/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/131209.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, December 9, 2013, Vol. 16, No. 243 Headlines A U S T R A L I A QANTAS AIRWAYS: Sees AUD300MM Loss in 6Mos. Ended Dec. 30 QANTAS AIRWAYS: Gets Below Investment Grade Rating QANTAS AIRWAYS: S&P Lowers CCR to 'BB+'; Outlook Negative STRUCTURAL CRANES: Placed into Administration C H I N A CHINA LUMENA: Moody's Withdraws 'B2' Corporate Family Rating I N D I A AISHWARYA AGRI: CRISIL Cuts Ratings on INR66.3MM Loans to 'B+' ALFA BATTERIES: CRISIL Assigns 'B' Ratings to INR60MM Loans BADARPUR FARIDABAD: CARE Reaffirms 'B' Rating on INR395.5cr Loan D. H. KHANDELWAL: CRISIL Reaffirms 'B+' Ratings on INR200MM Loans DADHEECH INFRASTRUCTURES: CARE Ups Rating on INR12cr Loan to 'B+' FUTURA DOOR: ICRA Lowers Ratings on INR11.5cr Loans to 'D' GANJAM NAGAPPA: CRISIL Reaffirms 'B+' Ratings on INR485MM Loans GOVIND AGRO: CRISIL Raises Ratings on INR140MM Loans to 'B+' GSS INFOTECH: CRISIL Cuts Ratings on INR567.5MM Loans to 'B+' GURU-G TEX: CRISIL Lowers Rating on INR199.9MM Loan to 'D' H.R. RICE: CRISIL Cuts Ratings on INR350MM Loans to 'D' HAJI ALIMOHAMED: ICRA Reaffirms B+ Rating on INR12r Loan HEALTHAID FOODS: CRISIL Cuts Ratings on INR295MM Loans to 'D' HINDVA BUILDERS: ICRA Assigns 'B+' Rating to INR14cr Loan JAGRUTHI EDUCATIONAL: CRISIL Reaffirms D Ratings on INR80MM Loans JAIN IRRIGATION: CRISIL Reaffirms 'B+' Ratings on INR8.04BB Loans KARPASA EXPORT: ICRA Reaffirms 'B' Rating on INR9.5cr Loan M M POLYMERS: CARE Rates INR4.93cr LT Bank Loans at 'B+' MAA MAHAMAYA: ICRA Reaffirms 'B+' Ratings on INR7cr Loans MANJEERA RETAIL: ICRA Assigns 'B' Ratings to INR314cr Loans MJR BUILDERS: CRISIL Reaffirms 'B+' Rating on INR200MM Loan MOHAMMED KHAN: CRISIL Ups Rating on INR200MM Loan to 'B+' N.C. INFRASTRUCTURE: CRISIL Cuts Rating on INR162.5MM Loan to 'D' OB INFRASTRUCTURE: CRISIL Ups Ratings on INR4.38BB Loans to 'B-' OM LAMCOAT: ICRA Assigns 'B' Ratings to INR8.75cr Loans POLYLACE INDIA: CARE Assigns 'B+' Rating to INR1cr LT Bank Loan PRAMUKH ALLOYS: ICRA Assigns 'B-' Ratings to INR7.30cr Loans QUINTEGRA SOLUTIONS: ICRA Suspends 'D' Rating on INR113.05cr Loan RAJ INTERNATIONAL: CRISIL Cuts Ratings on INR749.9MM Loans to 'D' RC GOYAL: CRISIL Upgrades Rating on INR100MM Loan to 'B+' S.N.Q.S. INT'L: CRISIL Rates INR9MM Term Loan at 'B+' SAGAR ENTERPRISES: CRISIL Lowers Rating on INR90MM Loan to 'B+' SANDEEP TRADING: CRISIL Cuts Ratings on INR205.8MM Loans to 'D' SARTHAK ISPAT: ICRA Reaffirms 'B' Ratings on INR29.56cr Loans SRI BALAJI: ICRA Reaffirms 'B+' Ratings on INR58.07cr Loans SRI LAKSHMI: CRISIL Raises Ratings on INR1.1BB Loans to 'B+' STANDARD CORPORATION: CRISIL Cuts Ratings on INR406M Loans to 'D' SURBHI FERRO: ICRA Assigns 'B' Ratings to INR15cr Loans TARA EXPORTS: ICRA Reaffirms 'B+' Ratings on INR3.23cr Loans TECHNOFAB ENGINEERS: CRISIL Cuts Ratings on INR80MM Loans to 'D' UGAM IMPEX: CRISIL Downgrades Ratings on INR730MM Loans to 'D' VIJAY STEEL: ICRA Cuts Ratings on INR11.77cr Loans to 'B+' YASH AUTOMOTIVE: CRISIL Cuts Ratings on INR220MM Loans to 'B' J A P A N EACCESS LTD: Merger No Impact on Rating & Outlook, Moody's Says LEOPARD TWO: Fitch Affirms Class D and E Notes' 'BB' Ratings N E W Z E A L A N D MAINZEAL PROPERTY: Parent Placed in Provisional Liquidation STRATEGIC FINANCE: Receiver Files Action Against Auditor WINDFLOW TECHNOLOGY: Shareholders Allow Additional Debt S I N G A P O R E GLOBAL A&T: Debt Swap Sparks Bondholder Revolt, WSJ Reports S O U T H K O R E A * Financially Weak South Korean Firms' Balance Sheets Worsen - - - - - ================= A U S T R A L I A ================= QANTAS AIRWAYS: Sees AUD300MM Loss in 6Mos. Ended Dec. 30 --------------------------------------------------------- David Fickling at Bloomberg News reports that Qantas Airways Ltd. flagged a record first-half loss and 1,000 job cuts, sending its shares down the most in 18 months. Rising fuel costs and a drop in domestic ticket prices will drive losses of between AUD250 million (US$226 million) and AUD300 million before tax and one-time items in the six months ending Dec. 30, the Sydney-based company said in a regulatory statement, Bloomberg relates. The airline is aiming for AUD2 billion of cost savings over the next three years. According to Bloomberg, the forecast prompted Moody's Investors Service to place Qantas's credit rating on review for a possible downgrade, underscoring the challenges Chief Executive Officer Alan Joyce faces amid a market share fight with second-ranked Virgin Australia Holdings Ltd. (VAH) A first-half loss may leave Qantas shareholders sitting on aggregate net losses over the five years since Joyce took over, compared with AUD3.31 billion of profits posted in the previous five years. "The model's broken and they keep on doggedly doing the same thing," Neil Hansford, chairman of consultants Strategic Aviation Solutions, told Bloomberg. "It's about time Joyce stopped complaining and actually got on with running the business." Mr. Joyce and Qantas's board will have their pay cut and executives won't take a bonus for the current financial year, the company said in the statement cited by Bloomberg News. About Qantas Airways Headquartered in Sydney, Australia, Qantas Airways Limited -- http://www.qantas.com.au/-- is an Australian airline company engaged in the operation of international and domestic air transportation services, and the provision of time definite freight services. Qantas is also engaged in the sale of international and domestic holiday tours, and associated support activities, including flight training, catering, passenger and ground handling, and engineering and maintenance. It is organized into four segments: Qantas, Jetstar, Qantas Holidays and Qantas Flight Catering. QANTAS AIRWAYS: Gets Below Investment Grade Rating -------------------------------------------------- Ross Kelly, writing for The Wall Street Journal, reports that Qantas Airways Ltd. received a credit rating below investment grade for the first time since it was privatized nearly two decades ago, increasing borrowing costs for the Australian flag carrier and pressuring it to shore up its balance sheet with asset sales. Standard & Poor's Ratings Services on Dec. 6 cut its rating on Qantas to double-B-plus from investment-grade triple-B-minus, a day after the airline warned of a pretax loss of as much as 300 million Australian dollars, or roughly US$275 million, for the six months through December, notes The Journal. Moody's Investors Service put its investment-grade rating on Qantas on review for a possible downgrade, the report adds. According to WSJ, S&P cut its rating on Qantas even as the airline pledged to slash costs by AUD2 billion over the next three years, in part by eliminating 1,000 jobs. "A structural shift in the domestic competitive landscape has weakened Qantas's business risk profile," the report quoted S&P as saying. The service said it didn't expect the airline to recover its investment-grade rating in the near term. The report adds that the airline's difficulties stem from weak travel demand, high fuel costs and fierce competition with Virgin Australia Ltd., which is trying to loosen Qantas's grip on Australia's business-travel market. Qantas was privatized in 1995, and has been on a path to become more commercially viable, says WSJ. Qantas's balance sheet is on relatively stable footing, says the report. In recent years, the airline sold a freight business and canceled or deferred aircraft deliveries to boost its capital position. As of June 30, the company had AUD2.83 billion in cash and undrawn loan facilities valued at AUD630 million, WSJ notes. According to The Journal, the airline isn't alone in having junk- rated debt. Only a handful of the world's airlines, including Air New Zealand Ltd., Southwest Airlines Co. and Deutsche Lufthansa AG, have investment-grade status, the report relays. Qantas said on Dec. 6 it had "a strong financial position, including a large cash balance and a significant asset base," notes WSJ. An airline spokesman acknowledged that the downgrade is "expected to increase the cost of some company debt." Qantas shares closed 3.7% lower on Dec. 6, extending an 11% drop on Thursday, notes the WSJ report. Qantas Chief Executive Alan Joyce on Dec. 5 flagged the possibility of asset sales to "potentially unlock sources of capital and value for shareholders" who have suffered from a consistently weak stock performance since the financial crisis hit late in 2007, the report relays. Qantas shares are down more than 80% from where they were in November 2007, while Australia's benchmark S&P/ASX 200 index is only about 20% off its precrisis highs, notes The Journal. "We see three major asset sales as possible, but each is complicated," WSJ quoted Simon Mitchell, an analyst at UBS, as saying. He cited the company's Sydney airport leases, its frequent-flier business and its equity stakes in ventures in Japan, Vietnam, Singapore and Hong Kong for the company's low-cost unit Jetstar. The Journal notes that in the fiscal year that ended in June, Qantas logged AUD260 million in profit before interest and tax from the frequent-flier program -- the only part of the company that increased earnings from a year earlier. Jetstar booked AUD138 million in earnings before interest and tax, says the report. Too Big to Fail, Opposition Says Prior to Quantas getting the below investment grade rating, Joe Kelly at The Australian reported that opposition treasury spokesman Chris Bowen declared Qantas as too big to fail and urged the government to consider making a direct equity injection in the national carrier. The Australian related that Mr. Bowen said he was neither in favor nor opposed to the government taking out a stake in Qantas, but stressed the option should be on the table. "We need to have that discussion," Mr. Bowen told Sky News' Australian Agenda program, The Australian said. "A small stake would send a signal to the debt markets around the world and to financiers that this was a body with which the government had a keen interest. . . That is one of the options on the table which we would look at constructively," he added. According to The Australian, Mr. Bowen said the most appropriate course of action would be for the government to put out a discussion paper or a white paper setting out the options available to assist Qantas. The Australian said Qantas was expected to seek from the federal government the same kind of guarantee it gave to banks during the global financial crisis, to help protect the airline from a downgrade of its investment-grade credit rating -- only one notch above junk status. The report added that if Qantas's debt were to be downgraded to junk, it is thought that borrowing costs could rise by up to $120 million, damaging the company as it competes with rival Virgin which is backed by four overseas airlines that provide it with a cheaper source of funds and which will soon hold up to 80 per cent of its shares. However, Mr. Bowen said the issue was not the Qantas Sale Act which restricts foreign ownership of the national carrier to 49 per cent and which was imposed on the carrier when it was sold by the government in the early 1990s, The Australian relayed. "Qantas have said themselves . . . that they don't see that as the solution," he said. "What we have said about the Qantas Sale Act and the restrictions is that this has been bipartisan policy since 1992. "It's not been an issue for which a case for change has been made . . . if there is to be a discussion about changing it, let's have the discussion. "If Qantas was saying to us 'This is a big problem. This is what's stopping us going forward.' Well, then you could have a good look at that. But that is not the case," Mr. Bowen, as cited by The Australian, said. China Southern Airline in Plan to Back Stake Damon Kitney and Steve Creedy at The Weekend Australian reported that the biggest airline in Asia, state-owned China Southern, held detailed discussions last year to bankroll a group of wealthy investors -- including former Qantas chief executive Geoff Dixon, adman John Singleton and retail king Gerry Harvey -- to buy a cornerstone shareholding in the national carrier. The Weekend Australian said the powerhouse Asian carrier was introduced to the consortium by billionaire trucking magnate Lindsay Fox and that Mr. Dixon held discussions with China Southern chairman Si Xianmin, encouraging the Chinese to provide financial backing for the syndicate, which had acquired a stake of about 2 per cent in Qantas. About Qantas Airways Headquartered in Sydney, Australia, Qantas Airways Limited -- http://www.qantas.com.au/-- is an Australian airline company engaged in the operation of international and domestic air transportation services, and the provision of time definite freight services. Qantas is also engaged in the sale of international and domestic holiday tours, and associated support activities, including flight training, catering, passenger and ground handling, and engineering and maintenance. It is organized into four segments: Qantas, Jetstar, Qantas Holidays and Qantas Flight Catering. QANTAS AIRWAYS: S&P Lowers CCR to 'BB+'; Outlook Negative --------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Australian airline Qantas Airways Ltd. to 'BB+/B', from 'BBB-/A-3'. The outlook is negative. S&P also lowered its senior unsecured debt ratings on Qantas to 'BB+', from 'BBB-', and placed the issue ratings on CreditWatch with negative implications. The downgrades reflect S&P's view that intense competition in the airline industry has weakened Qantas' business risk profile to "fair" from "satisfactory", and financial risk profile to "significant" from "intermediate". S&P don't expect Qantas to recover to a credit profile commensurate with a 'BBB-' rating in the near term. S&P recognizes that Qantas has strong financial flexibility and a good track record of responding to earnings pressures through cost cutting and other measures. However, S&P believes in the current circumstances, the benefits would take time to realize and the positive impact would not be sufficient to outweigh the pressure on Qantas' stand-alone credit profile. A structural shift in the domestic competitive landscape has weakened Qantas' business risk profile. Additions to capacity have accelerated significantly over the past 12 months in both corporate and leisure travel--a trend that is unlikely to ease given S&P's expectation that Qantas will aggressively seek to maintain its established market share. Virgin Australia has become a more formidable competitor to Qantas, partly as a result of its dual-brand strategy and well-capitalized shareholders. These competitive pressures have eroded Qantas' yield and threatened its strong and defendable position in its domestic market. In addition, high fuel costs and weak demand have exacerbated the impact. In S&P's view, the profitability of Qantas' domestic operation is key to the group's competitive position and long-term viability. In addition, the benefits of Qantas' partnership with Emirates Airline have yet to prove to be sufficient to offset the mounting competition in its international operations. To arrest the downward earnings trend, Qantas is embarking on a number of initiatives including accelerating a program that targets A$2 billion in cost reduction over three years, review of all planned capital expenditures, and potential asset sales. Notwithstanding Qantas' good track record of executing these cost- cutting strategies to preserve cash and improve its cost position, S&P believes the benefits would take time to realize and it's unlikely to offset the cyclical and structural headwinds facing Qantas. "Our assessment of Qantas "significant" financial risk profile factors in a material spike in its leverage (measured by adjusted debt to EBITDA) and weakening in operating cash flows in fiscal 2014 due to the significant loss incurred. However, we expect a slow recovery of Qantas' key credit metrics from fiscal 2015 onward, due to the benefits of Qantas' cost-cutting initiatives, capital expenditure deferral, as well as our expectation that a less intense competitive environment will lead to improvement in yields," S&P added. "Our assessment of Qantas "fair" business risk profile reflects the highly competitive and cyclical nature of the airline industry, high fuel costs, stiffer competition across Qantas' route network, and Qantas' dual-brand strategy and strong domestic market position. This and the "significant" financial risk assessment results in a 'bb' initial analytical outcome ("anchor") under the Standard & Poor's corporate rating criteria that became effective Nov. 19, 2013. This outcome is uplifted by one notch, reflecting Qantas significant financial flexibility, to derive the 'BB+' corporate credit rating," S&P noted. S&P assumes fuel prices will not increase materially in its forecast. In the absence of material asset sales, S&P's base-case scenario expects Qantas' adjusted funds from operations (FFO) to debt to drop slightly below 20% in fiscal 2014, but recover to 20%-25% in fiscal 2015. S&P also expects its adjusted debt to EBITDA to approach 4x in fiscal 2014, but improve to a low 3x in fiscal 2015. S&P considers Qantas' liquidity to be "strong", based on the following: -- S&P expects that sources of liquidity in the next 12 months will exceed uses by at least 1.5x. We expect that liquidity sources will continue to exceed uses, even if EBITDA were to decline by 30%. -- The company has a manageable debt-maturity profile in the next two years, with about A$800 million debt maturing in fiscal 2014, and A$1.1 billion in fiscal 2015 (excluding operating leases). -- S&P notes that none of Qantas' debt facilities have financial covenants. S&P expects Qantas will continue to hold a sizable unrestricted cash balance of about A$2 billion. Principal liquidity sources -- Cash of more than A$2 billon; -- Standard & Poor's estimate of lease adjusted FFO of about 1.4 billion; and -- About A$600 million of undrawn committee facility. Principal liquidity uses -- Debt maturities of about A$800 million in fiscal 2014; and -- Standard & Poor's estimate of capital expenditure of A$1.1 billion in fiscal 2014. The negative outlook reflects the risk of protracted intense competition for domestic market share reducing Qantas' profitability and outweighing the benefits of the actions undertaken by the airline. The ratings could be lowered if Qantas fails to arrest the downward trend in its profitability to the extent that credit metrics worsen considerably, including its adjusted FFO-to-debt falling to less than 20% for a prolonged period. A weakening of Qantas' liquidity position will also put downward pressure on the rating, particularly if S&P assess Qantas' unrestricted cash and available liquidity were to decline to less than A$2 billion. S&P would revise the outlook to stable if there is improvement in Qantas' financial risk profile due to less intense competitive behavior by market participants or successful management of these vulnerabilities. The 'BB+' issuer credit rating incorporates S&P's expectation that management will undertake a range of initiatives to support Qantas' credit quality. S&P's 'BB+' rating on Qantas doesn't factor in any extraordinary government support. Upward pressure could occur if S&P assess Qantas to be a government-related entity (GRE) in accordance with its criteria. S&P expects to resolve the CreditWatch on the senior unsecured debt when it finalizes its assessment of the recovery rating of the debt. STRUCTURAL CRANES: Placed into Administration --------------------------------------------- Cliff Sanderson at dissolve.com.au reports that around 35 workers of Structural Cranes Newcastle were left jobless after the company entered voluntary administration. Stewart Free -- StewartF@jirschsutherland.com.au -- and Bradd Morelli -- BraddM@jirschsutherland.com.au -- of Jirsch Sutherland were appointed as the Carrington-based company's administrators, the report says. dissolve.com.au notes that as the stocks of the company were taken by liquidators, approximately, 24 full-time and 11 casual employees were terminated. According to the report, Mr. Morelli said it was unfortunate that Structural Cranes, a business that had been operating for some time already had to been put into administration. Structural Cranes was founded in 1971. ========= C H I N A ========= CHINA LUMENA: Moody's Withdraws 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service has withdrawn its B2 corporate family rating on China Lumena New Materials Corp. Ratings Rationale: Moody's has withdrawn the rating for its own business reasons. China Lumena New Materials Corp has two business segments: (1) the mining, processing and manufacturing of thenardite, and (2) the production of polyphenylene sulphide (PPS). The PPS business was acquired in January 2011 from Sino Polymer, previously owned by China Lumena's major shareholder. ========= I N D I A ========= AISHWARYA AGRI: CRISIL Cuts Ratings on INR66.3MM Loans to 'B+' -------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Aishwarya Agri Processors Pvt Ltd to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Foreign Letter 8 CRISIL A4 (Downgraded from of Credit 'CRISIL A4+') Cash Credit 42 CRISIL B+/ Stable (Downgraded from 'CRISIL BB-/Stable') Term Loan 24.3 CRISIL B+/'Stable (Downgraded from 'CRISIL BB-/Stable') The rating downgrade reflects weakening in AAPL's financial risk profile because of large debt-funded capital expenditure (capex) over the 1.5 years through September 2013 leading to weak capital structure and debt protection metrics. The company's adjusted gearing weakened significantly to 4.04 times as on March 31, 2013, from 2.29 times as on March 31, 2012. The company expanded its manufacturing capacity to 12 tonnes per hour (tph) from 6 tph through capex of around INR34.4 million in 2012-13 (refers to financial year, April 1 to March 31). The company funded the capex largely through debt of INR24.3 million leading to weak capital structure. Furthermore, AAPL is setting up two silos and related machinery at a cost of INR12 million in 2013-14, funded through term loan of INR8 million, leading to deterioration in the company's capital structure. Despite high year-on-year revenue growth of 57 per cent for 2012-13, AAPL's net worth remains small because of modest operating margin and low accretions to reserves. CRISIL believes that AAPL's financial risk profile will remain weak over the medium term, marked by high gearing and small net worth. The ratings reflect the susceptibility of AAPL's operating margin to regulatory changes and to volatility in raw material prices. These rating weaknesses are partially offset by the extensive experience of AAPL's promoters in the rice business. Outlook: Stable CRISIL believes that AAPL will benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' in case of sustained improvement in the company's financial risk profile, most likely because of material increase in net worth on the back of equity infusion by the promoters or more-than-expected accretion to reserves, leading to improvement in its capital structure. Conversely, the outlook may be revised to 'Negative' in case of steep decline in the company's profitability margins or turnover or significant deterioration in its capital structure on account of larger-than-expected working capital requirements or because of larger-than-expected debt- funded capex. AAPL was set up as a partnership firm named Aishwarya Industries in 1995 and was engaged in rice milling in Ranga Reddy district (Andhra Pradesh). The company was reconstituted as a private limited company with the current name in January 2013. AAPL is managed by Mr. Om Prakash Goel and Mr. Naresh Kumar Goel, with other family members. The mill has a rice milling capacity of 12 tph (raw and parboiled included); the company increased capacity from 6 tph in 2012-13. ALFA BATTERIES: CRISIL Assigns 'B' Ratings to INR60MM Loans ----------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long term bank facilities of Alfa Batteries Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 2.2 CRISIL B/Stable Cash Credit 55.0 CRISIL B/Stable Proposed Long-Term Bank Loan Facility 2.8 CRISIL B/Stable The rating reflects ABPL's modest scale of operations in the intensely competitive battery manufacturing industry coupled with working-capital-intensive nature of its operation. The rating is further constrained by below-average financial risk profile, marked by moderate networth base, high gearing and subdued debt protection metrics. These rating weaknesses are partially offset by the extensive experience of the promoters in the battery manufacturing industry. Outlook: Stable CRISIL believes that ABPL will continue to benefit over the medium term from its promoters extensive experience in the industry. The outlook may be revised to 'Positive' in case there is significant and sustained improvement in the company's revenue and profitability, while improving its capital structure. Conversely, the outlook may be revised to 'Negative' in case of a decline in the company's revenues or profitability margins or an elongation of its working capital cycle, or if it undertakes any debt funded capex programme, resulting in further weakening of its financial risk profile. ABPL incorporated in 2010, manufactures lead-acid based automotive batteries and inverter batteries. The company is managed by Mr. Rajendra G. Joshi. ABPL has its manufacturing unit located in Jaysingpur (Kolhapur, Maharashtra). ABPL, on a provisional basis, reported a profit after tax (PAT) of INR2.25 million on net sales of INR223.4 million for 2012-13, as against a PAT of INR1.1 million on net sales of INR177 million for 2011-12. BADARPUR FARIDABAD: CARE Reaffirms 'B' Rating on INR395.5cr Loan ---------------------------------------------------------------- CARE reaffirms the rating assigned to the bank facilities of Badarpur Faridabad Tollway Ltd. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 395.50 CARE B Reaffirmed Facilities Rating Rationale The reaffirmation of the rating assigned to the bank facilities of Badarpur Faridabad Tollway Ltd. takes into account the restructuring of term loan facilities, Major Maintenance Reserve (MMRA) in form of liquid assets and expected benefit arising from renewal of Operations & Maintenance contract at reduced cost. The rating also factors in lower than envisaged toll collections on account of significant traffic leakage due to the existing road traversing below the project highway, moderate gearing levels of the project as well as interest rate risk. Any significant change in toll revenues and/or O&M expenses impacting the liquidity cushion constitutes the rating sensitivities. Badarpur Faridabad Tollway Limited is a Special Purpose Vehicle (SPV) incorporated by Hindustan Construction Company Limited through its step-down subsidiary HCC Concessions Limited, to undertake the construction of an Elevated Six Lane Highway of 4.4 km from 16.10 km to 20.50 km (including its approaches) on the Delhi-Agra stretch on National Highway (NH-2) on Build Operate Transfer (BOT) - Design Build Finance and Operate (DBFO) pattern under National Highway Development Programme (NHDP). The Concession Agreement (CA) was signed between National Highways Authority of India (NHAI) and BFTL on September 04, 2008 for a concession period of 20 years including construction period of two years. The highway is operational since November 2010. During FY13 (refers to period from April 1 to March 31), the company reported toll income of INR33.14 crore as against toll income of INR 32.62 crore in FY12. Also during H1FY14 the company reported toll revenue to INR 18.07 crore as compared to INR 16.19 crore in H1FY13. D. H. KHANDELWAL: CRISIL Reaffirms 'B+' Ratings on INR200MM Loans ----------------------------------------------------------------- CRISIL's rating on the bank facilities of D. H. Khandelwal Commercial Pvt Ltd continue to reflect DH Khandelwal's initial phase of operations and average financial risk profile, marked by average net worth and debt protection metrics. These rating weaknesses are partially offset by the promoters' extensive experience in the gold jewellery business. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 170 CRISIL B+/Stable (Reaffirmed) Proposed Long-Term 15 CRISIL B+/Stable (Reaffirmed) Bank Loan Facility Term Loan 15 CRISIL B+/Stable (Reaffirmed) For arriving at the ratings, CRISIL has treated unsecured loan of INR81 million extended to DH Khandelwal by its promoters as neither debt nor equity, as these loans would be retained in the business and are interest free in nature. Outlook: Stable CRISIL believes that DH Khandelwal will continue to benefit from its promoter's extensive industry experience over the medium term. The outlook may be revised to 'Positive' if the liquidity improves substantially led by equity infusion or efficient working capital management. Conversely, the outlook may be revised to 'Negative' if capital structure and liquidity deteriorate, most likely because of a large debt-funded capital expenditure or in case of lower-than-expected sales and profitability, leading to a weaker financial risk profile. Incorporated in 2011, DH Khandelwal is a retailer of gold, silver, and diamond jewellery in Nagpur. The company started operations in April 2011 under the name, Khandelwal Jewellers. The showroom is managed by the promoter, Mr. Rajesh Khandelwal, his father, Mr. Dhanraj Khandelwal, and wife, Mrs. Radhika Khandelwal. For 2012-13 (refers to financial year, April 1 to March 31), DH Khandelwal reported a profit after tax (PAT) of INR4.3 million on net sales of INR393 million against profit after tax (PAT) of INR0.05 million on net sales of INR328 million in 2011-12. DADHEECH INFRASTRUCTURES: CARE Ups Rating on INR12cr Loan to 'B+' ----------------------------------------------------------------- CARE revises/reaffirms the ratings assigned to the bank facilities of Dadheech Infrastructures Pvt Ltd. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 12.0 CARE B+ Revised from Facilities CARE B Short-term Bank 13.0 CARE A4 Reaffirmed Facilities Rating Rationale The revision in the ratings of the bank facilities of Dadheech Infrastructures Pvt Ltd takes into cognizance the increase in scale of operation in FY13 (refers to the period April 1 to March 31) vis-�-vis FY12 and comfortable order book position. The ratings continue to remain constrained by its relatively small scale of operations, risk of volatility in input prices, risk associated with delay in project execution, working capital intensive nature of operations and sluggish growth witnessed in the construction industry. This apart, the ratings continue to derive strengths from the rich experience of the promoters. Going forward, DIPL's ability to maintain a healthy order book, achieve the envisaged revenue and profit margin, ability to execute orders within the stipulated time period and ability to manage working capital effectively will be the key rating sensitivities. Dadheech Infrastructures Pvt Ltd, incorporated in March 2007 by Mr KP Sharma, Mr SK Sharma and Mr PK Sharma of Kolkata, West Bengal, is into the execution of construction activities. DIPL has tie-ups with RDB Realty & Infrastructure Ltd and MBL Infrastructures Ltd, for which it works as a sub-contractor. This apart, presently, the company has received some projects in its own name. The company is primarily into execution of government projects and has a pan- India presence. DIPL is, currently, managed by Mr SK Sharma along with his brother, Mr PK Sharma. Both of them are associated with this business since inception. They look after the day-to-day affairs of the company with the assistance of a team of experienced professionals. During FY13, the company reported a total income of INR103.9 crore (FY12: INR52.8 crore) and a PAT of INR2.1 crore (FY12: INR1.6 crore). Furthermore, as informed by the management, DIPL has achieved total revenue of INR38.8 crore during 7MFY14. FUTURA DOOR: ICRA Lowers Ratings on INR11.5cr Loans to 'D' ---------------------------------------------------------- ICRA has revised the long term rating assigned to INR0.55 crore term loan, INR6.50 crore cash credit and INR4.45 crore long term fund based facilities of Futura Door Products Private Limited from '[ICRA]B' to '[ICRA]D'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term, Fund based 0.55 Revised to [ICRA]D Limits-Term Loan from [ICRA]B Long Term, Fund based 6.50 Revised to [ICRA]D Limits-Cash Credit from [ICRA]B Short Term, Fund based 4.45 Revised to [ICRA]D Unallocated from [ICRA]B The ratings revision takes into account delays in debt servicing by the company. As per the information available with ICRA, the company has been classified as a non-performing asset by the bank. Futura Door Products Private Limited was incorporated in 2007, by Mr. Hemal Bhayani, and Haren Bhayani. The company is engaged in the manufacturing of laminated and PVC door. The company's product range includes single door, double door, door frames, and FRP (Fiberglass Reinforced Polyester) doors. GANJAM NAGAPPA: CRISIL Reaffirms 'B+' Ratings on INR485MM Loans --------------------------------------------------------------- CRISIL has re-affirmed its 'CRISIL B+/Stable' rating to the bank facilities of Ganjam Nagappa and Son Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 425 CRISIL B+/Stable Term Loan 60 CRISIL B+/Stable The rating continues to reflect GNSPL's working capital-intensive nature of operations, exposure to intense competition in the retail jewellery segment and subdued financial risk profile. These rating weaknesses are partially offset by GNSPL's established presence in the Bangalore market and extensive experience of the company's promoters in the jewellery business. Outlook: Stable CRISIL believes that GNSPL will continue to benefit, over the medium term, on the back of the established 'Ganjam' brand and experience of its promoters in the jewellery business. The outlook may be revised to 'Positive' if GNSPL's financial risk profile improves significantly driven by higher-than-expected revenues and profitability, while improving its debt protection metrics and working capital cycle. Conversely, the outlook may be revised to 'Negative' if the company's revenues and margins decline significantly or if it undertakes a large, debt-funded, capital expenditure (capex) programme, thereby weakening its financial risk profile. Update GNSPL's operating performance in 2012-13 (refers to financial year, April 1 to March 31), was in line with CRISIL's expectations, with revenues of INR1.12 billion and operating margins of around 11 per cent. The revenues remained stagnant on a year-over-year basis, declining 3 per cent from INR1.15 billion in 2011-12. GNSPL's flagship store continues to contribute more than 90 percent to overall revenues. For 2013-14, GNSPL's revenues are expected to grow modestly to around INR1.17 - 1.20 billion for the year. The company has already recorded sales of around INR550 million till September 30, 2013. The company's operations remain highly working capital-intensive with gross current assets (GCA) of around 263 days as on March 31, 2013 mainly due to the high inventory requirements, considering the inherent nature of the retail business. GNSPL's financial risk profile continues to remain subdued marked by high gearing and modest debt protection metrics. The company's networth increased to INR218 million as on March 31, 2013 on account of moderate accretion to reserves. However, its gearing continues to remain high at around 2.4 times in 2012-13. The company also plans to relocate its flagship store from Infantry Road to UB City in Bengaluru. The total project cost of around INR225 million is expected to be funded by a term loan of around INR175 million and the remaining from promoters funds. As a result, the company's gearing is expected to remain high over the medium term. Its debt protection metrics are also subdued with net cash accruals to total debt and interest coverage at 7 per cent and 1.64 times, respectively, in 2012-13. The company's liquidity remains stretched marked by high utilisation of bank limits due to working capital intensive operations. GNSPL's available bank facilities of around INR425 million were utilized at an average of around 95 percent over the past 12 months ended September 2013. GNSPL is expected to generate cash accruals of around INR37 to INR40 million as against term debt obligations of INR36 million in 2013-14. The repayment obligations are modest in 2014- 15 and are expected to rise in 2015-16. Incorporated in 1980 by the Bangalore-based Ganjam family, Ganjam Nagappa & Sons Pvt. Ltd. is engaged in manufacturing and retailing of gold jewellery and diamond-studded ornaments. The group is engaged in the retail jewellery business since 1889. The company's flagship store is at Infantry Road, Bangalore; it has three other stores, one each in Bangalore, Delhi, and Mumbai. GNSPL reported a profit after tax (PAT) of INR22.4 million on net sales of INR1.12 billion for 2012-13, as against a PAT of INR35.5 million on net sales of INR1.15 billion for 2011-12. GOVIND AGRO: CRISIL Raises Ratings on INR140MM Loans to 'B+' ------------------------------------------------------------ CRISIL has upgraded its rating on the bank facilities of Govind Agro Foods to 'CRISIL B+/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 123.5 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Term Loan 16.5 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The upgrade reflects the ramp-up in GAF's operations in 2012-13 (refers to financial year, April 1 to March 31); the firm reported increase in revenue to INR562 million in 2012-13 from INR360 million the previous year, while maintaining its operating margin and managing its working capital requirements efficiently. The revenues are expected to be around INR600 million in 2013-14. As a result, the firm's accruals improved and are expected to be sufficient to meet its debt obligations for 2013-14. The upgrade also factors in the support to GAF's liquidity provided by enhancement of its bank line to INR180 million from INR120 million in September 2013 and unsecured loans of INR32 million extended by its promoters in 2013-14. CRISIL's rating reflects GAF's weak financial risk profile marked by small net worth, high gearing, and weak debt protection metrics. The rating also reflects GAF's large working capital requirements, small scale of operations, and susceptibility to changes in government policies and to erratic rainfall. These rating weaknesses are partially offset by the benefits that GAF derives from its promoters' extensive business experience and the healthy growth prospects for the basmati rice industry. For arriving at the rating, CRISIL has treated the unsecured loans of INR62.0 million extended to GAF by its promoters as neither debt nor equity, as the loans are interest-free and have been subordinated to bank debt. Outlook: Stable CRISIL believes that GAF will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm's capital structure improves significantly because of higher accruals or significant equity infusion. Conversely, the outlook may be revised to 'Negative' if GAF's liquidity deteriorates with increase in working capital requirements or larger-than-expected debt-funded capital expenditure. GAF was set up in July 2009 as a partnership firm by Mr. Subhash Chand and his son, Mr. Neeraj Kumar. It processes basmati rice and sells to domestic companies, most of which export to the Middle East. GSS INFOTECH: CRISIL Cuts Ratings on INR567.5MM Loans to 'B+' ------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of GSS Infotech Ltd to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB- /Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 32.5 CRISIL A4 (Downgraded from 'CRISIL A4+') Proposed Long-Term 427.5 CRISIL B+/Stable (Downgraded Bank Loan Facility from 'CRISIL BB-/Stable') Working Capital Term Loan 140.0 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects deterioration in GSSIL's operating performance marked by sharp decline in revenues and profitability margins. CRISIL expects the revenue growth and margins to remain under pressure over the near to medium term. The company's revenues declined to INR2.94 billion (on a consolidated basis) for 2012-13 (refers to financial year, April 1 to March 31) and INR2.91 billion for 2011-12 (for 9-month period ended March 2012) from INR4.85 billion for 2010-11 (refers to accounting year from July 1 to June 30). The company reported revenues of INR1.42 billion in April-September 2013, against INR1.69 billion for April -September 2012. The company's operating margins remained flattish at 2.75 per cent for 2012-13 as compared to 2.71 per cent for 2011-12 and 18.5 per cent for 2010-11. The sharp decline in margins over the past two years was primarily on account of high employee costs coupled with decline in its revenues. The company had ramped up its headcount in anticipation of a business growth; however, the revenue growth was much below expectations, thereby impacting the company's operating margin. GSSIL reported net losses of INR59.4 million in 2012-13 and INR509.8 million in 2011-12 (9-month period ending March 2012). The profitability was impacted in 2011-12 due to abnormal amortisation of software of INR482 million. The operating margin for first half of 2013-14 are around 10% and are expected to remain at similar level for the entire year. GSSIL's financial risk profile also deteriorated marked by weakening of its capital structure and debt protection indicators. Despite equity infusion INR57.4 million in 2012-13, the company's adjusted networth1 declined to INR271.5 million as on March 31, 2013 from INR340.9 million as on March 31, 2012, primarily on account of net losses and increase in intangible assets (of INR210 million) in 2012-13. With increase in debt levels, the adjusted gearing deteriorated to around 0.9 times as on March 31st, 2013 from 0.85 times as on March 31st, 2012. The gearing is expected to remain at similar levels over the medium term. On account of low profitability, the debt protection measures also weakened with interest coverage ratio of 1.77 times for 2012-13 from 3.52 times for 2011-12. The company restructured in June 2013 its cash credit facility into a working capital term loan of INR140 million, which is repayable over the next 5 years. The company's cash accruals are expected to be sufficient to meet these maturing obligations of INR18 million in 2013-14 and INR27.5 million in 2014-15. The company's current ratio also declined to 0.92 times as on March 31, 2013, from 1.23 times as on March 31, 2012. The ratings continue to reflect the intense competition in the company's key operating segments leading to a churn in its client base, thereby negatively impacting the company's revenue profile and profitability. The rating weakness is partially offset by service offerings across multiple verticals coupled with extensive experience of founder-promoters in information technology (IT) sector and positive long-term fundamentals of IT outsourcing industry. For arriving at GSSIL's ratings, CRISIL has considered the consolidated financials of GSSIL along with its subsidiaries - GSS Infotech Inc (USA) and GSS IT Solutions Private Ltd (India), and its step-down subsidiaries in USA - System Dynamix Corporation, ATEC Group, GCI Systems, Veloce Group, Infovista Technologies, Technovant Inc and Infovision Technologies Inc. Outlook: Stable CRISIL believes that the GSSIL will continue to benefit over the medium term from its established track record and relationships with customers. The outlook may be revised to 'Positive' if the GSSIL is able to demonstrate a significant and sustainable organic growth in its revenue which substantially improving its profitability margins and maintaining its capital structure. Conversely, the outlook may be revised to 'Negative' if the company faces continued pressures on revenue and profit margins, or if it undertakes larger-than-expected debt-funded capital expenditure or acquisition programmes, thereby weakening its capital structure. GSSIL, was established in 1999, is a CMMI Level 5 company and a provider of information technology and IT enabled solutions and services to companies worldwide. The company was formerly known as GSS America Infotech Limited and changed its name to GSS Infotech Limited in March 2011. GSSIL has four development centers in New York, Illinois, Connecticut, and Hyderabad and seven business centers in New York, Illinois, Connecticut, Dubai, Hyderabad, Singapore and Minneapolis. The company has software solutions design/development centres and marketing offices in Chicago U.S.A. and Global Delivery Centres in Hyderabad, India. GSSIL reported a net loss of INR59.4 million on net sales of INR2.94 billion for 2012-13 (refers to financial year, April 1 to March 31), as against a net loss of INR509.8 million on net sales of INR2.91 billion for 2011-12. GURU-G TEX: CRISIL Lowers Rating on INR199.9MM Loan to 'D' ---------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facility of Guru-G Tex Print Pvt Ltd to 'CRISIL D' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 199.9 CRISIL D (Downgraded from 'CRISIL B+/Stable') The rating downgrade reflects Guru-G's continuously overdrawn cash credit limits, and instances of delays in payment of interest on its bank facilities. The overdrawn limits and delays have resulted from the company's weak liquidity. Guru-G also has working-capital-intensive operations and a low operating margin leading to weak debt protection metrics. However, the company benefits from the promoters' extensive experience in the textile industry. Guru-G was incorporated in 2009. The company trades yarn and fabric. Guru-G also undertakes job work by undertaking embroidery work on sarees and fabric. H.R. RICE: CRISIL Cuts Ratings on INR350MM Loans to 'D' ------------------------------------------------------- CRISIL has downgraded its ratings on the long term bank loan facilities of H.R. Rice Industries Pvt Ltd to 'CRISIL D' from 'CRISIL B-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 340 CRISIL D (Downgraded from 'CRISIL B-/Stable') Term Loan 6 CRISIL D (Downgraded from 'CRISIL B-/Stable') Proposed Long-Term Bank Facility 4 CRISIL D (Downgraded from 'CRISIL B-/Stable') The rating downgrade reflects instances of delay by HRRIPL in servicing its term debt obligations owing to weak liquidity driven by low profitability and working capital intensive nature of its operations. Furthermore, the ratings indicate HRRIPL's weak financial risk profile marked by small net worth and high gearing, and the company's small scale of operations in the intensely competitive rice milling industry. These rating weaknesses are partially offset by its promoters' extensive experience in the rice processing industry. Update HRRIPL's operations are expected to remain small over the medium term; its financial risk profile, especially liquidity, is also expected to be constrained over the medium term. The company is likely to report an operating income of INR1.78 billion to INR1.82 billion in 2013-14 (refers to financial year, April 1 to March 31) as against operating income of INR1.77 billion in 2012-13. The company had operating income of INR825.8 million for the six months ended September 30, 2013. The scale of operations of HRRIPL is expected to remain small on account of intense competition in the rice milling industry. The company had an operating margin of 2.6 per cent in 2012-13, in-line with the past trends. The margins are expected to stay around similar level over the medium term on account of limited value added nature of its operations in the intensely competitive rice milling industry. The company's financial risk profile continues to remain weak marked by a small net worth of INR25 million, high gearing of 13.93 times as on March 31, 2013, and weak interest coverage and net cash accruals to total debt ratios of 1.14 times and 1.47 per cent, respectively, for 2012-13. CRISIL believes that HRRIPL's financial risk profile will remain weak over the medium term due to large working capital requirements on account of seasonal availability of the paddy crop and low profitability in the paddy milling business. HRRIPL reported a profit after tax (PAT) of INR2.7 million on net sales of INR1.77 billion for 2012-13 against a loss of INR2.3 million on net sales of INR1.50 billion for 2011-12. HRRIPL, initially established as a proprietorship concern in 1987 by Mr. Sudarshan Verma, was reconstituted as a private limited company in 2011. It is engaged in the milling and trading of non- basmati rice. HAJI ALIMOHAMED: ICRA Reaffirms B+ Rating on INR12r Loan -------------------------------------------------------- ICRA has reaffirmed the '[ICRA]B+' rating to the INR12.00 crore (enhanced form INR8.00 crore) working capital facility of Haji Alimohamed Moosa & Co. ICRA has also reaffirmed an '[ICRA]A4' rating to INR0.50 crore (enhanced from INR0.20 crore) short-term forward contract limit of HAMC. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Working Capital 12.00 [ICRA]B+ reaffirmed (CC/EPC/PSCFC/PCFC/FBD/FBP) Forward Contract limit 0.50 [ICRA]A4 reaffirmed * CC- Cash Credit, EPC- Export Packing Credit, PSCFC-Post- shipment Credit in Foreign Currency, FBD- Foreign Bill Discounting, FBP-Foreign Bill Purchase The ratings continue to be constrained by Haji Alimohammed Moosa & Co's modest scale of operation and weak financial position as is evident in the low profitability, highly leveraged capital structure and weak debt protection indicators. ICRA also takes note of the highly competitive and fragmented cotton ginning industry with limited value addition and the susceptibility of the profitability to adverse movements in raw material prices which in turn is linked to the seasonal nature of the cotton industry and government regulations on MSP and exports. Also, being a partnership firm, any substantial withdrawal by the partners can have an adverse impact on the capital structure of the firm. The ratings, however, continue to factor in the long standing experience of the promoters in the cotton industry, established track record of the firm and favorable location, giving it easy access to high quality raw cotton. The ratings also consider the forward integration in crushing facilities for castor seeds and cottonseeds resulting in limited diversification and additional revenue as well as a positive demand outlook for edible oil in India. Haji Alimohamed Moosa & Co. was initially established as a sole proprietor concern which later in October 2004, converted into a partnership firm with three partners, Mr. Adambhai A. Halai and his two sons Mr. Aslam Halai and Mr. Noormohamed Halai. The firm is engaged in cotton ginning and pressing and the crushing of cottonseeds and castor seeds with 25 double roller ginning machines and 5 expellers located at Kodinar, Gujarat. The firm has the capacity to produce 8000 MT of cotton bales, 4500 MT of cottonseeds oil and 6000 MT castor seeds oil. Recent Results For the year ended 31st March, 2013, the firm reported an operating income of INR78.79 crore with profit after tax (PAT) of INR0.58 crore. HEALTHAID FOODS: CRISIL Cuts Ratings on INR295MM Loans to 'D' ------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Healthaid Foods Specialist Pvt Ltd to 'CRISIL D' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 235 CRISIL D (Downgraded from 'CRISIL B+/Stable') Rupee Term Loan 60 CRISIL D (Downgraded from 'CRISIL B+/Stable') The downgrade reflects delays by HFSPL in servicing its term debt; and irregularities in its cash credit facility for more than 30 days. HFSPL's delays in meeting its debt obligations have been caused by liquidity crunch. HFSPL has a weak financial risk profile, marked by a small net worth, weak debt protection metrics, and high gearing. The company has a low operating margin, because of its presence in a low- value-added segment; average scale of operations; susceptibility to regulatory changes; and customer concentration in its revenue profile. These rating weaknesses are partially offset by the industry experience of HFSPL's promoters along with established customer and supplier relations. HFSPL was incorporated in 1984 and manufactures milk products such as ghee, skimmed milk powder (SMP), whole milk powder (WMP) and dairy whitener. HFSPL derives most of its revenue from Punjab and the remainder from the Northern Capital Region (NCR), Jodhpur and South India. HFSPL's profit after tax (PAT) and net sales were INR22 million and INR1210 million, respectively, for 2011-12 (refers to financial year, April 1 to March 31). The company reported a PAT of INR4 million on net sales of around INR751 million for 2010-11. HINDVA BUILDERS: ICRA Assigns 'B+' Rating to INR14cr Loan --------------------------------------------------------- The rating of '[ICRA]B+' has been assigned to the INR14.00 crore fund based working capital of Hindva Builders. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based working 14.00 [ICRA]B+ assigned capital The assigned rating is constrained by the residual execution risks related to the ongoing real estate projects as well as the significant market & funding risks associated with them, given the weak booking status and low customer advances received in comparisons to construction work executed for most of the ongoing projects. The ratings are further constrained by the intense competitive pressures in the real estate market of Ahmedabad and Surat area and the geographical concentration risk arising from all the firm's projects being located in Ahmedabad and Surat areas. ICRA further notes that the firm remains exposed to demand cyclicality in the real estate business as well as input commodity price risks. The assigned rating also factors in the risk associated with the partnership nature of the firm, any substantial withdrawals from capital account would impact the net worth and thereby the capital structure. The rating however favorably factors in the longstanding experience of the promoter group in real estate development through various projects executed in the group entities and favourable location of the ongoing projects being in proximity of schools, parks, temples and malls. Hindva Builders was incorporated as a partnership firm in December 2009 by the Patel and Kheni families of Surat, Gujarat. It is engaged in construction and development of Real Estate projects. The firm is based in Ahmedabad, Gujarat and is currently focussing on execution of residential and commercial projects in Ahmedabad and Surat. The firm is further diversifying its operations in the Mumbai Real Estate market with its redevelopment projects located at Santacruz and Parel. The firm is currently constructing and developing four projects in Ahmedabad and one project in Surat. JAGRUTHI EDUCATIONAL: CRISIL Reaffirms D Ratings on INR80MM Loans ----------------------------------------------------------------- CRISIL rating on the long-term bank facilities of Jagruthi Educational & Welfare Society continues to reflect instances of delay by JEWS in servicing its debt; the delays have been caused by JEWS's weak liquidity. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Rupee Term Loan 75.0 CRISIL D (Reaffirmed) Proposed Long-Term Bank Loan Facility 5.0 CRISIL D (Reaffirmed) JEWS has an average financial risk profile marked by small net worth, moderate gearing, and below-average debt protection metrics. Also, the society faces intense competition from other educational institutions in Hyderabad (Andhra Pradesh). However, the society benefits from its management's extensive experience in the education sector. JEWS was registered in 1997 under the Societies Registration Act, 1860, and started operations in 2008; it offers graduate and postgraduate courses in engineering and management. Dr. Srinivas Reddy is the president and Dr. Venkateshwara Rao is the general secretary of the society. JAIN IRRIGATION: CRISIL Reaffirms 'B+' Ratings on INR8.04BB Loans ----------------------------------------------------------------- CRISIL's has reaffirmed its ratings on the bank facilities of Jain Irrigation Systems Ltd. The reaffirmation is based solely on publicly available information, as Jain Irrigation has not cooperated with CRISIL in its surveillance process. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5,079.7 CRISIL B+/Stable Letter of credit & Bank Guarantee 3,487.5 CRISIL A4 Term Loan 2,961.5 CRISIL B+/Stable CRISIL's ratings continue to reflect Jain Irrigation's below- average financial risk profile, moderately stretched liquidity, and working-capital-intensive operations, due to high receivables. The ratings also factor in the susceptibility of Jain Irrigation's micro irrigation system (MIS; drip and sprinkler systems) business to any adverse impact of regulatory changes, and the vulnerability of the company's operating profitability to volatile raw material prices and foreign exchange (forex) movements. These rating weaknesses are partly offset by Jain Irrigation's diversified revenue profile, strong market position in its key businesses supported by its large distribution network, and the healthy medium-term prospects for the MIS segment in India. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Jain Irrigation and its subsidiaries. Outlook: Stable CRISIL believes that Jain Irrigation's financial risk profile will remain moderately stressed in the near term, because of weak liquidity (at present, the company's working capital limits are almost entirely utilised), and outstanding receivables from various state governments towards subsidy payments for its MIS business. The outlook may be revised to 'Positive' if the company's capital structure and liquidity improve, driven by larger-than-expected cash flows and a sustained reduction in the MIS division's receivables. Conversely, the outlook may be revised to 'Negative' if Jain Irrigation's liquidity and gearing weaken due to an increase in its working capital borrowings, large debt- funded capital expenditure programmes or acquisitions, or a sharp deterioration in its operating profitability. Jain Irrigation was established in 1986 by Mr. B H Jain. The company started operations by trading agricultural inputs and equipment. In 1980, Jain Irrigation began manufacturing polyvinyl chloride (PVC) pipes, and commenced MIS operations in 1987. Currently, Jain Irrigation operates in four diverse, but integrated, segments of the agriculture supply chain-MIS, PVC pipes and polyethylene pipes, PVC and polycarbonate sheets, and food processing. On July 6, 2012, Jain Irrigation obtained the regulatory approval from the Reserve Bank to India to launch its non-deposit taking non-banking financial company (NBFC), Sustainable Agro-commercial Finance Ltd (SAFL). SAFL has commenced operations in Maharashtra and has around 22 branches. For 2012-13 (refers to the financial year, April 1 to March 31), Jain Irrigation, on consolidated basis, reported a net profit of INR30.8 million on net sales of INR49.2 billion, compared with a net profit of INR2.2 billion on net sales of INR48.5 billion in 2011-12. For the six month period from April 1, 2013, to September 30, 2013, Jain Irrigation, on consolidated basis, reported a net loss of INR1.4 billion on net sales of INR25.9 billion, vis-�-vis a net loss of INR40.2 million on net sales of INR22.3 billion during the corresponding period of the previous year. KARPASA EXPORT: ICRA Reaffirms 'B' Rating on INR9.5cr Loan ---------------------------------------------------------- ICRA has reaffirmed the '[ICRA]B' rating to the INR9.50 crore (enhanced from INR6.50 crore) working capital facility and INR1.42 crore standby line of credit of Karpasa Export Private Limited. ICRA has also reaffirmed a short term rating of '[ICRA]A4' to INR0.80 crore credit exposure limit, INR4.50 crore Letter of credit facility (sublimit within working capital limits) and INR2.50 crore Bank Guarantee facility ( sublimit within working capital limits) of KEPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Working Capital 9.50 [ICRA]B reaffirmed (EPC/PCFC/CC/FBP/FBD) SLC 1.42 [ICRA]B assigned Credit Exposure Limit 0.80 [ICRA]A4 reaffirmed Letter of Credit/Buyers Credit (4.50) [ICRA]A4 reaffirmed Bank Guarantee (2.50) [ICRA]A4 reaffirmed * EPC- Export Packing Credit, PCFC-Post-shipment Credit in Foreign Currency, CC- Cash Credit, FBP- Foreign Bill Purchase, FBD- Foreign Bill Discounting The ratings continue to be constrained by Karpasa Export Private Limited's (KEPL) modest scale of operations, weak financial risk profile characterized by thin profitability following trading nature of business, leveraged capital structure and weak coverage indicators. The ratings also take into account the vulnerability of operations to regulatory changes on the export of commodities as well as partial/complete withdrawal of various export incentives. Further, the ratings also factor in the high competitive intensity of the trading business resulting from low entry barriers as well as the dependence of operations on the seasonality of various agro products as well as the crop harvest. The ratings however favourably consider the growth in operating income supported by the addition of other products in the profile, favorable location of the company in Gujarat which results in easy availability for most of the agro products traded by the company and stable demand prospects for various agro products like cotton, sesame seeds etc. Karpasa Export Pvt Ltd. was incorporated in t2007 by Mr. Nikhil Tilaka and Mr. Prashant Tilaka. It is currently engaged in the trading of agro commodities. KEPL has extended its product profile by entering into the trading of commodities like water purifiers, copper rods, etc. KEPL in FY 2012 was appointed the authorized distributor for CNG Kit, an Italy based manufacturer named Landirenzo. Besides, the company's business profile also includes conversion of raw products namely seasame seeds, groundnuts etc. into final products on a job work basis which are finally sold in the market. The company is located in Rajkot, Gujarat. Recent Results For the year ended March 31, 2013, the company reported an operating income of INR57.10 crore with profit after tax (PAT) of INR0.09 crore. M M POLYMERS: CARE Rates INR4.93cr LT Bank Loans at 'B+' -------------------------------------------------------- CARE assigns 'CARE B+' ratings to the bank facilities of M M Polymers Pvt Ltd. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 4.93 CARE B+ Assigned Facilities Rating Rationale The rating assigned to the bank facilities of M M Polymers Pvt Ltd are primarily constrained by its short track record coupled with small scale of operations and low net-worth base, leveraged capital structure, susceptibility of its profit margins to volatility in raw material prices, high bargaining power of the suppliers and its working capital intensive nature of the business. The rating, however, favourably takes into account the experience of the promoters in the plastic industry and satisfactory capacity utilization of pet preforms. The ability of the company to grow its operations and improves its profitability along with effective management of the working capital will remain the key rating sensitivities. M M Polymers Pvt Ltd was incorporated in May, 2009 by Mr Rajesh Kumar Thourani and Mr Anil Kumar Thourani of Raipur, Chhattisgarh. The company is engaged in manufacturing pet preforms with an installed capacity of 1,920 Metric Tonnes per Annum (MTPA) at its manufacturing facility located at Raipur, Chhattisgarh. The company commenced commercial production in February, 2010. The product of the company is used in the packaging industry. The company manufactures pet preform in different colours, shapes and sizes. The raw material used in the manufacturing of pet perform is plastic granules, which is procured domestically. In FY12 (refers to the period April 1 to March 31), MPL reported a PBILDT of INR0.85 crore and a PAT of INR0.09 crore on a total operating income of INR9.38 crore. Furthermore, in FY13 (provisional), MPL reported a total operating income of INR13.25 crore and PAT of INR0.11 crore. MAA MAHAMAYA: ICRA Reaffirms 'B+' Ratings on INR7cr Loans --------------------------------------------------------- ICRA has reaffirmed the '[ICRA]B+' rating assigned to the INR7.00 crore fund-based bank facilities of Maa Mahamaya Steels Pvt. Ltd. ICRA has also reaffirmed the '[ICRA]A4' rating assigned to the INR1.00 crore non-fund based bank facilities of MMSPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 2.05 [ICRA]B+; reaffirmed Fund-Based Limits (Cash Credit) 4.95 [ICRA]B+; reaffirmed Non-Fund Based Limits 1.00 [ICRA]A4; reaffirmed Rating Rationale The ratings take into consideration the long track record of the MMSPL's promoters in steel manufacturing and the growth in the turnover of the company during 2012-13. However, the ratings are constrained by the nominal profits and cash accruals earned by the company, the ongoing weakness and the cyclicality associated with the steel industry, which is likely to keep MMSPL's profitability and cash flows volatile in future. The weak profitability also impacts the company's coverage indicators adversely, which continue to remain at depressed levels. The ratings also factor in MMSPL's moderately high gearing, although it continues to witness an improving trend. MMSPL was incorporated in 2004 by the Bilaspur, Chattisgarh based Mr. Anil K. Shivdasani and family. The company is involved in manufacturing of TMT bars. The manufacturing plant of the company, which has a steel rolling mill with an annual production capacity of 16,000 metric tonne (MT), is located at Industrial Area Sirgitti, Bilaspur, Chattisgarh. The TMT bars produced by the company are sold under the brand name, 'Mahashakti'. Recent Results In 2012-13, as per the audited financial statements, MMSPL reported an operating income of INR52.02 crore and a net profit of INR0.27 crore as compared to an operating income of INR40.83 crore and a net profit of INR0.14 crore in 2011-12. MANJEERA RETAIL: ICRA Assigns 'B' Ratings to INR314cr Loans ----------------------------------------------------------- ICRA has assigned an '[ICRA]B' rating to INR290.00 crore term loans and INR24.00 crore bank guarantee facility of Manjeera Retail Holdings Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term loans 290.00 [ICRA]B Assigned Bank Guarantee 24.00 [ICRA]B Assigned The rating is constrained by the high market risk for Manjeera Trinity Corporate (MTC) with around 94% of the project yet to be sold; in addition around 35% of Manjeera Majestic Commercial (MMC) is yet to be sold. A combined space of 1.01 million sft of commercial and retail space is yet to be sold from both these projects. One of the rated term loans being an LRD loan, MRHPL is reliant on timely remittance of rentals from retailers to ensure adherence to its debt repayment schedule; however advance collection of rentals at the beginning of the month could partly mitigate the risk. ICRA notes that given that the current project location is predominantly residential and MTC and MMC being the first large commercial projects in Kukatpally area. The ability of the company to attract corporate bodies remains to be seen. Also, the pricing is at par with other well developed commercial areas like Gachibowli which could act as a deterrent for prospective buyers. Further, the rating is constrained by MRHPL's irregular debt servicing track record in the past. The initial project loans were completely repaid albeit with delays by end of June, 2013. The rating however draws comfort from the low funding risk as the debt has been tied up for the sole project under construction- MTC and the promoters have brought in the required equity; the demonstrated project management capability of the promoters (by successful completion of MMC and MTM- 0.78 million sft combined). Further the rating is supported by the attractive location of the mall property, strong brand mix of the lessees and the limited revenue volatility in lease rentals given that low proportion (~2%) of total leasable area is leased on pure revenue sharing basis. Going forward, the timely completion of the MTC project as per revised schedule, improved pace of bookings coupled with timely cash collections would aid the cash flow situation of the company. In addition, healthy occupancy rates for MTM coupled with timely payment of rentals by the lessees will remain key rating sensitivities. Manjeera Retail Holdings Private Limited is a special purpose vehicle created in 2007 for the development of 2.075 million sft mixed use real estate development at Kukatpally, Hyderabad. Manjeera Majestic Homes (residential) - 0.35 million sft; Manjeera Majestic Commercial (retail cum office) - 0.33 million sft; Manjeera Trinity Mall (cum multiplex) - 0.45 million sft and Manjeera Trinity Corporate (office) - 0.95 million sft under JDA with APHB (Andhra Pradesh Housing Board) with a revenue sharing agreement (5%). The entire development is spread across 8.295 acres. MJR BUILDERS: CRISIL Reaffirms 'B+' Rating on INR200MM Loan ----------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B+/Stable' rating to the long- term bank facility of MJR Builders Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 200 CRISIL B+/Stable The rating continues to reflect MJRBPL's exposure to implementation-related risks associated with its ongoing real estate projects and susceptibility of its revenues and earnings to cyclicality inherent in real estate industry. These rating strengths are partially offset by the extensive experience of MJRBPL's promoters in the real estate industry. Outlook: Stable CRISIL believes that MJRBPL will maintain its business risk profile over the medium term, supported by its promoters' established track record in the real estate sector. The outlook may be revised to 'Positive' if MJRBPL generates more-than- expected cash flows from operations, driven most likely by accelerated execution of its projects and increased customer advances. Conversely, the outlook may be revised to 'Negative' if the company's financial risk profile deteriorates, caused most likely by substantially less-than-expected cash flows from operations because of subdued response to the project or less- than-expected customer advances. MJRBPL was established in February 2011 by Mr. S Jayram Reddy and Mr. Madhusudhan Talamarla. Mr. S Jayram Reddy has been in the business of infrastructure real estate development for close to three decades through his family-run SJR group. The SJR group has built around 5 million square feet of saleable commercial, residential and retail real estate properties. MJRBPL is currently developing two projects in Bengaluru, a residential-cum-commercial property, MJR Platina, and a fully residential property, MJR Pearl. MOHAMMED KHAN: CRISIL Ups Rating on INR200MM Loan to 'B+' --------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Mohammed Khan Jewellers Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL B-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 200.0 CRISIL B+/Stable (Upgraded from 'CRISIL B-/Stable') The rating upgrade reflects sustainable improvement in MKJPL's financial risk profile, particularly its liquidity, due to extension of unsecured loans of INR15.5 million by its promoters in 2012-13 (refers to financial year, April 1 to March 31) and CRISIL's belief that these will be converted to equity in the near term. The upgrade also reflects CRISIL's belief that the management will remain averse to any long-term debt, which will ensure no major deterioration in the company's capital structure and liquidity over the medium term. The rating reflects MKJPL's below-average financial risk profile, marked by high gearing and moderate debt protection metrics, and its exposure to intense competition in the jewellery industry. These rating weaknesses are partially offset by the experience of the company's promoters in the gems and jewellery business, and its established brand in Hyderabad (Andhra Pradesh). Outlook: Stable CRISIL believes that MKJPL's financial risk profile will remain constrained over the medium term due to its working-capital- intensive operations. The outlook may be revised to 'Positive' if the company generates higher-than-expected accruals and tightens its working capital cycle, or if its promoters infuse significant equity, leading to improvement in its liquidity and capital structure. Conversely, the outlook may be revised to 'Negative' if MKJPL's sales and profitability decline or it undertakes a large debt-funded capital expenditure programme, leading to weakening of its financial risk profile. MKJPL was originally set up in 1991 as a partnership firm, Mohammed Khan Jewellers, by Mr. Niyamathulla Khan and his family; the firm was reconstituted as a private limited company in 2005. MKJPL undertakes manufacturing and retail trading of gold and diamond jewellery. For 2012-13 (refers to financial year, April 1 to March 31), MKJPL reported a profit after tax (PAT) of INR18.1 million on net sales of INR567.6 million, against a PAT of INR15.8 million on net sales of INR619.2 million for 2011-12. N.C. INFRASTRUCTURE: CRISIL Cuts Rating on INR162.5MM Loan to 'D' ----------------------------------------------------------------- CRISIL has downgraded its rating on the bank facility of N.C. Infrastructure to 'CRISIL D' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 162.5 CRISIL D (Downgraded from 'CRISIL B/Stable') The rating downgrade reflects instances of delay by NCI in servicing its debt due to stretched liquidity, resulting from a delay in the execution of its ongoing real-estate projects due to labour issues. The rating also reflects NCI's exposure to project risks, and to risks related to cyclical demand in the Indian real estate sector. These rating weaknesses are partially offset by the promoters' extensive experience in the real estate sector, and the firm's established market position in Mehsana (Gujarat). NCI was set up as a partnership firm in 2009, by Mr. Nareshkumar Rammanlal Patel, his family members, and business associates. The firm is currently constructing a residential complex named Aarush Icon, and bungalows named Aarush Green Ville 2. OB INFRASTRUCTURE: CRISIL Ups Ratings on INR4.38BB Loans to 'B-' ---------------------------------------------------------------- CRISIL has upgraded its rating on the term loan facilities of OB Infrastructure Ltd to 'CRISIL B- (SO)/Stable' from 'CRISIL D'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long-Term 944.4 CRISIL B-(SO)/Stable (Upgraded Bank Loan Facility from 'CRISIL D') Rupee Term Loan 3,441.8 CRISIL B-(SO)/ Stable (Upgraded from 'CRISIL D') The rating upgrade reflects timely servicing of debt by OBIL since June 2013. The company has adequate liquidity to meet its expenses and service debt for the next few months. OBIL has weak debt service coverage ratios, and is exposed to operational and maintenance risks related to its ongoing project. However, the company benefits from the strong credit quality of its sole counterparty, National Highways Authority of India (NHAI; rated 'CRISIL AAA/Stable'), and the annuity nature of its build- operate-transfer (BOT) project. OBIL has an escrow mechanism, which ensures that all revenue receipts are deposited in an escrow account and payments are made as per the defined payment waterfall. Outlook: Stable CRISIL believes that OBIL's debt service coverage ratio will remain weak in the near term, on account of low cash reserves and unexpected major maintenance expenses. The outlook may be revised to 'Positive' in case of significant improvement in the debt service coverage ratio through reduction in interest rate or increase in tenure of debt. Conversely, the outlook may be revised to 'Negative' in case of deterioration in the debt service coverage ratio due to higher maintenance cost or delay in receipt of annuity. OBIL is a special-purpose vehicle (SPV) promoted by NCC Ltd (NCC; rated 'CRISIL BBB/Negative/CRISIL A3+') and KMC Constructions, which hold stakes of 64 per cent and 36 per cent, respectively. OBIL was incorporated in 2006 to undertake a road project on the Orai-Bhognipur stretch of National Highway (NH)-25, and the Bhognipur-Barah stretch of NH-2 in UP. The project involves strengthening and widening of 62.8 km of the existing two-lane carriageway into a four-lane dual-carriageway, at a total cost of INR5.85 billion. This stretch forms a part of NHAI's east-west corridor project, and is located between Kanpur and Jhansi. OBIL received its provisional certificate of completion from its independent consultant Wilbur Smith Associates Pvt Ltd as on July 11, 2011, effective from June 30, 2009. OBIL signed a concession agreement with NHAI in April 2006 for a period of 17.5 years, undertaking the construction, operation, and maintenance of the above-mentioned project on an annuity basis. NHAI has agreed to pay an annuity of INR448.2 million on a semi- annual basis for 15 years. As per the escrow structure, the annuity from NHAI and all other revenue receipts pertaining to the project will be deposited in the escrow account. The receipts will be used towards (in order of priority) payment of taxes; engineering, procurement, and construction (EPC) and operational and maintenance expenses; monthly proportionate provision for debt service payments and payment of debt service charges when due; reimbursement of expenditure incurred by NHAI; and remuneration cost and expenses of independent consultants. OM LAMCOAT: ICRA Assigns 'B' Ratings to INR8.75cr Loans ------------------------------------------------------- ICRA has assigned the long term rating of '[ICRA]B' to the INR4.75 crore term loans and INR4.00 crore cash credit facility of Om Lamcoat Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit facility 4.00 [ICRA]B assigned Term Loan 4.75 [ICRA]B assigned The rating assigned is constrained by lack of track record of operations as the company is still in the project phase; and the sensitivity of project metrics and future cash flows to the establishment of the company's products, their acceptability and commercial success. Further, the high reliance on debt for project funding exposes the company to possible stress on debt servicing capability in case of slower than expected ramp up of cash flows. The rating is also constrained by the high competitive intensity in the laminates business which limits pricing flexibility and profitability; the company's relatively modest envisaged scale of operations; and vulnerability of profitability to adverse fluctuations in the prices of the key raw material. The rating, however, favourably considers the experience of OLPL's promoters and their long association with related business; and the favourable long term demand outlook for decorative laminates due to the large proposed scale of real estate development and rising urbanization in the country. Incorporated in March 2013, Om Lamcoat Private Limited is setting up a plant to manufacture decorative laminates sheets of 0.8 mm and 1.0 mm thickness, which are primarily used in the furniture for surface decoration. The proposed unit is located at Morbi, (Dist Rajkot) in Gujarat. The proposed project entails the installation of fully automated plant and machinery with a production capacity of 1,200,000 sheets (0.8 mm) per annum. The project is promoted by Mr. Bhavesh Parsania, Mr. Suresh Vadhadiya, Mr. Prakash Kavar and other share holders who have more than a decade of experience in the industry by virtue of their association with other group entity Om Laminates & Plywood, engaged in trading of laminates and other plywood items since 2003. POLYLACE INDIA: CARE Assigns 'B+' Rating to INR1cr LT Bank Loan --------------------------------------------------------------- CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank facilities of Polylace India Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 1 CARE B+ Assigned Facilities Long-term/Short- 32 CARE B+/A4 Assigned term Bank Facilities Rating Rationale The ratings assigned to the bank facilities of Polylace India Private Limited are primarily constrained by the stabilization risk associated with its debt-funded project, weak financial risk profile marked by small scale of operations, declining PBILDT margins with low PAT margins and high debt-equity ratio. The ratings, however, favorably take into account the experienced and resourceful promoters and moderate operating cycle. Going forward, streamlining of the production process of the newly set up manufacturing activities, ability to scale up its operations with improvement in profitability margins and capital structure shall be the key rating sensitivities. PIP was initially incorporated as a proprietorship firm by Mr Rajinder Sharma and Mr Rajeev Kalra. The firm was later converted into a private limited company in January 1993. The company is engaged in the manufacturing of zip fasteners, commonly known as zippers. PIP manufactures a wide range of zippers which find its usage in different industries like garments, automobiles seat covers, shoes, etc. PIP has a manufacturing facility located in Wazirpur (New Delhi) having six different units with an installed capacity of 1,800,000 kg per annum as on March 31, 2013. The company sells its products all over India through an established network of 50 wholesale distributors under the brand name 'TONI' all over India. The main raw materials used for manufacturing zippers are monofilament yarn, polyester yarn, aluminum wire and brass wire, which are mainly procured domestically (around 95% of the total raw material purchased) from Gujarat. The company also uses imported raw material from Taiwan and China (around 5% of the total raw material purchased is imported during the last two years). PIP reported a PAT of INR0.12 crore on a total income of INR23.61 crore in FY13 (refers to the period April 01 to March 31) as against a PAT of INR0.20 crore on a total income of INR23.19 crore in FY12. PIP has achieved a total operating income of INR15 crore till Sept. 30, 2013. PRAMUKH ALLOYS: ICRA Assigns 'B-' Ratings to INR7.30cr Loans ------------------------------------------------------------ The rating of '[ICRA]B-' has been assigned to the INR7.30 crore long term fund based facilities of Pramukh Alloys Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 3.50 [ICRA]B- assigned Term Loan 3.80 [ICRA]B- assigned The assigned rating is constrained by limited track record of the company's operations in the steel re-rolling mill business and small envisaged scale of operations in steel re-rolling business activity which is highly fragmented resulting from low entry barriers due to low complexity of work involved. The rating also takes into account vulnerability of company's profitability to raw material price fluctuations with limited flexibility to fully pass on the same to its customers. Given the low margins in the business & stiff competitive pressures, the company's ability to scale up the volumes also remains crucial from credit perspective. The rating, however, favourably takes into account the long experience of the promoters in real estate and construction industry which is the key target segment for the company's products. ICRA also takes into account the timely project execution with no cost and time overruns. Incorporated in March 2012, Pramukh Alloys Private Limited (PAPL) is engaged in manufacturing of MS angles and MS channels from metal scrap. The manufacturing facility is located at Vijapur district of Gujarat, with an annual installed capacity of 10,000 MTPA (Metric Tonnes Per Annum). The company commissioned commercial operations at the newly set up plant from 15th April 2013 onwards. The promoters of the company Mr Mukesh Chaudhary and Mr. Kanu Chaudhary have been associated with the commercial and residential housing construction for over a decade, and at present the promoters are executing three residential and commercial projects at Gandhinagar, Gujarat through other group concerns. QUINTEGRA SOLUTIONS: ICRA Suspends 'D' Rating on INR113.05cr Loan ----------------------------------------------------------------- ICRA has withdrawn the suspended rating of '[ICRA]D' assigned to the INR113.05 crore bank lines of Quintegra Solutions Limited. As per ICRA's policy on withdrawals, ICRA can withdraw the rating in case the rating remains suspended for more than three years. RAJ INTERNATIONAL: CRISIL Cuts Ratings on INR749.9MM Loans to 'D' ----------------------------------------------------------------- CRISIL has downgraded its rating on the bank facilities of Raj International Ltd to 'CRISIL D/CRISIL D' from 'CRISIL B+/Negative/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 180 CRISIL D (Downgraded from 'CRISIL B+/Negative') Foreign Bill Discounting 520 CRISIL D (Downgraded from 'CRISIL A4') Term Loan 49.9 CRISIL D (Downgraded from 'CRISIL B+/Negative') The rating downgrade reflects Raj International's continuously overdrawn cash credit limits, and instances of delay by the company in meeting its debt obligations on its bank facilities. The overdrawn limits and delays have resulted from the company's weak liquidity. Raj International also has working-capital-intensive operations; and geographic and customer concentration in its revenue profile. However, the company benefits from the promoters' extensive experience in the trading business. Raj International was established as a partnership firm named Raj Synthetics in 1992. The firm was reconstituted as a private limited company in 1996. Raj International has various business divisions including textile trading, diamond trading, gold jewellery manufacturing, and wind power generation. In 2007, the company was reconstituted as a closely held public limited company and was subsequently renamed. RC GOYAL: CRISIL Upgrades Rating on INR100MM Loan to 'B+' --------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of RC Goyal Dall Udyog Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 100 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The rating upgrade reflects GDU's improving business risk profile, marked by an increasing scale of operations with sustained profitability. The upgrade also factors in the company's improved financial risk profile, marked by lower gearing on account of equity infusion by promoters, and moderate debt protection metrics. The rating continues to reflect GDU's average scale of operations, low profitability, constrained financial flexibility because of large working capital requirements, and its exposure to intense competition in the pulses industry. These rating weaknesses are partially offset by the company's established clientele, its promoters' extensive industry experience, and the financial support that it receives from them. Outlook: Stable CRISIL believes that GDU will continue to benefit over the medium term from its long track record of operations in the pulses industry, its established customer base, and its enhanced capacity. CRISIL, however, also believes that the firm's financial risk profile will remain constrained over this period by a low operating margin and high debt levels. The outlook may be revised to 'Positive' if GDU's financial risk profile improves, most likely because of increase in capital or improvement in its operating margin. Conversely, the outlook may be revised to 'Negative' if the company's revenues and profitability decline, or it contracts large incremental bank borrowings, for capital expenditure or for meeting any significant increase in its working capital requirements, resulting in deterioration in its financial risk profile. GDU was originally set up in 1986 as a partnership firm, Goyal Dall Udyog; this firm was recently, in April 2013, reconstituted as a private limited company with the current name. GDU is engaged in processing of pulses, mainly chana dal, with a processing capacity 75 tonnes per day. In addition, the firm processes moong dal and toor dal through group firm, Goyal Pulses, on a job work basis. S.N.Q.S. INT'L: CRISIL Rates INR9MM Term Loan at 'B+' ----------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of S.N.Q.S. Internationals. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 9 CRISIL B+/Stable Packing Credit 100 CRISIL A4 in Foreign Currency Packing Credit 15 CRISIL A4 Foreign Demand Bill Purchase 35 CRISIL A4 Inland/Import Letter of Credit 10 CRISIL A4 The rating reflects the SNQS's modest scale of operations in a highly fragmented readymade garment industry, geographical concentration in revenue profile and working capital intensive operations. These rating weaknesses are partially offset by the promoter's extensive experience in the textile industry. Outlook: Stable CRISIL believes that SNQS will continue to benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' if the concern generates significantly higher-than-expected revenues and profitability margins while maintaining its capital structure. Conversely, the outlook may be revised to 'Negative' if SNQS' revenue and profitability margins decline significantly, or if its working capital cycle lengthens, or if it undertakes any large debt funded capital expenditure, leading to significant deterioration in its financial risk profile. SNQS was set up in 1991 as a sole proprietorship concern of Mr. V. Elangovan. It is engaged in manufacturing of knitted and woven readymade garments, and providing product sourcing services to select customers based in Europe. The concern's manufacturing unit is located in New Tirupur (Tamil Nadu). SNQS recorded a profit of INR50.1 million on net sales of INR466.9 million for 2012-13 (refers to financial year, April 1 to March 31), against a PAT of INR59.7 million on net sales of INR649.6 million for 2011-12. SAGAR ENTERPRISES: CRISIL Lowers Rating on INR90MM Loan to 'B+' --------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facility of Sagar Enterprises to 'CRISIL B+/Stable' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 90 CRISIL B+/Stable (downgraded from CRISIL BB-/Stable) The rating downgrade reflects the deterioration in SE's business risk profile, driven by a significant decline in its scale of operations. The rating downgrade also reflects the firm's stretched liquidity, marked by low cash accruals vis-�-vis debt repayment obligations, and its below-average debt protection metrics. During 2012-13 (refers to financial year, April 1 to March 31), SE's topline declined by 20 per cent year-on-year to INR231 million, driven by lower demand from its sole customer, Canteen Stores Department (CSD) of the Ministry of Defence, Government of India. The firm's topline is expected to remain modest, and susceptible to demand from CSD, over the medium term. SE has booked revenues of around INR100 million for the six months ended September 30, 2013. The firm's modest scale of operations has resulted in modest accruals of INR5.6 million during 2012-13. Its accruals are expected to remain modest at INR5 million to INR7 million in 2013-14, and tightly matched against its debt repayment obligations of around INR5 million during the year. SE's low cash accruals have resulted in weak debt protection metrics, with net cash accruals to total debt and interest coverage ratios of 0.03 times and 1.30 times, respectively, for 2012-13. CRISIL believes that SE's debt protection metrics will remain below average over the medium term due to its low cash accruals. The rating reflects SE's below-average financial risk profile, marked by a modest net worth and below-average debt protection metrics, and its susceptibility to offtake-related risks associated with its sole customer, CSD. These rating weaknesses are partially offset by the extensive experience of SE's proprietor in the ready-made garments industry. Outlook: Stable CRISIL believes that SE will continue to benefit over the medium term from its established relationship with CSD. The outlook may be revised to 'Positive' if there is sustainable improvement in the firm's scale of operations and profitability, supported by diversification in its customer profile, leading to improvement in its cash accruals and debt protection metrics. Conversely, the outlook may be revised to 'Negative' if SE's working capital cycle stretches, leading to further deterioration in its liquidity, or in case of any further decline in its accruals, resulting in weakening of its debt protection metrics. SE, a proprietorship concern of Mr. Sunil Khanna, sells ready-made garments and home furnishings. It has more than 90 products, including shirts, T-shirts, hosiery, track suits, blankets, bed sheets, and towels, which are sold to CSD. The manufacturing of the various product lines is entirely outsourced to local manufacturers. SANDEEP TRADING: CRISIL Cuts Ratings on INR205.8MM Loans to 'D' --------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Sandeep Trading Co to 'CRISIL D' from 'CRISIL B-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 200 CRISIL D (Downgraded from 'CRISIL B-/Stable') Proposed Long-Term 5.8 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B-/Stable') The rating downgrade reflects regular instances of delay by STC in servicing its term loans over the past three months, due to weak liquidity. STC's interest obligations of INR0.28 million on October 31, 2013, was outstanding as on November 24, 2013. The firm's stretched liquidity is also evident from its regularly overdrawn bank limits, with average utilisation of around 101 per cent, for the 11 months through August 2013. In the absence of sufficient cash accruals, STC relies heavily on its bank limits to fund its working capital requirements. The firm generated cash accruals of INR4.1 million in 2012-13 (refers to financial year, April 1 to March 31), vis-�-vis its incremental working capital requirement of INR59 million, resulting in high dependence on external borrowings over eth same period. The ratings continue to reflect STC's weak financial risk profile, marked by high gearing because of large working capital requirements, and the susceptibility of its operating margin to fluctuations in raw material prices. These rating weaknesses are partially offset by the the extensive experience of the promoters in, and the healthy growth prospects for, the rice industry. For arriving at its ratings, CRISIL has treated STC's unsecured loans of INR59 million (as on March 31, 2013) from the promoters' friends, family and related companies as neither debt nor equity. This is because the loans have been subordinated to STC's bank debt during currency of the sanctioned limit. About the Firm STC was established in Kharar, Punjab in 1991. The firm mills and trades non-basmati rice, and has one milling unit in Kharar (Punjab). STC is promoted by Mr. Rajiv Verma. STC reported a profit after tax (PAT) of INR1.30 million on net sales of INR1026.2 million for 2012-13, vis-�-vis a PAT of INR1.18 million on net sales of INR781.4 million for 2011-12. SARTHAK ISPAT: ICRA Reaffirms 'B' Ratings on INR29.56cr Loans ------------------------------------------------------------- ICRA has reaffirmed the '[ICRA]B' rating assigned to the INR29.50 crore term loan and fund-based bank facilities of Sarthak Ispat Pvt. Ltd.. ICRA has also reaffirmed the '[ICRA]A4' rating assigned to the INR0.50 crore non-fund based bank facilities of SIPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 12.50 [ICRA]B; reaffirmed Fund-Based Limits (Cash Credit) 17.06 [ICRA]B; reaffirmed Non-Fund Based Limits 0.50 [ICRA]A4; reaffirmed Rating Rationale The ratings take into consideration the significant increase in the turnover of the company during 2012-13, which was its first full year of operation, and strengthening of its networth on account of an infusion of equity by the promoters during 2012-13. The ratings, however, continue to be constrained by the low margins in the business, the ongoing industry weakness and the cyclicality associated with the steel industry, which is likely to keep SIPL's profitability and cash flows volatile in future. The weak profitability also impacts the company's coverage indicators adversely, which remained at depressed levels during 2012-13. The ratings also factor in SIPL's high gearing, although it improved from FY2012 levels subsequent to the infusion of equity from the promoters during 2012-13. SIPL was incorporated in 2007 by Mr. Vijay Kumar Garg based in Raipur. The company's plant is located at the Urla Industrial Area of Raipur (Chattisgarh) and has a rolling mill, with an annual production capacity of 75,000 MT. The company manufactures medium and heavy steel structural products such as angles, beams, channels, joists and H-beams. Recent Results In 2012-13, as per the audited financial statements, SIPL reported an operating income of INR151.02 crore and a net profit of INR0.70 crore as compared to an operating income of INR28.86 crore and a net profit of INR0.21 crore in 2011-12. SRI BALAJI: ICRA Reaffirms 'B+' Ratings on INR58.07cr Loans ----------------------------------------------------------- ICRA has reaffirmed the long term rating assigned to the enhanced long term fund based facilities of INR45.0 crore and non fund based bank limits of INR13.07 crore of Sri Balaji Educational Charitable and Public Trust at '[ICRA]B+'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term-fund based 45.00 [ICRA]B+ reaffirmed Long term-non fund Based 13.07 [ICRA]B+ reaffirmed The reaffirmation in the rating takes into the account the regularization of interest payments on the trust's term loans that had been impacted previously due to mismatches in cash flows. The rating also takes into account the stable revenues arising out of the brand equity of established colleges under the trust resulting in full enrolment and pre-fixed fee structure for the tenure of the courses; and the healthy profitability levels. The rating, however, is constrained by the aggressive capex undertaken by the trust in the recent past, thereby resulting in elevated debt levels; and the lumpy cash flows associated with staggered receipts of academic fees. The rating also factors in the possible reduction in enrolment going forward for the engineering colleges under SBECPT on the back of lacklustre demand for engineering courses. Sri Balaji Educational and Charitable Public Trust was formed in 1996, under the leadership of Mr. M K Rajagopalan, the Chairman of the Trust. The trust owns and operates seven colleges in the Union Territory of Pondicherry and the neighbouring Tamil Nadu with a total student base of more than 6,000. The most notable of SBECPT's colleges is the Mahatma Gandhi Medical College & Research Centre (MGMC), which has a 1180-bed hospital attached to the college premises and contributes to more than 80% of the trust's profits. The other colleges include Bharathiyar College of Engineering and Technology (BCET), Rajiv Gandhi College of Engineering and Technology (RGCET), Kasturba Gandhi Nursing College, Sri Venkateswara College of Education, Indira Gandhi Institute of Dental Sciences and Sri Satya Sai Medical College and Research Institute (SSMC). Recent Results For the year ended 31st March 2013, the trust reported an Operating income and Surplus of INR185.6 crore and INR40.5 crore respectively. SRI LAKSHMI: CRISIL Raises Ratings on INR1.1BB Loans to 'B+' ------------------------------------------------------------ CRISIL has upgraded its rating on the long-term bank loan facilities of Sri Lakshmi Godavari Spinning Mills Pvt Ltd (Sri Lakshmi) to 'CRISIL B+/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 300 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Proposed Long-Term Bank Loan Facility 45.6 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Term Loan 754.4 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The rating upgrade reflects improvement in Sri Lakshmi's financial risk profile, particularly its liquidity, supported by expected improvement in cash accruals, resulting in alleviation of earlier envisaged pressure on its debt servicing ability. The cash accruals have improved because of better-than-expected operating performance. CRISIL believes that Sri Lakshmi's financial risk profile, particularly its liquidity, will improve over the medium term, marked by moderate cash accruals, and absence of any major capital expenditure plans. The rating continues to reflect Sri Lakshmi's below-average financial risk profile marked by high gearing and weak debt protection metrics, and working capital intensive nature of operations. These rating weaknesses are, however, offset by Sri Lakshmi's moderate operating efficiency, promoters' extensive industry experience, and established relationship with customers Outlook: Stable CRISIL believes that Sri Lakshmi will continue to benefit over the medium term from its established relationships with its customers and healthy operating margins. The outlook may be revised to 'Positive' in case the company reports substantial and sustained improvement in the company's revenues, while maintaining its profitability margins. Conversely, the outlook may be revised to 'Negative' if there is a steep decline in the company's profitability margins from the current levels resulting in deterioration in its liquidity profile. Sri Lakshmi, incorporated in 2005, manufactures cotton yarn. The company is promoted by Mr. V Siva Nageswara Rao and his family and friends. It commenced commercial production in August 2007. Sri Lakshmi's manufacturing unit in Guntur (Andhra Pradesh). For 2012-13, Sri Lakshmi reported, a profit after tax (PAT) INR24.7 million on net sales of INR717.7 million; the company reported a PAT of INR2.4 million on net sales of INR693.6 million for 2011-12. STANDARD CORPORATION: CRISIL Cuts Ratings on INR406M Loans to 'D' ----------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Standard Corporation India Ltd to 'CRISIL D/CRISIL D' from 'CRISIL B-/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 156.0 CRISIL D (Downgraded from 'CRISIL B-/Stable') Rupee Term Loan 90.0 CRISIL D (Downgraded from 'CRISIL B-/Stable') Letter of Credit 50.0 CRISIL D (Downgraded from 'CRISIL A4') Proposed Long-term Bank Loan Facility 110.0 CRISIL D (Downgraded from 'CRISIL B-/Stable') The rating downgrade reflects instances of devolvement of letters of credit (LCs) and overdrawing of its cash credit limit for more than 30 days consecutively owing to the company's weak liquidity. The deterioration in liquidity has been caused by subdued demand for SCIL's products because of the overall slowdown and competition in the agricultural (agro)-based machinery industry. The ratings continue to reflect SCIL's large working capital requirements, limited pricing flexibility, and its susceptibility to downturns in the agro-based machinery industry. These rating weaknesses are partially offset by the extensive experience of SCIL's promoters in the industry. Mr. Nachattar Singh and his brother Mr. Joginder Singh set up partnership firm Standard Combine in 1979. The firm was reconstituted as a private limited company in 1999 and as a public limited company (with its name being changed to the current one) in 2008. SCIL manufactures harvester combines, tractors, and cranes under the Standard brand and has capacity to manufacture 2000 harvester combines, 7500 tractors, and 300 cranes per annum. Its manufacturing unit is in Barnala (Punjab). SCIL reported loss of INR21.7 million on net sales of INR988.4 million for 2012-13 (refers to financial year, April 1 to March 31) against PAT of INR20 million on net sales of INR1648.5 million for 2012-13. SURBHI FERRO: ICRA Assigns 'B' Ratings to INR15cr Loans ------------------------------------------------------- ICRA has assigned a long-term rating of '[ICRA]B' to INR15.00 crore bank lines of Surbhi Ferro Impex Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Working Capital Limits 8.00 [ICRA]B assigned Unallocated 7.00 [ICRA]B assigned The assigned rating factors in SFIPL's relatively modest scale of operations on account of limited operational track record and the company's stretched liquidity position owing to the high working capital intensity of business, which has led to consistently high utilization of working capital facilities from bank. This, coupled with modest net worth has led to high gearing levels (3.58 times as on 31st March 2013) for the company. The rating is also constrained by the highly competitive and fragmented nature of the industry, which along with the trading nature of operations has resulted in low profitability indicators. Further, the company's profitability remains vulnerable to adverse movements in metal prices given the inventory levels required to be maintained by it, and exchange rate fluctuation in the absence of a hedging mechanism. However, ICRA draws comfort from the long experience of the promoters in the ferrous and non ferrous metal scrap trading business, which has enabled it to register healthy revenue growth since commencement of operations in the year 2010. The rating also drives comfort from the continued support of the promoters for the company in its initial stages through infusion of equity and unsecured loans. Surbhi Ferro Impex Private Limited (SFIPL) was incorporated in the year 2010 by Mr. Rajesh Kumar Gadiya. SFIPL is engaged in the business of trading ferrous and non ferrous metal scrap such as steel, brass, copper, zinc, aluminum etc. Recent Results For FY2013, the company has achieved an operating income of INR44.70 crore and a Profit after Tax (PAT) of INR0.13 crore. TARA EXPORTS: ICRA Reaffirms 'B+' Ratings on INR3.23cr Loans ------------------------------------------------------------ ICRA has reaffirmed the '[ICRA]B+' rating outstanding on the INR1.50 crore long term fund based facilities (sub limit) of Tara Exports. ICRA has assigned '[ICRA]B+' rating to the INR1.73 crore term loan facilities of the firm. ICRA has also reaffirmed the '[ICRA]A4' rating outstanding on the INR23.00 crore short term fund based facilities (reduced from INR25.00 crore) and the INR2.00 crore short term fund based facilities (sub limit) of the firm. ICRA has also assigned '[ICRA]A4' rating to the INR0.27 crore proposed short term facilities of the firm. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term fund based (1.50) [ICRA]B+ reaffirmed facilities (sub limit) Term loan facilities 1.73 [ICRA]B+ assigned Short term fund based 23.00 [ICRA]A4 reaffirmed Facilities Short term fund based (2.00) [ICRA]A4 reaffirmed facilities (sub limit) Short term proposed 0.27 [ICRA]A4 assigned Facilities The reaffirmation of ratings takes into account the experience of the promoters in the cashew processing industry spanning several decades and the firm's strong parentage, by virtue of it being part of the Kerala based KPP group - a renowned name in the global cashew processing industry. TE has an established customer profile and benefits from business linkages with group entities, including usage of a group entity's manufacturing facilities for production. The ratings are, however, constrained by TE's relatively weak financial profile. The firm witnessed a de-growth of over 35% in revenues in 2012-13 following lower sales, owing to paucity of funds during two months of the peak procurement season for the firm; TE was able to use its working capital limits only partially during the two month period, and as a result could not procure requisite quantities of raw materials. TE's capitalization and coverage metrics are stretched as on March 31, 2013, following high working capital intensity and consequently high working capital debt levels, amidst relatively low net worth and profits / accruals; the net worth has remained low compared to debt levels, despite an equity infusion of INR4.0 crore in 2012-13. TE's cash flow position also remains stretched and the debt funded capex plans could strain the liquidity position further, over the medium term. Further, TE's revenues and margins continue to remain exposed to foreign exchange fluctuations and volatility in cashew price movements, beyond the natural hedge prevalent. Also, TE has high customer and geographic concentration, and the intense competition in the highly fragmented industry, limited product differentiation and restricted pricing flexibility have resulted in high client churn rates for the firm. While TE's production is constrained by the prevailing labour shortage in the region and worsening of the situation could impact production further going forward, the proposed shift in focus to RCNs trading/mechanization/ diversification of operations to areas with adequate labour availability are expected to mitigate this risk to an extent. The firm is also exposed to agro-climatic risks. Commenced in 2010, Tara Exports is engaged in sale of cashew kernels and raw cashew nuts (RCNs). In the former segment, the firm either imports RCNs from African countries and processes through job work in dedicated factories owned by a group entity, or trades cashew kernels procured from local players. The cashew kernels are exported to countries like Korea, United States of America, United Kingdom and Canada to name a few, or sold locally. The RCNs are traded in domestic markets. TECHNOFAB ENGINEERS: CRISIL Cuts Ratings on INR80MM Loans to 'D' ---------------------------------------------------------------- CRISIL has downgraded its rating on the bank facilities of Technofab Engineers to 'CRISIL D' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 40 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Proposed Long-Term 25.3 CRISIL D (Downgraded from Bank Loan Facility 'C8RISIL BB-/Stable') Term Loan 14.7 CRISIL D (Downgraded from 'CRISIL BB-/Stable') The rating downgrade reflects the deterioration in concern's liquidity position, leading to in persistent irregularities in its cash credit account and delays in repayment of debt obligations. The rating reflects TE's modest scale of operations coupled with working capital intensive nature of activity and susceptibility to intense competition in transmission and telecom tower fabrication business. These rating weaknesses are partially offset by extensive experience of TE's proprietor in fabrication of transmission, telecom towers and sub-station structures. Established in 1991 by Mr. Chetan Lavania, as his proprietorship concern, Technofab Engineers is engaged in manufacturing, fabrication of transmission, telecom towers and sub-station structures, etc. The concern's office is located at Nagpur, Maharashtra. UGAM IMPEX: CRISIL Downgrades Ratings on INR730MM Loans to 'D' -------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Ugam Impex Ltd to 'CRISIL D' from 'CRISIL B+/Negative'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 300 CRISIL D (Downgraded from 'CRISIL B+/Negative') Mortgage Loan 14 CRISIL D (Downgraded from Facility 'CRISIL B+/Negative') Proposed Long-Term 373 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B+/Negative') Term Loan 43 CRISIL D (Downgraded from 'CRISIL B+/Negative') The rating downgrade reflects UIL's continuously overdrawn cash credit limits, and instances of delay by the company in payment of interest and principal on its bank facilities. The overdrawn limits and delays have resulted from the company's weak liquidity. UIL also has working-capital-intensive operations and a low operating margin leading to weak debt protection metrics. However, the company benefits from the promoters' extensive experience in trading segment. UIL was incorporated in 1996 as a private limited company. In 2009, UIL was reconstituted as a public limited company. UIL has several business divisions comprising yarn and fabrics trade, diamond trade and export, and wind power generation. VIJAY STEEL: ICRA Cuts Ratings on INR11.77cr Loans to 'B+' ---------------------------------------------------------- ICRA has revised the long-term rating of the INR2.77 crore (reduced from INR3.23 crore) term loan and the INR9.0 crore fund- based bank facilities of Vijay Steel Corporation Private Limited (Erstwhile Vicksons Steels Private Limited, to '[ICRA]B+' from '[ICRA]BB-'. ICRA has reaffirmed the short-term rating of the INR6.0 crore fund-based and the INR15.0 crore non-fund based bank facilities of VSCPL at '[ICRA]A4'. Interchangeability between the fund-based and non-fund based limits is allowed such that the total rated working capital limits do not exceed INR18.0 crore. The utilisation of total fund-based limits is capped at INR9.0 crore. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term loan 2.77 Revised to [ICRA]B+ from [ICRA]BB- (Stable) Long-term fund- based limits 9.00 Revised to [ICRA]B+ from [ICRA]BB- (Stable) Short-term fund- based limits 6.00 [ICRA]A4 reaffirmed Non-fund based limits 15.00 [ICRA]A4 reaffirmed The revision of the long term rating assigned to VSCPL takes into account a sharp decline in revenues in 2013 to INR110.4 crore from INR220.9 crore in 2011-12 leading to a net loss of INR2.69 crore during the year, which in turn resulted in weak coverage indicators. The ratings are also constrained by a leveraged capital structure of VSCPL and the fact that large corporate guarantees are extended to its associate company namely Vijay Transmission Private Limited, both of which adversely impact the financial risk profile of the company. The ratings also take into account the tight liquidity profile of the company and intensely competitive nature of the steel trading industry, which exerts pricing pressures. Nevertheless, the ratings take into account long experience of the promoters in the steel trading business; established relationships with reputed customers, which indicates good product quality and ensures repeat orders and low inventory levels maintained by the company, which reduce its exposure to volatility in steel prices. VSCPL was incorporated in 1966 by Mr. K. C. Paliwal as a partnership firm for trading of steel products. Subsequently, the firm was converted into a private limited company in 1995. The promoters have nearly four decades of experience in steel trading and have established relationships with reputed construction companies. The company predominantly trades in long products of numerous varieties and grades, which it procures from secondary steel manufacturers, rolling mills and other traders. The company's name was changed to VSCPL from Vicksons Steels Private Limited in 2012. Recent Results As per the provisional results for 2012-13, VSCPL reported a net loss of INR2.69 crore on the back of net sales of INR110.4 crore. In 2011-12, VSCPL reported a profit after tax (PAT) of INR0.26 crore on the back of net sales of INR220.9 crore. YASH AUTOMOTIVE: CRISIL Cuts Ratings on INR220MM Loans to 'B' ------------------------------------------------------------- CRISIL has downgraded its rating on the bank facilities of Yash Automotive Pvt Ltd to 'CRISIL B/Stable' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 160 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Proposed Long 25 CRISIL B/Stable (Downgraded from Term Bank Loan 'CRISIL B+/Stable') Facility Term Loan 35 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') The downgrade in rating reflects deterioration in YAPL's financial risk profile marked by an increase in its total outside liabilities to tangible net worth (TOLTNW) ratio, weak interest coverage ratio and low current ratio. The company's TOLTNW ratio increased to 15 times as on March 31, 2013 from 10.7 times as on March 31, 2012 on account of increase in working capital borrowing and debt-funded capital expenditure (capex) without commensurate infusion of capital by promoters. Its interest coverage ratio is low at 1 time for 2012-13 (refers to financial year, April 1 to March 31). The liquidity is also weak, marked by high bank limit utilisation and low current ratio of 0.9 times as on March 31, 2013. Furthermore, YAPL's cash accruals for 2013-14, are expected to be tightly matched with repayment obligations of INR4 million for the year. The company has already completed construction of two new workshops and has no plans to undertake any further capital expenditure over the medium term. CRISIL believes that YAPL's financial risk profile will remain weak over the medium term. The rating reflects YAPL's weak financial risk profile, marked by a small net worth, weak debt protection metrics, and high TOLTNW ratio; the rating also factors in the company's exposure to intense competition in the automobile (auto) dealership market, and supplier concentration in its revenue profile. These rating weaknesses are partially offset by YAPL's long track record in the auto dealership business. Outlook: Stable CRISIL believes that YAPL will maintain its business risk profile over the medium term on the back of its longstanding presence in the auto dealership business. However, the company's financial risk profile will remain weak over the period, driven by its large working capital requirements. The outlook may be revised to 'Positive' if the YAPL's financial risk profile improves significantly, driven by fresh equity infusion or significant improvement in capital structure due to efficient management of debt-funded working capital requirements. Conversely, the outlook may be revised to 'Negative' if YAPL's financial risk profile deteriorates because of increase in working capital debt or large, debt-funded capex. YAPL, incorporated in 2002, was promoted by Mr. Sanjeev Kumar. It is an authorised dealer for commercial vehicles (CVs) manufactured by Tata Motors Ltd (TML; rated 'CRISIL AA-/Positive/CRISIL A1+') for Mirzapur, Badohi and Sonbhadra (all in Uttar Pradesh), and has two showrooms, five extension counters, and four workshops in the CV segment. ========= J A P A N ========= EACCESS LTD: Merger No Impact on Rating & Outlook, Moody's Says --------------------------------------------------------------- eAccess Ltd. (Ba1 stable) announced on Dec. 3, 2013, it reached an agreement to merge with WILLCOM, Inc. (not rated) tentatively effective as of April 1, 2014. WILLCOM is a wholly owned wireless telecom operating subsidiary within SoftBank (Ba1 stable) group. eAccess will be the surviving entity after the merger transaction. The combined entities' debt burden will be somewhat higher than eAccess alone but, Moody's estimates, will not materially change the rating. The merger is positive for eAccess as it will create a larger company measured by sales (JPY390 billion for combined entity estimated by Moody's based on simple addition vs. JPY 220.7 billion for eAccess alone) and subscriber base. In addition, the combined company will be able to achieve operating efficiencies and reduce costs by combining both companies' business resources. The combined entity will serve more than 10 million subscribers (the sum of approximately 4.4 million for eAccess and 5.7 million for WILLCOM) and continue to offer both the mobile and fixed broadband business provided by eAccess as well as the Personal Handy System service provided by WILLCOM. There will be no change to the voting shares of eAccess, or, in Moody's opinion, the expected support provided by SoftBank, the company's largest shareholder. eAccess will continue to benefit from SoftBank's greater size, marketing and branding organization, and access to capital. Moody's has incorporated such expected support and equalized eAccess' rating to that of SoftBank. Moody's notes that SoftBank has not guaranteed nor is explicitly supporting eAccess' debt, and has only 33.29% governance control of the company. However, there is, in Moody's opinion, the expectation of support, if needed. SoftBank retains nearly all of the economic ownership of eAccess. The company provides an important support, through its LTE spectrum, to SoftBank's mobile product offering and is an increasingly integrated entity in SoftBank's domestic Japanese mobile strategy. WILLCOM is a telecom operator that uses Personal Handy System (PHS) network. It is the largest PHS operator in Japan and is the fourth largest wireless operator in Japan with estimated market share of 3.5% after SoftBank Mobile's 34.06 million subscribers at September-end 2013. eAccess Ltd, headquartered in Tokyo, is a multi-service operator of an asymmetric digital subscriber line (ADSL) business and a mobile broadband business. As a result of delisting from the Tokyo Stock Exchange on 26 December, 2012, it is no longer a publicly traded company. SoftBank Corp., headquartered in Tokyo, is a holding company that owns leading global providers of various services, including broadband, fixed-line and mobile telecommunications, software distribution and networking. LEOPARD TWO: Fitch Affirms Class D and E Notes' 'BB' Ratings ------------------------------------------------------------ Fitch Ratings has affirmed the ratings on Leopard Two Funding Limited's notes. The transaction is a securitisation of fully amortising mortgage loans backed by multi-family apartment properties throughout Japan. The rating actions are listed below. JPY3,202m Class A-1 notes affirmed at 'AAAsf'; Outlook Stable JPY3,202m Class A-2 notes affirmed at 'AAAsf'; Outlook Stable JPY520m Class B notes affirmed at 'AAsf'; Outlook Stable JPY520m Class C notes affirmed at 'Asf'; Outlook Stable JPY540m Class D notes affirmed at 'BBsf'; Outlook Stable JPY41m Class E notes affirmed at 'BBsf'; Outlook Stable All balances are as of 4 December 2013. Key Rating Drivers: The affirmations of the notes' ratings reflect Fitch's view that available credit enhancement (CE) levels are sufficient to support the current ratings. CE levels have continued to grow due to sequential payment from scheduled amortisation and prepayments. Only one loan in the underlying loan pool has defaulted since the transaction closed in August 2004. The master-lease structure has contributed to stable loan performance of the transaction, and delinquencies have also been limited to date. Fitch expects this trend to continue, given future rental performance based on the master-lease agreements. Fitch considers the improved CE levels are sufficient to offset the decline in rent income, which has resulted in the agency increasing its assumptions of net loss from the underlying loan pool in stressed scenarios. Rating Sensitivities: An unexpected increase in the delinquency or default rate may lead to higher loss assumptions, which may, in turn, affect the ratings of the notes. However, given the growth in CE levels to date and the master-lease structure in place, the risk of downgrade due to asset performance deterioration is considered low. ==================== N E W Z E A L A N D ==================== MAINZEAL PROPERTY: Parent Placed in Provisional Liquidation ----------------------------------------------------------- Paul McBeth at BusinessDesk reports that Richina Pacific, the parent of failed construction firm Mainzeal Property & Construction, is in provisional liquidation since quitting the NZX five years ago, and has handed over its financial statements to the Companies Registrar for the financial years leading up to its demise. The registrar was looking into the financial reporting obligations the Mainzeal and Richina group of companies, which were murky due to various amalgamations and restructures leading up to its ultimate collapse on earlier this year, BusinessDesk recalls. BusinessDesk relates that the registrar decided the only entity in the group obliged to file financial statements was Richina Pacific, which arose because the company was an issuer. It was initially registered as a local company, but later relocated to Bermuda, moving to the overseas company register, a spokesman for the registrar said in an emailed statement to BusinessDesk. "RPL was removed from the overseas companies register in 2009, but has provided the registrar with financial statements for the 2009, 2010 and 2011 financial years," he said. "RPL is now in provisional liquidation in Bermuda." Earlier this year, BusinessDesk recalls, Milford Asset Management executive director Brian Gaynor wrote in the New Zealand Herald newspaper that he remained a shareholder in Richina after it delisted from the NZX in December 2008, but has had no correspondence from the company nor received an annual report since then. Last month, receivers for Mainzeal Property & Construction, David Bridgman and Colin McCloy of PwC, said they expected to have surplus funds for the liquidator of the Mainzeal group, and have since said they'll hand over to the liquidator once preferential claims, such as paying employees, and other statutory obligations are met, BusinessDesk relates. The liquidators represent unsecured creditors owed some NZ$106.3 million, whereas the receivers were appointed by Bank of New Zealand, which was owed NZ $11.3 million, the bulk of which was over the Mainzeal headquarters building on Auckland's Victoria St. Preferential creditors, including staff entitlements and outstanding tax, were owed about NZ$5.3 million, according to the latest receiver's report obtained by BusinessDesk. About Mainzeal Property Mainzeal Property and Construction Ltd is a New Zealand-based property and construction company. The company forms part of the Mainzeal Group, which is owned by Richina Inc, a privately held New Zealand-based company with a strong China focus. On Feb. 6, 2013, Colin McCloy and David Bridgman, partners from PricewaterhouseCoopers, were appointed receivers to Mainzeal Property and Construction Limited and associated entities as a result of a request made by its director to BNZ. Mainzeal's director, Richard Yan advised that following a series of events that had adversely affected the Company's financial position coupled with a general decline in major commercial construction activity, and in the absence of further shareholder support, the Company could no longer continue trading. On Feb. 28, 2013, BDO's Andrew Bethell and Brian Mayo-Smith were appointed liquidators to those three companies in receivership and nine others in the group that were not in receivership. The companies now under the control of the liquidators are Mainzeal Group, Mainzeal Property and Construction, Mainzeal Living, 200 Vic, Building Futures Group Holding, Building Futures Group, Mainzeal Residential, Mainzeal Construction, Mainzeal, Mainzeal Construction SI, MPC NZ and RGRE. Mainzeal is estimated to owe NZ$11.3 million to the BNZ, NZ$70 million to unsecured creditors and NZ$5.2 million to employees, NZN discloses. Subcontractors are among the unsecured creditors, says NZN. STRATEGIC FINANCE: Receiver Files Action Against Auditor -------------------------------------------------------- BusinessDesk reports that the Financial Markets Authority has effectively completed a confidential settlement with the former directors of Strategic Finance, while the firm's receiver has filed proceedings against auditor BDO Spicers. According to the report, Strategic Finance receivers John Fisk and Colin McCloy of PwC have filed and served proceedings against BDO Spicers over its audit of the firm's 2007 financial statements, keeping the FMA in the loop, and are still waiting on certain matters to be completed over its settlement with the directors, according to their latest six-monthly report. In July, BusinessDesk recalls, the receivers said they had effectively completed a deal with Strategic's directors over potential breaches of the Companies Act, and entered into talks with a then-unnamed third party over a separate claim. "FMA's confidential settlement discussions with the directors are also effectively complete, subject to the resolution of certain outstanding matters," the report, as cited by BusinessDesk, said. While the receivers expect to provide a further update to investors by the end of March next year, a spokesman for the FMA said the regulator isn't necessarily on the same timeline, BusinessDesk relays. According to BusinessDesk, the FMA gave the board the opportunity to respond as it prepared to file civil proceedings against directors including Kerry Finnigan, Graham Jackson, Marc Lindale, Timothy Rich, Denis Thom and David Wolfenden. It dropped its investigation into former director Jock Hobbs, now deceased, in mid-2011 as the extent of his illness became apparent. Some 10,000 Strategic investors owed $367.8 million have been repaid 10 cents in the dollar, or $36.8 million, and PwC's Fisk still estimates they will get between 12 percent and 20 percent of their principal back, says the report. The receiver has clawed back $47.4 million from the lender's loan book, and is still working five key property loans in Northland, Fiji, Australia and two properties where Strategic has a second mortgage, BusinessDesk notes. About Strategic Finance Headquartered in Wellington, New Zealand, Strategic Finance Limited (NZE:SFLHA) -- http://www.strategicfinance.co.nz/-- operated as a specialist finance company offering financial services, primarily to the property sector. The Company also provided specialist financial and advisory services to the property and corporate sectors. The Company operated in New Zealand, Australia and Pacific Islands. The Company's operating subsidiaries include Strategic Advisory Limited, Strategic Nominees Limited, Strategic Mortgages Limited and Strategic Nominees Australia Limited. The Company's non- operating subsidiary is Strategic Properties No.1 Limited. In May 2009, the Company incorporated a subsidiary, Gulf Property Holdings Limited. Strategic Finance Limited's parent company, Strategic Investment Group, was wholly owned by Australian-based finance company Allco HIT Limited. The Troubled Company Reporter-Asia Pacific reported on March 15, 2010, that PricewaterhouseCoopers partners John Fisk and Colin McCloy were appointed receivers of Strategic Finance Limited and related companies Strategic Advisory Limited, Strategic Mortgages Limited, Strategic Nominees Limited, and Strategic Nominees Australia Limited. This ended the moratorium arrangement that had been in place since December 2008. The companies' trustee, Perpetual Trust, appointed receivers after SFL failed to generate sufficient loan recoveries for its milestone repayment on Jan. 7, 2010. The company owed NZ$417 million to 13,000 investors. Perpetual Trust Ltd., on July 27, 2010, appointed liquidators to Strategic Finance. The High Court in Wellington made an order that Corporate Finance's John Cregten and Andrew McKay be appointed liquidators. WINDFLOW TECHNOLOGY: Shareholders Allow Additional Debt ------------------------------------------------------- Marta Steeman at Stuff.co.nz reports that the shareholders of Windflow Technology have allowed the struggling company to go NZ$7.95 million deeper into the debt of shareholder David Iles. They voted at a special meeting in Christchurch on Dec. 6 to allow the company to increase its debt to the expat Kiwi investor to a total of NZ$14.7 million (GBP7.38m) by taking on additional loans provided by Mr. Iles, Stuff.co.nz relates. They also approved a capital raising seeking to raise NZ$3.4 million through the issue of preference shares on the basis of one for every three ordinary shares owned, according to Stuff.co.nz. Stuff.co.nz notes that the shareholders approved Mr. Iles effectively underwriting that by agreeing to Mr. Iles being permitted to buy up to NZ$2.5 million of the preference shares if the rights issue was not fully subscribed to. The rights may be traded. The shareholder approvals were needed because Mr. Iles is likely to end up holding more than 20 per cent of the ordinary shares if his holding of preference shares are converted to ordinary shares during or at the end of the five-year maturity period of the preference shares, the report says. According to the report, Windflow chief executive Geoff Henderson said the capital would be used to develop four more turbine projects in the United Kingdom which could take the total investment to seven turbines. The company has three single turbine projects on the Orkney Islands. One at Westray has been commissioned. An independent adviser report said there was a wide range of outcomes as to how many preference and ordinary shares Iles would control after the conversion of the preference shares, Stuff.co.nz relates. The adviser, Simmons Corporate Finance, estimated Iles could control between 29 per cent and 59 per cent after the conversion, the report adds. Christchurch, New Zealand-based Windflow Technology Limited -- http://www.windflow.co.nz/-- is engaged in the development and manufacture of wind turbines. The Company's wholly owned subsidiaries include, Wind Blades Ltd, Pacific Windfarms Ltd and Windflow Hawaii Ltd. The Company has one customer, NZ Windfarms Ltd. Wind Gears Ltd is owned 50% by Windflow Technology Limited. Wind Gears Ltd is engaged in the development and construction of gear boxes for the wind turbines. Windpower Otago Ltd is owned 20% by the Company. ================= S I N G A P O R E ================= GLOBAL A&T: Debt Swap Sparks Bondholder Revolt, WSJ Reports ----------------------------------------------------------- Fiona Law at The Wall Street Journal reports that a rare and complex debt swap by Global A&T Electronics Ltd. has sparked anger among its bondholders, who say the move unfairly hurts their investments and who are pushing the company to reverse the transaction. The Journal relates that the dispute has sparked as much as a 32% plunge in the price of Global A&T's debt since September. Moody's cut the company's credit rating last month due to poor earnings and the clash with bondholders, the Journal says. According to the Journal, an analyst said while unusual, the dispute underscores some of the risks of investing in Asia's rapidly growing bond markets, where yields are frequently high but investors' interests are usually less protected than in the U.S. and Europe. The Journal says the dispute involves United Test & Assembly Center Ltd., a unit of Global A&T. UTAC issued senior bonds in September to pay off a loan ranked as junior and lower down the capital structure. But holders of senior debt sold in January said the September offering dilutes their holdings as more junior creditors now have the same claim to assets they do, should there be a default, the Journal relays. The Journal notes that the company's bond price has rebounded somewhat as more bondholders have joined an investor group that appointed U.S.-based law firm Lowenstein Sandler to push for action. The biggest beneficiary of the debt swap is Affinity, which held 35% of the junior bond and owns 48% of Global A&T, the investor group said. About Global A&T Global A&T Electronics Ltd provides semiconductor assembly and test services operating under the name UTAC with manufacturing facilities in Singapore, Taiwan, Thailand and China. UTAC was privatized through a leverage buy-out by a private equity group led by TPG Capital and Affinity Equity Partners in October 2007. As reported in the Troubled Company Reporter-Asia Pacific on Oct. 7, 2013, Standard & Poor's Ratings Services assigned its 'B' long-term issue rating to the additional US$502.257 million senior secured notes issued by Global A&T Electronics. S&P do not assign a recovery rating to the notes because GATE has been gradually diversifying outside Singapore, into markets and jurisdictions where Standard & Poor's does not assign recovery ratings. In August 2013, Moody's Investors Service changed to negative from stable the outlook of Global A&T Electronics's B1 corporate family rating and the B1 rating of its $625 million first lien senior secured notes due 2019. Moody's has also affirmed both ratings and the B2 rating for GATE's existing second lien facilities totaling $543 million due 2015. ==================== S O U T H K O R E A ==================== * Financially Weak South Korean Firms' Balance Sheets Worsen ------------------------------------------------------------ Yonhap News Agency reports that South Korean companies with weak financial footing saw their balance sheets worsen further this year amid a protracted economic slowdown, with their debt ratio sharply rising and their ability to pay back interest declining, industry data showed on Dec. 8. The top 300 in terms of debt ratio, out of 1,501 listed non- financial firms, had the average debt ratio of 279.2 percent as of end-June this year, rising 35.7 percentage points from a year earlier, according to the data obtained by Yonhap. The June figure also compares with 259.3 percent at the end of June 2009, when the collapse of Lehman Brothers sent a shock to the global economy, the data showed, Yonhap relates. According to Yonhap, the data showed that their interest coverage ratio reached 425.8 on average as of end-June, improving from 292.8 percent at the end of June 2009. But their interest-paying capability further declined when Samsung Electronics Co., Hyundai Motor Co. and three other major firms were excluded from the calculation, with their interest coverage ratio standing at 245 percent, according to the data cited by Yonhap. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***