |
Plot No. 29,
Nagarjuna Hills, Punjagutta, |
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Tel. No.: |
91-40-23351585 (4
lines) |
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Fax No.: |
91-40-23358387 |
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E-Mail : |
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Administrative office : |
Erumathala P.O
Aluva, Ernakulam – 683 105, |
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Tel. No.: |
91-484-2839491 |
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Fax No.: |
91-484-2838585 |
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E-Mail : |
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Website : |
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Factory: |
Doubling Unit: Shadnagar Unit: Gundallapotlappally Balanagar, Nawdal,
Near Shadnagar, Mehaboobnagar – 509 202, |
DIRECTORS
AS ON 31.03.2009
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Name : |
Mr. M K Patodia |
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Designation : |
Managing Director and Chairman |
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Name : |
Mr. M Venkatesh |
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Designation : |
Director (Operations) |
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Name : |
Mrs. Anjana Patodia |
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Designation : |
Director |
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Name : |
Mr. B L Singhal |
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Designation : |
Director |
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Name : |
Mr. V Naryana Murthy |
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Designation : |
Nominee – IDBI Bank Limited |
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Name : |
Mr. M R Vikram |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. C R Gang |
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Designation : |
CFO |
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Name : |
Mr. Prabhakra Rao |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.03.2010
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Category of Shareholder |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding of Promoter and Promoter
Group |
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(1) Indian |
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Individuals / Hindu Undivided Family |
3,666,509 |
31.77 |
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Bodies Corporate |
3,425,679 |
29.68 |
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(2) Foreign |
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(B) Public Shareholding |
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(1) Institutions |
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Mutual Funds / Axis |
1,686 |
0.01 |
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Financial Institutions / Banks |
89,444 |
0.78 |
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Foreign Institutional Investors |
800 |
0.01 |
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(2) Non-Institutions |
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Bodies Corporate |
805,236 |
6.98 |
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Individuals |
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Individual shareholders holding nominal share capital
up to Rs. 0.100 million |
2,554,397 |
22.13 |
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Individual shareholders holding nominal share
capital in excess of Rs. 0.100 millions |
957,367 |
8.30 |
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Any Others (Specify) |
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Clearing Members |
39,260 |
0.34 |
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Total (A)+(B) |
11,540,378 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Cotton Yarn, Processed Yarn and Knitted Fabrics |
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Products : |
Generic Names of principal Products of Company
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PRODUCTION STATUS (As on : 31.03.2009):-
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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Spindles |
Nos. |
83416 |
--- |
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Doubling Spindles |
Nos. |
23826 |
--- |
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Yarn Processing |
MT/day |
10 |
*77.54 Kgs |
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Knitting |
MT/day |
5.8 |
0.39 Kgs |
GENERAL INFORMATION
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No. of Employees : |
Not Available |
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Bankers : |
·
Central Bank of India ·
IDBI Bank Limited ·
State Bank of India ·
Export-Import Bank of India ·
ING Vysya Bank Limited ·
State Bank of Travancore |
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Facilities : |
NOTES I. Term loans are secured by first charge,
on all Immovable assets, both present and future, by way of equitable mortgage
and hypothecation of all movable fixed assets of the Company (excluding
assets purchased on hire purchase basis) and further secured by a second
charge, on the current assets as mentioned in para IV(a) below, present and
future, ranking pari-passu, interse among the term lenders. One of the loan
Is guaranteed by the Managing Director of the Company to the extent of Rs. 42
millions (Previous Year Rs. NIL). II. Short Term Loan is secured by way of
charge against interest subsidy receivables under TUF Scheme. III. Hire Purchase Loans are secured by
hypothecation of vehicles purchased there against. IV. a) Working Capital loans stated above
and Non-Fund Based limits of Rs. 145 millions (Previous Year Rs. 44.753 millions)
availed from Banks are secured by a first charge, by way of hypothecation of
current assets of the Company except bookdebts IV(b) Both present and future and by second
charge on the fixed assets mentioned in para (I) above, ranking pari-passu, inter-se
among working capital Banks. These loans are further guaranteed by the
Managing Director of the Company and the legal heirs of past Chairman Late
Shri M.L.Patodia to the extent of assets inherited by them for the loans
outstanding as on the date of death i.e., 11.12.2008. b) Working Capital Loans from Others (SBI
Factors) are secured by specific book debts factored and further guaranteed
by the Managing Director of the Company.
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Banking
Relations : |
--- |
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Auditors : |
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Name : |
M/s Lodha
& Company Chartered
Accountants |
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Associates/Subsidiaries : |
· Perfect Knitters Limited · Imperial Garments Limited |
CAPITAL STRUCTURE
As on: 31.03.2009
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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20000000 |
Equity Shares |
Rs. 10/- each |
Rs.200.000 millions |
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3500000 |
Redeemable Preference Share |
Rs. 100/- each |
Rs.350.000 millions |
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TOTAL
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Rs.550.000
millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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11558778 |
Equity Shares (of the above, 42,00,000 Equity Shares were allotted as fully paid up
Bonus Shares by capitalization of Free Reserves) |
Rs. 10/- each |
Rs.115.588 millions |
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Less : |
Shares forfeited (18400 Equity Shares of Rs. 10/- each Rs. 5/- paid up
thereon ) |
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Rs. 0.092 million |
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TOTAL
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Rs.115.496
millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2009 |
31.03.2008 |
31.03.2007 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
115.496 |
115.496 |
115.496 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
297.705 |
487.898 |
512.585 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
413.201 |
603.394 |
628.081 |
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LOAN FUNDS |
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1] Secured Loans |
1813.985 |
1699.961 |
1502.828 |
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2] Unsecured Loans |
137.191 |
102.779 |
93.715 |
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TOTAL BORROWING |
1951.176 |
1802.740 |
1596.543 |
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DEFERRED TAX LIABILITIES |
121.390 |
209.773 |
211.124 |
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TOTAL |
2485.767 |
2615.907 |
2435.748 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1731.447 |
1771.301 |
1574.828 |
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Capital work-in-progress |
11.524 |
18.018 |
102.809 |
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INVESTMENT |
0.005 |
0.005 |
0.005 |
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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 |
616.776 |
541.899 |
513.584 |
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Sundry Debtors |
188.705 |
178.205 |
133.226 |
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Cash & Bank Balances |
42.987 |
19.590 |
31.486 |
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Other Current Assets |
1.541 |
1.337 |
1.996 |
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Loans & Advances |
177.568 |
247.729 |
259.845 |
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Total
Current Assets |
1027.577 |
988.760 |
940.137
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
287.835 |
160.424 |
172.190 |
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Provisions |
11.533 |
4.724 |
12.151 |
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Total
Current Liabilities |
299.368 |
165.148 |
184.341
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Net Current Assets |
728.209 |
823.612 |
755.796
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MISCELLANEOUS EXPENSES |
14.582 |
2.971 |
2.310 |
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TOTAL |
2485.767 |
2615.907 |
2435.748 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2009 |
31.03.2008 |
31.03.2007 |
|
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Sales Turnover |
2064.379 |
2805.399 |
1869.673 |
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Other Income |
3.730 |
2.633 |
4.303 |
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Total Income |
2068.109 |
2808.032 |
1873.976 |
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Profit/(Loss) Before Tax |
(274.768) |
(18.754) |
18.658 |
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Provision for Taxation |
(87.159) |
(1.305) |
16.002 |
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Profit/(Loss) After Tax |
(187.609) |
(20.059) |
2.656 |
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Export Value |
1199.363 |
2020.794 |
NA |
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Import Value |
313.482 |
445.602 |
NA |
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Expenditures : |
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Manufacturing Expenses |
363.401 |
355.290 |
1092.561 |
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Sales & Distribution Expenses |
128.465 |
168.915 |
348.840 |
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Raw Material Consumed |
1384.456 |
1800.620 |
69.349 |
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Increase/(Decrease) in Finished Goods |
(138.478) |
(10.083) |
(76.467) |
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Personnel Expense |
198.890 |
177.174 |
150.337 |
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Interest |
152.873 |
122.717 |
86.173 |
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Loss on Forex Fluctuations |
54.272 |
10.390 |
0.000 |
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Depreciation & Amortization |
153.674 |
139.451 |
125.666 |
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Other Expenditure |
67.687 |
60.470 |
58.859 |
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Earnings Per Share (Rs.) |
(16.26) |
(1.74) |
-- |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2009 |
30.09.2009 |
31.12.2009 |
|
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|
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Gross Sales |
|
537.000 |
610.800 |
748.600 |
|
Other Income |
|
0.300 |
0.500 |
0.600 |
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Total Income |
|
537.300 |
611.300 |
749.200 |
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Total Expenditure |
|
515.400 |
591.700 |
689.500 |
|
PBIDT |
|
21.900 |
19.600 |
59.700 |
|
Interest |
|
35.500 |
32.600 |
39.500 |
|
PBDT |
|
-13.600 |
-13.000 |
20.200 |
|
Depreciation |
|
7.700 |
38.700 |
40.400 |
|
Reported Profit After Tax |
|
-51.300 |
-51.700 |
-20.200 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2009 |
31.03.2008 |
31.03.2007 |
|
PAT / Total Income |
(%) |
(9.07) |
(0.71) |
0.14 |
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Net Profit Margin (PBT/Sales) |
(%) |
(13.31) |
(0.67) |
0.99 |
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Return on Total Assets (PBT/Total Assets) |
(%) |
(7.85) |
(0.68) |
0.55 |
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Return on Investment (ROI) (PBT/Networth) |
|
(0.66) |
(0.03) |
0.03 |
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Debt Equity Ratio (Total Liability/Networth) |
|
5.45 |
3.26 |
2.83 |
|
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|
Current Ratio (Current Asset/Current Liability) |
|
3.43 |
5.99 |
5.09 |
LOCAL AGENCY FURTHER INFORMATION
PERFORMANCE REVIEW:
During the Financial Year, the Company has achieved lower turnover at Rs.2064.4 millions against Rs.2805.400 millions in the corresponding previous year. The sales were lower mainly due to reduction in exports as Merchant Exporter, increase in stocks and lower realisation due to forward cover taken by the Company for most of its exports during the year.
The raw material cost has also gone up due to minimum support price and strengthening of dollar for imported cotton. In addition to these reasons, the other costs namely - revaluation of foreign currency liabilities, electricity cost, VRS and interest (increase in PLR, re-schedulement of Term Loans and higher utilisation of Working Capital Limits) have increased significantly, resulting in higher losses during the year.
During the year, there was a continuing demand recession and financial turmoil experienced in US and European Countries, resulted in significant reduction in exports for value added textile products, thus lower demand for yarn coupled with pressure on prices. The Company has also opted for selective customers credit depending on their financial credit worthiness to protect the realisation in due time. This caution approach restricted the supplies to new customers.
This situation is likely to continue for some time more and the Company has to make its best efforts to face the challenges emerging out of global conditions.
MANAGEMENT DISCUSSION AND ANALYSIS:
1. INDUSTRY STRUCTURE and
DEVELOPMENTS:
The Textile
Industry is one of the oldest Industry in the country and plays an Important
role in the Indian economy in terms of Industrial Production, Employment and Export earnings. The Textile Industry has
achieved a good growth
in the last two decades in terms
of installed spindles and
yarn production.
However, Indian Textile Industry has been facing a
difficult period since last 18
months endangering its
financial viability and
global competitiveness mainly due to financial turmoil and demand
recession in
During the
financial year, the
Government has announced economic stimulus packages to arrest the declining
trend in the economic growth, by way
of interest subvention, refund of service
tax on export services, increase
in rates under DEPB etc., but
this has supported marginally to the Textile Industry. This situation is
likely to continue during current financial year and
the Company has to make its best efforts
to face challenges emerging out of global conditions.
COTTON SCENARIO:
Since the launch of 'Technology Mission on Cotton'
by Government of India in February, 2000 significant achievements have been
made in
increasing yield and production through development of high yielding
varieties, better farm management
practices, increased area under cultivation of
BT cotton hybrids etc.
All these developments have resulted into a
turnaround in cotton production in the country in last 3/4 years.
The yield per hectare which has remained
stagnant at about 300 kg/hectare for more than a decade, increased
substantially and reached a level of 526 kg/hectare.
However, as per the Cotton Advisory Board the Indian
cotton crop was 290 lakh
bates for the year 2008-09 as
against 315 lakh bales for the
year 2007-08 due to reduction in
cultivated aria and product yield,
which has come down from 567 Kgs
to 526 Kgs per hectare.
According to
International Cotton Advisory Committee (ICAC), the
global cotton production is
estimated at 26.90 million tons for the year
2008-09 as against 25.87
million tons for the year
2007-08. The world
cotton consumption is estimated at 27.40 million tons in 2008-09 as
against 27.14 million tons in 2007-08.
Since the consumption is more than the supply, the cotton price
for the year 2008-09 was higher.
Further, domestic cotton prices have gone up due to substantial
increase in' minimum support price.
MARKETING:
Due to recession in global markets, volume and
value of export have come down
significantly. There was lower
Export turnover during 2008-09 when compared to previous year. Your Company
is mainly in export of medium fine
and superfine combed yarn and it has
been constantly focusing its efforts to
cater to high end users. The Company maintained excellent relations with
all its overseas customers which have
been dealing with the Company over the
years, by adhering
to quality standards, delivery
schedules and competitive prices.
The demand in domestic market is also
improving for woven and garment sector and gradually Company
expect to have larger sate In domestic
market.
The exchange
rate plays an important role since most of our business is in dollar.
The importing countries must be
able to import yarn at a proper price as per their currencies and any
major volatility in this aspect also affects
business competitiveness. During the year under review, the Company has suffered
due to forex volatility. Though US dollar was
strengthened against Rupee, however, advantage thereof was not available
due to forward cover taken by the
Company based on market perception of weakening dollar
FIXED ASSETS:-
· Land - Freehold
· Buildings
· Plant and Machinery
· Vehicles
· Electrical Installations
· Plant and Machinery
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.53.04 |
|
|
1 |
Rs.84.83 |
|
Euro |
1 |
Rs.68.21 |
|
Report Prepared
by : |
TPT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
4 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
3 |
|
--PROFITABILIRY |
1~10 |
3 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
3 |
|
--MARGINS |
-5~5 |
--- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
no |
|
--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 |
|
28 |
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 |
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 |
|
This report is issued at your request without any risk
and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its
officials.