/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/171213.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 Wednesday, December 13, 2017, Vol. 20, No. 247 Headlines A U S T R A L I A 5STAR PROPERTIES: First Creditors' Meeting Set for Dec. 19 5STAR SINAI: First Creditors' Meeting Set for Dec. 19 5STAR SION: First Creditors' Meeting Set for Dec. 19 CARRIER ELECTRICAL: Second Creditors' Meeting Set for Dec. 18 MJ LOGISTICS: Second Creditors' Meeting Set for Dec. 19 MY FAMILY DOCTORS: Court Enters Liquidation Order S&S PARTNERS: First Creditors' Meeting Set for Dec. 19 THINK TANK 2017-1: S&P Assigns B (sf) Rating on Class F Notes C H I N A CHINA COMMERCIAL: Closes $700,000 Stock Offering ELION RESOURCES: S&P Alters Outlook to Negative & Affirms 'B' CCR H O N G K O N G NOBLE GROUP: Sells Coal Unit for US$34.5 Million I N D I A ARAN MOTORS: CRISIL Reaffirms 'B' Rating on INR7.4MM Cash Loan ARDHENDU MONDAL: CRISIL Lowers Rating on INR6MM Secured Loan to D AVIAN TECHNOLOGIES: CRISIL Cuts Rating on INR3.26MM LT Loan to D AZEEM INFINITE: Ind-Ra Assigns Final BB Ratings to NCDs BALAJI ENTERPRISE: ICRA Assigns B Rating to INR6.50cr Cash Loan BALKRUSHNA GINNING: ICRA Reaffirms B+ Rating on INR5cr Loan BUNDELA EXPORTS: ICRA Reaffirms B+ Rating on INR7cr Loan DELUXE COTSPIN: CRISIL Assigns 'B' Rating to INR9MM Term Loan DIVYALAKSHMI TEXTILES: Ind-Ra Assigns BB+ LT Issuer Rating DOLPHIN POLY: ICRA Reaffirms B+ Rating on INR8.19cr Loan FAROOQ CONSTRUCTIONS: ICRA Reaffirms B- Rating on INR12cr Loan G.N PAL: ICRA Raises Rating on INR9cr Long Term Loan to B+ GOALTORE COLD: CRISIL Reaffirms B- Rating on INR6MM Cash Loan GUDIMETLA SUNDARA: CRISIL Lowers Rating on INR25MM Loan to D H R HYGIENE: CRISIL Assigns B+ Rating to INR3.13MM Term Loan HILLWOOD IMPORTS: CRISIL Lowers Rating on INR20MM Loan to D JBR IMPEX: CRISIL Assigns B+ Rating to INR20MM Cash Loan JIVANDHARA COTTON: ICRA Reaffirms B+ Rating on INR14cr Loan KUMARAGIRI SPINNERSS: CRISIL Withdraws B Rating on INR37.2MM Loan MAPSKO BUILDERS: CRISIL Withdraws B Rating on INR245MM Term Loan NAGARSHETH SHIPBREAKERS: CRISIL Ups Rating on INR85MM Loan to B NARAYANADRI HOSPITALS: Ind-Ra Raises LT Issuer Rating to 'BB-' NOOLI JEWELLERS: ICRA Reaffirms B+ Rating on INR22cr Cash Loan P.A.S. PETRO: CRISIL Reaffirms B Rating on INR3.5MM Cash Loan PRETTY JEWELLERY: CRISIL Reaffirms D Rating on INR5.3MM ST Loan PRIYADARSHINI CONSTRUCTIONS: CRISIL Withdraws B+ Loan Rating PRO KNITS: CRISIL Lowers Rating on INR20MM Packing Loan to 'D' R V R TECHNOLOGIES: Ind-Ra Raises LT Issuer Rating to 'B'/Stable RAJASTHAN SUN: Ind-Ra Withdraws WD Sr. Project Term Loan Rating RELIANCE COMMUNICATIONS: Lenders Get Bids for Company's Assets S. S. ENTERPRISES: CRISIL Assigns 'B' Rating to INR15MM Bank Loan SAP INDUSTRIES: ICRA Lowers Rating on INR2.50cr Loan to 'B' SHIVA INTERNATIONAL: CRISIL Assigns B Rating to INR5MM Loan SHREE SAIRAM: CRISIL Reaffirms B+ Rating on INR9.5MM Cash Loan SN JYOTI: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable SRI CHENNAKESAVA: CRISIL Reaffirms B Rating on INR2MM LT Loan SRI TEXTILE ERODE: Ind-Ra Withdraws 'D' LT Issuer Rating TROPICAL COATINGS: CRISIL Cuts Rating on INR6.20MM Term Loan to D YASH CONSTRUCTION: CRISIL Cuts Rating on INR7.3MM Cash Loan to D J A P A N TOSHIBA CORP: Settles Dispute With Western Digital Over Chip Sale M A L A Y S I A ASIA KNIGHT: Proposes Change of Auditors to Crowe Horwath S O U T H K O R E A WOORI BANK: Moody's Reviews Ba1(hyb) Debt Rating for Upgrade - - - - - ================= A U S T R A L I A ================= 5STAR PROPERTIES: First Creditors' Meeting Set for Dec. 19 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of 5Star Properties Pty Ltd will be held at The Wilarra Room, the Grace Hotel, 77 York Street, in Sydney, NSW, on Dec. 19, 2017, at 12:00 p.m. David Allan Ingram and Richard Albarran of Hall Chadwick Chartered Accountants were appointed as administrators of 5Star Sinai on Dec. 7, 2017. 5STAR SINAI: First Creditors' Meeting Set for Dec. 19 ----------------------------------------------------- A first meeting of the creditors in the proceedings of 5Star Sinai Limited will be held at The Wilarra Room, the Grace Hotel, 77 York Street, in Sydney, NSW, on Dec. 19, 2017, at 10:00 a.m. David Allan Ingram and Richard Albarran of Hall Chadwick Chartered Accountants were appointed as administrators of 5Star Sinai on Dec. 7, 2017. 5STAR SION: First Creditors' Meeting Set for Dec. 19 ---------------------------------------------------- A first meeting of the creditors in the proceedings of 5Star Sion Limited will be held at The Wilarra Room, the Grace Hotel, 77 York Street, in Sydney, NSW, on Dec. 19, 2017, 11:00 a.m. David Allan Ingram and Richard Albarran of Hall Chadwick Chartered Accountants were appointed as administrators of 5Star Sion on Dec. 7, 2017. CARRIER ELECTRICAL: Second Creditors' Meeting Set for Dec. 18 ------------------------------------------------------------- A second meeting of creditors in the proceedings of Carrier Electrical Services Pty Ltd has been set for Dec. 18, 2017, at 11:00 a.m. at the offices of the offices of Veritas Advisory, level 5, 123 Pitt Street, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Dec. 18, 2017 at 9:00 a.m. David Iannuzzi and Steve Naidenov of Veritas Advisory were appointed as administrators of Carrier Electrical on Nov. 13, 2017. MJ LOGISTICS: Second Creditors' Meeting Set for Dec. 19 ------------------------------------------------------- A second meeting of creditors in the proceedings of MJ Logistics Pty Ltd has been set for Dec. 19, 2017, at 2:30 p.m. at the offices of SV Partners, 138 Mary Street, in Brisbane, Queensland. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Dec. 18, 2017, at 4:00 p.m. Terrence John Rose of SV Partners was appointed as administrator of MJ Logistics on Sept. 13, 2017. MY FAMILY DOCTORS: Court Enters Liquidation Order ------------------------------------------------- Lucy Smith at Townsville Bulletin reports that a Townsville medical centre closed its doors on Nov. 27 after a court found it owed more than AUD92,000 to a local cleaner. Kirwan clinic My Family Doctors, whose director Dr Praveen Kumar is currently suspended from medical practice and on bail for unrelated criminal charges, was ordered by a court into liquidation, according to the report. Townsville Bulletin relates that the clinic was ordered to pay AUD92,224 to Vinesh Prasad, the owner of A1 Clean Team in Townsville Magistrates Court. The cleaner was owed money from September 2014 to early last year, which his lawyer William Evans said had caused "significant hardship" for the owner and his family, the report relays. "Despite the non-payment, the business has managed to continue trading," he said. The report says Mr. Prasad made a statutory demand for payment within 21 days, which the company did not comply with. My Family Doctors was then presumed insolvent and Mr. Prasad, through his lawyers Connolly Suthers, applied for a winding up order, the report relates. Justice David North heard the application in the Supreme Court in Townsville on Nov. 27. Barrister Rowan Pack appeared for WorkCover Queensland, a supporting creditor as it is owed AUD5,444 by My Family Doctors. He and Mr. Evans provided affidavits and documents to the court, Townsville Bulletin notes. Solicitor Paul Gray, for My Family Doctors, applied to adjourn the hearing on Nov. 27, the report says. "I have no material at this point, I was dragged into this matter at 8:00 p.m. last night [Nov. 27]and asked to appear this morning [Nov. 28]," the report quotes Mr. Gray as saying. "I understand (Dr Kumar's) intention is to appeal the decision of the magistrate in the District Court." Mr. Pack and Mr. Evans objected to My Family Doctors tendering unsigned documents, Townsville Bulletin notes. "This application's been on foot for several weeks now, Your Honour, it's been filed, there was certainly ample opportunity to address the matters during the 21-day period," the report quotes Mr. Pack as saying. "There should have been an agreement reached, or an attempt for an agreement reached." Townsville Bulletin relates that Justice North said when a business has been presumed insolvent there must be "extraordinary circumstances" for the company not to be wound up. He made the winding up order and appointed a liquidator, Robert Humphreys of BRI Ferrier. A liquidator may close a business or trade with a view to selling it, the report notes. S&S PARTNERS: First Creditors' Meeting Set for Dec. 19 ------------------------------------------------------ A first meeting of the creditors in the proceedings of S&S Partners Group Pty Ltd will be held at Wilarra Room, The Grace Hotel, 77 York Street, in Sydney, NSW, on Dec. 19, 2017, at 12:30 p.m. David Allan Ingram of Hall Chadwick Chartered Accountants was appointed as administrator of S&S Partners on Dec. 19, 2017. THINK TANK 2017-1: S&P Assigns B (sf) Rating on Class F Notes -------------------------------------------------------------- S&P Global Ratings assigned its ratings to seven of the nine classes of small-ticket commercial mortgage-backed, floating rate, pass-through notes issued by BNY Trust Co. of Australia Ltd. as trustee of Think Tank Series 2017-1 Trust. Think Tank Series 2017-1 Trust is a securitization of loans to commercial borrowers, secured by first-registered mortgages over Australian commercial or residential properties originated by Think Tank Group Pty Ltd. (Think Tank). The ratings reflect: -- S&P's view of the credit risk of the underlying collateral portfolio, including the fact that this is a closed portfolio, which means no further loans will be assigned to the trust after the closing date. -- S&P's view that the credit support is sufficient to withstand the stresses we apply. This credit support comprises note subordination for each class of rated note. -- S&P's expectation that the various mechanisms to support liquidity within the transaction, including an amortizing liquidity facility equal to 3.0% of the outstanding balance of the rated notes, and principal draws, are sufficient under S&P's stress assumptions to ensure timely payment of interest. S&P's cash-flow analysis also reflects that a minimum margin will be maintained on the assets. -- The extraordinary expense reserve of A$250,000, funded from day one by Think Tank, available to meet extraordinary expenses. The reserve will be topped up via excess spread if drawn. RATINGS ASSIGNED Class Rating Amount (mil. A$) A1 AAA (sf) 180.0 A2 AAA (sf) 34.2 B AA (sf) 23.1 C A (sf) 23.7 D BBB (sf) 15.0 E BB (sf) 12.9 F B (sf) 5.7 G NR 2.4 H NR 3.0 N.R.--Not rated. ========= C H I N A ========= CHINA COMMERCIAL: Closes $700,000 Stock Offering ------------------------------------------------ China Commercial Credit, Inc., has entered into a securities purchase agreement with Long Yi, the chief financial officer of the Company and Yang Jie, a significant shareholder and VP of Finance of the Company whereby the Company agreed to sell 200,000 shares of common stock at a purchase price of $3.50 per Share, for gross proceeds to the Company of approximately $700,000. In connection with the purchase of the Shares, the Purchaser will receive a warrant to purchase up to the number of shares of the Company's common stock equal to 80,000 shares of common stock purchased by the Purchaser pursuant to the Purchase Agreement. The Warrants have an exercise price of $4.20 per share, become exercisable on the date of issuance and expire five years from the date of issuance. The offering closed on Dec. 4, 2017. The Purchase Agreements contain customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, termination provisions, and other obligations and rights of the parties. The Company estimates that the net proceeds from the offering will be approximately $685,000. The offering is being made pursuant to the Company's effective registration statement on Form S-3 (Registration Statement No. 333-217473) previously filed with the Securities and Exchange Commission and a prospectus supplement thereunder. The securities may be offered only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A prospectus supplement relating to the offering of the securities has been filed with the SEC and is available on the SEC's Web site at http://www.sec.gov. About China Commercial Credit Founded in 2008, China Commercial Credit -- http://www.chinacommercialcredit.com/-- provides business loans and loan guarantee services to small-to-medium enterprises, farmers and individuals in China's Jiangsu Province. Due to recent legislation and banking reform in China, these SMEs, farmers and individuals -- which historically had been excluded from borrowing funds from State-owned and commercial banks -- are now able to borrow money at competitive rates from microfinance lenders. China Commercial's independent accounting firm Marcum Bernstein & Pinchuk LLP, in Shanghai, China, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016, citing that the Company has accumulated deficit that raises substantial doubt about its ability to continue as a going concern. China Commercial reported a net loss of US$1.98 million on US$1.29 million of total interest and fee income for the year ended Dec. 31, 2016, compared with a net loss of US$61.26 million on US$2.98 million of total interest income for the year ended Dec. 31, 2015. The Company's balance sheet as of Sept. 30, 2017, showed US$7.71 million in total assets, US$8.48 million in total liabilities and a total shareholders' deficit of US$774,251. ELION RESOURCES: S&P Alters Outlook to Negative & Affirms 'B' CCR ----------------------------------------------------------------- S&P Global Ratings revised the outlook on Elion Resources Group Co. Ltd. to negative. S&P affirmed its 'B' long-term corporate credit rating on the company. S&P said, "We revised the rating outlook on Elion Resources to negative to reflect the uncertainty regarding the company's funding access following a recent technical default and misuse of bond proceeds. "We expect Elion Resources to maintain normal operations in desertification control and other businesses in China, and to generally perform in line with our base-case assessment. However, the recent events indicate a deficiency in the company's internal controls. If this dampens investors' confidence in Elion Resources, it may negatively affect the company's access to funding. In our estimate, Elion Resources has around Chinese renminbi (RMB) 22.0 billion of short-term debt maturing in the next 12 months. We believe that the company will mainly rely on short-term refinancing for the debt repayment. Declining support from its banks or the capital markets could increase refinancing risk and further weaken its liquidity. "We understand that management will take measures to enhance corporate governance. These measures include making debt repayments one day prior to the due date, seeking third-party confirmation on payment completion, and enhancing internal training. In our view, establishing a track record that shows improvements in internal control is key to restoring the investment community's confidence during refinancing." Timeline of events: Nov. 21, 2017: Elion Resources failed to repay its RMB1.5 billion three-year medium-term notes in full on time, constituting a technical default. According to company management, this was due to technical difficulties. The company made the rest of the payment plus interest for an additional day on Nov 22. Nov. 10, 2017: The China Securities Regulatory Commission in Inner Mongolia announced that Elion Resources misused certain bond proceeds, and it asked the company to make rectifications accordingly. According to the announcement, the company privately placed RMB2.1 billion bonds in March 2017 for working capital purposes. Subsequently, the company purchased a trust product with RMB1.0 billion of the proceeds, and transferred the beneficial rights to a Chinese bank, which in turn granted the company an RMB1.0 billion working capital loan. Management stated that by doing so, it saved several million renminbi in financing costs, but also suggested that the company would strictly adhere to rules and regulations in the future. The negative outlook on Elion Resources reflects the uncertainty on the company's funding access due to the recent technical default and misuse of bond proceeds. This also reflects S&P's view that the company's internal controls are deficient. S&P said, "We would downgrade Elion Resources if recent developments undermine the company's funding access or its operations. We could also downgrade the company if its financial metrics deviate significantly from our forecasts and worsen over the next two to three years, possibly due to weaker working capital management or higher debt than we estimate. "We would revise the outlook to stable if the company can demonstrate a track record of unimpeded access to funding, as well as improving its internal control with no observed deficiencies." ================ H O N G K O N G ================ NOBLE GROUP: Sells Coal Unit for US$34.5 Million ------------------------------------------------ The Business Times reports that Noble Group has completed the sale of MR Coal Marketing and Trading, a unit dealing in coal sales, for a cash consideration of US$34.5 million to an unnamed buyer. The sale, made by a Noble unit (Noble Americas Emerald Corp), was undertaken after the buyer had exercised a call option, which was granted by Noble in 2015 in connection with Noble's initial acquisition of MR Coal in the same year, the Business Times says. "The grant of the call option which is not exercisable at the discretion of the group did not amount to a disclosable transaction for the purposes of Chapter 10 of the listing manual of the Singapore Exchange Securities Trading Limited at the time of grant of the option," Noble said, the report relays. At the time of the sale, the book value and net tangible asset value of MR Coal, which is based in the United States, was around US$35.6 million, the Business Times adds. Hong Kong-based Noble Group Limited (SGX:N21) -- http://www.thisisnoble.com/-- engages in supply of agricultural, industrial and energy products. The Company supplies agricultural and energy products, metals, minerals and ores. Agriculture products include grains, oilseeds and sugar to palm oil, coffee, and cocoa. Energy business includes coal, gas and liquid energy products. In metals, minerals and ores (MMO), it supplies iron ore, aluminum, special ores and alloys. The Company operates nearly in 140 locations. It supplies growth demand markets in Asia and Middle East. Alcoa World Alumina and Chemicals is the subsidiary of this company. As reported in the Troubled Company Reporter-Asia Pacific on Nov. 22, 2017, Fitch Ratings downgraded Hong Kong-based commodities trader Noble Group Limited's Long-Term Foreign- Currency Issuer Default Rating (IDR), senior unsecured rating and the ratings on all its outstanding senior unsecured notes to 'CC' from 'CCC'. The Recovery Rating is 'RR4'. The downgrade follows Noble's Nov. 15, 2017 announcement that it has commenced discussions with stakeholders on its capital structure. ========= I N D I A ========= ARAN MOTORS: CRISIL Reaffirms 'B' Rating on INR7.4MM Cash Loan -------------------------------------------------------------- CRISIL Ratings has reaffirmed its rating on the long-term bank facilities of Aran Motors (AM) at 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 7.4 CRISIL B/Stable (Reaffirmed) Electronic Dealer Financing Scheme (e-DFS) 4.0 CRISIL B/Stable (Reaffirmed) Proposed Term Loan 0.9 CRISIL B/Stable (Reaffirmed) The rating continues to reflect the firm's highly leveraged capital structure and exposure to intense competition in the automobile industry. These weaknesses are partially offset by the extensive experience of its proprietor and established relationship with principal, Mahindra & Mahindra Ltd (M&M). Key Rating Drivers & Detailed Description Weakness * Highly leveraged capital structure: Networth is estimated to have been negative at INR(1.4) crore as on March 31, 2017, due to expected large capital withdrawal in fiscal 2017 and also limited accretion to reserves following low operating profitability of 2.5-3.0% constrains net worth. With gradual increase in networth following expected infusion in FY 2018, capital structure is still expected to remain leveraged over the medium term. * Exposure to intense competition in the automobile industry: The firm has to compete with dealers of other original equipment manufacturers (OEMs) such as Maruti Suzuki India Ltd and Tata Motors Ltd OEMs have also been encouraging more dealerships (thereby increasing competition among dealers) to improve penetration and sales. This has created the need for differentiation and hence, auto dealers have to refurbish their dealership outfits and service centres regularly, besides offering incentives to penetrate market. Strength * Established relationship with principal and proprietor's financial flexibility: AM benefits from its strong relationship with principal, M&M. The firm was set up by Mr. P A Paranthaman to diversify operations (he already has entities engaged in civil construction). It has dealership for M&M's commercial and passenger vehicles in the Thanjavur, Tiruvarur, Nagapattinam, and Pudukottai districts of Tamil Nadu. Revenue stream is diverse, with 70% of income from sale of passenger vehicles and the remaining from commercial vehicles. Outlook: Stable CRISIL believes AM will continue to benefit from its established relationship with M&M and funding from proprietor. The outlook may be revised to 'Positive' in case of substantial improvement in cash accrual due to higher-than-expected revenue and profitability, or if fresh equity infusion improves capital structure and liquidity. The outlook may be revised to 'Negative' if financial risk profile, particularly liquidity, deteriorates because of lower-than-anticipated cash accrual, stretch in working capital management, or substantial debt-funded capital expenditure. Set up in 2010 as a proprietorship concern by Mr. P A Paranthaman, AM is a dealer for M&M's passenger and commercial vehicles. ARDHENDU MONDAL: CRISIL Lowers Rating on INR6MM Secured Loan to D ----------------------------------------------------------------- CRISIL Ratings has downgraded its ratings on bank loan facilities of Ardhendu Mondal (AM) to 'CRISIL D/CRISIL D' from 'CRISIL BB- /Stable/CRISIL A4+'. The ratings downgrade reflects instances of delay in repayment of overdraft account due to liquidity mismatch. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 2.42 CRISIL D (Downgraded from 'CRISIL A4+') Proposed Bank Guarantee 3.58 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Secured Overdraft Facility 6.00 CRISIL D (Downgraded from 'CRISIL BB-/Stable') The ratings also reflect intense competition in the construction industry and liquidity mismatch. These weaknesses are partially offset by promoter's extensive industry experience. Key Rating Drivers & Detailed Description Weakness * Exposure to intense competition in the civil construction industry: The construction and civil works sector is highly fragmented, marked by the presence of large companies. The intense competition in the civil construction industry restricts the ability of a company to diversify its scale of operations from different segments and restricts its ability to fully pass on any significant increase in costs to end customers, given the tender-based nature of operations. * Liquidity mismatch: The firm has been exposed to risk of liquidity mismatch due to uneven revenue realisation. This has resulted in default against payment of dues to bank. Strengths *Promoters extensive experience: The partners of the company has industry experience of more than 25 years. This has helped the firm in winning tenders for the firm. The partners experience has also helped the firm in establishing healthy relation with the key suppliers which has helped the firm in sourcing its inputs smoothly. AM, is a partnership firm, incorporated in 1992. The firm is promoted by Mr. Ardhendu Mondal and his family members. AM undertakes road construction, irrigation, canal protection and maintenance projects, in the state of west Bengal. AVIAN TECHNOLOGIES: CRISIL Cuts Rating on INR3.26MM LT Loan to D ---------------------------------------------------------------- CRISIL Ratings has been consistently following up with Avian Technologies (AT) through letters and emails (dated January 24, and February 13, 2017, among others), apart from telephonic communication, for obtaining information. However, the issuer has remained non-cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 2 CRISIL D (Issuer Not Cooperating; Downgraded from 'CRISIL B-/Stable') Foreign Letter 1.95 CRISIL D (Issuer Not of Credit Cooperating; Downgraded from 'CRISIL B-/Stable') Long Term Loan 3.26 CRISIL D (Issuer Not Cooperating; Downgraded from 'CRISIL B-/Stable') Proposed Long Term .39 CRISIL D (Issuer Not Bank Loan Facility Cooperating; Downgraded from 'CRISIL B-/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale CRISIL has downgraded its rating on the bank facilities of AT to 'CRISIL D/Issuer Not Cooperating' from 'CRISIL B-/Stable/Issuer Not Cooperating.' The downgrade reflects delays by the firm in servicing debt. CRISIL had discussions with the bank, which has confirmed the delay in repayment. AT, established in 2013-14 (refers to financial year, April 1 to March 31), is a partnership firm of Mr. Anupkumar D and Ms. Lakshmi Venkatsubramanian. It is engaged in sheet metal fabrication and caters to industries such as capital goods, automotive, and construction equipment. The firm's plant is in Chennai and has installed capacity of 150 tonne per month. AZEEM INFINITE: Ind-Ra Assigns Final BB Ratings to NCDs ------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Azeem Infinite Dwelling India Private Limited's (AIDIPL) non-convertible debentures (NCDs) the following final ratings: -- INR2,000 mil. NCDs - Series 1, issued on November 16, 2017 at 12% coupon rate, due on September 2022, assigned IND BB/Stable rating; and -- INR1,950 mil. NCDs - Series 2 issued on November 16, 2017 at 12% coupon rate, due on September 2022, assigned with IND BB/Stable rating. The final ratings are based on the receipt of the debenture trust agreement, conforming to the information already received by Ind- Ra, and the confirmation from the issuer with respect to its execution. KEY RATING DRIVERS The ratings reflect moderate financing and high execution and offtake risks associated with AIDIPL's upcoming projects. The company was incorporated in 2016 to execute five residential real estate projects in Bengaluru. The total project cost is likely to be about INR23,336 million, of which INR5,000 million will be funded through external borrowings, INR485 million will be contributed by the promoters and the balance will be funded through customer advances. AIDIPL has used the proceeds of the NCDs for the acquisition of four projects and land for one project. The company has applied for a term loan of INR1,050 million. Its application is in process. The ratings, however, are supported by the extensive experience of AIDIPL's promoters. AIDIPL is associated with the G M Infinite group and its promoters have an experience of over 25 years in the real estate industry. The group has so far completed residential projects in Bengaluru, with a cumulative area of 2.12 million square feet (sf). The group, through other group companies, is developing 7.8 million sf of area. The G M Infinite group commenced operations as a construction contractor in 1962 and developed several projects with a total area of about 10 million sf. In 2007, the group switched to real estate development. The ratings are also supported by AIPIPL's moderate liquidity. The company expects to have a cash debt service coverage ratio of 1.4x-12.0x over the life of the projects. In accordance with the terms of the NCDs, the company will have to maintain a debt service reserve account sufficient to meet two quarters of interest payments for the first 12 months of the NCD subscription and thereafter a debt service reserve account sufficient to meet one quarter of interest payments. RATING SENSITIVITIES Negative: Lower-than-expected bookings and/or lower realisation in upcoming projects and/or significant time or cost overruns in the projects could result in a negative rating action. Positive: Fast bookings with large customer advances and timely execution of upcoming projects without additional debt could result in a positive rating action. COMPANY PROFILE AIDIPL was incorporated in 2016 by the G M Infinite group to execute five real estate projects. The company is managed by Gulam Mustafa and Jawind Hussain. BALAJI ENTERPRISE: ICRA Assigns B Rating to INR6.50cr Cash Loan --------------------------------------------------------------- ICRA has assigned the long-term rating of [ICRA]B to the INR6.50- crore fund-based facility of Balaji Enterprise. The outlook on the long-term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Cash Credit 6.50 [ICRA]B (Stable); Assigned Rationale The assigned rating is constrained by BE's relatively small scale of operations with limited track record and the below average financial risk profile as marked by low profit margins, small net-worth base and its elongated receivables cycle, which results in high working capital intensity. The ratings are further constrained by the intense competition in the coal trading business and the vulnerability of the firm's profitability to any fluctuation in coal prices. The rating, however, favourably factors in the location of its warehouse in Wankaner (Gujarat), which ensures an easy access to the Morbi-based tile manufacturers and coal suppliers. ICRA expects BE to witness healthy growth in its operating income in FY2018 on the back of anticipated increase in the volume handled. However, the profitability would remain on lower side owing to the trading nature of operations with a leveraged capital structure owing to high working capital requirements. In ICRA's opinion, BE's ability to ramp up its scale of operations amid intense competition and maintain a healthy credit profile will be some of the key rating sensitivities. Key rating drivers Credit strengths * Proximity to Morbi (Gujarat), India's ceramic hub: The firm is benefitted in terms of lower transportation costs and an easy access to Morbi-based tile manufacturers and coal suppliers. Credit weaknesses * Small scale of operations with limited track record: BE has recently commenced its operations in September, 2016 with its limited track record. Also, its scale of operations remains small with the operating income of INR7.45 crore in FY2017 (six months of operations), which has improved to INR14.13 crore in 6M FY2018. * Below average financial risk profile: Owing to the trading nature of operations, the profit margins stood low with an operating margin of 1.76% and net margin of 1.25% in FY2017. Further, a small net-worth base of INR1.44 crore as on March 31, 2017, coupled with relatively high debt levels to fund the high working capital requirements of the business resulted in an adverse capital structure with a gearing of 2.97 times as on March 31, 2017. * Intense competition and fragmented industry: The firm faces stiff competition from numerous players present in the coal trading industry, which limits its pricing flexibility and bargaining power with customers, thereby putting pressure on its revenues and margins. * Vulnerability of profitability to any fluctuation in coal prices: The sales realisations of the firm are primarily affected by the prevailing coal prices. Although, the procurement of coal is order backed, however, it maintains the inventory of ~30 days, which exposes its sales realisations, and hence its profit margins to any fluctuation in coal prices to the extent of inventory held by it. Established in September 2016, as a partnership firm, Balaji Enterprise is into coal trading and grading business. BE's warehouse is situated at Wankaner (Gujarat). It procures the coal of 0-50 millimetre (mm) dimension, which is then graded into three different dimensions - 0-6 mm, 6-20 mm and 20-50 mm and supplies to the customers based on their requirements. In FY2017 (six months of operations), the firm reported a net profit of INR0.09 crore on an operating income of INR7.45 crore. BALKRUSHNA GINNING: ICRA Reaffirms B+ Rating on INR5cr Loan ----------------------------------------------------------- ICRA has reaffirmed the long-term rating at [ICRA]B+ assigned to the INR6.00-crore fund based facilities of Balkrushna Ginning and Pressing Industries (BGPI). The outlook on the long-term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based-Cash Credit 5.00 [ICRA]B+ (stable); Reaffirmed Fund-based-Term Loans 1.00 [ICRA]B+ (stable); Reaffirmed Rationale The rating reaffirmation continues to remain constrained by BGPI's modest scale of operations and weak financial profile as evident by low profitability, weak debt coverage indicators and high working capital intensity. The rating also factors in the vulnerability of the firm's profitability to any fluctuations in raw material prices (raw cotton) considering the inherently low value-added nature of ginning business. The rating also factors in firm's exposure to stiff competition charecterised by numerous small and unorganised players and the partnership constitution of BGPI wherein any significant withdrawals from the capital account could adversely impact its net-worth and thereby its credit profile. The rating, however, continues to favourably factor in the extensive experience of the partners in the cotton ginning industry and the proximity of the firm's manufacturing unit to raw material source. Going forward, the firm's ability to scale up its operations and profitability, improve the coverage indicators and efficiently managing its working capital requirements would remain important from a credit perspective. Furthermore, the firm's ability to generate sufficient cash flow for timely repayment of its debt obligations would also remain key rating sensitivity. Key rating drivers Credit strengths * Extensive experience of the promoters in the cotton ginning industry: Promoters of BGPI have over a decade of experience in the cotton ginning industry leading to established relationship with the customers and suppliers. * Locational advantage by virtue of being located in cotton producing belt: BGPI is located in the Saurashtra region of Gujarat, an area with high cotton acreage and quality cotton crop. The firm benefits from its location due to the easy availability of quality raw cotton at competitive prices. Credit weaknesses * Weak financial risk profile: BGIP's scale of operations remained modest with operating income at INR27.86 crore in FY2017. The low value added nature of cotton ginning operations results in low operating profitability at 2.18% in FY2017 (compared to 3.33% in FY2016). In line with low profitability, the coverage indicators remained with interest coverage of 1.81 times, Total Debt/OPBDITA of 7.02 times and NCA/Total debt of 7% as on March 31, 2017. * Profitability remains vulnerable to fluctuations in raw material prices and regulatory changes: The profit margins are exposed to fluctuations in raw cotton prices, which depend upon various factors like seasonality, climatic conditions, global demand and supply situation, export policy, etc. Further, it is also exposed to the regulatory risks with regards to the minimum support price (MSP), which is set by the Government. * Intense competition and fragmented industry: The firm faces stiff competition from other small and unorganised players in the industry, which limits its bargaining power with customers and suppliers and hence, exerts pressure on its margins. * Risks inherent in partnership firm: Any capital withdrawal, given the partnership nature of constitution, could adversely impact the capital structure of the firm. Established in 2006, Balkrushna Ginning & Pressing Industries (BGPI) is a partnership firm and is owned and managed by the Kalasaria family. BGPI currently gins and presses raw cotton to produce cotton bales and cotton seeds. The manufacturing unit is located in Una, Junagadh district of Gujarat and is currently equipped with 18 ginning machines and 1 pressing machine, with an installed capacity to produce 180 cotton bales per day (24 hours operation). BUNDELA EXPORTS: ICRA Reaffirms B+ Rating on INR7cr Loan -------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B+ to the INR7.0-crore fund-based facilities of Bundela Exports. The outlook on the long-term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Limits 7.00 [ICRA]B+ (Stable); Reaffirmed Rationale The rating reaffirmation factors in the decline in operating income (OI) in FY2017 due to demonetisation and obstruction of mines operations due to water logging. This has, however, been accompanied by an improvement in the operating margins, thereby resulting in improved coverage indicators. ICRA's ratings continue to take into account the intense competition of the granite processing industry in which BE operates, with a large number of unorganised and small players, resulting in limited pricing flexibility. The rating also continues to be constrained by the firm's modest scale of operations and the vulnerability of its profitability to any change in Government policy on royalty charges and tax rate, as were seen in the previous years. ICRA also takes note of the partnership constitution of the company, which exposes it to risks of withdrawal of capital, dissolution etc. ICRA's ratings continue to positively factor in the promoter's experience in granite processing and assured availability of granite from quarries owned by the partners. The rating also continues to factor in its moderate capital structure, which, despite the proposed debt-funded capital expenditure for capacity enhancement in FY2019, will remain comfortable. Going forward, the firm's ability to ramp up its scale of operations, while maintaining the healthy profitability and optimal working capital intensity, will be the key rating sensitivities. Key rating drivers Credit strengths * Extensive experience of promoters in mining and constructions business: The partners were involved in trading of granite for more than two decades before starting granite processing at their own in BE. They also have a rich experience in the construction business. * Proximity to granite mines ensures easy availability of raw material: Based out of Lalitpur in Uttar Pradesh, the processing facility of BE is located near the quarry owned by its promoters. This ensures easy availability of raw granite for processing. Credit weaknesses * Decline in FY2017 revenue due to demonetisation and water logging: The firm posted lower sales turnover in FY2017, mainly due to the impact of demonetisation and water logging in the mines resulting from flood in and around Lalitpur district where mines are located. * Intense competition from various small players limiting pricing flexibility: The manufacturing process of granite blocks is not so technologically intensive. Low technical intensity translates into high competition among industry players. Moreover, given the low value addition of the product and the moderate capex requirement, the industry is primarily unorganised and fragmented with numerous small and regional players in the market. * Risk associated with partnership status of business: BE being a partnership firm is exposed to the risk of capital withdrawal by the partners. This is evident from the fact that its partners have withdrawn capital in the previous years. BE was set up in 2000 by the Bundela family in Lalitpur, Uttar Pradesh, with Mr Sujan Singh Bundela, Mr Chandra Bhushan Singh Bundela and Mr Shashi Bhushan Singh Bundela as partners, with equal profit sharing. The firm processes granite stone into proper size granite blocks and has an existing production capacity of 10,000 cubic metre per annum. It sources granite from a quarry owned by the partners. DELUXE COTSPIN: CRISIL Assigns 'B' Rating to INR9MM Term Loan ------------------------------------------------------------- CRISIL Ratings has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of Deluxe Cotspin (DC). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 9 CRISIL B/Stable Proposed Long Term Bank Loan Facility 0.1 CRISIL B/Stable Bank Guarantee 0.4 CRISIL A4 Cash Credit 2.0 CRISIL B/Stable The ratings reflect a modest scale due to the start-up nature of operations, an average financial risk profile, and susceptibility to volatility in raw material prices. These weaknesses are partially offset by the extensive experience of the partners in the textile industry. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations: Commercial production started only in September 2017. Revenue of about INR13 crore is expected in fiscal 2018. Due to the start-up nature of operations rand intense competition, revenue is likely to remain modest over the medium term. * Average financial risk profile: The gearing is expected to be high at 2.41 times as on March 31, 2018 debt protection metrics are likely to be subdued, with interest coverage ratio at 1.51 times and net cash accrual to total debt ratio at 0.04 time, for fiscal 2018. * Vulnerability of operating margins to raw material price fluctuation: Operating margin has declined to 7.03% in fiscal 2017, from over 10.65% in fiscal 2015. This is primarily due to susceptibility of operating margins to raw material prices and non-order backed inventory. Strengths * Extensive experience of the promoters: The twelve-year experience of the promoters, and their longstanding association with customers and suppliers, will continue to support the business risk profile. Outlook: Stable CRISIL believes DC will continue to benefit from the industry experience of its partners. The outlook may be revised to 'Positive' if operations are stabilised earlier than expected, leading to healthy cash accrual and an improvement in the financial risk profile. The outlook may be revised to 'Negative' if the operating margin is low, there is sizeable debt-funded capital expenditure, or working capital management deteriorates, significantly weakening the financial risk profile. DC was established in 2016 in Panipat, Haryana, by Mr. Yogesh Vadehra with his brother, Mr. Deepak Vadehra, and nephew, Mr. Raghav Chawla. The firm is engaged in open-ended cotton yarn spinning (count: 10s to 24s). The partners have over 12 years of experience in the industry through another firm. The manufacturing facility in Panipat has 1344 rotors with a capacity of 10 tonne per day. Commercial operations started from September 28, 2017. DIVYALAKSHMI TEXTILES: Ind-Ra Assigns BB+ LT Issuer Rating ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Divyalakshmi Textiles Pvt Ltd (DTPL) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR52.1 mil. Long-term loans due on February 2024 assigned with IND BB+/Stable rating; -- INR95 mil. Fund-based facilities assigned with IND BB+/Stable/IND A4+ rating; and -- INR102.9 mil. Non-fund-based facilities assigned with IND A4+ rating. KEY RATING DRIVERS The ratings reflect DTPL's small scale of operations, volatile EBITDA margin and moderate credit metrics due to the competitive nature of the textile industry. Revenue increased to INR550 million in FY17 from INR463 million in FY16, driven by a rise in orders from existing customers. At end-October 2017, DTPL had an order book of INR125.9 million, which will be executed in the next two months, thereby providing near-term moderate revenue visibility. DTPL booked INR250 million in revenue for 1HFY18. Moreover, EBITDA margin was 13.0%-18.4% over FY14-FY17. EBITDA interest coverage (operating EBITDA/gross interest expense) improved to 5.0x in FY17 from 3.0x in FY16, driven by a decrease in interest expenses. During the period, net financial leverage (adjusted net debt/operating EBITDAR) deteriorated to 1.7x from 1.0x. The deterioration was due to an increase in the debt taken for a capex. Ind-Ra expects credit metrics to deteriorate in the medium term in view of an additional debt-led capex to increase the installed capacity. The total cost will be INR50 million, 71% of which is debt-funded. The capex will commence from February 2018. The ratings also reflect a tight liquidity, indicated by an average utilisation of the fund- and non-fund-based working capital limits of about 98% and 78% for the 12 months ended November 2017. The ratings, however, are supported by the promoters' experience of over two decades in cotton yarn manufacturing that has led to established relationships with customers and suppliers. RATING SENSITIVITIES Negative: A decline in revenue and/or EBITDA margin leading to deterioration in the credit metrics on a sustained basis and/or a stressed liquidity position will lead to a downgrade. Positive: Any substantial improvement in revenue while maintaining EBITDA margin and credit metrics at the current levels will be positive for the ratings. COMPANY PROFILE Incorporated in 2005, DTPL is engaged in cotton yarn manufacturing. It has a facility with an installed capacity of 28,800 spindles in Aruppukottai (Tamil Nadu). DOLPHIN POLY: ICRA Reaffirms B+ Rating on INR8.19cr Loan -------------------------------------------------------- ICRA has re-affirmed the long-term rating of [ICRA]B+ for the INR8.19 crore fund-based facilities of Dolphin Poly Plast Private Limited. ICRA has also re-affirmed the short-term rating of [ICRA]A4 for the INR1.50 crore non-fund based facilities of DPPPL. In addition, ICRA has re-affirmed the long-term rating of [ICRA]B+ and the short-term rating of [ICRA]A4 for the INR0.31 crore unallocated limits of DPPPL. The outlook on the long-term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Limits 8.19 [ICRA]B+ (Stable); re-affirmed Non-fund Based Limits 1.50 [ICRA]A4; re-affirmed Unallocated Limits 0.31 [ICRA]B+ (Stable)/[ICRA]A4; re-affirmed Rationale The ratings continue to remain constrained by DPPPL's modest scale of operations, although its top-line reached INR21.0 crore in FY2017, reporting growth of 21.6% with addition in its product profile and healthy demand for its micro irrigation system (MIS) products. The ratings are also constrained by the leveraged capital structure characterised by a gearing of 3.1 times as on FY2017 end owing to debt-funded capex. ICRA notes DPPPL's stretched liquidity position evident from its consistently high utilisation of working capital limits as a result of elongated receivables from Government authorities. ICRA takes into account the fragmented nature of the industry with competition from established as well as a large number of unorganised players, along with vulnerability of profitability to volatility in raw material prices, given the fixed nature of contracts as well as its linkage to fluctuating crude oil prices. The ratings, however, favorably factor in more than two decades of the promoters' experience. The ratings further derive comfort from the company's registration with Gujarat Green Revolution Company Limited (GGRC) as an authorised supplier for Gujarat, as well as its registration with other states, namely Rajasthan, Maharashtra and Karnataka. ICRA expects steady growth in revenues over the near to medium term on account of the increasing demand of MIS products, supported by Government policies. Going forward, the ability of the company to scale up in a profitable manner, improve its capital structure and manage increasing working capital requirements would be some of the key rating sensitivities. Key rating drivers Credit strengths * Extensive experience of promoters in the irrigation industry: The promoters have an experience of more than two decades in the irrigation business. Mr. Mavji Limbasiya has been associated with pipe manufacturing since 1980 and Mr. Haresh Kothiya has been in the irrigation sector since 1998. * Authorised supplier of MIS with various state governments: DPPPL is registered with GGRC, as an authorised supplier of MIS in Gujarat. The company is also registered with other state governments, namely Rajasthan, Karnataka and Maharashtra. Registration with governments helps to gain a customer base for the sprinkler irrigation and drip irrigation systems. Credit weaknesses * Modest scale of operations: The operating income of the company remained at INR21.0 crore, despite reporting 21.6% growth in FY2017, indicating small scale of operations. * Leveraged capital structure and moderate coverage indicators: In spite of infusion of share capital in FY2017, debt funded capex caused the gearing level to remain high at 3.1 times as on March 31, 2017. It is expected to stretch further with disbursement of a term loan to the tune of INR1.5 crore in FY2018. Interest coverage and debt service coverage ratio (DSCR) stood moderate at 2 times and 1.3 times, respectively, as on March 31, 2017 because of a high debt level. * Stretched liquidity position reflected by high working capital intensity: Working capital intensity of the company, as reflected from its net working capital intensity/operating income, remained stretched at 39% as on March 31, 2017, because of elongated receivables from government authorities and high inventory holding. * Intense competition in the business; vulnerability of profitability to fluctuation in raw material prices: There are 59 authorised suppliers of MIS registered with GGRC (as of October 4, 2017), resulting in high competition from both established players and a large number of unorganised players. Furthermore, the company's profitability is vulnerable to fluctuating raw material prices that are linked to crude oil prices. Incorporated in 1999, Dolphin Poly Plast Private Limited (DPPPL) is involved in manufacturing high density polyethylene (HDPE) pipes, sprinkler pipes, emitting pipes, lateral pipes, polyvinyl chloride (PVC) pipes and fittings and unplasticised PVC pipes (uPVC). The company sells these products in the market as well as makes use of them in-house for supplying entire sprinkler irrigation and drip irrigation systems, from its plant in the Rajkot district of Gujarat. After a capex incurred in FY2017, the installed capacity of the company increased from 6,500 metric tonnes per annum (MTPA) to 8,100 MTPA. DPPPL is promoted by Mr. Mavji Limbasiya, Mr. Haresh Kothiya and their families. Mr. Mavji Limbasiya has experience in pipe manufacturing since 1980, and Mr. Haresh Kothiya has an experience of around two decades in assembling and manufacturing MIS related products. In FY2017, the company reported profit after tax of INR0.21 crore on an operating income of INR20.96 crore, as compared to a profit after tax of INR0.21 crore on an operating income of INR17.24 crore in FY2016. FAROOQ CONSTRUCTIONS: ICRA Reaffirms B- Rating on INR12cr Loan -------------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B- to the INR12.00-crore long-term fund-based facilities of Farooq Constructions and rating removed from Issuer Not Cooperating Category. The outlook on the long-term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term-Fund- 12.00 [ICRA]B- (Stable); reaffirmed based and removed from Issuer not cooperating Rationale The rating reaffirmation continues to remain constrained by the firm's small scale of operations which limits it from meeting necessary qualifications for taking up higher value orders, and its stretched capital structure due to withdrawals by the partners. The rating also takes into consideration the susceptibility of profitability to variations in raw material prices owing to absence of price variation clause in orders taken up by the firm. The rating continues to factor in the high working capital intensive nature of operations on account of delays in receiving payments from Public Works Department (PWD), the sole revenue contributor for the firm. The rating reaffirmation, however, derives comfort from long experience of the promoter in the construction industry and the proven track record of the firm in executing road projects. The rating positively factors in the healthy revenue visibility in the near term supported by strong book position of INR19.60 crore. The rating also takes into consideration the adequacy of manpower and equipments to execute orders in hand. Going forward, the ability of the firm to scale up operations and efficiently manage working capital requirements will remain the key rating sensitivities. Key rating drivers Credit strengths * Longstanding experience of the firm in the construction industry: The promoter of the firm, Mr. Baiju Rasheed, has an extensive experience of nearly 17 years in the construction industry. The long presence of the firm in the industry and its proven track record support growth prospects going forward. * Healthy order book position: The firm had unexecuted orders of INR19.60 crore as on November 10, 2017 which aids revenue visibility in the near term. Credit weaknesses * Small scale of operations: The operating income of Farooq Constructions stood at INR15.43 crore in FY2017. The small scale of operations of the firm limits its ability to meet pre- qualification requirements for taking up large scale projects. * Substantial geographic and customer concentration: The firm's presence is limited to road projects in and around Alappuzha in Kerala, which imposes the risk of geographic concentration of projects. Besides, with Public Works Department of Kerala being the sole revenue contributor, the customer concentration also remains high. * High competition for road sector projects in Kerala: The significant competition prevailing in the road construction segment in Kerala has resulted in a low bid success ratio for the firm in the past. * Risks associated with being a partnership entity: The partnership nature of the firm imposes risk of withdrawal from the capital account, as witnessed in the past, which may have an adverse bearing on the gearing level. Farooq Constructions is a civil works contracting firm based in Alappuzha in Kerala and was established in the year 2000 as a proprietorship concern owned and promoted by Mr. Baiju Rasheed. In the year 2009, it was converted to a partnership firm with Mr. Baiju Rasheed and his wife Mrs. Sajeela Baiju as its partners. The firm undertakes Kerala State Public Works Department (PWD) contract works, especially road construction and other related civil works. In FY2017, as per provisional financials, Farooq Constructions recorded an operating income of INR15.43 crore and a net profit of INR0.83 crore as compared to an operating income and a net profit of INR12.35 crore and INR0.66 crore respectively in FY2016. G.N PAL: ICRA Raises Rating on INR9cr Long Term Loan to B+ ---------------------------------------------------------- ICRA has upgraded the long-term rating to [ICRA]B+ from [ICRA]B on the INR10.00-crore bank limits of G.N Pal and Sons (GNPS). The outlook on the long-term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund- 9.00 [ICRA]B+ (Stable); upgraded Based-Cash credit from [ICRA]B Long-term Fund- 1.00 [ICRA]B+ (Stable); upgraded Based-Term Loans from [ICRA]B Rationale ICRA's rating upgrade takes into account the first full year of operations of GNPS, wherein the firm has been able to scale up its revenues and achieve the estimated profitability in FY2017. Furthermore, ICRA's rating takes into consideration the improved scale of revenues in 7M FY2018 as well as moderation in the regulatory environment. The rating also draws comfort from the fact that the firm operates a franchise of Tanishq, a well- established brand in the Indian markets. The favourable location of the store at one of the prime locations in Haldwani also results in higher footfall. The rating, however, is constrained by the limited track record of the firm and intense competition in the gold jewellery retailing from other organised and unorganised players in the Haldwani region. The rating is also constrained by the susceptibility of the firm's profitability to the risks in gold price fluctuation, although fast-moving inventory and return policy of Tanishq helps manage inventory risk to some extent. Going forward, the ability of the firm to further increase its scale of operations, manage its working capital requirements and improve its operating profitability will be the key rating sensitivities. Any significant change in the regulatory environment will be a key rating monitorable. Key rating drivers Credit strengths: * Ramp up of operations: The firm has been able to scale up its revenues and achieve the estimated profitability in its first full year of operations in FY2017. The firm has also been able to book improved scale of revenues in 7M FY2018 on a YoY basis on account of the growing reputation of the store and moderation in regulatory environment in which the firm operates. * Managing a franchise of the renowned Tanishq brand: The firm is managing a franchise of Tanishq in Haldwani, Uttarakhand. Tanishq is a prominent jewellery brand that has pioneered the concept of branded jewellery and ornaments in India. It is a division of Titan Company Limited, a company promoted by the Tata Group. * Favourable location of the store: The firm's franchise store is situated in Haldwani at one of the prime locations, Thandi Sarak. This store is the first one in the Haldwani region. Earlier, the nearest location for the Tanishq showroom was Bareilly, which is around 100 km away. Credit weaknesses: * Limited track record of operations: GNPS's operational track record is limited as it commenced operations in October 2015. However, the company has been able to scale up its revenues in the last two years. Further, visible performance improvement is yet to be seen. * Intense competition in gems and jewellery industry: The firm faces intense competition in the gold jewellery retailing from other organised and unorganised players in the Haldwani region, which restricts the operating profit margins of the firm. * Susceptibility to fluctuations in gold prices: The firm operates a franchise of Tanishq, wherein approximately 75-80% of the sales are achieved through the sales of gold jewellery. This exposes the firm's profitability to any adverse fluctuation in the gold prices. GNPS was established in 2015 as a partnership concern and started operations in October 2015. The firm operates a franchise of Tanishq in Haldwani. All the ornaments sold are manufactured and supplied by Titan Industries Ltd. The showroom has been set up to fulfil the norms and standards of Titan with respect to display, stocking and selling. GOALTORE COLD: CRISIL Reaffirms B- Rating on INR6MM Cash Loan ------------------------------------------------------------- CRISIL Ratings has reaffirmed its 'CRISIL B-/Stable' rating on the long-term bank facilities of Goaltore Cold Storage Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6 CRISIL B-/Stable (Reaffirmed) Proposed Cash Credit Limit 4 CRISIL B-/Stable (Reaffirmed) Working Capital Demand Loan 1 CRISIL B-/Stable (Reaffirmed) The rating continues to reflect GCSPL's weak financial risk profile, and exposure to risks inherent in the highly regulated and intensely competitive cold storage industry of West Bengal. These weaknesses are partially offset by the experience of the promoters. Key Rating Drivers & Detailed Description Weakness * Weak financial risk profile: Networth was modest at INR1.4 crore as on March 31, 2017, while gearing was high at 1.7 times. Financial risk profile may remain weak over the medium term due to muted accretion to reserve. Net cash accrual to total debt and interest coverage ratio were 0.06 and 1.22 times respectively for fiscal 2017 * Highly regulated and competitive nature of industry: The potato cold storage industry in West Bengal is regulated by the West Bengal Cold Storage Association. Rental rates are fixed by the state's department of agricultural marketing, thereby limiting the ability of players to make profit based on their strengths and geographical advantages. Furthermore, intense competition limits pricing power with suppliers and customers, and forces players to offer discounts to ensure healthy utilisation of capacity. Strengths * Experience of promoters: Benefits derived from the promoters' experience of two decades, strong market understanding, and healthy relations with traders and farmers should continue to support the business. Outlook: Stable CRISIL believes GCSPL will continue to benefit over the medium term from the experience of the promoters. The outlook may be revised to 'Positive' if revenue and operating margin increase substantially. Conversely, the outlook may be revised to 'Negative' if decline in revenue or operating margin, any large, debt-funded capital expenditure, or stretch in working capital cycle weakens financial risk profile. GCSPL, based in West Bengal, was initially set up as a partnership firm in 1993 by Mr. Tapan Kumar and his family; it was reconstituted as a private-limited company in 1997. The company operates a cold storage unit for potato farmers. GUDIMETLA SUNDARA: CRISIL Lowers Rating on INR25MM Loan to D ------------------------------------------------------------ CRISIL Ratings has been consistently following up for information with Gudimetla Sundara Rami Reddy & Co (GSRR) through letters and emails dated September 21 and October 26, 2017, and through telephone calls. However, the issuer remains non-cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 25 CRISIL D (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward-looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL is yet to receive any information on either the financial performance or strategic intent of GSRR. This restricts CRISIL's ability to take a forward looking view on the credit quality of the company. CRISIL believes that the information available for GSRR is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL B rating category or lower'. CRISIL has currently downgraded its ratings on the bank facilities of GSRR to 'CRISIL D/Issuer Not Cooperating' from 'CRISIL B+/Stable'. The downgrade reflects irregularity in the cash credit facility for more than 30 consecutive days. Set up as a partnership firm in 1985, GSRR mills and processes paddy into rice, and produces by-products such as broken rice, bran, and husk. Its rice milling unit is in West Godavari (Andhra Pradesh). Mr. Gudimetla Rama Krishna, Mr. Gudimetla Tulasi, Mr. Gudimetla Nagamani, and Mr. Gudimetla Sundara Rami Reddy are the partners. H R HYGIENE: CRISIL Assigns B+ Rating to INR3.13MM Term Loan ------------------------------------------------------------ CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the long-term bank loan facilities of H R Hygiene Products Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 3.13 CRISIL B+/Stable Cash Credit 2 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 0.87 CRISIL B+/Stable The rating reflects exposure to project implementation risks and to timely stabilisation and commensurate ramp-up in sales during its initial phase of operations. The rating also factors in expectation of an average financial risk profile because of the debt-funded project. These rating weaknesses are partially offset by the moderate entrepreneurial experience of the promoters and their funding support, and the ballooning, long-tenure term debt repayment structure, which cushions liquidity during the ramp-up phase. Key Rating Drivers & Detailed Description Weakness * Exposure to timely project implementation and stabilization: The operations are expected to commence from February 2018. Timely implementation, stabilisation and commensurate ramp-up in sales during the initial phase of the project, will remain critical, and will be monitored closely. * Average financial risk profile: Financial risk profile may remain average on account of debt contracted to fund the ongoing project. Project gearing is estimated around 1.79 times. Strengths * Moderate entrepreneurial experience of the promoters: Benefits from the moderate entrepreneurial experience of the promoters, Mr. Hemal Borsadiya and Mr. Rahul Sheradia, who have been associated with iron & steel trading and agricultural net manufacturing businesses for around a decade should continue to support the business risk profile in the initial phase of operations. * Promoters' funding support and favourable repayment structure: Equity and unsecured loans from the promoters, and the ballooning repayment structure for the long-tenure (7 years) term loan will support liquidity in the initial years of operations. Outlook: Stable CRISIL believes HRHPPL will benefit from the moderate entrepreneurial experience and funding support of the promoters. The outlook may be revised to 'Positive' if timely implementation and stabilisation of the project leads to anticipated revenue, profitability and cash accrual during the initial phase of operations. The outlook may be revised to 'Negative' if delay in implementation or stabilisation of the project leads to lower revenue and cash accrual, or if a stretch in working capital cycle weakens the financial risk profile, especially liquidity. Incorporated in July 2016, HRHPPL is establishing a green field project in Rajkot, Gujarat for manufacturing PVC sanitation napkins with an installed capacity of 1 lakh pieces per day. Mr. Hemal Borsadiya and Mr. Rahul Sheradia are the promoters. Commercial production is expected to begin in February 2018. HILLWOOD IMPORTS: CRISIL Lowers Rating on INR20MM Loan to D ----------------------------------------------------------- CRISIL Ratings has downgraded its ratings on the bank facilities of Hillwood Imports and Exports Private Limited (HIEPL) to 'CRISIL D/CRISIL D' from 'CRISIL B/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 1 CRISIL D (Downgraded from 'CRISIL B/Stable') Letter of Credit 20 CRISIL D (Downgraded from 'CRISIL A4') The ratings reflect instances of delay by HIEPL in servicing its debt obligations; the delays have been on account of weak liquidity. The weak liquidity is primarily due to large working capital requirement. The ratings also reflect HIEPL's average financial risk profile because of moderate gearing and modest net worth. However, the company benefits from the promoter's extensive experience in the timber trading business. Analytical Approach For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Hillwood Furniture Private Limited (HFPL) and HIEPL. This is because both the companies, together referred to as the Hillwood group, have a common promoter, operate in similar lines of business, and have fungible funds. Key Rating Drivers & Detailed Description Weaknesses * Average financial risk profile: HIEPL 's financial risk profile is average, marked by modest net worth and moderate gearing of INR3.7 crores and 1.27 times respectively in fiscal 2016. Also, debt protection metrics is weak as reflecting in its interest coverage and net cash accruals to total debt at 1.33 times and 0.10 times respectively for fiscal 2016. Strength * Extensive experience of the promoter and established position in timber trading business: The promoter has experience of over 25 years in the plywood and timber industry. The promoter has extensive experience in procurement of raw materials (timber), and his established contacts enable the group to procure high- quality raw materials at competitive prices; the group imports its entire timber requirement from Singapore and Myanmar. HFPL based in Kerala, were incorporated in 2001-02 and process timber logs. HFPL also manufactures building materials such as window, door, and kitchen frames. HFPL primarily deals in teakwood, while HIEPL deals mostly in hardwood. JBR IMPEX: CRISIL Assigns B+ Rating to INR20MM Cash Loan -------------------------------------------------------- CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the bank facility of JBR Impex India Private Limited (JBR). The rating reflects exposure to risks relating to early stage of operations, and average financial risk profile. These weaknesses are partially offset by the promoters' extensive experience in the agri commodity business. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 20 CRISIL B+/Stable Key Rating Drivers & Detailed Description Weakness * Exposure to risks relating to early stage of operations: Commercial operations at the new manufacturing facilities are to start by end-December 2017. Susceptibility to risks relating to stabilisation and demand are, therefore, likely to persist. * Average financial risk profile: Financial risk profile is expected to remain average due to working capital intensity in operations, and large working capital debt. Strengths * Extensive business experience of the promoters: Mr. Nitin Gaur and his family have been trading in agri commodities for the past 15 years. The longstanding experience has helped build a strong customer base and maintain supplier relations. Outlook: Stable CRISIL believes JBR will benefit from the extensive industry experience of its promoter. The outlook may be revised to 'Positive' if timely stabilisation of the project leads to anticipated revenue, profitability and cash accrual during the initial phase of operations. The outlook may be revised to 'Negative' if delay in ramp-up leads to lower revenue or cash accrual, or if stretch in working capital cycle weakens the financial risk profile, especially liquidity. A private limited company incorporated in April 2017, JBR is based in Delhi and is promoted and managed by Mr. Nitin Gaur. The company has set up a dal processing unit in Mayapuri with a capacity of 14,400 tonne per annum. Currently it is engaged in trading of dal. The manufacturing facilities are to be commercialised by end-December 2017. JIVANDHARA COTTON: ICRA Reaffirms B+ Rating on INR14cr Loan ----------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B+ to the INR14.00 crore fund-based limit of Jivandhara Cotton Industries. The outlook on the long-term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Limit- Cash Credit 14.00 [ICRA]B+(Stable); Reaffirmed Rationale The rating reaffirmation continues to remain constrained by JCI's weak financial profile, characterised by low profitability and weak debt coverage indicators. The rating also factors in the vulnerability of the firm's profitability to any fluctuations in raw material prices (raw cotton) considering the inherently low value-added nature of the ginning business. Further, it is also exposed to the regulatory risks with regards to the minimum support price (MSP), which is set by the Government. The rating also factors in the firm's exposure to stiff competition characterised by numerous small and unorganised players and the partnership constitution of JCI, wherein any significant withdrawals from the capital account could adversely impact its net-worth and thereby its credit profile. The rating, however, continues to favourably factor in the extensive experience of the partners in the cotton ginning industry and the proximity of the firm's manufacturing unit to raw material source. Going forward, the firm's ability to scale up its operations and profitability, and thereby improve its capital structure and coverage indicators would remain important from a credit perspective. Key rating drivers Credit strengths * Extensive experience of key promoters in the cotton industry: Promoters of JCI have over a decade of experience in the cotton ginning industry, leading to established relationships with customers and suppliers. * Locational advantage from being present in cotton producing belt: JCI is located in the Saurashtra region of Gujarat, an area with high cotton acreage and quality cotton crop. The firm benefits from its location due to the easy availability of quality raw cotton at competitive prices. Credit weaknesses * Weak financial risk profile: Volatile operating income as depicted from deep de-growth in FY2016 on account of suspension of operations for nine months. The low value added nature of cotton ginning operations results in low operating profitability at 0.58% in FY2017 (compared to 1.77% in FY2016). In line with low profitability, the coverage indicators remained weak with interest coverage of 1.97 times, Total Debt/OPBDITA of 9.45 times and NCA/Total debt of 8% as on March 31, 2017. * Profitability remains vulnerable to fluctuations in raw material prices and regulatory changes: The profit margins are exposed to fluctuations in raw cotton prices, which depend upon various factors like seasonality, climatic conditions, global demand and supply situation, export policy, etc. Further, it is also exposed to the regulatory risks with regards to the minimum support price (MSP), which is set by the Government. * Intense competition and fragmented industry structure: The firm faces stiff competition from other small and unorganised players in the industry, which limits its bargaining power with customers and suppliers, and hence, exerts pressure on its margins. * Risks inherent in partnership firm: Any capital withdrawal, given the partnership nature of the constitution, could adversely impact the capital structure of the firm. Established in 2006, as a partnership firm, Jivandhara Cotton Industries is in the business of ginning and pressing of raw cotton to produce cotton bales and cotton seeds. The firm's manufacturing facility is in Rajkot, Gujarat, which is equipped with 28 ginning machines with a processing capacity of 10,625 metric tonnes per annum (MTPA) of raw cotton. The partners of the firm are associated with another associate concern - Navjivan Cotton Industries, Gujarat Traders and Saurashtra Traders - engaged in the same business sector. KUMARAGIRI SPINNERSS: CRISIL Withdraws B Rating on INR37.2MM Loan ----------------------------------------------------------------- CRISIL Ratings has been consistently following up with Kumaragiri Spinnerss Private Limited (KSPL) for obtaining information through letters and emails dated January 20, 2017 and February 10, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee .98 CRISIL A4 (Issuer Not Cooperating; Rating Withdrawal) Cash Credit 18.50 CRISIL B/Stable (Issuer Not Cooperating; Rating Withdrawal) Long Term Loan 37.20 CRISIL B/Stable (Issuer Not Cooperating; Rating Withdrawal) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company'. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of KSPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for the company is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information' corresponding to CRISIL BB rating category or lower. Based on the last available information, the rating on bank facilities of KSPL continues to be 'CRISIL B/Stable/CRISIL A4; Issuer not cooperating' CRISIL has withdrawn its rating on the bank facilities of KSPL at the company's request and receipt of no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loans. Incorporated in 2004 and promoted by Mr. T R Thangavelu, KSPL manufactures cotton-and-polyester-blended yarn (blended typically in the ratio of 40:60). The company is based in Erode (Tamil Nadu).Incorporated in 2004 and promoted by Mr. T R Thangavelu, KSPL manufactures cotton-and-polyester-blended yarn (blended typically in the ratio of 40:60). The company is based in Erode (Tamil Nadu). MAPSKO BUILDERS: CRISIL Withdraws B Rating on INR245MM Term Loan ---------------------------------------------------------------- CRISIL Ratings has been consistently following up with Mapsko Builders Private Limited (MBPL) for obtaining information through letters dated July 10, 2017, and August 9, 2017, among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 25 CRISIL B/Stable (Issuer Not Cooperating) Term Loan 245 CRISIL B/Stable (Withdrawn) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL did not receive any information on either the financial performance or strategic intent of MBPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes information available for MBPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB Rating category or lower.' Based on the last available information, rating continues to be 'CRISIL B/Stable' (Issuer Not Cooperating). CRISIL has withdrawn its rating on the INR245 crore long term bank facility of MBPL at the company's request and based on a no- dues/no-objection certificates from its bankers. The rating action is in line with CRISIL's policy on withdrawal of bank loan ratings. Incorporated in January 2003, MBPL develops residential real estate projects. It is a part of the Krishna Apra group that was set up in 1997 by Mr. Amrit Singla (director, Apra Builders Ltd). NAGARSHETH SHIPBREAKERS: CRISIL Ups Rating on INR85MM Loan to B --------------------------------------------------------------- CRISIL Ratings has upgraded its ratings on the bank facility of Nagarsheth Shipbreakers to 'CRISIL B/Stable' from 'CRISIL D'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Line of Credit 85 CRISIL B/Stable (Upgraded from 'CRISIL D') The rating upgrade reflect sufficient track record with in timely payment for letter of credit & sufficient cushion in bank lines. NS has witnessed a turnaround in its business performance since feb-2017 with recovery in prices of scraps which allowed NS to ensure timeliness in payment of letter of credit & surplus in bank line. Key Rating Drivers & Detailed Description Weakness * Susceptible to movement in scrap prices and intense competition in the ship-breaking industry: The viability of the ship-breaking business is inversely proportional to the Baltic freight index1. If the freight index is low, the revenue earned by ships declines and therefore it is more profitable to dispose the old ships, thus improving the prospects for the ship-breaking industry. When the freight index is high, old ships become costlier. Further scrap prices movement also influences the operating margins. * Below-average financial risk profile: The firm's financial risk profile is below-average marked by its small net-worth, high gearing and weak debt protection metrics. Strength * Extensive industry experience of promoters: The promoter, Mr. Mukund Nagarsheth, and his son manage the overall activities of the firm. Mr. Mukund Nagarsheth is one of the promoters of this firm and thereby has over 26 years of industry experience. During this period, he has achieved domain expertise and is also able to maintain good relationship with suppliers and cash buyers for purchasing ships. Outlook: Stable CRISIL believes that NS will benefit over the medium term from the extensive industry experience of its partners. The outlook may be revised to 'Positive' if the firm achieves significantly higher scale and profitability, resulting in improvement in its financial risk profile. Conversely, the outlook may be revised to 'Negative' if NS's revenue or profitability decline significantly, most likely as a result of lower ship-breaking activity or volatility in forex rates, thereby resulting in cash flow mismatches and constraining its liquidity. NG is engaged in shipbreaking activities. The firm is managed by Mr. Devang M. Nagarsheth and Mr. Mukund S. Nagarsheth. NARAYANADRI HOSPITALS: Ind-Ra Raises LT Issuer Rating to 'BB-' -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Narayanadri Hospitals and Research Institute Private Limited's (NHRIPL) Long- Term Issuer Rating to 'IND BB-' from 'IND B'. The Outlook is Stable. The instrument-wise rating actions are: -- INR104.1 mil. Term loan due on March 2022 upgraded with IND BB-/Stable rating; and -- INR19.5 mil. Fund-based working capital limit upgraded with IND BB-/Stable/IND A4+ rating. KEY RATING DRIVERS The upgrade reflects an improvement in NHRIPL's revenue leading to an improvement in its credit metrics. Revenue grew to INR206 million in FY17 (FY16: INR160 million) due to an increase in occupancy level to 90% (70%). However, the scale of operations remained small. Gross interest coverage (operating EBITDA/gross interest expense) improved to 2.1x in FY17 (FY16: 1.7x) and net leverage (adjusted net debt/operating EBITDA) to 4.3x (4.7x) due to an increase in absolute EBITDA to INR33 million (INR28 million). However, the ratings are constrained by a decline in NHRIPL's EBITDA margin and tight liquidity position. The EBITDA margin deteriorated to 16.0% in FY17 (FY16: 17.3%) on account of increase in administrative expenses including doctors' salary and maintenance costs. The company's average maximum utilisation of the fund-based limits was 99% for the 12 months ended November 2017. NHRIPL sold INR48 million worth of lab equipment during FY16-FY17; proceeds will be used for working capital purposes. However, the ratings remain supported by the promoters' combined experience of over five decades in the healthcare industry and the locational advantage of its multi-specialty hospital, located at Renigunta Road, Tirupati. RATING SENSITIVITIES Positive: A significant increase in the scale of operations and an improvement in the liquidity position leading to a sustained improvement in the credit metrics would be positive for the ratings. Negative: A decline in the revenue and operating profitability or a stretch in the liquidity position resulting in a significant deterioration in the credit metrics would be negative for the ratings. COMPANY PROFILE Incorporated in 2010, NHRIPL is a 250-bed multi-specialty hospital providing orthopaedics, urology, neurology and cardiology services. NOOLI JEWELLERS: ICRA Reaffirms B+ Rating on INR22cr Cash Loan -------------------------------------------------------------- ICRA has reaffirmed the long term rating of [ICRA]B+ assigned to the INR22.00 crore (enhanced from INR12.00) fund based limits of Nooli Jewellers. The outlook on the long-term rating is 'stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based-Cash Credit 22.00 [ICRA]B+ (Stable) reaffirmed Rationale The rating reaffirmation is constrained by decline in operating income of the firm from INR57.66 crore in FY2016 to INR34.96 crore in FY2017 owing to weak demand and government regulations; and weak financial risk profile with gearing of 4.16 times as on March 31, 2017 and interest coverage of 1.38 times in FY2017. Being in jewellery retailing business, the firm is required to maintain high inventory and the margins of the firm remains exposed to volatility in gold prices in the absence of hedging mechanism. The rating continues to be constrained by high competitive nature of jewellery retailing business and risk inherent in proprietorship nature of the firm. However, the rating positively factors in the long standing experience of promoters in jewellery business; established position as jewellery retailer in Tanuku district and improved operating profit margin in FY2017 from 5.70% in FY2016 to 12.05% in FY2017 owing to improved realization and increased focus on sale of high end jewellery. Going forward, ability of the firm to improve revenues, maintain the profitability and manage its working capital requirements will be key rating sensitivities from credit perspective. Key rating drivers Credit strengths * Long standing experience of the promoters in the jewellery retail business: Nooli Jewellers is promoted by Mr. Nooli Venkareanam. It's a family run business and promoters have an experience of over seven decades in jewellery business. Credit weaknesses * Decline in operating income: The operating income declined to INR34.96 crore in FY2017 from INR57.66 crore in FY2016 owing to drop in sales volume on the back of increased gold prices and various government's regulations. * High working capital intensity: Increased credit sales in March 2017, resulted in high working capital intensity at 83% in FY2017 against 53% in FY2016. This has primarily been funded through increased interest bearing unsecured loans. * Weak capitalisation and coverage indicators: The gearing is high at 4.16 times as on March 31, 2017 owing to high debt levels. The interest coverage ratio is low at 1.38 times in FY2017. * Exposure of profitability to volatility in gold prices: Due to absence of firm hedging policy, profitability of the firm is exposed to volatility in gold prices. Nooli Jewellers (NJ) was formerly known as Nooli Venkatratnam, and was promoted by Mr. Nooli Venkatranam 70 years back. In the year 1979, name of entity changed to Nooli Jewellers. The firm is engaged in manufacturing and trading of gold, silver and stone studded jewellery. The firm's jewellery collection ranges from 22 karat gold jewellery to 18 karat jewellery studded with diamonds, gemstones like rubies, emeralds, sapphires, semi precious stones. NJ sells all forms of jewellery including earrings, necklaces, bangles, rings, anklets etc. The retail show room of the firm is at Tanuku, East Godavari district of Andhra Pradesh spread across 1500 sq. ft. In FY2017, the firm reported net profit of Rs.1.17 crore on an operating income of INR34.96 crore as compared to net profit of INR0.68 crore on an operating income of INR57.66 crore in FY2016. P.A.S. PETRO: CRISIL Reaffirms B Rating on INR3.5MM Cash Loan ------------------------------------------------------------- CRISIL Ratings has reaffirmed its rating on the bank facility of P.A.S. Petro Product (PAS) at 'CRISIL B/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3.5 CRISIL B/Stable (Reaffirmed) Foreign Letter of Credit 8.0 CRISIL A4 (Reaffirmed) The ratings continue to reflect PAS's modest scale of operations in the highly fragmented chemical trading industry and its working capital-intensive operations. These weaknesses are partially offset by the extensive experience of the promoters and their established relationships with customers and suppliers. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations in the intensely competitive and highly fragmented chemical trading industry: PAS's scale of operations remains small, despite being in the industry for over a decade, because of low value addition and commodity nature of products, and intense competition in the industry. * Working capital intensive operations: PAS has high working capital requirements, as reflected in gross current assets (GCA) of 150 to 250 days over the three years ended March 31, 2017. This is mainly on account of high level of inventory which the firm has to maintain of around 5-6 months. However around 50% of the inventory is order backed. Strength * Promoters' extensive industry experience and established relationships with suppliers and customers: The firm is based in Chennai and is promoted by Mr. S Senthil Kumar and his family members. The promoter family has been trading chemicals since 1952, and set up PAS in 1992 to trade on a large scale. Over the years, the promoters have developed strong relationships with suppliers and customers. Outlook: Stable CRISIL believes PAS will continue to benefit from the extensive experience of its promoters and its established relationships with customers and suppliers. The outlook may be revised to 'Positive' if revenue and profitability improve on a sustainable basis, resulting in a better financial risk profile. The outlook may be revised to 'Negative' if there is considerable decline in revenue or profitability or deterioration in working capital management resulting in stretched liquidity, or if the firm undertakes large, debt funded capital expenditure, affecting its financial risk profile. Established in 1992 and based in Chennai, PAS trades in soda ash and sodium sulphate. PRETTY JEWELLERY: CRISIL Reaffirms D Rating on INR5.3MM ST Loan --------------------------------------------------------------- CRISIL Ratings has reaffirmed its 'CRISIL D' rating on the short- term bank facilities of Pretty Jewellery Private Limited (PJPL; part of the Araska group). The rating continues to reflect overdue in the company's packing credit limit for more than 30 days. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Foreign Documentary Bills Purchase 5 CRISIL D (Reaffirmed) Packing Credit 5 CRISIL D (Reaffirmed) Proposed Short Term Bank Loan Facility 5.3 CRISIL D (Reaffirmed) PJPL has large working capital requirement and a subdued financial risk profile. However, it benefits from its established presence in the diamond industry, supported by its promoters' extensive experience and established customer relationships. Analytical Approach CRISIL has consolidated the business and financial risk profiles of Araska Diamond Pvt Ltd (ADPL) and its 99.9% subsidiary, PJPL. Both companies are in similar businesses, and have operational and financial linkages. They are together referred to, herein, as the Araska group. Key Rating Drivers & Detailed Description Weaknesses * Overdue bank facilities: Stretched liquidity due to delay in recovery of receivables from overseas clients has led to bank facilities remaining overdue for more than 30 days. * Large working capital requirement: The group had gross current assets of 369 days as on March 31, 2017, on account of large receivables and inventory. * Subdued financial risk profile: The financial risk profile is constrained by high total outside liabilities to adjusted networth ratio of 6.0 times as on March 31, 2017, and average interest coverage ratio of 1.8 times for fiscal 2017. Strengths * Established presence in the diamond industry supported by the promoters' extensive experience and established customer relationships: The key promoter, Mr. Shailesh Mehta, has experience of over three decades in the diamond industry, and has established relationships with major suppliers and customers. Incorporated in 2002, PJPL manufactures and exports gold and diamond studded jewellery. The company derives all its revenue from export. Its manufacturing facility in Seepz, Mumbai, has 120-125 artisans. ADPL was established as a proprietorship firm named SR Diamond in 1976, and was reconstituted as a private limited company with the current name in 2007. It trades in polished diamonds, and derives 90% revenue from export and 10% from diamond-studded jewellery. PRIYADARSHINI CONSTRUCTIONS: CRISIL Withdraws B+ Loan Rating ------------------------------------------------------------ CRISIL Ratings has withdrawn its outstanding ratings on the bank facilities of Priyadarshini Constructions (PC) at the company's request and based on the no due certificate received from the banker. The rating action is in line with CRISIL's policy on withdrawal of bank loan ratings. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 9 CRISIL B+/Stable (Rating reaffirmed and Withdrawal) PC, based at Bhopal (Madhya Pradesh), is a proprietorship firm of Mr. Pradeep Sharma. The firm is engaged in real estate development. It is currently undertaking construction of two residential projects in Bhopal. PRO KNITS: CRISIL Lowers Rating on INR20MM Packing Loan to 'D' -------------------------------------------------------------- CRISIL Ratings has downgraded its ratings on the bank facilities of PRO Knits to 'CRISIL D/CRISIL D' from 'CRISIL BB/Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting 8 CRISIL D (Downgraded from 'CRISIL BB/Stable') Packing Credit 20 CRISIL D (Downgraded from 'CRISIL A4+') The downgrade reflects instance of delay of 1 day in servicing of its term loan obligation on account of insufficient liquidity. The rating reflects modest scale of operations, higher customer and geographic concentration, and working capital intensive nature of operations. These weakness are partly offset by extensive experience of its promoters in the ready-made garment industry, their established relationship with clients and moderate financial risk profile of the firm. Key Rating Drivers & Detailed Description Weakness * Recent delays in debt servicing due to insufficient funds: Pro Knits has delayed in servicing its term debt obligations recently. There was a delay of 1 day in servicing of term loan obligations due to insufficient funds on account of delayed receivables. * Modest scale of operations and high geographic and customer concentration in revenue profile: The scale of operations remain moderate with revenues of around INR125 crores for the FY17 in highly fragmented ready-made garment industry. Further, despite large capital expenditure of INR9.5 crore over 2 years till fiscal 2017, the firm's revenue-growth has remained muted. Also, its top 2 customers predominantly present in UK and European countries, contribute about 85% of its total revenues, resulting in customer and geographical concentration and susceptibility to any demand fluctuations in these geographies. However, this is partially mitigated by the established relationship with the customers over more than 5 years. * Intense competition in highly fragmented industry: The ready- made garment manufacturing segment is marked by fragmentation and intense competition. Despite its presence in the business for more than 3 decades and having established relationships with customers and suppliers, the firm remains exposed to competition from other ready-made garment manufacturers thereby restricting its bargaining power and constraining the profitability. Strengths * Extensive experience of the promoters and steady relationship with customer: The promoter's extensive experience of over 3 decades in ready-made garments industry has helped to build established relationships with major customers such as Primark Ltd and Ernstings family. CRISIL believes that the firm will continue to be benefitted by its established relationships with key customers and experienced promoters' team. * Moderate financial risk profile: The financial risk profile is supported by above-average interest coverage ratio of 3.12 times as on March 31, 2017. However, the financial risk profile is constrained by a high gearing and below-average net cash accrual to adjusted debt (NCA/AD) of around 2.74 times and 3.3% respectively as on March 31, 2017. Gearing deteriorated from 2.2 as on March 31, 2016 to 2.7 as on March 31, 2017 on account of increase in short term bank borrowing towards meeting increase in the working capital requirements. Gross current assets (GCA) stood at 189 days as on March 31, 2017 and is expected to remain at similar levels over medium term. However the financial risk profile will be constrained by low liquidity which resulted in delay in debt servicing obligations. Going forward, the firm's liquidity position and its track record of servicing of debt obligations will be key monitorables for credit rating. Established in 1998 by Mr. Ravi Kumar and Mrs. Mallika as a partnership firm, Pro Knits is into manufacture and export of readymade garments to UK and various other European countries. The firm specialises in the manufacture of knitted garments of kids, men, and women. The firm has a manufacturing plant in Tirpur. R V R TECHNOLOGIES: Ind-Ra Raises LT Issuer Rating to 'B'/Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded R.V.R. Technologies Limited's (RVR) Long-Term Issuer Rating to 'IND B' from 'IND B-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR10 mil. Term loan withdrawn with WD rating (repaid in full); -- INR65 mil. (increased from INR45 mil.) Fund-based limits upgraded with IND B/Stable rating; and -- INR10 mil. Non-fund-based limits withdrawn with WD (repaid in full). KEY RATING DRIVERS The upgrade reflects an improvement in RVR's net working capital cycle and a shift in its business model to trading (FY17: 80%; FY16: 60%) from manufacturing. The net working capital cycle improved to 117 days in FY17 (FY16: 144 days) due to a decrease in inventory holding period to 98 days (124 days) on account of increased focus on the trading division. RVR had almost fully utilised its fund-based facility over the 12 months ended November 2017. The ratings also benefit from growth in revenue to INR505 million in FY17 (FY16: INR384 million) due to increase in orders. However, RVR's scale of operations remained small. During 1HFY18, the company achieved revenue of INR320 million. As of November 2017, it had an order book of INR35 million, to be executed before end-December 2017. However, EBITDA margin declined to 3.6% in FY17 (FY16: 5.8%) due to higher execution of low margin orders in the trading division. Despite repayment of term loan, RVR's credit metrics continued to be weak in FY17 owing to the decrease in the EBITDA margin. Interest coverage (operating EBITDA/gross interest expense) was stable at 1.6x in FY17 (FY16: 1.6x), while net financial leverage (total adjusted net debt/operating EBITDAR) deteriorated to 8.1x (6.0x). However, the ratings remain supported by the directors' over a decade of operating experience in the manufacturing of cycle tube. RATING SENSITIVITIES Positive: A substantial increase in the revenue leading to an improvement in the credit metrics and an improvement in the liquidity position could be positive for the ratings. Negative: A decline in the revenue and operating profitability or a stretch in the liquidity position resulting in a significant deterioration in the credit metrics would be negative for the ratings. COMPANY PROFILE Incorporated in 1984, RVR is a Bhopal-based company engaged in the trading and manufacturing of bicycle tubes and tyres. The company manufacturing unit, located in Mandideep (Bhopal), has an annual installed capacity of 11 million tubes. RAJASTHAN SUN: Ind-Ra Withdraws WD Sr. Project Term Loan Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Rajasthan Sun Technique Energy Private Limited's (RSTEPL) senior project term loan rating as follows: -- INR1,140 mil. (INR935.1 outstanding on Sept. 30, 2017 mil.) Senior project term loan due on March 31, 2028 withdrawn with WD rating. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating for the term loan after it received no objection from the lender. This is consistent with The Securities and Exchange Board of India's circular dated 31 March 2017 for credit rating agencies. Last published rationale for RSTEPL can be accessed here. COMPANY PROFILE RSTEPL is a special purpose vehicle, incorporated to build, maintain and operate a 100MW concentrated solar power-based plant at Pokaran tehsil, Rajasthan. The project company is a 100% subsidiary of Reliance Power Limited. The project commenced operations in November 2014, eight months after the revised schedule date. The project is based on Areva Solar's proprietary compact linear Fresnel reflector technology. RSTEPL has a 25-year power purchase agreement with NTPC Vidyut Vyapar Nigam Limited, at a fixed tariff of INR11.97/unit. RELIANCE COMMUNICATIONS: Lenders Get Bids for Company's Assets -------------------------------------------------------------- Business Standard reports that lenders to the Anil Ambani- controlled Reliance Communications (RCom) have received bids for the assets of the ailing entity, under heavy debt. The assets put on the block are in telecom and real estate, the report says. Its earlier plans for merger with Aircel and sale of its tower business to Brookfield have not succeeded, Business Standard notes. It was looking to monetise real estate assets in the Mumbai region and Delhi to repay and bring down debt. According to the report, senior public sector bank (PSB) executives said their consortium had received bids for the assets and these would be processed. RCom is already under a Strategic Debt Restructuring plan, signed in June. The lenders' consortium, led by State Bank of India, have to decide on converting part of the debt into equity by the end of this month, Business Standard relates. Business Standard adds that a PSB official said the issue of conversation of debt and the strategy to deal with insolvency suits filed by China Development Bank against the company would be taken up in a meeting scheduled next week. The Chinese bank had filed a case on November 28 under the Insolvency and Bankruptcy Code. Credit rating agency Fitch has also withdrawn its ratings for RCom, the report notes. The company has announced various asset sales and a comprehensive debt resolution plan. "Accordingly, for the time being, no payment of interest and/or principal is being made to any lenders and/or bondholders of the company," the report relays. About Reliance Communications Based in Mumbai, India, Reliance Communications Ltd (BOM:532712) -- http://www.rcom.co.in/Rcom/personal/home/index.html-- is a telecommunications service provider. The Company operates through two segments: India Operations and Global Operations. India operations segment comprises wireless telecommunications services to retail customers through global system for mobile communication (GSM) technology-based networks across India; voice, long distance services and broadband access to enterprise customers; managed Internet data center services, and direct-to- home (DTH) business. Global operations comprise Carrier, Enterprise and Consumer Business units. It provides carrier's carrier voice, carrier's carrier bandwidth, enterprise data and consumer voice services. The Company owns and operates Internet protocol (IP) enabled connectivity infrastructure, comprising over 280,000 kilometers of fiber optic cable systems in India, the United States, Europe, Middle East and the Asia Pacific region. As reported in the Troubled Company Reporter-Asia Pacific on Nov. 22, 2017, Moody's Investors Service has withdrawn Reliance Communications Limited's (RCOM) Ca corporate family rating (CFR) and its negative outlook. At the same time, Moody's has also withdrawn the Ca rating on RCOM's senior secured notes. On Nov. 6, 2017, RCOM announced that pursuant to the invocation of Strategic Debt Restructuring (SDR) scheme by the lenders of the company as per the Reserve Bank of India guidelines agreed in June 2017, the company is under a debt standstill period until December 2018, as it looks to complete a corporate and debt restructuring. Accordingly, for the time being, no payment of interest and/or principal is being made to any RCOM lenders and/or bondholders. The TCR-AP reported on Dec. 8, 2017, that Fitch Ratings has withdrawn Rcom's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) of 'Restricted Default' (RD) and the rating on Rcom's USD300 million 6.5% senior secured notes due 2020 of 'C' with Recovery Rating of 'RR4'. S. S. ENTERPRISES: CRISIL Assigns 'B' Rating to INR15MM Bank Loan ----------------------------------------------------------------- CRISIL Ratings has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of S. S. Enterprises - Mira Road Thane (SS). The ratings reflect volatility in the traffic volumes in toll collection and working capital intensive operations. This weakness are partially offset the proprietors' extensive experience and SS's average financial risk profile. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 10 CRISIL B/Stable Bank Guarantee 15 CRISIL A4 Proposed Bank Guarantee 15 CRISIL B/Stable Key Rating Drivers & Detailed Description Weakness * Working capital intensity in operations: Operations are working capital intensive as reflected in gross current assets of 140 days as on March 31, 2017, owing to various deposits required to be maintained with the government authorities. * Volatility in traffic volumes in toll collections: The revenue risks persist as contracting authorities do not provide any traffic guarantee. The revenue risks associated with variability in traffic volumes which will persist over the medium term; however, a strong in-house traffic assessment team partially offsets the risk. Strengths * Extensive experience of the proprietor: The proprietor has extensive experience of over two decades in toll collection operations. His extensive knowledge of traffic movement, toll forecasting and cash management of toll plaza collection will continue to benefit the firm over the medium term. * Average financial risk profile: Net worth is estimated about INR29-30 crore, and the TOLTNW ratio at around 4.5-5 times, for fiscal 2018. The interest coverage ratio is estimated at around 2.3-2.5 times in fiscal 2018. Outlook: Stable CRISIL believes SS will continue to benefit from the extensive experience of the promoters in the toll collection business. The outlook may be revised to 'Positive' if a significant growth in revenue and profitability, leads to higher cash accrual leading to improvement in the financial risk profile. The outlook may be revised to 'Negative' in case of a decline in revenue or margin, or if a stretch in the working capital cycle, weakens the financial risk profile, especially liquidity. Incorporated in 2005, SS, is a Thane based company, is involved in toll and parking collection on contractual basis for National Highways Authority of India (NHAI; rated CRISIL AAA/Stable) and Public Work Department (PWD) bodies of states. The company is not engaged in building/operating of roads. SAP INDUSTRIES: ICRA Lowers Rating on INR2.50cr Loan to 'B' ----------------------------------------------------------- ICRA has downgraded the long-term rating from [ICRA]B+ to [ICRA]B for the INR2.50-crore cash credit facility of SAP Industries. ICRA has also reaffirmed the short-term rating at [ICRA]A4 for the INR0.50-crore standby line of credit facility and INR5.25- crore bank guarantee facility of SAP Industries. ICRA has also revised rating from [ICRA]B+/A4 to [ICRA]B(Stable)/A4 for the unallocated limits of SAP. The outlook on the long-term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 2.50 [ICRA]B (Stable); Downgraded from [ICRA]B+ Fund based-Standby Line of Credit 0.50 [ICRA]A4; Reaffirmed Non-fund based- Bank Guarantee 5.25 [ICRA]A4; Reaffirmed Unallocated limits 1.75 [ICRA]B(Stable); downgraded from [ICRA]B+ and [ICRA]A4 reaffirmed Rationale The revision in ratings take into account the firm's declining scale of operations over FY2016, FY2017 as well as during the current fiscal, on the account of slowdown in orders from Tamil Nadu Electricity Board (TNEB). The shrinking scale of operations coupled with decline in realizations in FY2017 resulted in decline in operating profitability from 9.3% in FY2016 to 7.7% in FY2017. The ratings continue to factor in the high customer concentration risks with 92% of the revenues in FY2017 being derived from the State Power utility; as well as the intense competition in the fragmented industry, which limit the firm's pricing flexibility. The ratings also remain constrained by the working capital intensive nature of operations owing to delayed collections from TNEB as evidenced by significantly high debtor days of 164 days in FY2017. The ratings, however, continue to positively factor in the significant experience of the promoters in the industry and the price variation clauses in the orders which support margins to an extent. Going forward, the ability of the firm to improve its revenues and margins amidst the competition and efficiently manage its working capital cycle, to generate adequate and timely cash flows for debt servicing obligations would remain the key rating sensitivities. Outlook: Stable ICRA believes SAP Industries will continue to benefit from the extensive experience of its partners and the favourable price variation clauses which are expected to support the margins to some extent. The outlook may be revised to 'Positive' if substantial improvement in orders translating into growth in revenue and profitability, and better working capital management, strengthens the financial risk profile. The outlook may be revised to 'Negative' if the order inflow and execution are further impacted owing to persisting scenario in the State; and if significant delays in collections from the TNEB result in further increase in working capital intensity and strain the liquidity position. Key rating drivers Credit strengths * Significant experience of promoter in the industry for more than three decades: The promoters have over three decades of experience in the transformers industry and are actively involved in the firm's operations. * Favourable price variation clauses in the orders support margins, however plagued by delayed collection from the State Power utility: The presence of price-variation clause links the sales realization to variation in raw material costs, thus protecting the margins of the company to some extent. However, overall the realisations have witnessed significant decline in FY2017. Credit weaknesses * Shrinking scale of operations on account of slowdown in orders from Tamil Nadu Electricity Board - On the account of slowdown in orders from TNEB and decline in realizations on account of execution of small ticket orders, the revenues witnessed a de- growth of 23.2% from INR18.2 crore in FY2016 to INR14.0 crore in FY2017. The margins declined on account of under-absorption of overheads coupled with increase in expense towards bill discounting in FY2017. * High working capital intensity of the business owing to stretched receivables: Working capital intensity was much higher at 41.1% in FY2017 compared to 22.2% in FY2016 on account of slowdown in collections from TNEB and increase in inventory. In spite of certain bills being paid at discounted amounts by Tamil Nadu Industrial Investment Corporation on behalf of TNEB to SAP, there are significant delays in collections from TNEB resulting in high debtor position of INR6.4 crore as on March 31, 2017. * High customer concentration with majority of revenues derived from State Power utility: The firm's customer profile has remained concentrated towards TNEB with more than ~90% of the total revenue being derived from the single customer, resulting in vulnerability to variability in demand from single customer as witnessed recently. SAP Industries was established in the year 2001 as a partnership concern with Mr. A Shanmugavelayuthan and his friend Mr. G.V. Parthasarathy. The firm primarily manufactures electrical transformers, followed by isolators as well as does fabrication work on a minor scale. The firm supplies transformers, both distribution and power transformers, largely to Tamil Nadu Electricity Board. The manufacturing unit is located at SIDCO Industrial Estate, Thirumudivakkam (Chennai). In FY2017, the company reported a net profit of INR0.2 crore on an operating income of INR14.0 crore compared to a net profit of INR0.6 crore on an operating income of INR18.2 crore in the previous year. SHIVA INTERNATIONAL: CRISIL Assigns B Rating to INR5MM Loan ----------------------------------------------------------- CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Shiva International (SI). The rating reflects the firm's modest scale of operations, large working capital requirement, and modest financial risk profile marked by high external indebtness and subdued debt protection metrics. These weaknesses are partially offset by the extensive experience of the promoter in the garments industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 2 CRISIL B/Stable Cash Credit 5 CRISIL B/Stable Proposed Fund- Based Bank Limits 4 CRISIL B/Stable Analytical Approach CRISIL has treated unsecured loans (Rs 4.30 crore as on March 31, 2017) as neither debt nor equity as the loans are expected to remain in the business over the medium term. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations in intensely competitive industry: SI has modest scale of operations reflected in revenue of INR15.8 crores for fiscal 2017. The industry is exposed to the risk of low entry barriers. The small initial investment and the low complexity of operations have resulted in existence of innumerable entities, much smaller in size, leading to significant fragmentation. The company is a modest-size player in the readymade industry and faces intense competition from other readymade garment manufacturers and traders. This restricts the bargaining power with customers and suppliers. * Large working capital requirement: Gross current assets were around 400 days in the three fiscals through March 2017 on account of large receivables (395 days as on March 31, 2017). In the last quarter of the fiscal, receivables rise on account of increased orders due to seasonal factors. Inventory is moderate, at 50-75 days, as most transactions are order-backed. Part of the working capital is funded through payables and unsecured loans from the promoter. With increase in scale of operations, the working capital requirements will increase, and will remain a key rating sensitivity factor. * Modest financial risk profile: Networth was INR50.8 million as on March 31, 2017, on account of low operating margin. Total outside liabilities to adjusted networth ratio was high at 6.01 times as on March 31, 2017 (considering unsecured loans as neither debt nor equity). SI's debt protection metrics have remained moderate with interest coverage and net cash accruals to total debt ratios of 1.95 times and 0.08 times in fiscal 2017. Strengths * Promoter's extensive industry experience, and established relationships with customers and suppliers: Promoters' extensive experience of more than 15 years in the garment export business, has helped the firm to establish strong relationship with global customers across the US and Europe. The promoter's longstanding presence has led to established relationships with suppliers in the domestic market. Outlook: Stable CRISIL believes SI will benefit from the extensive industry experience of its management. The outlook may be revised to 'Positive' if revenue and profitability, as well as working capital management, improve, leading to a better financial risk profile. The outlook may be revised to 'Negative' if lower-than- expected revenue or profitability, or stretch in working capital cycle, weakens financial risk profile, particularly liquidity. Set up by Mr. Atul Tyagi in 2002, SI trades and exports garments for women and kids. It is based in Noida, Uttar Pradesh, and exports to the US and Europe. SHREE SAIRAM: CRISIL Reaffirms B+ Rating on INR9.5MM Cash Loan -------------------------------------------------------------- CRISIL Ratings has reaffirmed its rating on the long-term bank facility of Shree Sairam Communications (India) Private Limited (SSCPL) at 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 9.5 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect modest scale of SSCPL's operations in the intensely fragmented industry, and its below- average financial risk profile. These rating weaknesses are partly offset by the extensive industry experience of promoters and the company's established relationship with its principal, Bharti Airtel Limited. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations in intensely competitive trading industry: SSCPL is engaged in distributorship of Airtel's products to retailers across Chennai. With revenues of INR45 crore in fiscal 2017, the scale remains modest in the highly competitive and fragmented market marked by numerous players in the same business. * Modest net worth and high external indebtedness: The financial risk profile was below-average marked by small net worth of INR1.3 crore as on 31st March, 2017 and high total outstanding liabilities to tangible net worth at 8.5 times as on same date. With modest accretions to reserves, the net worth is expected to remain at similar levels over the medium term. Strength * Promoters' extensive entrepreneurial experience: The promoters of SSCPL have been in the business since 2007 and have over the years developed healthy business relation with their principal, Bharti Airtel Limited. The company also has an established customer base of around 400 retailers in Chennai. CRISIL believes that the company will benefit over the medium term from its promoters' extensive entrepreneurial experience and resourcefulness. Outlook: Stable CRISIL believes that SSCPL will continue to benefit from the promoters' extensive industry experience. The outlook may be revised to 'Positive' if significant improvement in revenues and profitability along with efficient working capital management results in better cash accruals, and consequently to improved liquidity. Conversely, the outlook may be revised to 'Negative' if financial risk profile further weakens owing to decline in its cash accruals or deterioration in its working capital management, or significant withdrawals by the promoters. Incorporated in 2014, Chennai-based SSCPL is an authorized distributor of Airtel SIM cards, mobile handsets, recharge vouchers and Airtel DTH products to 200 retailers in Chennai region. The operations of the company managed by Mr. S Ponkarthick and Mr. Sushil Lalwani. SN JYOTI: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned SN Jyoti Associates Private Limited (SJAPL) a Long-Term Issuer Rating of 'IND BB' with a Stable Outlook. The instrument-wise rating actions are as follows: -- INR100 mil. Fund-based working capital limit assigned with IND BB/Stable rating; -- INR120 mil. Non-fund-based working capital limit assigned with IND A4+ rating. KEY RATING DRIVERS The ratings reflect SJAPL's moderate scale of operations, credit metrics and liquidity because of the small order sizes. During FY17, revenue improved to INR594 million (FY16: INR558 million) on account of the healthy execution of work orders. Net interest coverage (operating EBITDA/gross interest expense) improved to 2.2x in FY17 (FY16: 2.0x) due to a decline in interest cost. However, the net financial leverage (adjusted net debt/operating EBITDAR) increased slightly to 3.1x (3.0x) due to a fall in the operating EBIDTA margins to 12.1% (13.5%) on account of an increase in the execution expenses. Its use of the working capital limits was around 98.4% on average utilisation during the 12 months ended October 2017. The ratings factor in SJAPL's revenue visibility for the next one to one and half years, arising from the order book of INR687.9 million. The company generally takes in short-term contracts which can be executed within a period of one year. The ratings are supported by more than two decades of experience of the company's directors in civil construction. RATING SENSITIVITIES Negative: Any decline in the revenue and profitability leading to a decline in the credit metrics will be negative for the ratings. Positive: A substantial increase in the order book resulting in a substantial increase in revenue while maintaining the current credit metrics could lead to a positive rating action. COMPANY PROFILE Incorporated in 2012, SJAPL executes civil construction work contracts for both private and government departments. SRI CHENNAKESAVA: CRISIL Reaffirms B Rating on INR2MM LT Loan ------------------------------------------------------------- CRISIL Ratings has reaffirmed its ratings on the bank loan facilities of Sri Chennakesava Constructions at 'CRISIL B/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 21 CRISIL A4 (Reaffirmed) Overdraft 1 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 2 CRISIL B/Stable (Reaffirmed) The ratings continue to reflect a small scale of operations, high geographic and customer concentration in order book, and exposure to intense competition in the construction industry. These rating weaknesses are partially offset by the extensive industry experience of the promoters and moderate financial risk profile. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations, and high geographic and customer concentration in order book: The business risk profile is constrained by modest scale of operations and limited revenue diversity. Modest revenue, at INR34.74 crore in fiscal 2017, prevents the firm from achieving economies of scale and limits the bargaining power with suppliers. SCC operates mainly in Andhra Pradesh and Telangana. Any instance of civic disturbance or labour shortage in these states could impact realisation from projects, thereby impacting the liquidity. The business risk profile will remain constrained over the medium term by its modest scale of operations and the high geographic and customer concentration in its revenue profile. * Exposure to intense competition in the construction industry: The civil construction segment is highly fragmented, marked by the presence of large companies as well as small local players as a major portion of the firm's orders are tender-based, and its revenue depends on ability to bid successfully for these tenders. Profitability of each project is subject to factors, such as pricing, availability of labour, machinery mobilisation, and weather conditions. In view of its promoters' extensive experience, the firm has an edge over other companies of similar or smaller size. However, continues to face competition from major players as well as local and small unorganised players, constraining its profitability. The business risk profile will remain constrained over the medium term by intense competition in the construction industry. Strengths * Extensive experience of promoters in civil construction industry: The business risk profile is aided by its promoters' extensive experience in the civil construction industry. Mr. G Ramaiah has experience of over four decades as a contractor for civil works in Andhra Pradesh and Telangana. Since the 1970s, he has been undertaking various civil works, especially for government entities. He started as a small contractor undertaking orders of low value. Over the years, he has developed capabilities in executing canal works and has also developed strong relationships with various government departments and raw material suppliers. Financial risk profile * Low gearing and moderate networth: The gearing was healthy at 0.13 time as on March 31, 2017, and is expected to remain healthy over the medium term. The networth was moderate at around INR11.56 crore as on March 31, 2017. * Above-average debt protection metrics: The debt protection metrics are estimated to be above-average over the medium term, with interest coverage and net cash accrual to total debt ratios at 5.83 times and 1.55 times, respectively, for fiscal 2017. Outlook: Stable CRISIL believes SCC will continue to benefit from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if substantial and sustained increase in scale of operations persist, while profitability margin and continued improvement in working capital management is maintained. The outlook may be revised to 'Negative' if a steep decline in profitability margin, or deterioration in liquidity caused most likely by a stretched working capital cycle, affects the financial risk profile. SCC was set up in 1994 by Mr. G Ramaiah and his family members. The firm undertakes construction of canals, bridges, and roads. It is based in Hyderabad. SCC reported a profit after tax (PAT) of INR2.12 crore on revenue of INR34.74 crore in fiscal 2017, against PAT INR1.31 crore on revenue of INR20.13 crore in fiscal 2016. SRI TEXTILE ERODE: Ind-Ra Withdraws 'D' LT Issuer Rating -------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Sri Textile Erode Private Limited's (STEPL) Long-Term Issuer Rating of 'IND D'. The instrument-wise rating actions are as follows. -- INR350 mil. Fund-based facilities withdrawn with WD rating; -- INR75.9 mil. Term loan due on September 2023 withdrawn with WD rating; and -- INR50 Non-fund-based facilities withdrawn with WD rating. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the ratings, as the agency has received no-objection certificates from the lenders. This is consistent with the Securities and Exchange Board of India's circular dated 31 March 2017 for credit rating agencies. Ind-Ra will no longer provide analytical and rating coverage for STEPL. COMPANY PROFILE Incorporated in 1990, STEPL manufactures fabric and garments at its manufacturing facilities in Erode (Tamil Nadu) and Hosur (Karnataka). TROPICAL COATINGS: CRISIL Cuts Rating on INR6.20MM Term Loan to D ----------------------------------------------------------------- CRISIL Ratings has been consistently following up for information with Tropical Coatings International Pvt Ltd (TCIPL) through letters and emails dated November 21, 2016, December 22, 2016 and March 16, 2017, apart from telephonic communication. However, the issuer remains non-cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1 CRISIL D (Issuer Not Cooperating; Downgraded from 'CRISIL A4') Cash Credit 1.57 CRISIL D (Issuer Not Cooperating; Downgraded from 'CRISIL B/Stable') Letter of Credit 0.36 CRISIL D (Issuer Not Cooperating; Downgraded from 'CRISIL A4') Term Loan 6.20 CRISIL D (Issuer Not Cooperating; Downgraded from 'CRISIL B/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company'. Detailed Rationale CRISIL has downgraded its ratings on the bank facilities of TCIPL to 'CRISIL D/CRISIL D/Issuer Not Cooperating' from 'CRISIL B/Stable/CRISIL A4/Issuer Not Cooperating'. The downgrade reflects delays by the company in servicing debt. CRISIL had discussions with the bank, which has confirmed the delay in repayment. Established in 2012, TCIPL manufactures waterproofing membranes and allied products at Vishakapatnam. Operations are managed by Mr. Ravindranath. YASH CONSTRUCTION: CRISIL Cuts Rating on INR7.3MM Cash Loan to D ---------------------------------------------------------------- CRISIL Ratings has downgraded its rating on the long-term bank facilities of Yash Construction Equipments Pvt Ltd (YCEPL) to 'CRISIL D' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 7.3 CRISIL D (Downgraded from 'CRISIL B/Stable') Proposed Long Term 0.5 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B/Stable') The downgrade reflects sustained overdrawal of cash credit account for a period exceeding 30 days owing to weak liquidity. Key Rating Drivers & Detailed Description Weakness * Delay in servicing bank debt: There has been sustained overdrawal of cash credit account for a period exceeding 30 days due to weak liquidity owing to significant increase in working capital requirement (gross current assets rose to 922 days as on March 31 2017, from 398 days a year ago). * Susceptibility to intense competition in the earth moving equipment industry: YCEPL has Tata Hitachi's dealership in Uttar Pradesh. Dependence on a single principal results in high revenue concentration. Also, the company has to compete with other dealers of Tata Hitachi, and with dealers of other earth-moving equipment manufacturers. This is reflected in modest operating income of INR9.65 crore in fiscal 2017. Strength * Extensive experience of promoters: The promoters have more than two decades of experience in the earthmoving equipment industry, resulting in established relationship with Tata Hitachi. YCEPL was set up in 2007 in Mirzapur, Uttar Pradesh, by Mr. Sanjay Kumar and his wife, Ms Sneha Kumar. The company is an authorised dealer of Tata Hitachi's heavy earth-moving equipment such as loaders, backhoe loaders, excavators, and car-mounted machines. It acquired Tata Hitachi's dealership in 2007. ========= J A P A N ========= TOSHIBA CORP: Settles Dispute With Western Digital Over Chip Sale ----------------------------------------------------------------- Pavel Alpeyev, Ian King, and Yuki Furukawa at Bloomberg News report that Toshiba Corp. and Western Digital Corp. have agreed in principle to settle their legal dispute over the $18 billion sale of Toshiba's flash-memory business with a formal announcement expected within the next 24 hours, according to people familiar with the matter. Bloomberg relates that the U.S. company will drop arbitration claims in the U.S. that were aimed at stopping Toshiba from selling the chip business to a consortium led by Bain Capital, while the Japanese company will end its legal claims against Western Digital, said the people, asking not to be identified because the matter is private. As part of the settlement, Western Digital will be able to invest alongside Toshiba in a cutting- edge chip plant in Japan and receive a guaranteed supply of next- generation memory chips, they said, Bloomberg relays. According to the report, the partners have been locked in a legal battle since early this year after Toshiba said it would sell the chip business to pay for enormous losses in its U.S. nuclear business. Bloomberg says the U.S. company had argued Toshiba needed its consent to sell the business, an assertion the Japanese company disputed. Toshiba needed to raise capital to avoid seeing its shares delisted from the Tokyo Stock Exchange. Toshiba shares have surged 10 percent since Bloomberg News reported the two companies were near a resolution to their dispute. Bloomberg says Toshiba had stepped up pressure on Western Digital in recent weeks. Last month, the Tokyo-based company said it would accelerate investments in its new Fab 6 chip facility in Yokkaichi, blocking Western Digital from participating and raising the prospect the U.S. company wouldn't get supplies of newer chips that it will need to remain competitive. According to Bloomberg, Toshiba also unveiled plans to raise JPY600 billion ($5.3 billion) in a stock sale, a deal that would help it avoid delisting even if the chip business sale isn't completed on time. About Toshiba Corp Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is a Japan-based manufacturer involved in five business segments. The Digital Products segment offers cellular phones, hard disc devices, optical disc devices, liquid crystal televisions, camera systems, digital versatile disc (DVD) players and recorders, personal computers (PCs) and business phones, among others. The Electronic Device segment provides general logic integrated circuits (ICs), optical semiconductors, power devices, large- scale integrated (LSI) circuits for image information systems and liquid crystal displays (LCDs), among others. The Social Infrastructure segment offers various generators, power distribution systems, water and sewer systems, transportation systems and station automation systems, among others. The Home Appliance segment offers refrigerators, drying machines, washing machines, cooking utensils, cleaners and lighting equipment. The Others segment leases and sells real estate. As reported in the Troubled Company Reporter-Asia Pacific on Oct. 6, 2017, S&P Global Ratings said that it has affirmed its 'CCC-' long-term corporate credit and 'C' short-term corporate credit and commercial paper program ratings on Japan-based capital goods and diversified electronics company Toshiba Corp. S&P also removed the ratings from CreditWatch. The outlook is negative. S&P said, "At the same time, we raised the senior unsecured rating one notch to 'CCC-' from 'CC' following completion of our review of the rating. The review follows our publication of our revised issue rating criteria, "Reflecting Subordination Risk In Corporate Issue Ratings" on Sept. 21, 2017, after which we placed the rating "under criteria observation" (UCO). With our criteria review complete, we are removing the UCO designation from the rating. We also removed the senior unsecured rating from CreditWatch with negative implications following our affirmation of the long-term corporate credit rating and resolution of the CreditWatch." =============== M A L A Y S I A =============== ASIA KNIGHT: Proposes Change of Auditors to Crowe Horwath --------------------------------------------------------- The Sun Daily reports that Asia Knight Bhd proposes to change its auditors to Messrs Crowe Horwath subject to the approval of its shareholders at an EGM to be convened. "The board of directors of Asia Knight confirm that there were no disagreements with the existing auditors Messrs Baker Tilly Monteiro Heng on the accounting treatment within the last 12 months and that Asia Knight is not aware of any other circumstances in relation to the proposed change of auditors that should be brought to the attention of the shareholders of the company," Asia Knight said in a stock exchange filing on Dec. 11, the Sun Daily relays. According to the report, the company had on Dec. 3, 2017 received a nomination letter from shareholder See Han Liong of his intention to nominate Crowe Horwath as auditors of the company for the financial year ending June 30, 2018 (FY18) in place of the existing auditors Baker Tilly, and to hold office until the conclusion of the forthcoming AGM of the company at a remuneration to be fixed by the directors. The Sun Daily relates that the company had subsequently on Dec. 5, 2017 received a letter from Baker Tilly informing them of their resignation with immediate effect. Asia Knight proposed that the resignation of Baker Tilly be accepted, and Crowe Horwath appointed in their stead for FY18 and to hold office until the conclusion of the next AGM, the report says. Authority is also sought for the directors to determine their remuneration. Asia Knight Berhad is an investment holding company based in Malaysia. The Company's segments include manufacturing segment and other reportable segments. The manufacturing segment is engaged in the manufacturing of plastic parts. The Company's subsidiaries include T-Venture Industries (M) Sdn. Bhd., which manufactures plastic parts, and Citiview Hotel Sdn. Bhd. The company has been a Practice Note 17 issuer since October 2014. Asia Knight has triggered Paragraph 2.1(d) of the Practice Note 17 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad as the Company Auditors have expressed disclaimer opinion in the Company's latest audited financial statements for the 18 months financial period ended June 30, 2014. ==================== S O U T H K O R E A ==================== WOORI BANK: Moody's Reviews Ba1(hyb) Debt Rating for Upgrade ------------------------------------------------------------ Moody's Investors Service has affirmed the ratings and assessments of KEB Hana Bank, Kookmin Bank and Shinhan Bank. Moody's has also revised to stable from negative the ratings outlook of KEB Hana Bank and Shinhan Bank, and maintained Kookmin Bank's ratings outlook at stable. Moody's has placed under review for upgrade all of Woori Bank's long-term ratings, long-term counterparty risk assessment, baseline credit assessment (BCA) and adjusted BCA of baa3. At the same time Moody's affirmed its short-term ratings and short-term counterparty assessment. RATINGS RATIONALE The affirmation of the ratings and assessments for KEB Hana Bank, Kookmin Bank and Shinhan Bank, as well as the placing of Woori Bank under review for upgrade, reflect the improved operating environment of the banks. Korea as an open export-driven economy is one of the key beneficiaries of the synchronized global economic expansion. Moody's expects Korea's real GDP to grow at 3% in 2017 and 2.8% in 2018, which is higher than the other G20 advanced countries. In addition, Moody's expects structural changes in the loan portfolio and cost base that the banks have achieved will result in improved asset quality and profitability on a more sustained basis. For example, the four banks' exposures to vulnerable industries undergoing restructuring - such as shipbuilding, shipping and construction - have declined to 5.1% of their total loans as of June 2017 from 9.5% as of December 2013. On the cost front, the banks have also reduced the number of domestic branches (by 15% as of June 2017) compared to the peak at the end of 2012. The number of domestic employees declined by 12% as of June 2017 from the peak at the end of 2013. Tail risk from the banks' existing exposures to cyclical sectors has also diminished significantly, a result of the reduced leverage of the shipbuilding and shipping sectors - because of their ongoing restructuring - as well as an increase in shipbuilding orders. This will result in higher utilization rates at Korean shipyards in 2018. In addition to improved asset quality, these banks are also sufficiently capitalized. Moody's also expect to see benign asset quality for retail loans, partially because of the continued strengthening of prudential measures for household loans and mortgages, driven by government policies to curb the growth of household debt. A low loans-to-value ratio of system-wide mortgage loans, mostly at about 50% means that the equity buffer built into system-wide mortgage loans is good. The outlook for Shinhan Bank and KEB Hana Bank was changed to stable from negative because of the absence of a deterioration in asset quality or profitability that Moody's was concerned about, when the banks' outlook was changed to negative. Moody's expects that these banks' liquidity, funding and capitalization will remain stable at current levels over the outlook period. Among Korean banks, Shinhan Bank has the highest BCA - of a3 - which reflects its long track record of superior asset quality performance and stable profitability. For Kookmin Bank, Moody's maintained its stable outlook on the bank's deposit and senior debt ratings. Kookmin Bank is one of the best capitalized banks in Korea, and as a result has a strong capital buffer against its asset risk, which had shown high volatility in the past. Kookmin Bank's credit metrics have improved to similar levels with that of Shinhan Bank, but its BCA of baa1 and long-term deposit and senior unsecured debt ratings of A1 are one notch lower than that of Shinhan Bank, because the performance of Kookmin Bank's credit metrics has been less consistent through the cycle. For Woori Bank, Moody's placed its long-term ratings, long-term counterparty risk assessment, BCA and adjusted BCA under review for upgrade in order to determine whether recent improvements to Woori Bank's credit fundamentals are structural and sufficiently sustainable to merit an increase to its BCA, which is currently at baa3. Moody's will also consider any new information the Korean government or KDIC may announce regarding their plan or direction for the further sale of the remaining government stake in Woori Bank. Woori Bank has made structural improvements to its asset risk, by reducing exposures to large corporates with low credit ratings and to cyclical sectors such as shipbuilding. The improvement in its capitalization was especially pronounced, with Woori Bank's tangible common equity to risk-weighted assets rising by 1.4 percentage points to 12.2% as of September 2017 from the level registered at the end of 2015. It also completed an early retirement program in the third quarter of 2017, which reduced its work force by 6%. The bank has also continued to shrink its branch network, which will be helpful to its efficiency. Its financial metrics have improved as a result, creating clear upward pressure on its BCA of baa3. Upward pressure on Woori Bank's senior ratings is less clear because an upgrade of its long-term ratings will depend on Moody's view on whether or not current government support is sustainable, in light of the government's ultimate plan to dispose of its stakes in Woori Bank completely. Woori Bank's ratings currently benefit from four notches of government support, which is higher than the three notches applied to its peers such as KEB Hana, Kookmin and Shinhan Bank. At Sept. 30, 2017, the Korean government, via the Korea Deposit Insurance Corporation (KDIC), held an 18.5% stake in Woori Bank. WHAT COULD CHANGE THE RATINGS UP/DOWN For KEB Hana Bank, Kookmin Bank and Shinhan Bank, Moody's could downgrade these banks' ratings if their financial fundamentals deteriorate significantly and on a sustained basis. All other rating factors being constant, their BCAs would come under downward pressure if any of these conditions are met: (1) a significant increase in the problem loan ratio and provision charges without increases in core capital; (2) a significant weakening of capitalization with TCE/RWA ratios decreasing by more than 200 basis points; and/or (3) a significant deterioration in their funding and liquidity positions. For the banks with stable outlooks, their ratings could be upgraded, if their financial fundamentals improve significantly, leading to upward pressure on their BCAs from: (1) significant improvements in capitalization, while maintaining stable asset quality; (2) a significant decline in problem loan ratios and provision charges, while maintaining stable capitalization; and (3) significant improvements in their funding and liquidity positions. For Kookmin Bank, Moody's will also consider whether the bank will develop a longer term track record of improved asset risk. For Woori Bank, evidence that the current financial metrics can be sustained or improved further, particularly capitalization and asset risk, could lead to an increase in its BCA and upgrades to its subordinated debt and preference stock non-cumulative ratings. Upgrades of its long-term deposit and senior unsecured debt ratings will depend on the scope of BCA improvement, as well as Moody's review of government support for Woori Bank, in consideration of the government's plan for future stake sales. The principal methodology used in these ratings was Banks published in September 2017. KEB Hana Bank, headquartered in Seoul, South Korea, had total assets of KRW325 trillion (USD284 billion) at the end of September 2017. Kookmin Bank, headquartered in Seoul, South Korea, had total assets of KRW327 trillion (USD285 billion) at the end of September 2017. Shinhan Bank, headquartered in Seoul, South Korea, had total assets of KRW328 trillion (USD286 billion) at the end of September 2017. Woori Bank, headquartered in Seoul, South Korea, had total assets of KRW318 trillion (USD278 billion) at the end of September 2017. LIST OF AFFECTED RATINGS KEB Hana Bank - Foreign currency and local currency long-term deposit ratings of A1 affirmed with a stable outlook; - Foreign currency and local currency short-term deposit ratings of P-1 affirmed; - Foreign currency long-term and short-term deposit note/CD program rating of (P)A1/(P)P-1 affirmed; - Foreign currency senior unsecured debt rating of A1 affirmed with a stable outlook; - Foreign currency commercial paper rating of P-1 affirmed; - Foreign currency other short-term rating of (P)P-1 affirmed; - Foreign currency senior unsecured/ Basel III-compliant subordinated debt medium-term notes (MTN) programmes of (P)A1/(P)Baa2 affirmed; - Plain vanilla foreign currency subordinated debt rating of Baa1 affirmed; - Foreign currency Basel III-compliant subordinated debt rating of Baa2(hyb) affirmed; - Long-term / Short-term counterparty risk assessment of Aa3(cr)/P-1(cr) affirmed - Baseline credit assessment and adjusted baseline credit assessment of baa1 affirmed - Outlook is changed to stable from negative KEB Hana Bank, London Branch Foreign currency long-term and short-term deposit note/CD program rating of (P)A1 and (P)P-1 affirmed; Long-term and short-term counterparty risk assessment of Aa3(cr)/P-1(cr) affirmed Outlook is changed to stable from negative KEB Hana Bank, Singapore Branch Foreign currency long-term and short-term deposit note/CD program rating of (P)A1 and (P)P-1 affirmed; Long-term and short-term counterparty risk assessment of Aa3(cr)/P-1(cr) affirmed Outlook is changed to stable from negative KEB Hana Bank, Hong Kong Branch Foreign currency long-term and short-term deposit note/CD program rating of (P)A1 and (P)P-1 affirmed; Long-term and short-term counterparty risk assessment of Aa3(cr)/P-1(cr) affirmed Outlook is changed to stable from negative Kookmin Bank - Foreign currency and local currency long-term deposit ratings of A1 affirmed with a stable outlook - Foreign currency and local currency short-term deposit ratings of P-1 affirmed - Foreign currency long-term and short-term deposit note/CD program rating of (P)A1/(P)P-1 affirmed; - Foreign currency commercial paper rating of P-1 affirmed - Foreign currency other short-term rating of (P)P-1 affirmed; - Foreign currency senior unsecured rating of A1 affirmed with a stable outlook - Foreign currency senior unsecured MTN program rating of (P)A1 affirmed - Long-term and short-term counterparty risk assessment of Aa3(cr) and P-1(cr) affirmed - Baseline credit assessment and adjusted baseline credit assessment of baa1 affirmed - Outlook is maintained at stable Shinhan Bank - Foreign currency long-term deposit rating of Aa3 affirmed with a stable outlook; - Foreign currency short-term deposit rating of P-1 affirmed - Foreign currency commercial paper of P-1 affirmed - Long-term / Short-term counterparty risk assessment of Aa3(cr)/P-1(cr) affirmed - Baseline credit assessment and adjusted baseline credit assessment of a3 affirmed - Foreign currency Other short-term rating of (P)P-1 affirmed - Foreign currency senior unsecured debt rating of Aa3 affirmed with a stable outlook; - Foreign currency senior unsecured shelf rating of (P)Aa3 affirmed - Foreign currency senior unsecured MTN program rating of (P)Aa3 affirmed - Foreign currency Basel III compliant subordinated debt rating of Baa1(hyb) affirmed - Foreign currency Basel III-compliant subordinated MTN program rating of (P)Baa1 affirmed - Foreign currency Basel II subordinated MTN program rating of (P)A3 affirmed - Outlook is changed to stable from negative Shinhan Bank, New York Branch - Local currency long-term and short-term deposit note/CD program of (P)Aa3/P-1 affirmed - Local currency commercial paper rating of P-1 affirmed - Long-term/ Short-term Counterparty risk assessment of Aa3(cr)/P-1(cr) affirmed - Outlook is changed to stable from negative Shinhan Bank, Hong Kong Branch - Foreign currency long-term and short-term deposit note/CD program rating of (P)Aa3/(P)P-1 affirmed - Outlook is changed to stable from negative Woori Bank - Foreign currency long-term deposit rating of A2, under review for upgrade - Foreign currency short-term deposit rating of P-1 affirmed - Foreign currency long-term deposit note/CD program rating of (P)A2 under review for upgrade; - Foreign currency short-term deposit note/CD program rating of (P)P-1 affirmed; - Foreign currency commercial paper rating of P-1 affirmed - Foreign currency other short-term rating of (P)P-1 affirmed - Foreign currency senior unsecured rating of A2 under review for upgrade - Foreign currency senior unsecured MTN program rating of (P)A2 under review for upgrade - Foreign currency Basel III compliant subordinated debt rating of Ba1(hyb) under review for upgrade - Foreign currency Basel II subordinated debt rating of Baa2 under review for upgrade - Foreign currency Basel III compliant subordinated MTN program rating of (P)Ba1 under review for upgrade - Foreign currency preference stock non-cumulative rating of Ba3(hyb) under review for upgrade - Long-term counterparty risk assessment of A1(cr) under review for upgrade - Short-term counterparty risk assessment of P-1(cr) affirmed - Baseline credit assessment and adjusted baseline credit assessment of baa3 under review for upgrade - Outlook is changed to rating under review from stable Woori Bank, London Branch - Foreign currency long-term deposit note/CD program rating of (P)A2 under review for upgrade; - Long-term counterparty risk assessment of A1(cr) under review for upgrade - Foreign currency short-term deposit note/CD program rating of (P)P-1 affirmed; - Short-term counterparty risk assessment of P-1(cr) affirmed - Foreign currency commercial paper rating of P-1 affirmed - Outlook is changed to rating under review from stable Woori Bank, Hong Kong Branch - Foreign currency long-term deposit note/CD program rating of (P)A2 under review for upgrade; - Long-term counterparty risk assessment of A1(cr) under review for upgrade - Foreign currency short-term deposit note/CD program rating of (P)P-1 affirmed; - Short-term counterparty risk assessment of P-1(cr) affirmed - Outlook is changed to rating under review from stable Woori Bank, Los Angeles Branch - Local currency long-term deposit note/CD program rating of (P)A2 under review for upgrade; - Long-term counterparty risk assessment of A1(cr) under review for upgrade - Local currency short-term deposit note/CD program rating of (P)P-1 affirmed; - Short-term counterparty risk assessment of P-1(cr) affirmed - Outlook is changed to rating under review from stable ********* 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. 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