MIRA INFORM REPORT

 

 

Report Date :

19.11.2013

 

IDENTIFICATION DETAILS

 

Name :

ADVINUS THERAPEUTICS LIMITED

 

 

Formerly Known As :

ADVINUS THERAPEUTICS PRIVATE LIMITED

 

 

Registered Office :

Administrative Block 21, 22, Peenya Industrial Area, Phase II, Bangalore-560058, Karnataka

 

 

Country :

India

 

 

Financials (as on) :

31.03.2013

 

 

Date of Incorporation :

21.04.2005

 

 

Com. Reg. No.:

08-036126

 

 

Capital Investment / Paid-up Capital :

Rs.1336.424 Millions

 

 

CIN No.:

[Company Identification No.]

U24117KA2005PTC036126

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

BLRA07046E

 

 

PAN No.:

[Permanent Account No.]

AAFCA2502B

 

 

Legal Form :

A Closely Held Public Limited Liability Company

 

 

Line of Business :

Subject is into business of Pre Clinical Testing, Drug Discovery and formulation.

 

 

No. of Employees :

455 (Approximately)

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba (45)

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

Slow but correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established company having satisfactory track record.

 

There appears huge accumulated losses recorded by the company during 2013, due to which the networth of the company has been eroded. Profitability is under pressure since its inception.

 

However, the ratings take into consideration the strong parentage of the company i.e. The “Tata Group” one of India’s largest business conglomerates.

 

Trade relations are fair. Business is active. Payment terms are reported as slow but correct.

 

In view of experienced management team, collaboration with “Global Pharma Companies”, the subject can be considered normal for business dealings at usual trade terms and conditions. 

 

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 – March 31st, 2013

 

Country Name

Previous Rating

(31.12.2012)

Current Rating

(31.03.2013)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

INDIAN ECONOMIC OVERVIEW

 

The current downturn provides an opportunity to push ahead with reforms to accelerate growth, says the latest India Development Update report released by the World Bank. The report says that the adverse effects of rupee depreciation are likely to be offset by the gains in the exports performance due to improved external competitiveness. Since May this year, the local currency has depreciated substantially and fell to a record level of Rs 68.85 to a dollar on August, 28.

 

A stagflation like situation appears to have arisen as inflation jumped to an eight month high of 6.46 % for the month of September. It is up from 6.10 % in August. Growth continues to be muted with factory output plunging to 0.6 % in August. Onion prices have risen nearly 300 % from last September. Vegetables cost nearly 90 % more than they did last year. Wake up to the economic contribution of slum dwellers. They contribute more than 7.5 % to the country’s gross domestic product, according to a recent study conducted in 50 top cities.

 

136000 estimated number of jobs created during the second quarter of the current financial year. 50000 estimated number of additional jobs in the field of corporate social responsibility in the coming years.

 

The International Finance Corporation expects to come out with its rupee linked bonds issue before the end of 2013 as a part of its plan to raise $ 1 billion. The Apple iPhone 5c (Rs 41900 for 16 GB variant) and 5s (Rs 53500 for 16GB variant) has been launched in India from 1st November.

 

The Land Acquisition Act to provide just and fair compensation to farmers will come into force from January 1 next year, said Rural Development Minister Jairam Ramesh. The Act replaces a 119 year old registration. The Securities and Exchange Board of India has approved the trading of currency futures on the Bombay Stock Exchange. The exchange plans to launch the currency futures platform with advanced trading technology by the end of November.

 

EXTERNAL AGENCY RATING

 

Rating Agency Name

CARE

Rating

Long term bank facilities: “BBB –“

Rating Explanation

Moderate degree of safety and moderate credit risk.

Date

09.01.2013

 

Rating Agency Name

CARE

Rating

Short term bank facilities: “A3“

Rating Explanation

Moderate degree of safety and higher credit risk.

Date

09.01.2013

 

 

RBI DEFAULTERS’ LIST STATUS

 

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

 

 

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

 

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

 

 

LOCATIONS

 

Registered Office :

Administrative Block 21, 22, Peenya Industrial Area, Phase II, Bangalore-560058, Karnataka, India

Tel. No.:

91-80-28394959

Fax No.:

91-80-28394015

E-Mail :

info@advinus.com

Website :

http://www.advinus.com

 

 

Factory  :

Phase-I, Rajiv Gandhi Infotech Park, Quantum Towers, Plot No. 9, Infotech, Pune - 411057, Maharashtra, India

Tel. No.:

91-20-66539600

Fax No.:

91-20-66539620

 

 

DIRECTORS

 

As on: 23.07.2012

 

Name :

Mr. Homi Rustam Khusrokhan

Designation :

Director

Address :

No.302, Dalsylea, Off. Mount, Pleasant Road, Malabar Hill, Mumbai – 400006, Maharashtra, India 

Date of Birth/Age :

15.12.1943

Qualification:

B. Com., CA

Date of Appointment :

30.04.2005

DIN No.:

00005085

 

 

Name :

Mr. Venkatrao Shridhar Sohoni

Designation :

Director

Address :

342, Carolina lane Palo Alto CA 94306 USA

Date of Birth/Age :

28.05.1942

Qualification:

B. Tech(Hons), Phd

Date of Appointment :

30.04.2005

DIN No.:

00012010

 

 

Name :

Mr. Gopalkrishnan Ramabadran

Designation :

Director

Address :

Baug- E Abbas Flat, 101, 1st Floor, 21Al, Captain Prakash Petha Marg, Cuffe Parade, Mumbai-400005, Maharashtra, India

Date of Birth/Age :

25.12.1945

Date of Appointment :

30.04.2005

DIN No.:

00027858

 

 

Name :

Mr. Kishor Anant Chaukar

Designation :

Director

Address :

Flat 72 A, - NCPA Apratments, 7th Floor, Dorabji Tata Road, Nariman Point, Mumbai-400021, Maharashtra, India

Date of Birth/Age :

01.08.1947

Date of Appointment :

08.11.2006

DIN No.:

00033830

 

 

Name :

Ms. Rashmi Barbhaiya

Designation :

Managing Director

Address :

No. 15, 1st Cross, 1st Block, RMV 2nd Stage, Near Ashwathnagar, Bangalore – 560094, India

Date of Birth/Age :

22.09.1952

Qualification:

Phd

Date of Appointment :

30.04.2005

PAN No.:

AHDPB2201L

DIN No.:

01922891

 

 

KEY EXECUTIVES

 

Name :

Mr. T. S. Krishnan

Designation :

Company Secretary

Address :

No.119, 6th Main First Cross, Shankar Nagar, Banagalore – 560096, Karnataka, India

Date of Birth/Age :

09.02.1980

Date of Appointment :

14.12.2010

PAN No.:

AIIPK5348M

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on: 23.07.2012

 

Names of Shareholders

 

No. of Shares

Tata Sons Limited, Mumbai

 

57850000

Rashmi Barbhaiya

 

14373600

Sajiv Kaul

 

5360000

Tata Industries Limited, Mumbai

 

32102000

Rallis India Limited

 

18286000

Kasim Mookhtiar

 

43308000

Nimish Vachharajani

 

13400000

 

 

 

Total

 

184679600

 

Equity Share Break up (Percentage of Total Equity)

 

As on: 23.07.2012

 

Category

 

Percentage

 

 

 

Bodies corporate

 

80.99

Directors or relatives of directors

 

10.76

Other top fifty shareholders

 

8.25

 

 

 

Total

 

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Subject is into business of Pre Clinical Testing, Drug Discovery and formulation.

 

 

Products :

Product Description

ITC Code

Technical Testing and Analysis

98049804

Drug Discovery, Research, Scientific and Technical Consultancy

98049804

 

 

GENERAL INFORMATION

 

No. of Employees :

455 (Approximately)

 

 

Bankers :

  • Corporation Bank, Industrial Finance Branch, Rallaam Building, No. 30, Mission Road, Bangalore-56027, Karnataka, India
  • Indusind Bank Limited Ground Floor, Centenary Building, No.28, M. G. Road, Bangalore - 560001, Karnataka, India

 

 

Facilities :

Secured Loan

31.03.2013

(Rs. in Millions)

31.03.2012

(Rs. in Millions)

Long-term Borrowings

 

 

Bonds/debentures

(Secured redeemable 5 percent non convertible  debentures of Rs 1.000 Million each)

2050.000

0.000

Short-term borrowings

 

 

Loans repayable on demand from banks

292.615

197.194

Total

2342.615

197.194

 

 

 

Banking Relations :

--

 

 

Finance Institutions :

 

Il and FS Trust Company Limited, Il and FS Financial Centre Plot No C22 G Block Bandra, Kurla Complex Bandra East, Mumbai - 400051, Maharashtra, India

 

 

Auditors :

 

Name :

Deloitte Haskins and Sells

Chartered Accountants

Address :

Deloitte Centre, Anchorage II, 100/2, Richmond Road, Bangalore-560025, Karnataka, India

Tel. No.:

91-80-66276000

Fax No.:

91-80-66276011

PAN No.:

AACFD3771D

 

 

Holding Company:

·         Tata Sons Limited

 

 

Subsidiaries :

·         Advinus Therapeutics Inc.

·         Tata Industries Limited

·         TATA AIG Life Insurance Company Limited

·         Tata Services Limited

·         TATA Teleservices (Maharashtra) Limited

·         TT Forex Limited

 

 

CAPITAL STRUCTURE

 

As on: 31.03.2013

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

150000000

Equity Shares

Rs.10/- each

Rs.1500.000 Millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

133642400

Equity Shares

Rs.10/- each

Rs.1336.424 Millions

 

 

 

 

 

 


 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2013

31.03.2012

31.03.2011

I.        EQUITY AND LIABILITIES

 

 

 

(1)Shareholders' Funds

 

 

 

(a) Share Capital

1336.424

1336.424

1328.590

(b) Reserves & Surplus

(3202.934)

(2885.432)

(2269.806)

(c) Money received against share warrants

0.000

0.000

0.000

 

 

 

 

(2) Share Application money pending allotment

0.000

0.000

0.000

Total Shareholders’ Funds (1) + (2)

(1866.510)

(1549.008)

(941.216)

 

 

 

 

(3) Non-Current Liabilities

 

 

 

(a) long-term borrowings

2082.080

97.290

406.700

(b) Deferred tax liabilities (Net)

0.000

0.000

4.602

(c) Other long term liabilities

0.944

1.454

50.165

(d) long-term provisions

179.269

27.960

0.000

Total Non-current Liabilities (3)

2262.293

126.704

461.467

 

 

 

 

(4) Current Liabilities

 

 

 

(a) Short term borrowings

442.615

947.194

844.683

(b) Trade payables

182.094

117.702

129.052

(c) Other current liabilities

292.824

1452.235

953.191

(d) Short-term provisions

17.656

45.077

45.984

Total Current Liabilities (4)

935.189

2562.208

1972.910

 

 

 

 

TOTAL

1330.972

1139.904

1493.161

 

 

 

 

II.    ASSETS

 

 

 

(1) Non-current assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible assets

501.288

613.918

762.825

(ii) Intangible Assets

7.689

4.440

3.619

(iii) Capital work-in-progress

2.005

0.000

5.927

(iv) Intangible assets under development

0.000

0.000

0.000

(b) Non-current Investments

0.050

0.050

0.050

(c) Deferred tax assets (net)

0.000

0.000

0.000

(d)  Long-term Loan and Advances

96.193

97.556

115.454

(e) Other Non-current assets

48.058

0.000

0.000

Total Non-Current Assets

655.283

715.964

887.875

 

 

 

 

(2) Current assets

 

 

 

(a) Current investments

0.000

0.000

0.000

(b) Inventories

0.000

0.000

0.000

(c) Trade receivables

437.097

341.107

185.172

(d) Cash and cash equivalents

9.635

21.514

335.498

(e) Short-term loans and advances

45.190

23.338

56.854

(f) Other current assets

183.767

37.981

27.762

Total Current Assets

675.689

423.940

605.286

 

 

 

 

TOTAL

1330.972

1139.904

1493.161

 

 

 

 

 


PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2013

31.03.2012

31.03.2011

 

SALES

 

 

 

 

 

Income

1290.717

802.703

489.389

 

 

Other Income

27.140

53.221

38.599

 

 

TOTAL                                     (A)

1317.857

855.924

527.988

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Cost of materials consumed

206.748

227.604

188.614

 

 

Employee benefit expense

501.628

463.919

451.147

 

 

Other expenses

448.650

327.237

424.825

 

 

TOTAL                                     (B)

1157.026

1018.760

1064.586

 

 

 

 

 

Less

PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

160.831

(162.836)

(536.598)

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

340.376

265.581

162.751

 

 

 

 

 

 

PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                               (E)

(179.545)

(428.417)

(699.349)

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

137.956

187.209

197.885

 

 

 

 

 

 

PROFIT/ (LOSS) BEFORE TAX (E-F)                  (G)

(317.501)

(615.626)

(897.234)

 

 

 

 

 

Less

TAX                                                                  (H)

0.000

0.000

0.000

 

 

 

 

 

 

PROFIT/ (LOSS) AFTER TAX (G-H)                   (I)

(317.501)

(615.626)

(897.234)

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Technical Testing and Analysis

820.290

610.310

339.608

 

 

Drug Discovery and Research

347.450

3.740

38.946

 

TOTAL EARNINGS

1167.740

614.050

378.554

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Lab Consumables

48.927

75.657

47.531

 

 

Capital Goods

8.634

10.978

8.499

 

 

Spares

5.956

4.624

0.000

 

TOTAL IMPORTS

63.517

91.259

56.030

 

 

 

 

 

 

Earnings/ (Loss) Per Share (Rs.)

(2.38)

(4.63)

(7.08)

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2013

31.03.2012

31.03.2011

PAT / Total Income

(%)

(24.09)

(71.93)

(169.93)

 

 

 

 

 

Net Profit Margin

(PBT/Sales)

(%)

(24.60)

(76.69)

(183.34)

 

 

 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)

(23.89)

(54.01)

(60.33)

 

 

 

 

 

Return on Investment (ROI)

(PBT/Networth)

 

0.17

0.40

0.95

 

 

 

 

 

Debt Equity Ratio

(Total Debt/Networth)

 

(1.35)

(0.67)

(1.33)

 

 

 

 

 

Current Ratio

(Current Asset/Current Liability)

 

0.72

0.16

0.31

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Sr. No.

Check List by Info Agents

Available in Report (Yes / No)

1]

Year of Establishment

Yes

2]

Locality of the firm

Yes

3]

Constitutions of the firm               

Yes

4]

Premises details

No

5]

Type of Business

Yes

6]

Line of Business

Yes

7]

Promoter's background

Yes

8]

No. of employees

Yes

9]

Name of person contacted

No

10]

Designation of contact person

No

11]

Turnover of firm for last three years

Yes

12]

Profitability for last three years

Yes

13]

Reasons for variation <> 20%

--

14]

Estimation for coming financial year

No

15]

Capital in the business

Yes

16]

Details of sister concerns

Yes

17]

Major suppliers

No

18]

Major customers

No

19]

Payments terms

No

20]

Export / Import details (if applicable)

No

21]

Market information

--

22]

Litigations that the firm / promoter involved in

--

23]

Banking Details

Yes

24]

Banking facility details

Yes

25]

Conduct of the banking account

--

26]

Buyer visit details

--

27]

Financials, if provided

Yes

28]

Incorporation details, if applicable

Yes

29]

Last accounts filed at ROC

Yes

30]

Major Shareholders, if available

Yes

31]

Date of Birth of Proprietor/Partner/Director, if available

Yes

32]

PAN of Proprietor/Partner/Director, if available

Yes

33]

Voter ID No of Proprietor/Partner/Director, if available

No

34]

External Agency Rating, if available

Yes

 

 

UNSECURED LOAN

 

Particular

31.03.2013

(Rs. in Millions)

31.03.2012

(Rs. in Millions)

Long-term Borrowings

 

 

Borrowing from government semi-government bodies

32.080

36.090

Non-convertible debentures others

0.000

61.200

Short-term borrowings

 

 

Loans repayable on demand

150.000

750.000

Total

182.080

847.290

 

 

CORPORATE INFORMATION

 

The company Advinus Therapeutics Limited is into business of Pre Clinical Testing, Drug Discovery and formulation. Advinus has been formed by acquiring Rallis Research Center (RRC) from Rallis India Limited (RIL) on 21st April 2005. The registered office of the Company is located in Bangalore. The Companys Drug Discovery operations are carried out in Pune. The Company also has a subsidiary Advinus Therapeutics Inc based in USA and a subsidiary Advinus Canada Incorporated based in Canada.

 

 

BUSINESS OVERVIEW

 

The Income from Operations of the company for the year was Rs.1290.700 millions in comparison to previous year figure of Rs.802.700 millions, representing a positive growth of about 61%. The Growth in Business was due to the improved value propositions in the portfolio of services offered. The company reported an operating loss due to a shift in the time line of the out-licensing of its lead molecule and the need for continued spend on Research and Development work to build and progress a robust pipeline. The total number of people engaged in the Company increased from 448 to 455 in the current year. The net loss from operations was Rs.317.500 millions.

 

 

INDEX OF CHARGES

 

S.No.

Charge ID

Date of Charge Creation/Modification

Charge amount secured

Charge Holder

Address

Service Request Number (SRN)

1

10403435

12/02/2013

100,000,000.00

INDUSIND BANK LIMITED

GROUND FLOOR, CENTENARY BUILDING, NO.28, M.G. ROAD, BANGALORE, KARNATAKA - 560001, INDIA

B68296474

2

10362898

07/08/2012 *

2,050,000,000.00

IL & FS TRUST COMPANY LIMITED

IL AND FS FINANCIAL CENTREPLOT NO C22 G BLOCK BANDRA, KURLA COMPLEX BANDRA EAST, MUMBAI, MAHARASHTRA - 400051, INDIA

B45109097

3

10011851

31/05/2013 *

350,000,000.00

CORPORATION BANK

INDUSTRIAL FINANCE BRANCH, RALLARAM BUILDING, NO. 30, MISSION ROAD, BANGALORE, KARNATAKA - 560027, INDIA

B77508570

 

* Date of charge modification

 

FIXED ASSETS

 

Tangible Assets

·         Land

·         Buildings

·         Plant and Equipment

·         Furniture and Fixtures

·         Vehicles

·         Office Equipment

·         Computer Equipment

·         Leasehold Improvements

 

Intangible Assets

·         Computer Software

 


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.62.63

UK Pound

1

Rs.101.06

Euro

1

Rs.84.56

 

 

INFORMATION DETAILS

 

Report Prepared by :

DPH/ VRN/ KVT

 


 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

5

--PROFITABILIRY

1~10

4

--LIQUIDITY

1~10

6

--LEVERAGE

1~10

5

--RESERVES

1~10

4

--CREDIT LINES

1~10

4

--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

NO

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

DEFAULTER

 

 

--RBI

YES/NO

NO

--EPF

YES/NO

NO

TOTAL

 

45

 

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

--

NB

                                       New Business

 

--