MIRA
INFORM REPORT
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Report No. : |
340153 |
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Report Date : |
05.09.2015 |
IDENTIFICATION DETAILS
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Name : |
ITOCHU CORPORATION |
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Registered Office : |
2-5-1 Kitaaoyama Minatoku Tokyo 107-8807 |
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Country : |
Japan |
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Financials (as on) : |
31.03.2015 |
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Date of Incorporation : |
December 1949 |
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Com. Reg. No.: |
1200-01-077358 (Osaka-Chuoku) |
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Legal Form : |
Limited Company (Kabushiki
Kaisha) |
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Line of Business : |
A general
trading house; Sales breakdown by divisions:
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No. of Employee : |
110,487 |
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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Status : |
Excellent Company |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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 31, 2015
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Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
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Japan |
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 |
JAPAN - ECONOMIC OVERVIEW
In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop an advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been impressive - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the aftereffects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession four times since 2008. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2014 stood as the fourth-largest economy in the world after first-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.
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Source
: CIA |
Company name and address
ITOCHU CORPORATION
REGD NAME: Itochu
Shoji KK
MAIN OFFICE: 2-5-1
Kitaaoyama Minatoku Tokyo 107-8807 JAPAN
Tel: 03-3497-2121
Fax: 03-3497-4141
*.. Registered at: 3-1-3 Umeda
Kitaku Osaka, as given
E-Mail
address: webmaster@itochu.co.jp
ACTIVITIES
General
trading house
BRANCHES
Osaka,
Nagoya, Fukuoka, Hiroshima, Sapporo, other (Tot 90)
OVERSEAS
North/South
America, Europe, China, S/E Asia, other (Tot 115 over 80 countries)
CHIEF EXEC
MASAHIRO
OKAFUJI, PRES & CEO
Yen
Amount: In million Yen, unless
otherwise stated
SUMMARY
FINANCES FAIR A/SALES Yen 5,591,435 M
PAYMENTS REGULAR CAPITAL Yen 253,448 M
TREND UP WORTH Yen 2,748,251 M
STARTED 1949 EMPLOYES 110,487
COMMENT
NATION’S
LEADING GENERAL TRADING HOUSE.
FINANCIAL SITUATION CONSIDERED
FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.
Unit: In Million Yen
Forecast (or estimated) figures for 31/03/2016 fiscal term
HIGHLIGHTS
This is major general trading house, currently top textile
trader among domestic trading companies, with comprehensive strength in all
areas of the textile industry from upstream to down-stream operations, while
actively trying to expand into textile retailing. Also strong in food industry, machinery
plants, chemicals, energy and condominiums.
Further aggressive in satellite communications to lead other trading
houses in telecom & China businesses.
Has stake in Perfect TV satellite broadcaster. Implemented independently managed “division
company system” in Apr 1997. (See
OPERATION). Acquired 3% stake in
UNY, general supermarket operator based in Tokai area for collaboration in
merchandise development and operation in China.
Constructing export terminals on West Coast jointly with major US grain
firm as strategic base for export to China & other Asian countries. Capital spending is at Yen 350 billion-plus
in the March 2012 and March 2013 terms for metals & energy resources. The company is eager to acquire additional
new metals resources in light of opportunities presented by the deteriorating
market, and will focus on iron ore and coal.
It will adopt IFRS from the March 2015 term. The company plans to increase payout ratio
from the present figure of around 23%.
FINANCIAL INFORMATION
The sales volume for Mar/2015 fiscal term amounted to Yen
5,591,435 million, an almost similar amount of Yen 5,589,525 million in the
previous term. The recurring profit was
posted at Yen 418,515 million and the net profit at Yen 300,569 million,
respectively, compared with Yen 360,762 million recurring profit and Yen
245,312 million net profit, respectively, a year ago.
For the current term ending Mar 2016 the recurring profit is
projected at Yen 406,000 million and the net profit at Yen 330,000 million,
respectively, on a 1.64% up in turnover, to Yen 5,500,000 million. Profits generated from CITIC will start to be
realized. The metal business will remain
flat, but machinery sales and the general products and information and
communication technology business will drive earnings growth.
The financial situation is considered FAIR and good for
ORDINARY business engagements.
REGISTRATION
Date Registered: Dec 1949
Regd No.: 1200-01-077358 (Osaka-Chuoku)
Legal Status:
Limited Company (Kabushiki Kaisha)
Authorized: 3,000 million shares
Issued:
1,662,889,504 shares
Sum: Yen 253,448
million
Major shareholders (%): Company’ Treasury Stock (4.8),
Japan Trustee Services T (4.1), Master Trust Bank of Japan T (3.9), CP
Worldwide Investment (3.8), Mizuho Bank (2.3), Nippon Life Ins (2.0), Mitsui
Sumitomo Ins (1.8), Sompo Japan Nipponkoa Ins (1.5), Barclays Securities Japan
(1.5), Asahi Life Ins (1.4); foreign owners (38.2)
No. of shareholders:
150,725
Listed on the S/Exchange (s) of:
Tokyo
Managements: Eizo Kobayashi, ch; Masahiro Okafuji,
pres; Koji Takayanagi, v pres; Tomofumi Yoshida, s/mgn dir; Hitoshi Okamoto,
s/mgn dir; Takao Shiomi, s/mgn dir; Yuji Fukuda, mgn dir; Shuichi Koseki, mgn
dir; Eiichi Yonekura, mgn dir; Fumihiko Kobayashi, mgn dir; Tsuyoshi Hachimura,
mgn dir; Ichiro Fujisaki, dir; Chikara Kawakita, dir
Nothing
detrimental is known as to the commercial morality of executives.
Related companies:
Itochu Techno Solutions, Itochu Shokuhin, Itochu Enex, other
OPERATION
Activities: Activities:
A general trading house; Sales breakdown by divisions:
Textile Company (10%): Raw cotton, Cotton
yarns, Wool, yarns, Rayon staple, Spun rayon yarns, Rayon yarns, Synthetic staple,
Synthetic filament, Cotton fabrics, Wool fabrics, Silk fabrics, Rayon fabrics,
Spun rayon fabrics, Synthetic filament fabrics, Knit fabrics, Knit outer
garments, Knit under garments, Woven outer garments, Woven under garments,
Other garments, Secondary textile products, Imported sundries, Bedding fabrics,
Interior fabrics, Industrial fibers, Inorganic fibers and related products,
etc.
Machinery Company (7%): Civil engineering, Construction, Mining and related materials
handling machinery, Agricultural machinery, Metalworking and processing
machinery and plant, Forging machinery, Textile machinery, Semiconductor
manufacturing equipment, Automobile parts manufacturing plant, Plant related to
the iron and steel industry, Cement plant, Food machinery, Grain silos,
Hospital equipment, Oil, gas, and chemical plants, Passenger vehicles,
Commercial vehicles, Automobile parts and equipment, Special-purpose vehicles,
Rolling stock, Ships, Power generating equipment, etc.
Aerospace, Electronics & Multimedia Company (5%): Satellite communications, International telecommunications,
Terminals and peripheral equipment for broadcasting and communications systems,
Entertainment and content business, Systems and related machinery for mobile
telephones, Systems and related equipment for computer and information
processing, Semiconductor equipment, Aircraft, In-flight equipment,
Space-related equipment, Security equipment etc.
Energy, Metals & Minerals Company (34%): Iron ore, Direct reduced iron, Coking coal, Coke, Thermal
coal, Ferro alloy and its materials, Ferrous scrap, Pig iron, Metal powder,
Electrodes, Activated carbon, Steel plates, Hot & cold rolled sheets and
coils, Galvanized steel, Steel for machinery, Stainless steel, High tensile
steel, Construction materials, Welded steel pipes, Seamless steel pipes, Steel
wires, Marine steel structures, Bridges, Prefabricated steel for buildings,
Rails, Non-ferrous metals, Precious metals, Rare metals, Aluminium, Crude oil,
Natural gas liquid (NGL), Gasoline, Naphtha, Kerosene, Jet fuel, Gas oil, Fuel
oil, Bunker oil, Lubricant, Asphalt, Liquefied petroleum gas (LPG), Liquefied
natural gas (LNG), Nuclear fuel (uranium concentrates, uranium hexafluoride),
Nuclear power related equipment
Food Company (34%): Wheat, Barley, Wheat flour, Rice, Starches, Soybeans,
Sunflower oil, Olive oil, Palm oil, Coconut oil, Corn, Soybean meal, Rapeseed
meal, Fish meal, Alfalfa pellets, Raw sugar, Sweeteners, High-fructose corn
syrup, Dairy products, Nuts, Coffee, Cocoa, Fruit juice, Liquor, Soft drinks,
Beef, Pork, Chicken, Fruits and vegetables, Processed foods, Frozen foods,
Canned foods, Pet foods, Consulting services for food business.
Finance, Realty, Insurance & Logistics
Services Company (10%): Finance: Foreign exchange and
securities trading, securities and fund investment, asset management (including
structuring and sales of financial products), lending, online securities
broking, other financial services; Realty: Planning,
developing, constructing, contracting, managing, operating, selling related
facilities and materials for residential housing, office buildings, resort
facilities, golf courses, industrial parks, hotels; Insurance: Insurance and
reinsurance agency, broking of insurance and reinsurance, consulting of
insurance and reinsurance; Logistics services: Warehousing,
trucking, operation of logistics centers, chartering, international intermodal
transport, air cargo, travel services, distribution processing, freight
forwarding, customs clearance
Overseas trading ratio: (42%)
Clients: [Wholesalers, mfrs] Nippon Access
Inc, Itochu Shokuhin, Idemitsu Kosan Kaisha, Japan Gas Energy, JX Nippon Oil
& Energy Corp, Prime Meat Packers, Itokin Co, Nisshin Ringyo, other.
No. of
accounts: 3,000
Domestic
areas of activities: Nationwide
Suppliers: [Mfrs, wholesalers, carmakers] Mazda
Motor, Nippon Steel, Isuzu Motors, Nissin Food Products, JGC Corp, Dole, Nissin
Foods, Dole Japan Inc, JX Nippon Oil & Energy Corp, Japan Petroleum
Exploration Co, Sakhalin Oil & Gas, other.
Payment record:
Regular
Location: Business area in Tokyo. Office premises at the caption address are
owned and maintained satisfactorily.
Bank References:
Mizuho
Bank (Uchisaiwaicho)
SMBC
(Osaka)
Relations:
Satisfactory
FINANCES
(In Million Yen)
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FINANCES: (Consolidated
in million yen) |
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Terms Ending: |
31/03/2015 |
31/03/2014 |
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INCOME STATEMENT |
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Annual Sales |
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5,591,435 |
5,587,526 |
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Cost of Sales |
4,502,371 |
4,542,504 |
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GROSS PROFIT |
1,089,064 |
1,045,022 |
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Selling & Adm Costs |
704,104 |
762,011 |
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OPERATING PROFIT |
384,960 |
283,011 |
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Non-Operating P/L |
33,555 |
77,751 |
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RECURRING PROFIT |
418,515 |
360,762 |
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NET PROFIT |
300,569 |
245,312 |
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BALANCE SHEET |
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Cash |
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700,292 |
653,739 |
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Receivables |
2,101,300 |
2,127,968 |
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Inventory |
780,550 |
744,441 |
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Securities, Marketable |
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Other Current Assets |
555,810 |
313,388 |
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TOTAL CURRENT ASSETS |
4,137,952 |
3,839,536 |
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Property & Equipment |
786,862 |
747,664 |
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Intangibles |
488,941 |
440,246 |
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Investments, Other Fixed Assets |
3,146,946 |
2,757,405 |
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TOTAL ASSETS |
8,560,701 |
7,784,851 |
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Payables |
1,669,814 |
1,661,973 |
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Short-Term Bank Loans |
543,660 |
472,667 |
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Other Current Liabs |
633,037 |
479,728 |
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TOTAL CURRENT LIABS |
2,846,511 |
2,614,368 |
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Debentures |
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Long-Term Bank Loans |
2,548,504 |
2,420,713 |
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Reserve for Retirement Allw |
56,404 |
57,022 |
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Other Debts |
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361,031 |
295,157 |
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TOTAL LIABILITIES |
5,812,450 |
5,387,260 |
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MINORITY INTERESTS |
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Capital, Paid-Up |
253,448 |
202,241 |
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Surplus |
2,494,803 |
2,195,350 |
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SHAREHOLDERS' EQUITY |
2,748,251 |
2,397,591 |
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TOTAL EQUITIES |
8,560,701 |
7,784,851 |
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CONSOLIDATED CASH FLOWS |
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Terms ending: |
31/03/2015 |
31/03/2014 |
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Cash
Flows from Operating Activities |
|
403,629 |
428,101 |
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Cash
Flows from Investment Activities |
-276,103 |
-270,377 |
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Cash
Flows from Financing Activities |
-97,896 |
-77,855 |
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Cash,
Bank Deposits at the Term End |
|
700,292 |
653,739 |
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ANALYTICAL RATIOS Terms ending: |
31/03/2015 |
31/03/2014 |
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Net
Worth (S/Holders' Equity) |
2,748,251 |
2,397,591 |
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Current
Ratio (%) |
145.37 |
146.86 |
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Net Worth
Ratio (%) |
32.10 |
30.80 |
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Recurring
Profit Ratio (%) |
7.48 |
6.46 |
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Net
Profit Ratio (%) |
5.38 |
4.39 |
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Return
On Equity (%) |
10.94 |
10.23 |
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FOREIGN EXCHANGE RATES
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Currency |
Unit
|
Indian Rupees |
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US Dollar |
1 |
Rs.66.40 |
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|
1 |
Rs.101.19 |
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Euro |
1 |
Rs.73.89 |
INFORMATION DETAILS
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Analysis Done by
: |
KAS |
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Report Prepared
by : |
ASH |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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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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 |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
NB |
New Business |
-- |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.