/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/191009.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, October 9, 2019, Vol. 22, No. 202 Headlines A U S T R A L I A ABI (WA): Second Creditors' Meeting Set for Oct. 17 ALITA RESOURCES: Administrators Seek Bids for Sale or DOCA CANBERRA CONSULTING: Second Creditors' Meeting Set for Oct. 16 DART CONTRACTING: Second Creditors' Meeting Set for Oct. 16 LA QUINTA: Second Creditors' Meeting Set for Oct. 15 PUMPFREE ENERGY: Second Creditors' Meeting Set for Oct. 16 SBL SOLUTIONS: Second Creditors' Meeting Set for Oct. 15 C H I N A E-HOUSE (CHINA): S&P Puts 'BB' Rating to New US$ Sr. Unsec. Notes UCF HOLDINGS: Confirms Chinese Tycoon Zhang Zhenxin is Dead I N D I A ACCORD INDUSTRIES: Insolvency Resolution Process Case Summary ARMAAN FLEXIPACK: CARE Reaffirms B+ Rating on INR3.16cr LT Loan ASHAPURA MINECHEM: NCLAT Sets Aside Insolvency Plea ASHIMA PAPER: CARE Maintains B Rating in Not Cooperating Category BANSAL SEEDS: CARE Cuts INR26cr LT Loan Rating to B+, Not Coop. CHEMLINKER TRADEX: Insolvency Resolution Process Case Summary DUGGAL AUTOMOBILES: CARE Assigns B+ Rating to INR7.0cr LT Loan EAST HOOGHLY: CARE Hikes Rating on INR9.81cr LT Loan to BB- ESSIX BIOSCIENCES: CARE Reaffirms B Rating on INR13cr LT Loan GEOSYS INDIA: CARE Maintains B+ Rating in Not Cooperating GLOBETECH MEDICARE: CARE Keeps B Rating in Not Cooperating GOYAL ENTERPRISES: CARE Maintains B+ Rating in Not Cooperating HEMALI INVESTMENT: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating IL&FS ENGINEERING: Defaults on Redemption of Preference Shares INTERJEWEL PRIVATE: CARE Maintains D Rating in Not Cooperating J.D. TALC: CARE Maintains B Rating in Not Cooperating Category JUPITER BROADCAST: Insolvency Resolution Process Case Summary K B A INFRASTRUCTURE: Ind-Ra Affirms B+ LT Rating, Outlook Stable KASATA HOMETECH: NCLT Initiates Insolvency Process Against Builder LORDS MARK: Ind-Ra Maintains BB+ Issuer Rating in Non-Cooperating MAJESTIC EXPORTS: Ind-Ra Hikes LT Rating to 'BB+', Outlook Stable MANTHAN BROADBAND: Insolvency Resolution Process Case Summary MARG LTD: Creditors' Panel Accepts Promoter's Settlement Offer MICRO DYNAMICS: Insolvency Resolution Process Case Summary MIGHTY AUTO: CARE Maintains B Rating in Not Cooperating Category MIL INDUSTRIES: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable P. LAKSHMI: Ind-Ra Migrates 'BB-' Issuer Rating to Non-Cooperating PIYUSH COLONISERS: NCLT Starts Insolvency Process Against Firm S.K. CREATIONS: CARE Cuts INR8.50cr Loan Rating to B, Not Coop. SANGAM HANDICRAFT: Insolvency Resolution Process Case Summary SARASWATI TIMBER: CARE Keeps B Rating in Not Cooperating Category SARVOTTAM POULTRY: CARE Keeps 'B' Rating in Not Cooperating SHRI RAMSWAROOP: Ind-Ra Withdraws BB- Bank Loan Ratings SIDHANT CREATIONS: CARE Lowers Rating on INR15cr Loan to D SRI MAANASA: CARE Cuts INR11.60cr LT Loan Rating to B+, Not Coop. SRI PARAMESWARA: Insolvency Resolution Process Case Summary TIRUPATI EXPORT: CARE Cuts INR9cr LT Loan Rating to B-, Not Coop. V.R. INDUSTRIES: CARE Maintains B+ Rating in Not Cooperating VISHWAKARMA AUTO: CARE Maintains B+ Rating in Not Cooperating [*] INDIA: Bankruptcies Double at Developers on Mini-Lehman Moment [*] INDIA: Credit Raters Keep Missing Big Company Defaults N E W Z E A L A N D EBERT CONSTRUCTION: New Group of Victims Emerge, Report Shows S I N G A P O R E PARKSON RETAIL: Independent Auditor Raises Going Concern Doubts X X X X X X X X [*] Quentin Olde Joins Ankura as Senior Managing Director - - - - - ================= A U S T R A L I A ================= ABI (WA): Second Creditors' Meeting Set for Oct. 17 --------------------------------------------------- A second meeting of creditors in the proceedings of ABI (WA) Pty Ltd has been set for Oct. 17, 2019, at 10:30 a.m. at the offices of Worrells Solvency & Forensic Accountants, Level 4, at 15 Ogilvie Road, in Mount Pleasant, WA. 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 Oct. 16, 2019, at 4:00 p.m. Mervyn Jonathan Kitay of Worrells Solvency & Forensic Accountants was appointed as administrator of ABI (WA) on Sept. 11, 2019. ALITA RESOURCES: Administrators Seek Bids for Sale or DOCA ---------------------------------------------------------- MiningNews.net reports that the administrators of Alita Resources, KordaMentha, have formally kicked off the recapitalisation process, and disclosed on Oct. 8 that it was seeking urgent expressions of interest from interested parties for a sale or a recapitalisation. According to MiningNews.net, KordaMentha was granted last week additional time by the Supreme Court of Western Australia to hold the next meeting of creditors. It comes after administrators reported 11 unsolicited proposals to acquire the Bald Hill mine in the Goldfields. Major shareholder and creditor Galaxy Resources is supporting the process, the report says. "Any transaction will require the support of the secured party to proceed; or alternatively the secured creditor will need to be repaid in full," KordaMentha, MiningNews.net, said. MiningNews.net says KordaMentha is seeking proposals for a sale or deed of company arrangement by November 7 and will select preferred proponents by November 8. It aims to negotiate final proposals for consideration by creditors by November 18 ahead of a report to creditors to be issued on November 21, the report notes. Creditors will vote on the proposals on November 28, with administrators aiming to execute a DOCA by December 5, MiningNews.net says. Operations at Ball Hill were put on care and maintenance last month, the report adds. About Alita Resources Alita Resources Limited (ASX:A40) operates as a mineral exploration and excavation company. The Company explores and produces lithium and tantalum concentrates. Alita Resources offers its services in Australia. The Company went into voluntary administration on Aug. 28, 2019 after restructuring talks with potential investors failed. Richard Tucker and John Bumbak of Kordamentha were appointed as administrators to the Company on Aug. 28. CANBERRA CONSULTING: Second Creditors' Meeting Set for Oct. 16 -------------------------------------------------------------- A second meeting of creditors in the proceedings of Canberra Consulting Resources Pty Ltd has been set for Oct. 16, 2019, at 10:00 a.m. at the offices of Slaven Torline, Ground Floor, at 243 Northbourne Avenue, in Lyneham, ACT. 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 Oct. 15, 2019, at 4:00 p.m. Michael Slaven of Slaven Torbine was appointed as administrator of Canberra Consulting on Sept. 12, 2019. DART CONTRACTING: Second Creditors' Meeting Set for Oct. 16 ----------------------------------------------------------- A second meeting of creditors in the proceedings of Dart Contracting Pty Ltd has been set for Oct. 16, 2019, at 10:00 a.m. at the offices of Morton's Solvency Accountants, Level 11, at 410 Queen 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 Oct. 15, 2019, at 4:00 p.m. Gavin Charles Morton of Morton's Solvency Accountants was appointed as administrator of Dart Contracting on Sept. 10, 2019. LA QUINTA: Second Creditors' Meeting Set for Oct. 15 ---------------------------------------------------- A second meeting of creditors in the proceedings of La Quinta Pty Ltd has been set for Oct. 15, 2019, at 10:00 a.m. at the offices of SV Partners, at 22 Market 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 Oct. 14, 2019, at 4:00 p.m. David Michael Stimpson of SV Partners was appointed as administrator of La Quinta on Aug. 13, 2019. PUMPFREE ENERGY: Second Creditors' Meeting Set for Oct. 16 ---------------------------------------------------------- A second meeting of creditors in the proceedings of PumpFree Energy Pty Ltd has been set for Oct. 16, 2019, at 11:00 a.m. at the offices of Jirsch Sutherland, Level 27, at 259 George 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 Oct. 15, 2019, at 4:00 p.m. Bradd William Morelli and Trent Andrew Devine of Jirsch Sutherland were appointed as administrators of PumpFree Energy on July 24, 2019. SBL SOLUTIONS: Second Creditors' Meeting Set for Oct. 15 -------------------------------------------------------- A second meeting of creditors in the proceedings of SBL Solutions Pty Ltd has been set for Oct. 15, 2019, at 12:00 p.m. at the offices of Veritas Advisory, Level 5, at 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 Oct. 14, 2019, at 4:00 p.m. Steve Naidenov and Vincent Pirina of Veritas Advisory were appointed as administrators of SBL Solutions on July 8, 2019. ========= C H I N A ========= E-HOUSE (CHINA): S&P Puts 'BB' Rating to New US$ Sr. Unsec. Notes ----------------------------------------------------------------- S&P Global Ratings assigned its 'BB' long-term issue rating to E-House (China) Enterprise Holdings Ltd.'s proposed U.S.-dollar-denominated senior unsecured notes. The China-based real estate service agency company (BB/Stable/--) will use the proceeds for refinancing its existing debt and for general corporate purposes. The issue rating is subject to S&P's review of the final issuance documentation. S&P said, "We equalize the issue rating with the issuer credit rating on E-House because the proposed notes are not significantly subordinated to other debt in the company's capital structure. As of June 30, 2019, E-House's capital structure consisted of about Chinese renminbi (RMB) 1.3 billion in secured bank loans and other bank loans at the subsidiary level. This amount--considered as priority debt--accounts for only 39% of total debt as of June 2019. Further senior note issuance will lower the company's priority debt ratio well below our notching-down threshold of 50%. "We expect E-House's rating buffer to thin following the proposed issuance. We estimate E-House's leverage--as measured by debt to EBITDA--to increase to 1.9x-2.0x by 2019, up from 1.6x-1.7x before the issuance. This will be close to our downside trigger of 2.0x, assuming a final issuance of US$200 million and half that amount for debt repayment. As such, we believe our rating on E-House will be subject to more downside pressure if the issuance amount increases significantly above US$200 million with no plans for more debt repayment. "Our stable outlook on E-House indicates that the company will maintain healthy growth and sound profitability as well as improve its working capital such that its operating cash flow will be positive for full-year 2019." UCF HOLDINGS: Confirms Chinese Tycoon Zhang Zhenxin is Dead ----------------------------------------------------------- Caixin Global reports that Zhang Zhenxin, the low-profile tycoon behind debt-ridden Chinese financial conglomerate UCF Holdings Group Ltd., died last month in London, the company announced on Oct. 5. The 48-year-old businessman suffered multiple organ failure linked to acute pancreatitis and alcohol dependence and died at the Chelsea and Westminster Hospital on Sept. 18, Caixin relates citing a statement posted on UCF Holdings' official account on the WeChat social media platform. Explaining the delay in making the announcement, the company said it acted prudently by waiting for official notification of Mr. Zhang's cause of death which was given in a formal death certificate issued by the hospital on Sept. 26. According to Caixin, Mr. Zhang's death adds to the turmoil that's engulfed UCF Holdings, along with its affiliates and subsidiaries, including Hong Kong-listed Chong Sing Holdings FinTech Group Ltd. Founded in 2003, the conglomerate runs a wide range of businesses including online payment, wealth management, peer-to-peer (P2P) lending, health care and investment. But it's been hit hard by the crisis in China's online lending industry and the crackdown on financial leverage, Caixin says. Caixin adds that in a separate notice that did not refer to Mr. Zhang's death, UCF Holdings said it had set up a temporary crisis management committee led by its chief executive, Zhang Liqun, which would continue to try and defuse risks and resolve the crisis at the group through measures including the disposal of assets. Caixin relates that the committee said it hoped the group's creditors, investors and partners would show some understanding and tolerance for its situation and that the company would strive to pay off its debts and reduce the losses investors and creditors were facing. Caixin notes that UCF Holdings started life offering guarantees and small loans but in an ambitious expansion strategy obtained licenses to provide a range of financial activities including banking, securities, fund management, wealth management, micro lending, insurance broking, and third-party payments. It also built up a fintech business around Beijing-based affiliate NCF Group which gained a backdoor listing in the U.S. through a merger with Nasdaq-listed Hunter Maritime Acquisition Corp., although the company was later relegated to the over-the-counter market. But the group sank deep into debt in the second half of 2018 following a regulatory crackdown on online and P2P lending that started in late 2016 and triggered a meltdown in the sector, along with a series of misfortunes, bad risk management and poor investment decisions including an unsuccessful foray into cryptocurrencies, Caixin relates. UCF Pay, a third-party payment subsidiary of Hong Kong-listed Chong Sing Holdings was caught embezzling client funds, with sources familiar with the matter telling Caixin the fraud had led to a shortfall of CNY240 million. UCF Pay's operations have been suspended and trading in Chong Sing Holdings' shares has been halted since July 8, Caixin notes. In May, financial regulators took the rare step of installing officials in the offices of N-Securities Co. Ltd., a troubled regional brokerage controlled by a UCF Holdings affiliate, to oversee its operations after an investigation into its business found it had failed to meet regulatory requirements on at least four risk-control indicators--including its capital leverage ratio and net stable funding ratio, which assess a company's ability to meet its financial obligations, Caixin recalls. ========= I N D I A ========= ACCORD INDUSTRIES: Insolvency Resolution Process Case Summary ------------------------------------------------------------- Debtor: Accord Industries Limited Alindra Plot No. 15, Alindra GIDC Manjusar, Savali Vadorada 391775 Insolvency Commencement Date: July 26, 2019 Court: National Company Law Tribunal, Ahmedabad Bench Estimated date of closure of insolvency resolution process: January 21, 2020 Insolvency professional: Mr. Ravi Kapoor Interim Resolution Professional: Mr. Ravi Kapoor 402, Shaival Plaza Near Gujarat College Ellisbridge Ahmedabad 380006 E-mail: ravi@ravics.com ipaccord@ravics.com Last date for submission of claims: September 23, 2019 ARMAAN FLEXIPACK: CARE Reaffirms B+ Rating on INR3.16cr LT Loan --------------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Armaan Flexipack Private Limited (AFPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 3.16 CARE B+; Stable Reaffirmed Long/Short- term Bank Facilities 8.84 CARE B+; Stable/CARE A4 Reaffirmed Detailed Rationale and key rating drivers The ratings assigned to the bank facilities of AFPL continued to be constrained on account of project stabilization risk regarding operations, volatility in prices of raw material and presence in highly competitive industry. The ratings however, draw comfort from experienced promoters and satisfactory completion of the project within the estimated cost. Going forward, the ability of the company to achieve its envisaged revenue and profitability margins shall be key rating sensitivities. Detailed description of the key rating drivers Key Rating Weakness Stabilization risk regarding operations The company has set up its manufacturing unit of printed laminated rolls and pouches with a total project cost of INR13.02crores which was funded through term loan of INR4.00 crore, promoter's contribution of INR2.04 crores and balance through unsecured loans. The company has completed the project within the estimated cost however with delay of one year. The Project has commenced its commercial operations from September 2019. During the initial phases of operations, the capital structure of the company is expected to remain leveraged characterized by debt funded capex and low capital base. Considering the initial stages of operation, the ability of the company to achieve the envisaged revenue and profitability is a key rating sensitivity. Volatility in prices of raw material The key raw material, i.e. plastic granules, polypropylene etc. are procured from local distributors. PP granules are a crude oil derivative. Its price is dependent on crude oil prices which are highly volatile. Therefore, the operating margin of AFPL remains susceptible to any sharp movement in the raw material prices. Furthermore, the limited suppliers of these raw materials make it a seller's market with limited bargaining power for buyers. Competitive nature of industry AFPL operates in a highly competitive industry marked by the presence of a large number of players in the unorganized sector. Further, with presence of various players, the same limits bargaining power which exerts pressure on its margins. Key Rating Strengths Experienced promoters Mr. Rajesh Khushwani and his wife, Mrs. Shweta Khushwani are the directors of AFPL and they collectively look after the business operations of the company. Mr. Rajesh Khushwani and Mrs. Shweta Khushwani, are both graduates by qualification and have an experience of more than two decades in the manufacturing industry through their association with associate concern - M/s Khushwani Print Pack Private Limited engaged in similar line of business. Liquidity Due to the delay in the project implementation, the liquidity remains stretched. As the repayment for the term loan has commenced from Oct'18 and the same has been funded through unsecured loan being infused by the promoters. Uttar Pradesh based, AFPL was incorporated in May, 2009. Initially, the name of the company was Enhance Exim Private Limited, which was later changed to AFPL in July, 2017. The company has been incorporated with an aim to set up a manufacturing unit of printed laminated rolls and pouches with an installed capacity of 3000 MT per annum at its manufacturing location in Kanpur, Uttar Pradesh on a plot area of 31,018 square meters. The commercial operations commenced from mid of September, 2019. ASHAPURA MINECHEM: NCLAT Sets Aside Insolvency Plea --------------------------------------------------- The Hindu BusinessLine reports that the National Company Law Appellate Tribunal (NCLAT) has set aside an order of the Mumbai NCLT admitting a plea filed by Ashapura Minechem Ltd for initiation of insolvency proceedings. The report says the appellate tribunal observed that the plea to initiate insolvency against it was filed by Ashapura Minechem under Section 10 of the Insolvency and Bankruptcy Code (IBC) without any prior approval of the annual general meeting (AGM) or extraordinary general meeting (EGM) of the company. Setting aside the order of the Mumbai bench of NCLT, which had on March 15, 2019 admitted the company's plea and had directed to initiate insolvency proceedings, NCLAT said it was against the law and asked to close the proceedings, the Hindu BusinessLine relates. Ashapura Minechem Limited is engaged in the business of mining, processing and trading minerals and ores, namely: Bentonite, a versatile clay having applications in foundries, iron ore pellatization, oil well drilling and civil engineering; Bauxite, the principal ore used for manufacturing alumina which is in turn used to produce Aluminum metal; Barytes, a clay with high specific gravity and is mainly used in oil well drilling; Iron ore, the principal ore for manufacturing steel. Ashapura is also engaged in the manufacturing of value added Bentonite for advanced applications for usage in paper, cosmetic and edible oil industries. The company also offers to arrange for logistical support for transportation and shipping of minerals which it sells to its customers. ASHIMA PAPER: CARE Maintains B Rating in Not Cooperating Category ----------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Ashima Paper Products (APP) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 6.16 CARE B; ISSUER NOT COOPERATING; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated January 8, 2019 placed the rating of APP under the 'issuer non-cooperating' category as APP had failed to provide information for monitoring of the rating. APP continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls September 13, 2019 and numerous phone calls. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The rating has been taken into account non-availability of requisite information and no due-diligence conducted with banker due to non-cooperation by Ashima Paper Products with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Detailed description of the key rating drivers At the time of last rating on January 8, 2019, the following were the rating strengths and weaknesses: Key Rating Weaknesses Small scale of operations Despite being operational for more than two decades the scale of operations remained small as evident from total operating income and gross cash accruals of INR15.47 crore and INR0.36 crore, respectively in FY18 (FY refers to the period April 1 to March 31).The small scale of operations limits the firm's financial flexibility in times of stress and deprives it from scale benefits. Leveraged capital structure The capital structure of the firm stood leveraged owing to high dependence on external borrowings as marked by overall gearing of around 4 times as on balance sheet dates of last three financial years i.e. FY16-FY18. Working capital intensive nature of operations and APP's operations are working capital intensive nature as reflected by high utilization of its sanctioned working capital limits. Being in a competitive industry, APP offers a credit period of around 3-4 months to its customers which resulted in an average collection period of 94 days in FY18. Further, APP maintains inventory in the form of raw material for smooth production process and finished goods to meet the immediate demand of its customer resulting in an average inventory holding of 80 days for FY18. The firm meets its working capital requirements through a credit period of around 2 months from its suppliers and utilization of sanctioned working capital limits . Weak liquidity indicators: The liquidity indicators stood weak as marked by current ratio and quick ratio of 0.87x and 0.54x respectively in FY18. The cash and bank balance stood at INR 0.01 crores as on March 31, 2018. Highly competitive industry along with susceptibility to volatility in prices of raw material APP operates in competitive segments of the industry wherein the presence of large number of entities limits the bargaining power with customers. Moreover, raw material cost constitutes approximately 70-80% of the total cost of production for the past three financial years i.e. FY16 - FY18. Thus, margins are vulnerable to fluctuation in raw material cost. Hence the profitability of the firm is based on the ability of the firm to absorb the increase in raw material prices which will have an impact on the profitability margins and sales realization. Key Rating Strengths Experienced management in paper industry The operations of APP are currently being managed by Mr. Shalender Goyal and Mrs. Manju Goyal. They are both port graduates and have an experience of more than a decade in the paper industry through their association with APP. They both look after the overall operations of the firm. Moderate profitability margins The profitability margins of the firm stood moderate owing to long track record of the entity due to which the firm has a better bargaining power as marked by PBILDT margin of more than 6.50% and PAT margin of more than 0.80% for the past three financial years, i.e. FY16-FYF18. Gurgaon based, Ashima Papers Products (APP) was established on June 24, 2005 as a partnership firm and is currently being managed by Mr. Shalender Goyal and Mrs. Manju Goyal who are sharing profits and losses equally. The firm is engaged in manufacturing of disposable paper cups at its manufacturing facility located in Gurgaon having an installed capacity of 3 crore pieces per month as on August 31, 2017. The products manufactured by APP are sold to companies such as Café Coffee Day, KFC and PVR Cinemas. The main raw material for the firm is kraft paper and the same is procured from traders located across India. BANSAL SEEDS: CARE Cuts INR26cr LT Loan Rating to B+, Not Coop. --------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Bansal Seeds Private Limited (BSPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 26.00 CARE B+; ISSUER NOT COOPERATING; Facilities Revised from CARE BB- on the best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated September 18, 2018, placed the ratings of BSPL under the 'issuer non-cooperating' category as BSPL had failed to provide information for monitoring of the rating. BSPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated September 9, 2019 and September 3, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The rating has been revised by taking into account no due-diligence conducted due to non-cooperation by BSPL with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. The rating has been revised by taking into account weak profitability margins, capital structure and coverage indicators. Further, the ratings takes into account its small scale of operations with low net worth base and presence in intensely competitive nature of the industry characterized by a number of small players. The ratings, however, draw comfort from experienced promoters and long track record of operations in agro-based business, moderate operating cycle and its presence of the company in agro cluster. Detailed description of the key rating drivers At the time of last rating on September 18, 2018 the following were the rating weaknesses and strengths: Key Rating Weaknesses Small scale of operations The scale of operations of the company has remained small marked by a total operating income and gross cash accruals of INR36.51 crore and INR0.15 crore respectively during FY18. The small scale limits the company's financial flexibility in times of stress and deprives it from scale benefits. Deterioration in the profitability margins, capital structure and coverage indicators The profitability margins of the company deteriorated as marked by PBILDT margin of 7.92% in FY18 as against 8.26% in FY17. The capital structure of the company deteriorated and stood 6.07x as on March 31, 2018 as against 4.18 as on March 31, 2017. Furthermore, coverage indicators marked by the interest coverage ratio and Total debt/GCA deteriorated and stood at 1.16x and 126.53x in FY18 as against 1.18x and 31.20x, respectively in FY17. Intensely competitive nature of the industry characterized by a number of small players The company operates in an industry characterized by high competition with presence of few established players and a large number of unorganized players in view of low investment and technological requirements. Intense competition has a negative impact on margins of the seed processors like BSPL. Key Rating Strengths Experienced promoters and long track record of operations BSPL was promoted by Mr Mukesh Kumar Agarwal (acting as a Managing Director) in 1999 and is engaged in this business since inception with track record of around 2 decades. He manages the entire operations of BSPL. Before setting up of this company, Mr Mukesh Kumar Agarwal was engaged with other group associates. Moderate operating cycle BSPL had moderate operating cycle in FY18. The company procures seeds on cash basis from agricultural universities and provides the same to farmers for germination on job contract basis. Further, the company procures raw material such as packing material and chemicals for a credit period of around a week. Moreover, the company makes sales to wholesalers and retailers on short credit period of 1-2 months. The company keeps inventory of packing material and chemicals leading to inventory period of 4-5 days resulting into comfortable operating cycle of 49 days in FY18. Presence in agro cluster BSPL is favorably located in the vicinity of the major wheat growing areas of the country where the company has easy access to the raw material and also to farmers who germinate seeds for the company. Its presence in the region gives additional advantage over the competitors in term of easy availability of the raw material as well as favorable pricing terms. Owing to its location, it is in a position to save on the freight component of incoming of raw material and outgoing finished goods. Liquidity The liquidity position of the company stood poor as on March 31, 2018. Current ratio and quick ratio were not meaningful as on March 31, 2018. Kashipur-based (Uttarakhand) BSPL was incorporated in November 1999 by the Agarwal family headed by Mr Mukesh Kumar Agarwal, Managing Director. The company is engaged in processing and trading of wheat and paddy seeds. BSPL purchases the breeder seeds (initial level or raw seeds) of wheat and paddy from the state authorities and Agriculture Universities and after processing the final seeds are certified. Post certification, these seeds are sold commercially in packed form. BSPL sells this certified seeds in the brand name of 'Bansal Seeds' through distributors in Bihar & Uttar Pradesh. CHEMLINKER TRADEX: Insolvency Resolution Process Case Summary ------------------------------------------------------------- Debtor: Chemlinker Tradex Private Limited Registered office: Shop No. G-3, Ground Floor Vardhman Bhanof Plaza Plot No. 6, Pocket-7 Sector-12, Dwarka New Delhi 110075 Insolvency Commencement Date: September 23, 2019 Court: National Company Law Tribunal, Bench-III, New Delhi Estimated date of closure of insolvency resolution process: March 22, 2020 (180 days from commencement) Insolvency professional: Vikas Garg Interim Resolution Professional: Vikas Garg 809, 8th Floor Arunachal Building 19, Barakhamba Road New Delhi 110001 E-mail: vikas@vamindia.in cirp.chemlinker@gmail.com Last date for submission of claims: October 9, 2019 DUGGAL AUTOMOBILES: CARE Assigns B+ Rating to INR7.0cr LT Loan -------------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Duggal Automobiles (DAM), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 7.00 CARE B+; Stable Assigned Detailed Rationale and key rating drivers The rating assigned to the bank facilities of DAM is constrained by small and declining scale of operations, leveraged capital structure and elongated operating cycle. The rating is further constrained by risk of nonrenewal of dealership agreement, proprietorship nature of constitution, and intense competition into auto dealership industry. The rating, however, derives strength from experienced proprietor and long track record of operations and authorized dealership of Hero Motocorp Limited. Going forward, the ability of the firm to scale up its operations while improving its profitability margins and overall solvency position shall remain the key rating sensitivity. Detailed description of the key rating drivers Key Rating Weaknesses Small and declining scale of operations with low net worth base and low PAT margin The scale of operations of the firm remained small marked by total operating income of INR25.52 crore in FY19 (Prov.) and net worth base of INR3.18 crore as on March 31, 2019 (Prov.). Further, the GCA of the firm also stood low at INR0.50 crore. The TOI of the firm witnessed a declining trend in FY17-FY19 period as the TOI of the firm declined from INR32.90 crore in FY17 to INR25.52 crore in FY19 as earlier the firm was the only authorized dealer of Hero Motocorp Limited for Pathankot, Gurdaspur and Batala regions thus having higher market share. However, the company had given its authorized dealership separately for Pathankot and Batala regions from 2017 onwards, which led to decline in income of Duggal Automobiles. The small scale of operations limits the financial flexibility of the firm in times of stress and deprives it of scale benefits. Further, the PBILDT margin of the firm stood moderate at 7.19% in FY19. It improved from 5.94% in FY18 mainly due to decline in employee cost and administrative cost due to decline in customer base. However, PAT margin stood low at 1.97% in FY19 as against 1.60% in FY18. Weak overall solvency position The capital structure of the firm stood leveraged marked by overall gearing ratio of 2.57x as on March 31, 2019 (PY: 2.69x) mainly due to high dependence on working capital borrowings. Further, the debt coverage indicators also remained weak marked by interest coverage ratio of 1.38x in FY19 and total debt to GCA ratio of 16.30x for FY19. The interest coverage ratio stood at the same level as per last year, however, total debt to GCA ratio deteriorated from 11.10x for FY18 to 16.30x for FY19 due to increase in debt levels coupled with decline in GCA of the firm in FY19. Risk of non-renewal of dealership agreement The firm has entered into a dealership agreement with Hero Motocorp Limited (Two wheelers). The dealership agreements with the above companies are subject to renewal from time to time. Furthermore, the agreements may get terminated at any time on violation of certain clauses. Proprietorship nature of constitution Duggal Automobiles, being a proprietorship firm, is exposed to inherent risk of the partner's capital being withdrawn at time of personal contingency and firm being dissolved upon the death/retirement/insolvency of the proprietor. Intense competition in the auto dealership industry The automobile industry is very competitive on the back of the presence of a large number of players dealing with similar products. Moreover, in order to capture the market share, the auto dealers offer better buying terms like providing credit period or allowing discounts on the purchase. Such discounts offered to the customers create a margin pressure and negatively impact the earning capacity of the firm. Furthermore, the auto industry is inherently vulnerable to the economic cycles and is sensitive to the interest rates and fuel prices. The firm thus faces significant risks associated with such cyclical nature of the auto industry. Key Rating Strengths Experienced proprietor and long track record of operations The firm commenced operations in 1980. DAM is currently being managed by Mr. Navneet Kumar Duggal as proprietor. He has a total work experience of 39 years which he has gained through this firm only. The proprietor has adequate acumen about various aspects of business which is likely to benefit DAM in the long run. Furthermore, the long track record has aided the company in having established relationship with customers and suppliers. Authorized dealer of Hero Motorcorp Limited Duggal Automobiles enjoys the reputation of being an authorized dealer of Hero Motorcorp Limited for its two wheelers. Currently, the firm has fully automated workshops with firm trained mechanics. Apart from this, they also have thirteen sub-dealers in the region. The entity has been one of market leaders in the region in the two wheeler segments for decades and has a wide & established distribution network of sales and service centres, providing it a competitive advantage over its peers. Stretched liquidity position The operating cycle of the firm stood elongated at 127 days for FY19 (Prov.). The working capital limits remained fully utilized for the last 12 months period ended August 2019. The liquidity position of the firm stood weak marked by current ratio and quick ratio of 1.22x and 0.34x as on March 31, 2019. The firm had free cash and bank balance of INR0.36 crore as on March 31, 2019. Duggal Automobiles (DAM), based in Gurdaspur, Punjab, was established as a proprietorship concern by Mr. Navneet Kumar Duggal in 1980. DAM is the authorized dealer of Hero Motocorp Limited (Two wheeler division) with its office located in Gurdaspur, Punjab. Currently, the firm has fully automated workshops with firm trained mechanics. Apart from this, they have a network of 13 sub-dealers in the region. EAST HOOGHLY: CARE Hikes Rating on INR9.81cr LT Loan to BB- ----------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of East Hooghly Agro Plantation Private Limited (EHAP), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 9.81 CARE BB-; Stable Revised from Bank Facilities CARE B+; Stable Short Term Bank Facilities 0.75 CARE A4 Reaffirmed Detailed Rationale & Key Rating Drivers The revision in the long-term rating assigned to the bank facilities of EHAP takes into account the growth in total operating income, improvement in profit margins, improvement in capital structure and debt coverage indicators during FY19 (refers the period from April 1, to March 31). However, the ratings continue to remain constrained by its small scale of operations with moderate profit margins, exposure to volatility in raw material prices, leveraged capital structure with moderate debt coverage indicators and highly competitive and fragmented nature of the industry. The ratings, however, continue to derive strength from experienced promoters and diversified use and favorable end user industries. Going forward, the ability of the company to increase its scale of operations with further improvement in profit margins and effective working capital management will remain the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Small scale of operations with moderate profit margins: The total operating income improved year on year during last three years with a compounded annual growth rate of 135.36% mainly on account of higher demand of its products in the market. Moreover, the overall scale of operations of the company remained small as marked by total operating income to INR46.31 crore (INR35.55 crore in FY18) and a PAT of INR0.89 crore (net loss of INR0.96 crore in FY18) in FY19. The company has reported GCA of INR2.80 crore during FY19. The tangible net worth of the company improved and stood at INR7.96 crore as on March 31, 2019. The profitability margins of the company improved during FY19 mainly on account of stabilization of operations and relatively lower capital charges. However, the profitability margins remained low as marked by PBILDT margin of 7.46% and PAT margin of 1.93% in FY19. However during 5MFY20, the company has reported a turnover of INR30.13 crore. Exposure to volatility in raw material prices: The primary raw materials required by EHAP are HDPE and tarpaulin (constituting about 92.52% of the cost of sales in FY19), the prices of which are highly volatile. Further, the company does not have any long term contracts with the domestic suppliers for the purchase of raw materials. Hence, the profitability margins of the company could get adversely affected with any sudden spurt in the raw material prices. Moderate capital structure with satisfactory debt coverage indicators: The capital structure of the company improved as on March 31, 2019 due to low debt level as on closing date and the same remained moderate marked by overall gearing ratio of 1.60x and debt equity ratio of 1.04x as on March 31, 2019. The debt coverage indicators also improved and the same remained satisfactory marked by interest coverage of 2.97x (1.39x in FY18) and total debt to GCA of 4.55x in FY19. The interest coverage ratio improved in FY19 on account of low interest costs during the year. Highly competitive and fragmented nature of the industry: The plastic and polymers industry is highly fragmented with a large number of small to medium scale organized and unorganized players owing to low entry barriers with no visible differentiators in product profile. High competition in the operating spectrum and small size of the company limits the scope for margin expansion. Key Rating Strengths Experienced promoters: EHAP is into manufacturer of high-density polyethylene (HDPE) tarpaulin since 2017 and thus has around a short track record of operations. Moreover, the key promoter Mr. Mainak Mondal has around two decade of experience in the same line of business looks after the day to day operations of the company. He is supported by other directors and a team of experienced professionals. Diversified use and favorable end user industry: The Polypropylene (PP) has high tensile strength and plastic woven sacks are much cleaner both in use and production and resist fungal attack. Air permeable sacks made from PP are suitable for the packaging of diversified products like cement, fertiliser, other chemical products, food grains, oil seeds, sugar, salt etc. Due to numerous advantages of PP woven sacks over jute sacks, these are finding more and more applications in packaging of a wide range of products of various industries. Adequate Liquidity Adequate liquidity characterized by sufficient cushion in accruals vis-à-vis repayment obligations and moderate cash balance of INR0.09 crore as on March 31, 2019. Its bank limits are on an average utilized to the extent of 90% during last 12 months ended on August 31, 2019. The liquidity is supported by its above unity current ratio at 1.59x as on March 31, 2019. West Bengal based East Hooghly Agro Plantation Private Limited (EHAP) incorporated on December 3, 2015, was promoted by Mr. Krishna Chandra Mondal, Mr. Mainak Mondal, Ms. Anima Mondal, Ms. Munmun Pal, Ms. Jumpha Mondal and Ms. Mousumu Pal. The company had started its commercial operation from December 2016 onwards. The company has been engaged in manufacturing of High Density Polyethylene (HDPE) fabric and woven sacks, used as covering products, thereby protecting them from moisture and dust. These products are available in different thickness and capacities. HDPE woven fabrics offer strong, durable and economical packaging for varied range industrial & commercial applications. It is light-weight and best suited for packing corrugated or wooden boxes, cloth bales, machinery and many other finished goods for external safety. Laminated and non-laminated HOPE PP Woven Fabric used for wrapping of paper rolls, textile fabrics, all type of rubber tyres, steel coils, galvanized pipes used in pharmaceuticals industry, polymer industry, fertilizer industry, cement industry etc. The manufacturing facility of the company is located at industrial area, Hooghly, West Bengal with an installed capacity of 1500MT per annum (HDPE Tarpaulin/Fabric and bag) and 2400 MT per annum (Leno Bag). ESSIX BIOSCIENCES: CARE Reaffirms B Rating on INR13cr LT Loan ------------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Essix Biosciences Limited (EBL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 13.00 CARE B; Stable Reaffirmed Short term Bank Facilities 7.00 CARE A4 Reaffirmed Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of EBL, continue to remain constrained by the weak financial risk profile of the company characterized by small scale of operations, weak overall solvency position and stretched liquidity position. The ratings further remain constrained by the customer concentration risk, regulatory risk and the susceptibility of the profitability margins to raw material price volatility & foreign exchange fluctuations. The ratings, however, derive strength from the experienced promoters, approved manufacturing facilities and diversified product profile. Going forward, the ability of the company to profitably scale-up its operations, while improving its overall solvency position and managing its working capital requirements efficiently, will remain its key rating sensitivities. Detailed description of the key rating drivers Key Rating Weakness Weak overall financial risk profile: In November-2017, EBL merged with eight of its group concerns which had negligible operations. The scale of operations continued to remain small with the total operating income of INR69.20 Crore in FY19 (Provisional) which grew by a marginal ~3% on account of increased demand from its main customer and a group concern- Ind-Swift Laboratories Limited ( ISLL; rated 'CARE C; Stable/ CARE A4' '). Further, EBL has achieved a total operating income of INR17.38 Crores in Q1FY20 (Provisional). The PBILDT margins of the company improved to 7.20% in FY19 (Provisional; Previous Year: 6.70%). The PAT margins of the company, however, remained low and deteriorated from 1.29% in FY18 to 0.68% in FY19 (Provisional) on account of increased interest expenses as well as depreciation cost incurred during the year. The capital structure of the company remained leveraged marked by the long term debt to equity ratio and overall gearing ratio of 1.85x and 2.04x respectively, as on March 31, 2019 (Provisional) as compared to 1.87x and 2.13x, respectively, as on March 31, 2018. Though the interest coverage ratio remained moderate in FY19 (Provisional), it deteriorated from previous year's levels owing to increase in interest expenses during the year. The total debt to GCA remained weak at 99.66x as on March 31, 2019 (Provisional). Stretched liquidity position: The overall liquidity position of the company remained stretched. The operating cycle of the company remained elongated at ~110 days as on March 31, 2019 (Provisional), while the average utilization of the working capital limit remained high at ~98% in the last twelve month period ended August-2019. The company had a low free cash and bank balance of INR0.16 Crore, as on March 31, 2019 (Provisional). EBL has a repayment obligation of INR1.22 Crore for FY20 and the same is proposed to be met through the internal accruals. The company has no major capex planned for the near future. The current and quick ratios of EBL stood at a moderate level of 1.35x and 0.40x as on March 31, 2019 (Provisional). Customer concentration risk: EBL derives almost its entire income from the sales to group concerns and job work done for them. ISLL contributed ~95% of the total income in FY19 (Provisional), while Ind-Swift Limited (ISL) contributed ~2%, thereby exposing its revenue stream to customer concentration risk. Susceptibility to raw material prices fluctuations and foreign currency fluctuations: The profitability margins of the company are susceptible to the fluctuations in raw material prices with the raw material costs constituting around 72% of the total income in FY19 (Provisional). Further, in FY19 (Provisional), the company imported around 36% of its total raw material requirements. In the absence of any hedging mechanism, the profitability margins of the company remain vulnerable to any adverse fluctuation in the foreign exchange rates. Susceptibility to regulatory risk in the industry: Pharmaceutical industry is a closely monitored and regulated industry and as such there are inherent risks and liabilities associated with the products and their manufacturing. Key Rating Strengths Experienced promoters: EBL has been engaged in the manufacturing of pharmaceutical products for more than two decades now. The company is operating with Mr. N.R. Munjal as its Managing Director and Mr. S.R. Mehta as the Chairman having an overall experience of around three decades each. The other directors of the company also hold an experience ranging from 5-30 years in the pharmaceutical industry. Approved manufacturing facilities and diversified product profile: EBL is an ISO 9001:2008 certified company. The labs of the company are also accredited by the National Accreditation Board for Testing and Calibration Laboratories (NABL) and complying with the GLP (Good Laboratory Practices) norms. The company manufactures more than ten APIs (Active Pharmaceutical Ingredients) which find application in a varied range of therapeutic segments like antiinflammatory drugs, blood pressure inhibitors, antibiotics, etc. Originally incorporated in 1993 as 'Essix Financial Services Ltd', the company was subsequently rechristened as 'Essix Biosciences Ltd' (EBL) in 2004. EBL is currently operating with Mr. S.R. Mehta as the Chairman and Mr. N.R. Munjal as its Managing Director, who are also the main promoters of the IND-Swift group engaged primarily in the pharmaceutical industry. Till 2007, EBL derived all its revenue from research activities done for ISLL. However, since 2008, the company is engaged in the manufacturing of Active Pharmaceutical Ingredients (API) Intermediates and APIs, which it supplies primarily to ISLL and ISL. Other group concerns of the company engaged in the pharmaceutical industry include Halycon Life Sciences Private Limited while, other entities of the group include Fortune India Constructions Limited (FICL), Swift Fundamental Research & Education Society etc., engaged in diverse industries. In November-2017, eight entities of the group: NRM Portfolios Pvt Ltd, GM Portfolios Pvt Ltd, AKJ Portfolios Pvt Ltd, SRM Portfolios Pvt Ltd, VRM Portfolios Pvt Ltd, VKM Portfolios Pvt Ltd, Integral Buildcon Pvt Ltd and Consummate Pharmaceuticals Pvt Ltd were merged with EBL. These companies had negligible operations but had investments made by the promoter group. The merged entity is continuing the existing business of manufacturing of Active Pharmaceutical Ingredients (API) Intermediates and APIs. EBL has Dashmesh Medicare Private Limited as its subsidiary which is currently non-operational. GEOSYS INDIA: CARE Maintains B+ Rating in Not Cooperating --------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Geosys India Infrastructure Private Limited (GIIPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 5.00 CARE B+; ISSUER NOT COOPERATING; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated December 18, 2018, placed the ratings of GIIPL under the 'issuer non-cooperating' category as GIIPL had failed to provide information for monitoring of the rating. GIIPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and an email dated September 13, 2019, September 06, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings). Detailed description of the key rating drivers At the time of last rating on December 18, 2018, the following were the rating weaknesses and strengths. (updated for the information available from Registrar of Companies) Key Rating Weaknesses Small scale of operations coupled with low networth base The scale of operations of the company continues to remain small marked by a total operating income and gross cash accruals of INR7.44 crore and INR1.56 crore respectively in FY18 (FY refer to April 01 to March 31). The networth stood at INR6.87 crores as on March 31, 2018. The small scale limits the company's financial flexibility in times of stress and deprives it from scale benefits. Business risk associated with tender -based-orders The company is exposed to the risk associated with the tender-based business, which is characterized by intense competition. The growth of the business depends on its ability to successfully bid for the tenders and emerge as the lowest bidder. Furthermore, any changes in the government policy or government spending on projects are likely to affect the revenues of the company. Moderate financial risk profile The profitability margins of the company continues to remain moderate during last three financial years (FY16-FY18) as marked by PBILDT margin and PAT margins of 14.78% and 7.51% respectively for FY18 as against 12.27% and 6.30% respectively for FY17. The improvement in profitability margins was due to a decline in the cost of operations. The capital structure of the company continues to remain moderate from the last three balance sheet dates. GIIPL's capital structure stood moderate as marked by debt equity ratio and overall gearing of 0.02x and 0.40x as on March 31, 2018 as against 0.03x and 0.34x as on March 31, 2017. The coverage indicators continues to remain moderate as marked by interest coverage ratio and total debt to GCA of 5.27x and 1.75x respectively for FY18 as against 8.50x and 1.22x respectively for FY17 owing to moderate profitability levels. Weak liquidity position The liquidity position of the company stood weak as marked by current and quick ratio of 1.14x and 1.06x respectively as on March 31, 2018. The cash and bank balance stood at INR 0.79 crore as on March 31, 2018. Competitive nature of industry GIIPL faces direct competition from various organized players in the market due to low entry barriers and lower capital requirements. There are number of small and regional players and catering to the same market which can exert pressure on its margins. The company undertakes sub-contracts from private entities like L&T Construction and some government departments like Madhya Pradesh Rural Road Development (MPRRD). Key Rating Strengths Experienced management Mr. Rajeev Agarwal has more than two decades of experience in geosynthetics & infrastructure business through his association with GIIPL and his other family businesses. He handles the overall operations of the company. He is supported by Chanchal Agarwal, who looks after human resources and administration departments and has more than half a decade of experience through her association with GIIPPL. Moderate order book GIIPL has an unexecuted order book of around INR 60 crores as on September 26, 2017 which is equivalent to ~3 times of the TOI in FY17 (Provisional). The tenor of the contracts to be executed varies up to 12 months. The moderate order book provides visibility in the short to medium term for the company. CARE is unable to comment on its present order book position due to non-cooperation by the client. Moderate working capital cycle The operating cycle of GIIPL stood moderate at 49 days for FY18. The company has a collection period of around 2-3 months and receives a credit period of 1-2 months as marked by an average collection period of 121 days and an average credit period of 84 days for FY18. The company doesn't maintain any inventory in the form of raw materials or finished products as it has a healthy relationship with its suppliers and procures raw material as and when required. The average inventory stood at 12 day for FY18. Kanpur (Uttar Pradesh) based Geosys India Infrastructures Private Limited. (GIIPL) was incorporated in 2008 as a private limited and is currently being managed by Mr. Rajeev Agarwal and Mrs. Chanchal Agarwal. The company is a Contractor & Engineer for turnkey projects and is engaged in the construction of roads, flyovers, reinforced earth walls and bridges. GIIPL executes contracts mainly for government departments like Madhya Pradesh Rural Road Department (MPRRD) some private entities such as L&T. The primary raw material in their projects is technical textile or geosynthetics which they procure from Maruti Rub Plast Private Limited. GLOBETECH MEDICARE: CARE Keeps B Rating in Not Cooperating ---------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Globetech Medicare Private Limited (GMPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 25.70 CARE B; ISSUER NOT COOPERATING; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated July 27, 2018, placed the ratings of GMPL under the 'issuer non-cooperating' category as GMPL had failed to provide information for monitoring of the rating. GMPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and an email dated September 6, 2019, September 3, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings). Detailed description of the key rating drivers At the time of last rating on July 27, 2018, the following were the rating weaknesses and strengths. (updated for the information available from Registrar of Companies) Key Rating Weaknesses Weak Liquidity indicators The liquidity position of the company stood weak as marked by current and quick ratio of 0.02x and 0.01x respectively as on March 31, 2018. Project execution risk coupled with debt funded capex The company is setting up a multi-specialty hospital in Varanasi. The hospital has commenced its operations from April 2017 and FY18 (refers to the period April 1 to March 31) being the first full year of operations. The project execution is at nascent stage and execution of the project within envisaged time and cost remains a risk for the company. Reputational risk Healthcare is a highly sensitive sector where any mishandling of a case or negligence on part of any doctor and/or staff of the unit can lead to distrust among the masses. Thus, all the healthcare providers need to monitor each case diligently and maintain standard of services in order to avoid the occurrence of any unforeseen incident. They also need to maintain high vigilance to avoid any malpractice at any pocket. Competition from existing players The healthcare industry is highly competitive with a large number of established organized players and their growing network of hospitals. The healthcare and specialty hospital sector mainly comprises of large national players, organized regional players, government hospitals, charitable trusts and a large number of nursing home and multi-specialty clinics making it highly competitive. The competition is expected to intensify with the expected entry of Public Private Partnerships in this segment. Key Rating Strengths Experienced promoters with diversified business experience The company is promoted by Dr B.K. Singh, Mr Saurabh Bhansali, Mr Ashish Tulsiyan, Mr Praveen Kumar and Ms Poonam Singh. Dr Singh is a renowned doctor and an eminent cardiologist of Varanasi having more than 20 years of medical experience. He would be looking after the overall operations of GMPL. Mr Ashish Tulsiya, a qualified chartered accountant and a company secretary having an experience of nearly half a decade through his association with companies engaged in the business of coal trading, manufacturing of sponge iron and education (schools). Mr Saurabh Bhansali, a chartered accountant looks after the financial and legal matters of the company. He is having an experience of around a decade through his association with companies engaged in real estate and manufacturing of ayurvedic medicines. Mr Praveen Kumar, a MBA from Banaras Hindu University looks after the marketing and administrative operations of the company. He is having an experience of around a decade through his association with companies engaged in the business of stone crushing, sales of country liquor and transporting. Ms Poonam Singh, a graduate will be looking after the day to day administrative activities and human resource related issues after project the project becomes operational. Positive outlook & high growth potential for the healthcare sector As per CARE Research, Indian healthcare sector is expected to grow at 10-12% CAGR, driven by the hospital industry, which accounts for 70% of the sector. Factors such as rise in per capita spending on healthcare, change in demographic profile, transition in disease profiles, increase in health insurance penetration, and fast growing medical tourism market, are expected to be the growth drivers of the industry. Increasing rural incomes and generous insurance schemes of the government have enhanced the affordability of quality health care in Tier II and III cities. Also, the XIIth Five Year Plan has allocated an amount of INR 3,000 bn to the Health Department, an increase of 235% over INR 896 bn spent in the XIth Five Year Plan. Kolkata-based (West Bengal) GMPL was incorporated in 2013 and is currently promoted by Dr. B.K. Singh, Mr Saurabh Bhansali, Mr Ashish Tulsyan, Mr Praveen Kumar and Ms Poonam Singh. The company was setup with an objective to construct and operate a multi-specialty hospital in Varanasi, Uttar Pradesh. The hospital would provide healthcare services in orthopedics, neurology, urology, pathology, nephrology, pediatric, cardiology, gynecology, laproscopy, primary care services, radiology and imaging center among others. It would also be equipped with modular operation theatre, Internal Care Unit (ICU) with advance ventilator support. The hospital will also have an outpatient clinic consisting of offices/consult rooms with examination rooms, pathology department etc. The hospital has commenced its operations from April, 2017 and FY18 being the first full year of operations. The project execution is at nascent stage and execution of the project within envisaged time and cost remains a risk for the company. GOYAL ENTERPRISES: CARE Maintains B+ Rating in Not Cooperating -------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Goyal Enterprises, Meerut (GE) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 11.25 CARE B+; ISSUER NOT COOPERATING; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE has been seeking information from GE to monitor the rating vide e-mail communications dated September 10, 2019, September 4, 2019 and August 30, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the ratings on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on GE's facilities will now be denoted as CARE B+; Stable ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while sing the above rating. Detailed description of the key rating drivers At the time of last rating on August 22, 2018, the following were the rating weaknesses and strengths. Credit Risk Assessment Key Rating Weakness Small scale of operations The scale of operations stood small as marked by the total operating income of INR 23.56 crore in FY18 (refers to period starting from April 1 to March 31; based on provisional results). The small scale limits the firm's financial flexibility in times of stress and deprives it from scale benefits. Low profitability margins and coverage indicators The firm is engaged in trading of surgical equipment's, scientific chemicals where value addition is low. The profitability margins of the firm stood low owing to its presence in highly competitive industry. The PBILDT and PAT margin of the firm stood around 3% and 0.75% for the past two financial years i.e. FY17-FY18. Further, the interest coverage indicators also stood low owing to low profitability; as marked by interest coverage ratio of 1.39x and total debt to gross cash accruals of 27.94 times for FY18. Leveraged capital structure The capital structure of the firm stood leveraged owing to higher dependence on external borrowings to meet its working capital requirement as marked by overall gearing ratio which remained around 3x for the balance sheet date of the past two financial years i.e. FY17-FY18. Weak Liquidity Position The liquidity position of the firm stood weak as marked by current and quick ratio of 1.26x and 0.63x as on March 31, 2018 (refers to the period from April 01 to March 31; based on provisional results). Working capital intensive nature of operations The business operations of Goyal Enterprise are working capital intensive in nature as reflected by higher utilization of sanctioned working capital limits. Since Goyal Enterprise operates in a competitive industry, it has limited bargaining power and is required to offer high credit period of around 2 months to its customers. The firm generally purchases on cash or advance basis resulting with a maximum credit period of 2 days in FY18.Further, being in the healthcare sector, GE also maintains inventory in the form of finished goods to meet the immediate needs of its customers. The working capital limits remained almost fully utilized for the past 12 months, period ending June 30, 2018. Competitive nature of industry Goyal Enterprise faces direct competition from various organized and unorganized players in the market. There are number of small and regional players and catering to the same market which can exert pressure on its margins. Constitution of the entity being a proprietorship firm The constitution of Goyal Enterprise is proprietorship firm which has the inherent risk of possibility of withdrawal of the proprietor capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of proprietor. Moreover, proprietorship firms have restricted access to external funds as credit worthiness of proprietor would be the key factors affecting credit decision for the lenders. Key Rating Strengths Experienced management The overall operations of the firm are managed by Mr. Ambuj Goyal. He is a post graduate by qualification and has a vast experience of around two decades in trading of lab testing, surgical equipment and scientific chemicals. He is further supported by a team of experienced professionals. Growing scale of operations Goyal Enterprises has witnessed growth in its TOI over the past three years (FY16 to FY18) at a compounded annual growth rate (CAGR) of 20%. During FY18, the firm registered growth of 37.94% in its total operating income which stood at INR 23.56 crore as against INR 17.08 crore in FY17. The growth was attributed due to increase in quantity sold to new and existing customers. Furthermore, the firm has achieved total operating income of INR 10.69 crores during 3MFY19 (period from April 1 to June 30; based on provisional results). Meerut based Goyal Enterprises (GE) was established as proprietorship firm by Mr. Ambuj Goyal in 2001. GE is engaged in the wholesale trading of surgical equipment such as sputum container, urine container, slide box, dropping bottle etc and various type of scientific chemicals. The firm procures the products from domestic distributors and sells these products to pathology laboratory, hospitals and medical colleges across India. HEMALI INVESTMENT: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating ------------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Hemali Investment & Finance Private Limited's (HIFPL) Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR650 mil. Term loan due on March 2022 migrated to non- cooperating category with IND BB+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on September 25, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1981, HIFPL executes commercial and residential real estate projects. IL&FS ENGINEERING: Defaults on Redemption of Preference Shares -------------------------------------------------------------- The Hindu BusinessLine reports that IL&FS Engineering and Construction Company on Oct. 7 said it has defaulted on redemption of preference shares worth INR39.5 crore in favor of Vistra ITCL (India) Ltd. The due date of redemption was September 30, the report says. "Due to the present circumstances in relation to the company . . . the company is unable to redeem the preference shares on the due date," it said in a filing to stock exchanges, the Hindu BusinessLine relays. According to the Hindu BusinessLine, default on the redemption is with respect of non-convertible redeemable cumulative preference shares and optionally convertible preference shares. The Hindu BusinessLine says the debt crisis at the infrastructure lender IL&FS, which created a turmoil in the Indian financial market and led to a situation of liquidity tightening in the system, came into light following a series of defaults by its group companies beginning September 2018. IL&FS Engineering and Construction Company Limited, formerly known as Maytas Infra Limited, is engaged in infrastructure development, construction and project management. INTERJEWEL PRIVATE: CARE Maintains D Rating in Not Cooperating -------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of InterJewel Private Limited continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term–Fund 210.00 CARE D; ISSUER NOT COOPERATING; Based Bank based on best available Facilities information Short Term-Non 1.60 CARE D; ISSUER NOT COOPERATING; Fund Based based on best available Bank Facilities information Detailed Rationale & Key Rating Drivers CARE has been seeking information from InterJewel Private Limited to monitor the rating(s) vide email communications dated Dec. 31, 2017, Nov. 30, 2017, Oct. 31, 2017, Feb. 28, 2018, Jan. 31, 2018, June 7, 2019, June 13, 2019, June 20, 2019, and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on InterJewel Private Limited's bank facilities will be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The ratings take into account the ongoing delays in debt servicing. Detailed description of the key rating drivers At the time of last rating on April 6, 2018 the following were the rating strengths and weaknesses Key Rating Weaknesses Ongoing delays in debt servicing Due to weakening of the liquidity profile of IPL, there are on-going instances of overdrawals in the working capital bank facilities. InterJewelPvt. Ltd (IPL) was established as a partnership firm in 1970, in the name of D. Navinchandra & Co. by Mr Shantibhai Mehta and Mr Navinbhai Mehta. The partnership firm was converted into a private limited company in April 2007, and subsequently renamed to its current name IPL. The group as a part of its restructuring process carried out a scheme of amalgamation and de-merger exercise with effect from April 01, 2009. IPL, now promoted by Mr Rupen Kothari, Mr Shrenik Choksi and Mr Hemal Choksi, is engaged in the business of importing and processing of rough diamonds and exporting cut and polished diamonds (CPD) of various sizes and shapes. The diamond processing activities of IPL are undertaken at its own manufacturing facilities in Surat. IPL has its sales offices at Mumbai, Delhi and Ahmedabad. Currently, IPL has a 'Rio Tinto Select Diamantaire' status. Day to day operations of the company is managed by Mr Hemal Choksi - CEO. J.D. TALC: CARE Maintains B Rating in Not Cooperating Category -------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of J.D. Talc (JDT) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 5.16 CARE B; ISSUER NOT COOPERATING; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated January 8, 2019 placed the rating of JDT under the 'issuer noncooperating' category as JDT had failed to provide information for monitoring of the rating. JDT continues to be noncooperative despite repeated requests for submission of information through e-mails, phone calls September 19, 2019 and numerous phone calls. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The rating has been taken into account non-availability of requisite information and no due-diligence conducted with banker due to non-cooperation by J.D. Talc with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Detailed description of the key rating drivers At the time of last rating on January 2019, the following were the rating strengths and weaknesses: Key Rating Weaknesses Small scale of operations Despite healthy growth of 32.87% reported during FY17 by the firm in its TOI, overall scale of operations stood small at INR12.61 crore. Leveraged capital structure and moderate debt coverage indicators The capital structure of the firm stood leveraged marked by an overall gearing ratio of 3.27 times as on March 31, 2017. However, debt coverage indicators stood moderate marked by TD/GCA of 8.10 times as on March 31, 2017 on account of moderate level of gross cash accruals against that of its debt level while Interest coverage stood at 2.02 times during FY17 on account of higher PBILDT and lower interest expenses. Moderate Liquidity position Liquidity position stood moderate marked by current ratio of 1.06 times as on March 31, 2017 while operating cycle stood at 79 days during FY17. Susceptibility of profit margins to raw material price volatility risk and foreign exchange fluctuation risk JD's main raw material is soap stone lumps and it procures these raw materials from its associate firm J D Minerals which is engaged in mining of soap stone lumps and also procures from the domestic market. Any adverse fluctuation in the material prices is likely to impact the profit margins of JD. JD is also engaged into export where they export to South Korea. Exports stood at INR3.30 crore in FY17 which is 26% of TOI of FY17. In absence of any active hedging policy, the firm is exposed to foreign exchange rate fluctuation. Key Rating Strengths Experienced promoters Mr. Rajendra Singh Daffoti holds total experience of fourteen years in chemical industry through his association with J D Minerals as a Proprietor. Other two partners also hold moderate experience of four years in same line of business. Haldwani (Nainital)–based J.D. Talc (JD) is a partnership firm established in 2013 by Mr. Rajendra Singh Daffoti. JD is engaged into micronizing and supply of soap lumps and powder and operates with an installed capacity of 50 Metric Tonnes Per Day (MTPD) from its ISO 9001:2015 certified facility. These products have application in making of paper, paints and coating, polyester putties, pharmaceuticals, plastics and rubber, cosmetics. J D Minerals is an associate firm which is promoted by Mr. Rajendra Singh Daffoti in 2004 which is engaged into mining of soap stone lumps and powder. JUPITER BROADCAST: Insolvency Resolution Process Case Summary ------------------------------------------------------------- Debtor: Jupiter Broadcast Private Limited Flat No. 309, 3rd Floor Kalpatru Plaza Chincholi Bunder Road Malad West, Mumbai Mumbai City Mh 400064 Insolvency Commencement Date: September 25, 2019 Court: National Company Law Tribunal, Mumbai Bench Estimated date of closure of insolvency resolution process: March 22, 2020 Insolvency professional: Partha Sarathy Sarkar Interim Resolution Professional: Partha Sarathy Sarkar Office No. 7, 2nd Floor Vikas Bhawan, 26-A Cawasji Patel Street Fort, Mumbai 400001 E-mail: sakarpartho@yahoo.com Last date for submission of claims: October 8, 2019 K B A INFRASTRUCTURE: Ind-Ra Affirms B+ LT Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed K B A Infrastructure Private Limited's (KBAIPL) Long-Term Issuer Rating at 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR50 mil. (reduced from INR100 mil.) Fund-based facilities affirmed with IND B+/Stable/IND A4 rating; and -- INR50 mil. (reduced from INR61.146 mil.) Non-fund based facilities affirmed with IND A4 rating. KEY RATING DRIVERS The affirmation reflects KBAIPL's continued small scale of operations. According to the provisional financials of FY19, revenue fell to INR174 million (FY18: INR233 million) due to the fewer number of orders received and executed. The company has an order book worth INR619.25 million (3.56x of FY19 revenue) to be executed till FY22. The ratings are constrained by company's modest EBITDA margins of 9.72% in FY19 (FY18: 10.79%) due to sub-contracting projects. KBAIPL's modest credit metrics deteriorated in FY19 with interest coverage (operating EBITDAR/gross interest expense) of 2.37x (FY18: 2.74x) and net leverage (adjusted net debt/operating EBITDAR) of 2.67x (1.42x) owing to a decline in absolute EBITDA to INR17 million (INR25 million). The company's return on capital employed was 4% in FY19 (FY18: 6%). Liquidity Indicator - Poor: The company's average use of fund-based facilities over the 12 months ended August 2019 was 76%. Cash flow from operations was INR39.40 million in FY19 (FY18: INR5.74 million) due to the changes in working capital requirements. Cash and cash equivalents were INR0.28 million in FY19 (FY18: INR36.04 million). The ratings continue to be supported by the promoters' experience of over two decades in civil construction. RATING SENSITIVITIES Negative: A substantial decline in the revenue or profitability and deterioration in the credit metrics, all on a sustained basis, will lead to a downgrade. Positive: A substantial rise in the revenue and the profitability, leading to an improvement in the credit metrics, all on a sustained basis, will be positive for the ratings. COMPANY PROFILE Incorporated in 2009, KBAIPL is an engineering, procurement, and construction contractor that executes government projects and subcontract works in Mumbai, Maharashtra. KASATA HOMETECH: NCLT Initiates Insolvency Process Against Builder ------------------------------------------------------------------ ETRealty.com reports that the National Company Law Tribunal (NCLT) Mumbai on Oct. 3 initiated corporate insolvency resolution process against Kasata Hometech under Section 7 of the Insolvency and Bankruptcy Code 2016. The court has appointed Jugraj Bedi as the interim resolution professional (IRP) for the case, ETRealty.com discloses. The court directed the IRP to make public announcement. According to ETRealty.com, the financial creditor said that a debenture holders' representative agreement dated March 29, 2016 was entered into between Kasata Hometech India, Milestone Trusteeship Services and Karvy India Realty. The petitioner subscribed to two sets of non-convertible Debentures (NCDs), issued under Tranche 1, Series 1 and Series 4. Under Tranche 1, Series 1, the petitioner subscribed to 30 NCDs, under Tranche 1, Series 4, the petitioner subscribed to 21 more NCDs. Hence the total debt due and payable to the petitioner is INR59.09 lakh. ETRealty.com relates that the builder in its plea stated that it is financially sound and commercially solvent. It has an asset value of more than INR39 crore. It also has an inventory of finished and unfinished stock off more than INR80 crore. It further said that action in case of any default can only be initiated after a decision by the Majority Debenture Holders ("such number of Debenture Holders holding 75% of the nominal value of the then outstanding Debentures), ETRealty.com relays. ETRealty.com adds that Kasata Hometech further stated that they have constructed and completed two out of three projects in or around the year 2018. However, due to overall depreciation in the market conditions of the real estate business, there was drastic reduction in the sale of the units in the projects. About INR17.52 crore is still receivable from the sold units. NCLT-Mumbai, however, noted that under IBC, the shift is from "inability to pay" to "existence of default," ETRealty.com adds. "Also, the Majority Debenture Holders cannot be countenanced, because that would amount to defeating the provisions of the IBC. Until the hearing of the petition, the builder has not settled the outstanding dues. It clearly shows that they are in default of a debt due and payable." Kasata Hometech Pvt Ltd., a Vadodara (Gujarat)-based company, was incorporated in 2009 by Mr. Ramesh Patel and his brother, Mr. Naresh Patel. The company constructs residential apartments in Vadodara. LORDS MARK: Ind-Ra Maintains BB+ Issuer Rating in Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Lords Mark Industries Private Limited's (LMIPL) Long-Term Issuer Rating of 'IND BB+ (ISSUER NOT COOPERATING)' and simultaneously withdrawn it. The instrument-wise rating actions are: -- The 'IND BB+' rating on the INR17 mil. Term loan due on April 2020 maintained in non-cooperating category and withdrawn; and -- The 'IND BB+' rating on the INR230 mil. Fund-based working capital facilities** maintained in non-cooperating category and withdrawn. Maintained at 'IND BB+ (ISSUER NOT COOPERATING)' before being withdrawn Maintained at 'IND BB+ (ISSUER NOT COPPERATING) / IND A4+ (ISSUER NOT COOPERATING)' before being withdrawn KEY RATING DRIVERS The rating has been maintained in the non-cooperating category because the issuer did not participate in the rating exercise despite continuous requests and follow-ups by Ind-Ra. Ind-Ra is no longer required to maintain the ratings, as the agency has received a no-objection certificate from the lenders. This is consistent with the Securities and Exchange Board of India's circular dated March 31, 2017 for credit rating agencies. COMPANY PROFILE Incorporated in 1998 by Mr. Sachidanand Upadhyay, Lords Mark Industries has manufacturing facilities in Vasai, Maharashtra, and Silvasa, Daman and Diu Union Territory. MAJESTIC EXPORTS: Ind-Ra Hikes LT Rating to 'BB+', Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Majestic Exports' (ME) Long-Term Issuer Rating to 'IND BB+' from 'IND BB- (ISSUER NOT COOPERATING)'. The Outlook is Stable. The instrument-wise rating actions are: -- INR160 mil. (increased from INR140 mil.) Fund-based working capital limits Long-term upgraded, Short-term affirmed with IND BB+/Stable/IND A4+ rating; -- INR5.5 mil. (increased from INR3.5 mil.) Non-fund-based working capital limits affirmed with IND A4+ rating; and -- INR39.3 mil. (increased from INR29.3 mil.) Term loans due on March 2022 upgraded with IND BB+/Stable rating. The upgrade reflects a significant and sustained growth in ME's revenue and operating EBITDA, and the resultant improvement in credit metrics, over FY16-FY19. KEY RATING DRIVERS ME's revenue grew 47% yoy to INR1,875 million in FY19 (FY18: INR1,276 million, FY17: INR931 million; FY16: INR890 million), primarily on account of increase in orders. However, the company's scale of operations continued to be medium. ME have an outstanding order book of INR844.4 million, scheduled to be executed by the end of January 2020. The absolute EBITDA rose to INR270 million in FY19 (FY18: INR204 million; FY17: INR148 million; FY16: INR105 million) on the back of revenue growth. The company's EBITDA margin remained healthy but fell to 14.4% in FY19 (FY18: 16%) owing to an increase in the cost of dyes imported from China and a rise in yarn prices. The return on capital employed was 45% in FY19 (FY18: 52%). The company's credit metrics were comfortable in FY19, with interest coverage (operating EBITDA/gross interest expense) of 21.2x in FY19 (FY18: 19.6x, FY17: 14.2x, FY16: 9.5x) and net leverage (adjusted net debt/operating EBITDA) of 0.7x (FY18: 0.4x, FY17: 0.4x, FY16: 1.04x). The interest coverage improved because of the growth in the absolute EBITDA. The net leverage deteriorated slightly on account of an increase in debt. The ratings are constrained by the intense competition in the industry. However, this risk is mitigated to some extent by ME's strong relationships with its existing customers. The ratings also reflect the high customer concentration risk, with Ralph Lauren contributing around 70% to ME's total revenue. The top 10 customers contributed 91.3% to the total revenue in FY19. Any issue with these customers could impact the revenue visibility of the firm. In addition, the ratings are constrained by the partnership nature of the business. Liquidity Indicator: Adequate – Majestic's liquidity position remained comfortable, with average maximum utilization of fund-based facilities of around 82.7% for the 12 months ended August 2019. The cash flow from operations fell to INR32 million in FY19 (FY18:INR95 million) owing to an increase in working capital requirements. However, the cash flow from operations was positive over FY16-FY19. Ind-Ra expects ME's liquidity to be sufficient to meet the repayment obligations over the medium term. The ratings continue to be supported by the promoters' operating experience of over two decades in the textile industry. RATING SENSITIVITIES Negative: Any decline in the revenue or profitability, along with a further rise in customer concentration, resulting in deterioration in the credit metrics, on a sustained basis, will be negative for the ratings. Positive: A sustained improvement in the revenue and profitability, along with reduction in customer concentration, while maintaining the credit metrics will be positive for the ratings. COMPANY PROFILE Established in 1987, Majestic Exports is a Tamil Nadu-based partnership firm involved in manufacturing and export of knitted garments. The company has its own facilities for knitting, sewing, embroidery and printing in Tirupur. The firm derives 99% of its revenue from the export markets. MANTHAN BROADBAND: Insolvency Resolution Process Case Summary ------------------------------------------------------------- Debtor: Manthan Broadband Services Private Limited 6, G C Avenue 3rd Floor Kolkata 700013 Insolvency Commencement Date: September 18, 2019 Court: National Company Law Tribunal, Kolkata Bench Estimated date of closure of insolvency resolution process: March 16, 2020 Insolvency professional: Shashi Agarwal Interim Resolution Professional: Shashi Agarwal Subarna Appartment (Opp.: Udayan Club) 21N, Block-A, New Alipore Kolkata 700053 E-mail: shashiagg@rediffmail.com mant6750@rediffmail.com Last date for submission of claims: October 2, 2019 MARG LTD: Creditors' Panel Accepts Promoter's Settlement Offer -------------------------------------------------------------- The Hindu BusinessLine reports that a Committee of Creditors (CoC) has approved the settlement offer submitted by GRK Reddy, the promoter of Chennai-based infrastructure developer Marg Ltd, by a majority vote, helping the embattled businessman regain control over his company that was admitted to a bankruptcy court this May. On May 28, the National Company Law Tribunal (NCLT), Chennai, had ordered the start of corporate insolvency resolution process (CIRP) against Marg for defaulting on dues of INR71.69 crore to ICICI Bank, the report notes. Reddy appealed the ruling at the National Company Law Appellate Tribunal (NCLAT). During a hearing on September 30, D Srinivasan, counsel for ICICI Bank, informed NCLAT that the CoC has accepted the terms of settlement submitted by Reddy under Section 12A of the Insolvency and Bankruptcy Code (IBC). "Therefore, ICICI Bank Limited has moved an application before the adjudicating authority for the withdrawal of the application filed under Section 7 of the IBC," he told NCLAT, the Hindu BusinessLine relays. After hearing the parties, NCLAT allowed ICICI Bank to withdraw the petition, the report says. "The impugned order dated 28 May 2019 for initiating Corporate Insolvency Resolution Process is set aside along with consequential steps taken. The application under Section 7 filed by the ICICI Bank is disposed of as withdrawn. The corporate debtor (Marg) is released from all rigour of law. The Resolution Professional will hand over the assets and documents to the corporate debtor through the promoter," NCLAT, as cited by the Hindu BusinessLine, ruled. "The corporate debtor is directed to pay the stakeholders/creditors in terms of settlement reached under Section 12A within the period as approved by the CoC, failing which it will be open to ICICI Bank to file an application for the recall of this order and revival of CIRP against the corporate debtor," said NCLAT. MARG Limited is an infrastructure development company. The Company has engineered IT infrastructure development, offering complete end-to-end turnkey solutions right from locating the property to providing build-to-suit facilities for IT and ITES Indian and global companies. Marg Ltd commenced insolvency proceedings on May 28, 2019. MICRO DYNAMICS: Insolvency Resolution Process Case Summary ---------------------------------------------------------- Debtor: Micro Dynamics Private Limited T-178, MIDC Bhosari Pune MH 411026 IN Insolvency Commencement Date: September 23, 2019 Court: National Company Law Tribunal, Pune Bench Estimated date of closure of insolvency resolution process: March 21, 2020 (180 days from commencement) Insolvency professional: Anagha Anasingaraju Interim Resolution Professional: Anagha Anasingaraju 1-2, Aishwarya Sankul 17 G.A. Kulkarni Path Opp. Joshi's Railway Museum Kothrud, Pune 411038 E-mail: rp.anagha@kanjcs.com Last date for submission of claims: October 11, 2019 MIGHTY AUTO: CARE Maintains B Rating in Not Cooperating Category ---------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Mighty Auto Wheels Private Limited (MAWPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 13.00 CARE B; ISSUER NOT COOPERATING; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated July 20, 2018, placed the ratings of MAWPL under the 'issuer non-cooperating' category as MAWPL had failed to provide information for monitoring of the rating. MAWPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated September 9, 2019 and September 3, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on July 20, 2018 the following were the rating weaknesses and strengths: Key Rating Weaknesses Short track record and nascent scale of operations MAWPL commenced operations in April 2017 and has very short track record of operations in auto dealership business as compared with other established players. Furthermore, stabilization risk of the newly setup facilities in terms of achieving the envisaged scale of business operations in the light of competitive nature of industry remains crucial for MAWPL. Low profitability margins and working capital intensive nature of operations The profitability margins of an automobile dealership normally remains low as the company has limited negotiating power with manufacturers and has no control over the selling price as the same is fixed by the manufacturers. Furthermore, an automotive dealer's revenues are driven by volumes, while the profits are driven by the sale of spares and service income as the latter fetch higher profit margins. Automobile dealer purchases vehicles from manufacturer by making full advance payment, resulting in low average creditor period. Though the sales to customers are made on a cash and carry basis; however, around 50-60% of the cars are bought on vehicle financing basis through banks. The said phenomenon results in a collection period of around 15-20 days. The dealer has to maintain models of different vehicles with each having various variants to meet the demand of the customer resulting in moderate inventory days of around 30-45 days. Entailing all lead to moderate operating cycle. However, considering the low capital base of the MAWPL at present and the working capital requirement are likely to be met though bank borrowing, resulting into the capital structure to be remained leveraged in the medium term. Presence in competitive nature of automobile dealership industry The fortunes of MAWPL are closely linked to those of Mahindra and Mahindra Limited, being the only supplier for the company. The sales and distribution of automobiles, especially the passenger vehicle and LCV is marked by intense competition attributable to presence of several dealers in the nearby areas. The already existing competition is further worsened by the major automobile manufacturers extending similar discounts and promotional schemes to lure customers for purchases. The profitability margin on products is set at a particular level by Mahindra and Mahindra Limited thereby restricting the company to earn incremental income. Further, with the large dealership network of Mahindra and Mahindra, the bargaining power of the dealer with the customer is further reduced. In light of the same, the margins are likely to remain severely constrained for the dealers and distributors. Also, in order to capture the market share, the auto dealers have to offer better buying terms like providing credit period or allowing discounts on purchases which create margin pressure and negatively impact the earning capacity of the company. Key Rating Strengths Experienced Promoters The directors; Mr. Parminder Tewatia and Mr. Samresh Kumar Singh have wide experience in diversified business segments i.e. auto dealership and real estate through their association with other associate concerns. Liquidity Position The liquidity position of the company stood moderate as on March 31, 2018. Liquidity ratio marked by current ratio and quick ratio stood at 1.24x and 0.59x. Further, cash profit stood at INR 0.63 crores for FY18. Incorporated in 2016, Mighty Auto Wheels Private Limited (MAWPL) is promoted by Mr. Parminder Tewatia and Mr. Samresh Singh. MAWPL is engaged in the dealership of passenger and commercial vehicle of Mahindra and Mahindra Limited (M&ML) on Haridwar and provide provides 3S services (Sales, Spares and Services). The operations of the company commenced from April 2017. Company also undertakes servicing of passenger vehicle work. MAWPL is another group of A to Z Developers Limited and A to Z Auto Wheels Private Limited, managed by Mr. Parminder Tewatia. MIL INDUSTRIES: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable ------------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed MIL Industries Limited's (MIL) Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR22 mil. Fund-based facilities affirmed with IND BB+/Stable rating; and -- INR65 mil. Non-fund-based facilities affirmed with IND A4+ rating. KEY RATING DRIVERS The affirmation reflects MIL's continued small scale of operations, as indicated by revenue of INR411 million in FY19 (FY18: INR299 million). The revenue increased on a yoy basis due to an increase in realizations from rubber lining and polytetrafluoroethylene (PTFE) lining products. The company has recorded revenue of INR156 million in 1QFY20. It has an unexecuted order book of INR140 million, which will be executed by December 2019. The ratings reflect the volatility in operating profitability over FY16-FY19 due to the fragmented nature of the industrial lining industry along with fluctuations in the key raw material prices of rubber and PTFE resin - a crude derivative. The EBDITA margin increased to a healthy 16% in FY19 (FY18:7.2%; FY17: 10%; FY16: 17%) on account of a decrease in cost of materials consumed and decline in employee costs. The margins were also supported by the high-value projects from Coromandel International Limited ('IND AA+'/Stable). The return on capital employed was 21% in FY19 (FY18: 5.4%). The ratings factor in MIL's moderate liquidity position, with average utilization of 35% of fund-based facilities and about 58% of non-fund based limits for the 12 months ended September 2019. The company's cash flow from operations increased to INR24 million in FY19 (FY18: INR23 million) owing to an improvement in the absolute operating EBITDA to INR66 million (INR22 million). As of March 2019, the company had an unutilized credit line of INR12 million and it did not have any term loan or unsecured loan outstanding. The ratings benefit from MIL's comfortable credit metrics due to lower dependency on external debts. The EBITDA interest coverage (operating EBITDA/gross interest expense) improved to 18x in FY19 (FY18: 5.3x) because of the increase in the absolute EBITDA. The company's net debt remained negative due to its lower dependency on external debts as well as comfortable cash balance of INR11 million in FY19 (FY18: INR120 million). Ind-Ra expects the credit metrics to remain comfortable over the medium term due to the absence of debt-led capex. The ratings also continue to be supported by the promoters' experience of more than five decades in the manufacturing of rubber and polytetrafluoroethylene lining. RATING SENSITIVITIES Negative: Any substantial decline in operating profitability, leading to deterioration in the liquidity and credit metrics, with interest coverage falling below 2.5x, will be negative for the ratings. Positive: An increase in the scale of operations and a stable operating profitability resulting in comfortable credit metrics, all on sustained basis, will be positive for the ratings. COMPANY PROFILE MIL manufactures anti-corrosion and anti-abrasion lining and products, such as rubber and polytetrafluoroethylene lining, for chemical and tire manufacturing industries. P. LAKSHMI: Ind-Ra Migrates 'BB-' Issuer Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated P. Lakshmi (PL) Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB-(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR130 mil. Fund-based limits migrated to non-cooperating category with IND BB- (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR60 mil. Non-fund-based limits migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on October 3, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1996, Tamil Nadu-based PL is a registered class I civil contractor with the Public Works Department. PIYUSH COLONISERS: NCLT Starts Insolvency Process Against Firm -------------------------------------------------------------- ETRealty.com reports that the National Company Law Tribunal (NCLT) has initiated corporate insolvency resolution process (CIRP) against Piyush Colonisers Limited under Section 7 of the Insolvency and Bankruptcy Code 2016. The CIRP is triggered on the petition filed by Oriental Bank of Commerce, the report says. According to ETRealty.com, the court has appointed Umesh Garg as the interim resolution professional (IRP) for the case. The court directed the IRP to make public announcement. Oriental Bank disbursed INR20.77 crore loans between 2015 and 2017 to Piyush Colonisers and total outstanding as of January 14, 2019 is INR28.43 crore. The bank classified the builder's account as non-performing asset (NPA) on March 31, 2017. It filed an application before Debts Recovery Tribunal for recovery of dues, which is still pending, ETRealty.com discloses. ETRealty.com relates that Piyush Colonisers in its plea said that the account was never declared NPA as per the guidelines issued by the Reserve Bank of India (RBI) and the bank has not communicated the declaration of the account as 'Regular', 'overdue', 'our of order' or 'NPA'. ETRealty.com adds that the builder further said that at the time of sanctioning of loan and credit facilities, bank had obtained our signatures on a series of papers, unfilled printed forms, letter-head signed in blank and without understanding the content thereof. NCLT, however, dismissed the builder's plea and said that the loan documents clearly depicts the loan was sanctioned, disbursed and the agreements were properly executed. The builder's plea that the signatures were taken on a series of paper is devoid of any substance, ETRealty.com notes. In its meeting of board of directors, issue concerning loan facility granted by the bank was considered and along with other resolution it was resolved that the project land, having khasra No 114, 115, 116 and 123 of the project to be mortgaged to the bank by Puneet Goyal, managing director of the company, according to ETRealty.com. Oriental Bank of Commerce has been ordered to deposit INR2 lakh to the IRP to meet the expenses to perform his function within three days of the order, ETRealty.com notes. ETRealty.com says the court has ordered a stay on all ongoing/pending suits or proceedings against Piyush Colonisers. It has also prohibited the company from transferring, encumbering or disposing of its assets. Any foreclosure of company's assets or recovery of any property by an owner or lessor where such property is occupied by or in the possession of the company has also been prohibited. During the CIRP period, the management of the builder shall vest in the IRP, ETRealty.com states. The ex-management has been directed to provide all documents in their possession and furnish every information within a period of one week from the admission of the petition to the IRP, adds ETRealty.com. Piyush Colonisers Limited operates as a real estate development company. The Company develops, constructs, and manages residential and commercial properties. Piyush Colonisers serves customers in India. S.K. CREATIONS: CARE Cuts INR8.50cr Loan Rating to B, Not Coop. --------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of S.K. Creations (SKC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 8.50 CARE B; ISSUER NOT COOPERATING; Facilities Revised from CARE B+ on the best available information Detailed Rationale & Key Rating Drivers CARE has been seeking no default statement from SKC to monitor the ratings vide e-mail communications dated September 16, 2019, September 11, 2019, September 9, 2019, September 5, 2019 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided no default statement for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings of SKC's bank facilities will now be denoted as CARE B; Stable; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. SANGAM HANDICRAFT: Insolvency Resolution Process Case Summary ------------------------------------------------------------- Debtor: Sangam Handicraft Private Limited F-1, Vinay Path Bani Park Jaipur 302016 Rajasthan Insolvency Commencement Date: September 25, 2019 Court: National Company Law Tribunal, Jaipur Bench Estimated date of closure of insolvency resolution process: March 23, 2020 (180 days from commencement) Insolvency professional: Mr. Nitin Sethi Interim Resolution Professional: Mr. Nitin Sethi C/o Shah Patni & Co. S.B. - One, Bapu Nagar J.L.N. Marg Jaipur 302015 India Tel: +91 141 2703949 Fax: +91 141 2719077 Mobile: +91-9414078378 +91-9799931119 E-mail: nitinsethiip@gmail.com nitin@spcoindia.com Last date for submission of claims: October 9, 2019 SARASWATI TIMBER: CARE Keeps B Rating in Not Cooperating Category ----------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Saraswati Timber Private Limited (STPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 7.99 CARE B; ISSUER NOT COOPERATING; Facilities Based on best available Information Long Term/ 1.63 CARE B/CARE A4; ISSUER NOT Short Term COOPERATING; Based on best Facilities available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated August 1, 2018, placed the ratings of STPL under the 'issuer non-cooperating' category as STPL had failed to provide information for monitoring of the rating. STPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated September 9, 2019 and September 3, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on August 1, 2018 the following were the rating weaknesses and strengths: Key Rating Weaknesses Small scale of operations with low profitability margins, leveraged capital structure and weak coverage indicators The scale of operations of the company stood small scale which limits the company's financial flexibility in times of stress and deprive of scale benefits. The profitability margins of the company remained on a lower side owing to the trading nature of the business and highly competitive industry. STPL had leveraged capital structure on account of low net-worth base. Further owing to high total debt and lower profitability the coverage indicators continues to remain weak. Working capital intensive nature of operations Being a highly competitive business and the product is being sold through large dealers and distributors; the payment is being realized once the products is being sold by the dealer to end customer, the average collection period remained high at around 3-4 months. The company has a large product portfolio which is required to maintain adequate inventory of raw material for smooth running of its production processes and finished goods of all the products to meet the immediate demand of its customers which resulted into average inventory holding period of around 2-3 months. Key Rating Strengths Experienced promoters and part of ACE Footmark group The promoters of STPL i.e. Mr. Surendra Kumar, Mr. Akash Kapoor and Mr. Arjun Puri have about more than a decade of experience each in the manufacturing and trading of footwear products. Further, being a part of "ACE" group, STPL enjoys the benefits such as established marketing and strong brand image. Location advantage and integrated manufacturing process The manufacturing facility of STPL is located in footwear park Bahadurgarh, Haryana. It gives the company easy availability of raw materials and other support items as a large number of companies engaged in the related business are located in the footwear park. Liquidity Position Liquidity ratios marked by current ratio and quick ratio improved and stood at 1.21 times and 0.74 times in FY18 as against 1.13x and 0.57x in FY17. Cash profits declined in FY18 to INR 0.35 crores from INR0.36 crores in FY17. Further, working capital cycle elongated to 79 day in FY18 as against 31 days in FY17 owing to increase in collection and inventory holding days. Incorporated in 1998, STPL is promoted by Mr Surendra Kumar, Mr Akash Kapoor and Mr Arjun Puri. The company started its commercial operations in July 2011 and is engaged in the manufacturing of footwear products like slippers, sandals, flip flops, etc. The manufacturing facility of the company is located at Bahadurgarh, Haryana. The company has its own inhouse ethylene vinyl acetate (EVA) compounding unit and manufactures EVA sheets from EVA granules. The main raw material of the company is rubber, which is procured domestically as well as imported from China. STPL sells its products domestically under the brand name 'Fizik' through a network of dealers as well as through large retail players. Besides STPL, other group companies include Ace Footmark Private Limited (AFPL), Focus Shoes Private Limited and NR Footwear Private Limited which are engaged in the trading & manufacturing of footwear products. SARVOTTAM POULTRY: CARE Keeps 'B' Rating in Not Cooperating ----------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Sarvottam Poultry Feed Supply Centre Private Limited (SPF) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 15.30 CARE B; ISSUER NOT COOPERATING; Bank Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated July 30, 2018, placed the ratings of SPF under the 'issuer non-cooperating' category as SPF had failed to provide information for monitoring of the rating. SPF continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and an email dated September 13, 2019, September 3, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings). Detailed description of the key rating drivers At the time of last rating on July 30, 2018, the following were the rating weaknesses and strengths. (updated for the information available from Registrar of Companies) Key Rating Weaknesses Small scale of operations The scale of operations of the company continues to remain small during last three financial years FY16-FY18 (refers to the period April 1 to March 31). The small scale limits the company's financial flexibility in times of stress and deprives it from scale benefits. Weak financial risk profile Profitability margins of the company continues to remain low for the last three financial years i.e. FY16-FY18 (refers to period April 1 to March 31) owing to the low value addition coupled with high competition. The capital structure continues to remain leveraged marked by overall gearing ratio which stood above 4.50x as on balance sheet dates of last three financial years i.e. FY16-FY18 on account of high debt to meet capex and working capital requirements coupled with low net worth base. The coverage indicators continues to remain weak marked by interest coverage ratio which stood below 2x for the last three financial years i.e. FY16-FY18. The operating cycle of the company continues to remain elongated and stood at 177 days in FY18. Weak Liquidity indicators The liquidity position of the company stood weak as marked by current and quick ratio of 1.44x and 0.77x respectively as on March 31, 2018.The cash and bank balance stood at INR 0.23 crore as on march 31, 2018. Raw material price fluctuation The major raw material for the company consists of soyameal, bajra, corn, peanuts which constituted major proportion of the total cost of sales. The prices of the raw material are highly fluctuating because of the irregularity of climatic condition to unpredictable yields. Moreover, soyameal, bajra, prices are regulated by government policies. The company has low bargaining power towards increase in final product prices. Key Rating Strengths Experienced promoters in poultry feed business SPF is currently being managed by Mr. Satpal Singh and his son, Mr. Abhimanyu. Mr. Satpal Singh is a graduate and have an experience of more than a decade in manufacturing of poultry feed through his association with group concern "NPF". Mr. Abhimanyu is a graduate by qualification and has an experience of around half a decade. They both look after the overall operations of the company. Positive demand outlook of poultry industry Poultry products like eggs have large consumption across the country in the form of bakery products, cakes, biscuits and different types of food dishes in home and restaurants. The demand has been driven by the rapidly changing food habits of the average Indian consumer, dictated by the lifestyle changes in the urban and semi-urban regions of the country. The potential in poultry sector is increasing due to a combination of factors - growth in per capita income, growing urban population and falling real poultry prices. Sarvottam Poultry Feed Private Limited (SPF) was incorporated in 2011 by Mr. Satpal Singh and Mr. Abhimanyu. The concern is engaged in the manufacturing of poultry feed which includes layer feed and broiler feed and it commenced operations in 2011. The main raw material required for manufacturing and processing of poultry feed is soyameal, bajra, corn, peanuts, mustard, maize, etc. The company procures its raw materials from dealers located in Delhi and nearby region. The company sells its products under the brand name "Sarvottam" to poultry farms located in Punjab, Uttar Pradesh and nearby region. SPF has one associate concern namely Nirmal Poultry Farm which is also engaged in similar business. SHRI RAMSWAROOP: Ind-Ra Withdraws BB- Bank Loan Ratings ------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Shri Ramswaroop Memorial Charitable Trust's bank facilities' ratings in the non-cooperating category and simultaneously withdrawn it. The detailed rating actions are: -- The 'IND BB-' rating on the INR466.3 mil. Term loan due on February 2022 maintained in non-cooperating category and withdrawn; and -- The 'IND BB-' rating on the INR368 mil. Fund-based working capital facilities* maintained in non-cooperating category and withdrawn. Maintained at 'IND BB- (ISSUER NOT COOPERATING)' before being withdrawn KEY RATING DRIVERS The rating has been maintained in the non-cooperating category because the issuer did not participate in the rating exercise despite continuous requests and follow-ups by Ind-Ra. Ind-Ra is no longer required to maintain the rating, as it has received a no-objection certificate from the lender. This is consistent with the Securities and Exchange Board of India's circular dated March 31, 2017 for credit rating agencies. COMPANY PROFILE Shri Ramswaroop Memorial Charitable Trust was established by Shri Ramswaroop Memorial Group in May 2010. Under its aegis, Shri Ramswaroop Memorial University was established under UP State Government Act 1 of 2012. The university, located in Uttar Pradesh, imparts education in the field of science, engineering and technology, bio and medical sciences, dental science, pharmacy, management, hotel and hospitality management, law and other professional courses, and history, culture, commerce, economics, humanities, philosophy and art. SIDHANT CREATIONS: CARE Lowers Rating on INR15cr Loan to D ---------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Sidhant Creations Private Limited (SCPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term/ 15.00 CARE D/CARE D Revised from Short-term CARE BB-; Stable/CARE A4 Bank Facilities Long-term 0.56 CARE D Revised from Bank Facilities CARE BB-;Stable Detailed Rationale & Key Rating Drivers The revision in the ratings assigned to the bank facilities of SCPL is primarily due to irregularity in servicing of its debt obligations. Detailed description of key rating drivers Key Rating Weaknesses On-going delay in debt servicing: SCPL has been irregular in servicing its debt obligation due to weak liquidity position of the company. Liquidity: Poor The liquidity position of the company remained poor as marked by net cash flow from operating activities which remained at negative INR0.10 crore during FY18 coupled with low cash and bank balance of INR0.25 crore as on March 31, 2018. Further, Cash credit limit utilized around 90% over the past twelve months ended September, 2018. Furthermore, SCPL's operating cycle elongated to 231 days in FY18 from 161 days on the back of increase in collection and inventory period during the year. Surat-based (Gujarat) SCPL was incorporated in 2008 as a private limited company by Dhingra family. SCPL is into the business of manufacturing of designer sarees and lehengas. SCPL is operating from its sole manufacturing plant located in Surat (Gujarat) with an installed capacity of manufacturing 60,000 pieces of designer saress p.a. and 25,000 pieces of lehengas p.a. as on March 31, 2018. The promoters also run another entity Sidhant Fabrics which undertakes embroidery related job work for SCPL. SRI MAANASA: CARE Cuts INR11.60cr LT Loan Rating to B+, Not Coop. ----------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Sri Maanasa Enterprises Private Limited (SMEPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 11.60 CARE B+; ISSUER NOT COOPERATING; Facilities Revised from CARE BB- on the best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated June 8, 2018, placed the rating(s) of SMEPL under the 'issuer non-cooperating' category as SMEPL had failed to provide information for monitoring of the rating. SMEPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated July 19, 2019, July 22, 2019, August 27, 2019, August 28, 2019 and September 13, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers The revision in the ratings assigned to the bank facilities of Sri Maanasa Enterprises Private Limited (SMEPL) takes into account growth in scale of operations and revenue over the years, leveraged capital structure and weak debt coverage indicators. The ratings are constrained by Fluctuating profit margins, working capital intensive nature of operations. The ratings are underpinned by the extensive experience of the promoters. Going forward, the company's ability to increase its scale of operations along with profit margins and improve its capital structure and debt coverage indicators while improving its working capital requirements effectively would be the key rating sensitivities. Key Rating Weakness Small scale of operations The company has operating income of INR 4.44 crore as on march 31, 2018 with low net worth of INR 13.04 crore Leveraged capital Structure and weak debt coverage indicators The debt equity ratio and overall gearing ratio of the company remained leveraged due to carried forward of losses there is erosion in net-worth over the period from FY16 to FY18. Working capital Intensive nature of operations The company operates in a working capital intensive industry and consequently the operating cycle has been high about 3-4 months. The operating cycle improved from 221 days in FY16 to 29 days in FY17 and again deteriorated to 85 days in FY18. Key rating strengths Extensive experience of promoters The company has been promoted by Mr. Krishna Murthy Gollapudy (Managing Director) along with his relatives, who has been associated with the SMEPL since its inception (as a partnership firm) and has been present in the retail industry since the past 15 years. The business operations of SMEPL have benefited from his long established track record and the vast industry network developed over the years. He is involved extensively in the day-to-day operations of the company and looks after the finance and accounts as well as sales and marketing aspects of the company. Growth in scale of operations and revenue over the years The total operating income (TOI) of the company remained fluctuating over the period from FY16 to FY18. In FY16 TOI stood at INR13.44 crore and increased to INR14.79 crore in FY17 and declined to INR13.39 crore in FY18. atisfactory profitability margins Increasing profitability margins during the review period. The PBILDT margin increased from 5.85 % in FY16 to 11.99 % in FY18 due to increase in scale of operations. The PAT margin improved and stood at 0.16% in FY18. Liquidity Analysis: The current ratio of the firm stood moderate at 1.45x as on March 31, 2018 mainly on account of high current assets compared to the current liabilities. Sri Maanasa Enterprises Private Ltd. (SMEPL) was incorporated on August 10, 2012. The company was started as a partnership firm in 2007 under the name of M/s. Sri Maanasa Enterprises at Kakinada with a single retail outlet before being incorporated as a private limited concern. In 2011, another retail outlet was started in Vizag under the name of Sri Maanasa Garments Private Limited and subsequently, in 2013, both the units got amalgamated into the present form of Sri Maanasa Enterprises Private Ltd. The company is engaged in textile trading business dealing in men's, women's and children's garments, and currently operates four retail outlets; one each in Vizag and Eluru and two in Kakinada, Andhra Pradesh.The entire shareholding lies with the promoters and their relatives. Mr. Krishna Murthy Gollapudy (Managing Director) has around 15 years of experience in the retail industry. SRI PARAMESWARA: Insolvency Resolution Process Case Summary ----------------------------------------------------------- Debtor: Sri Parameswara Poultry Farm Pvt. Ltd. 18-190/1, Opp Saibaba Temple Shad Nagar Farooq Nagar Mahaboob Nagar Telangana State 509216 India Insolvency Commencement Date: September 17, 2019 Court: National Company Law Tribunal, Pune Bench Estimated date of closure of insolvency resolution process: March 15, 2020 Insolvency professional: Mr. Satish Kumar Jain Interim Resolution Professional: Mr. Satish Kumar Jain C2/401, Prestine Royal Behind Spicer College Aundh, Pune 411007 E-mail: skjain317868@gmail.com - and - Office No. 309, 3rd Floor A Wing, City Point Dhole Patil Road Pune 411001 Last date for submission of claims: October 1, 2019 TIRUPATI EXPORT: CARE Cuts INR9cr LT Loan Rating to B-, Not Coop. ----------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Tirupati Export and Import Corporation(TEIC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 9.00 CARE B- ISSUER NOT COOPERATING; Bank Facilities Revised from CARE B on the best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated January 08, 2019 placed the rating of TEIC under the 'issuer non-cooperating' category as TEIC had failed to provide information for monitoring of the rating. TEIC continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls September 19, 2019 and numerous phone calls. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The Long-term ratings has been revised by taking into account non-availability of requisite information and no due diligence conducted with banker due to non-cooperation by Tirupati Export and Import Corporation with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Further, the ratings continue to remain constrained owing by small though fluctuating scale of operations, weak financial risk profile, high collection period and presence in a competitive industry. The ratings, however, continue to take comfort from Experienced management and long track of operations. Detailed description of the key rating drivers At the time of last rating on January 8, 2019, the following were the rating strengths and weaknesses: Key Rating Weaknesses Small though fluctuating scale of operations The scale of operations stood small marked by a total operating income and gross cash accruals of INR32.78 crore and INR0.27 crore, respectively, in FY17 (refers to the period April to March 31). The small scale limits the company's financial flexibility in times of stress and deprives it from scale benefits. Further company's total operating income has been fluctuating over the past three years (FY15-FY17). The total operating income registered a decline on y-o-y basis in FY16 due to subdued demand and registered a growth in FY17 on account of higher quantity sold. Further, the firm achieved total operating income of INR15.00 crore during 8MFY18 (refers to the period April 01 to November 30). Weak Financial Risk Profile The profitability margins stood low as marked by PBILDT margin and PAT margin of 2.60% and 0.65% respectively in FY17 as against 7.26% and 1.10% respectively in FY16. The decline in the profitability margins was on account of increase in cost of the traded product from around 91.66% of total costs in FY16 to around 96.28% of the total cost in FY17. The capital structure of TEIC stood leveraged as marked by overall gearing of 5.01x as on March 31, 2017 as against 4.80x as on March 32, 2016. The deterioration was on account of higher utilization of sanctioned working capital borrowing limits as on balance sheet date coupled with infusion in the form unsecured loans to support growing scale of operations. Furthermore, the coverage indicators of TEIC stood weak as marked by interest coverage ratio and total debt to gross cash accruals of 1.46x and 46.77x respectively in FY17. High collection period The operating cycle of TEIC stood elongated at 91 days in FY17 emanating from a high collection period. The firm primarily sells to manufacturers of packing materials and realizes the payment from its customers once the inventory is sold. Further, being a highly competitive business, the company has to give extended credit which resulted into collection period of 112 days in FY17. The company maintains inventory of around 2-4 weeks to meet the immediate needs of its customers and receives a credit period of a month. The high working capital requirements were met largely through bank orrowings which resulted in almost full utilization of working capital limits for the past 12 months period ended November 30, 2017. Weak Liquidity Position: The current ratio and quick ratio stood 0.85x and 0.80x in FY17(A) on account of high trade receivables. Presence in a competitive industry The trading industry is a competitive industry wherein there is a presence of a large number of players in the unorganized and organized sector. There are a number of small and regional players catering to the same market which limits the bargaining power that the company exerts pressure on its margins. Smaller companies in general are more vulnerable to intense competition due to their limited pricing flexibility, which constrains their profitability as compared to larger companies who have better efficiencies and pricing power considering their scale of operations. Key Rating Strengths Experienced management and long track of operations TEIC was established in April, 1999 and has a long track record of almost two decades in the trading of plastic granules. Mr. Balmukund Jhunjhunwala is the proprietor of TEIC. He is a graduate by qualification and has experience of almost three decades in the trading industry though his association with TEIC and other family businesses. He looks after the overall operations of the firm. Delhi based Tirupati Export and Import Corporation (TEIC) was established in April, 1999 as a proprietorship by Mr. Balmukund Jhunjhunwala. Mr. Balmukund Jhunjhunwala looks after the overall operations of the firm. TEIC is primarily engaged in the wholesale trading of plastic granules which find application in the packaging industry. The firm procures majority of the plastic granules from Luxembourg and Singapore and sells them to packaging manufacturers in Noida, Agra and Varanasi. V.R. INDUSTRIES: CARE Maintains B+ Rating in Not Cooperating ------------------------------------------------------------ CARE Ratings said the rating for the bank facilities of V.R. Industries Private Limited (VPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 10.00 CARE B+; ISSUER NOT COOPERATING; Bank Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated July 30, 2018, placed the ratings of VPL under the 'issuer non-cooperating' category as VPL had failed to provide information for monitoring of the rating. VPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and an email dated September 6, 2019, September 3, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings). Detailed description of the key rating drivers At the time of last rating on July 30, 2018, the following were the rating weaknesses and strengths. (updated for the information available from Registrar of Companies) Key Rating Weaknesses Small scale of operations with low networth base Despite being operational for two decades, the scale of operations has continued to remain small marked by total operating income and gross cash accruals of INR 34.31 crore and INR 1.42 crore respectively during FY18. Further, the company's networth base was relatively small at INR 11.25 crore as on March 31, 2018. The small scale limits the company's financial flexibility in times of stress and deprives it from scale benefits. Weak Liquidity Position The liquidity position of the company stood weak as marked by current and quick ratio of 1.10x and 0.83x respectively as on March 31, 2018. The cash and bank balance stood at INR 0.15 crore as on March 31, 2018. Customer concentration risk VPL caters its products mainly to canteen store departments (CSD) of Indian Armed Forces across India and has its revenue stream attached to it. Although the company has been catering CSD for more than two decades, but still the company is exposed towards customer concentration risk. Any change in the procurement policy of the customer would have direct and significant impact on the future prospects of the company as well. Raw material price fluctuation risk The raw materials for the company are various agri-based products such as soya, wheat, rice etc. Agro industry is characterized by its seasonality, as it is dependent on the availability of raw materials, which further varies with different harvesting periods. The prices of agri-based raw materials also depends upon factors like area under cultivation, vagaries of the monsoon, prices of other competing crops, MSP and various other incentives offered by the Govt. of India. This makes the prices of these raw materials volatile in nature which in turn could adversely impact VPL's margins. Key Rating Strengths Experienced promoters and long track record of operations VPL was incorporated in 1994 and has a track record of more than two decades. The company is promoted by Mr. Rahul Bakshi and Mr. Vishal Bakshi. Mr. Rahul Bakshi is a graduate and holds two decade of experience in manufacturing of FMCG products through his association with VPL since its inception. He looks after the overall operations of the company. Mr. Vishal Bakshi is also a graduate and holds one and a half decade of experience with VPL. He is also engaged in the day to day activities of the company. Further, the directors of the company are also supported by Major S.K Bakshi who is an exserviceman in Indian Army. He supports the company in procuring orders from army canteen stores departments across India. Positive outlook for FMCG sector The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage. Penetration level as well as per capita consumption in most product categories in India is low indicating the untapped market potential. Increasing urbanization, rising disposable income, larger percentage of younger people, expanding presence of organized retail chains are some of the reasons for steady growth in demand in FMCG sector. Average financial risk profile The profitability of the company continues to remain moderate marked by PBILDT margin of above 7% in past three financial years i.e. FY16-FY18. Further high financial and depreciation expenses resulted in net losses. The capital structure of the company continues to remain moderate as marked by overall gearing which stood below unity as on the balance sheet dates of past three financial years i.e. FY16-FY18. Owing to moderate profitability margins, the coverage indicators of the company continues to be comfortable marked by interest coverage and total debt to GCA of 3.33x and 5.60x respectively for FY18. VPL was incorporated in 1994 by Mr Rahul Bakshi and Mr Vishal Bakshi. VPL is engaged in the manufacturing of FMCG products in two major segments i e household care and packaged food products. The company manufactures detergents, soaps and toilet cleaners under household care segment and breakfast cereals, nuts and snacks in the packaged food segment. The manufacturing facility of the company is located in Manesar, Gurgaon (Haryana). The main raw material for the company includes agro food items such as corn, nuts, soya, rice as well as other chemical products such as sodium bicarbonate, soda ash etc. for manufacturing of detergents. The company procures these materials from domestic dealers and distributors across various states. The company mainly caters to Canteen Stores Departments (CSD) of Indian Armed Forces located all over the India. The company sells its products under various brands such as 'Admiral' for detergents and toiletries; '8 AM' for breakfast cereals and 'Golden Gate' for nuts and snacks. The operations of the company are ISO 9001: 2000 certified. The company has also obtained Hazard Analysis & Critical Control Points (HACCP) and BSCIC Certifications for the quality processes. VISHWAKARMA AUTO: CARE Maintains B+ Rating in Not Cooperating ------------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Vishwakarma Auto Parts Private Limited (VAPPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 10.63 CARE B+; ISSUER NOT COOPERATING; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE has been seeking no default statement from VAPPL to monitor the ratings vide e-mail communications dated September 16, 2019, September 11, 2019, September 9, 2019, September 5, 2019 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided no default statement for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings of VAPPL's bank facilities will now be denoted as CARE B+; Stable; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. Faridabad (Haryana) based Vishwakarma Auto Parts Private Limited (VAPPL) was incorporated in 2011. The company is engaged in manufacturing of auto components namely precision turned and machined components. The manufacturing facility of the company is located at Faridabad, Haryana with combined installed capacity of ~500,000 pieces per month. The company sells its products under the brand name of "RSE". Vishwakarma Automotive Private Limited is an associate concern and engaged into manufacturing of metal casting used as a raw material for manufacturing of automotive parts. [*] INDIA: Bankruptcies Double at Developers on Mini-Lehman Moment ------------------------------------------------------------------ Dhwani Pandya and Upmanyu Trivedi at Bloomberg News report that the number of Indian real estate companies tipped into insolvency has doubled in less than a year since the collapse of a key shadow bank, an event often compared to the Lehman crisis that squeezed American funding markets a decade ago. As many as 421 developers entered bankruptcy court by the end of June, up from 209 in September 2018, around the time when the government seized control of Infrastructure Leasing & Financial Services Ltd, Bloomberg discloses. The move triggered a credit crunch for smaller financiers and property firms, which depend on funds from shadow lenders, Bloomberg says. According to Bloomberg, Vivek K. Chandy, joint managing partner at law firm J. Sagar Associates said the numbers will probably increase. Of the 421 cases, 164 have been closed, he said, which means they were resolved, withdrawn, or the companies faced liquidation. Bloomberg notes that the growing number of insolvencies highlight Indian property developers' inability to complete apartments and meet their debt obligations amid the funding crisis. The crunch is feeding into--and worsened by--an economic slowdown that is hitting Indians' demand for goods and services. "Banks have become more vigilant. Markets are not too good, money is tight, compliance has increased," Bloomberg quotes Chandy as saying. "Home owners have now become financial creditors by legislation, so they will be able to put more pressure on real estate companies and can start insolvency proceedings. [*] INDIA: Credit Raters Keep Missing Big Company Defaults ---------------------------------------------------------- Rahul Satija at Bloomberg News report that mounting debt failures in India have been catching rating companies off guard, underscoring continued challenges a year after the landmark failure of shadow bank IL&FS increased scrutiny of the industry. Bloomberg says defaults at companies including Dewan Housing Finance Corp., Cox & Kings Ltd. and Altico Capital India Ltd. have occurred even as their long-term ratings indicated very low to moderate risk of non-payment. "Raters have not been able to detect stress in time," Bloomberg quotes Ashutosh Khajuria, chief financial officer at Federal Bank Ltd, as saying. "Cutting credit profiles after the defaults is no rocket science." There's a lot at stake as India tries to navigate a shadow-banking crisis and expand its debt market, Bloomberg notes. The lack of more forewarning on payment problems has fueled questions about the quality of ratings, and could keep some investors away from corporate bonds, hindering market development. India's major rating firms include Crisil, the Indian unit of S&P Global; ICRA, the local unit of Moody's Investors Service; Fitch-owned India Ratings & Research; and Care Ratings, Bloomberg discloses. Crisil declined to comment on industry practices, adding that it didn't rate most of the large credits that defaulted recently. ICRA, Care and India Ratings & Research didn't immediately comment, Bloomberg notes. "Indian rating companies are reluctant to give poor ratings to companies before the default happens," said independent analyst Hemindra Hazari, who writes for the Smartkarma platform, Bloomberg relays. "They fear losing their clients." According to Bloomberg, the securities market regulator strengthened disclosure rules earlier this year after rating firms failed to give ample warning on IL&FS group's defaults from 2018, which triggered a prolonged cash squeeze in the nation. They now have to reveal annual default rates among the companies they evaluate. The new rules are set to improve the quality of ratings in the industry over time, said Somasekhar Vemuri, senior director at Crisil. Bloomberg says the regulator also started probes on whistle-blower complaints against two of the raters. Amid those investigations, ICRA decided to terminate the employment of Naresh Takkar as managing director in August while Care sent Chief Executive Officer Rajesh Mokashi on leave in July until further notice, Bloomberg relates. Bloomberg adds that rating companies have been looking at ways to improve the quality of their assessments. For instance, Care's board said that its interim CEO will not be part of rating operations to ensure the independence of ratings. Some observers said the industry's problems, in India and elsewhere like in the U.S., are more fundamental, Bloomberg states. The norm of firms charging issuers for ratings has been a target of criticism since the global financial crisis. "Ultimately conflict-of-interest remains as long as the issuer pays for his ratings," Bloomberg quotes J N Gupta, managing director at Stakeholder Empowerment Services, as saying. ===================== N E W Z E A L A N D ===================== EBERT CONSTRUCTION: New Group of Victims Emerge, Report Shows ------------------------------------------------------------- The New Zealand Herald reports that clients of collapsed Ebert Construction with defects in new buildings have not held enough money back in retentions to be able to cover repairs, the latest receivers' report showed. NZ Herald relates that in a six-monthly report from PwC's John Fisk, Lara Bennett and Richard Longman, a new group of victims has emerged, on top of the creditors claiming more than NZ$45 million. "A number of Ebert clients contacted us to notify ongoing defects in respect of the company's construction works. Some of these customers advised that the cost of remedying the alleged defects will exceed the value of the retentions held against Ebert and they do not intend to release any funds. Given the complexities we have worked through these matters on a project by project basis," the receivers said, NZ Herald relays. According to NZ Herald, Ebert was working on 15 projects last July when directors declared issues, bringing to a halt construction of the huge Union Green apartments in Auckland--now being finished by Dominion Constructors--as well as many other projects by the firm which specialised in apartments and dairy processing plants. Assets of NZ$30.1 million were identified, based on their book value. But outstanding debts and liabilities include NZ$24.5 million claimed by trade creditors, NZ$9.3 million in subcontractor retentions, NZ$6 million owed to the BNZ, NZ$3.5 million claimed by director Kevin Eric Hale, NZ$349,000 owed to Inland Revenue, NZ$1.2 million owed to employees and unknown further amounts owed to creditors, NZ Herald discloses. No money is available to pay, NZ Herald notes. "Based on the realisations achieved to date, it is unlikely that there will be any surplus funds available from the recoveries made during the receivership," the receivers, as cited by NZ Herald, said. NZ Herald relates that Ebert's receivers have said the company had two principal areas of operation: construction of processing facilities mainly for the dairy sector and general commercial building including multi-unit or apartment blocks. The dairy factory work had been performing well for years but Ebert had "significant actual and anticipated losses relating to a small number of poorly performing general construction contracts." That meant its ongoing ability to trade was hit and the directors called in the receivers on July 31. On October 3, liquidators from Grant Thornton were appointed but they were replaced in November by BDO Wellington. The PwC receivers said they were now working with the BDO liquidators, NZ Herald notes. About Ebert Construction New Zealand-based Ebert Construction Limited provided construction management services. It offered design management, value engineering, cost planning, programming, construction management, health and safety management, quality management, and project reporting services. Lara Bennett, John Fisk and Richard Longman from PwC were appointed receivers to Ebert Construction Limited in July 2018 as a result of a request made by the Ebert Board of Directors to its bank. At the time of PwC's appointment, the company was involved in 15 active projects, employed 100 staff and was forecasting turnover of NZ$171 million in the year through March 2019, according to NZ Herald. Some NZ$640,000 was owed to staff as preferential creditors, with a further NZ$1.3 million owed to employees on an unsecured basis, NZ Herald disclosed citing receivers' first report. NZ Herald said Ebert co-founder and managing director Kevin Hale is also a secured creditor, owed NZ$3.5 million, which he loaned to the business on July 24, 2018, as a short-term measure before new capital was raised from other shareholders. Ebert was placed in liquidation in October 2018. ================= S I N G A P O R E ================= PARKSON RETAIL: Independent Auditor Raises Going Concern Doubts --------------------------------------------------------------- Nisha Ramchandani at The Business Times reports that Parkson Retail Asia's independent auditor has raised a "material uncertainty" about the department store operator's ability to remain as a going concern, the company announced on Oct. 7. However, Parkson added: "The board wishes to inform that the group has received undertaking from (ultimate holding company) Parkson Holdings Berhad to provide continued financial support for a period of 12 months from the date of the board's approval of the audited financial statements." It also pointed out that the auditors' report for the previous financial year ended June 30, 2018 contained a similar emphasis of matter, BT relates. According to BT, auditor Ernst & Young highlighted that for the year ended June 30, 2019, Parkson had incurred a net loss of SGD34.61 million while its current liabilities exceeded its current assets by SGD61.33 million. BT adds that the company said it will be issuing its full annual report in "due course", which will contain the audited financial statements and the independent auditor's report. Parkson's next annual general meeting will be held this month. In a separate filing to the Singapore Exchange (SGX) on Oct. 7, Parkson flagged that it had racked up consecutive pre-tax losses for the three most recently completed financial years. In addition, its latest six-month average daily market cap is SGD17.72 million, below the SGD40 million threshold, BT discloses. Parkson Retail Asia Limited is a Singapore-based investment holding company. The Company operates as a department store retailer. The Company's segments include Malaysia, Vietnam, Indonesia, Myanmar and Cambodia. The Company offers a range of merchandise from fashion apparel to household goods. =============== X X X X X X X X =============== [*] Quentin Olde Joins Ankura as Senior Managing Director --------------------------------------------------------- Ankura, a global leading business advisory and expert services firm, on Oct. 8, 2019, announced the appointment of Quentin Olde to Senior Managing Director. Based in Sydney, Australia, Mr. Olde brings over 25 years of experience as a prominent restructuring advisory practitioner in the Asia-Pacific region. Mr. Olde will use his broad industry expertise and extensive client relationships in Australia to cultivate and develop an on-the-ground team focused on delivering expert services in the local Australian restructuring advisory market. Mr. Olde will also assist in serving Ankura's global clients with international mandates, particularly those listed on the Australian Securities Exchange. In addition, he will be joining Ankura's Europe, Middle East & Africa (EMEA) and Asia-Pacific (APAC) Management Committee and will collaborate with Simon Michaels, the newly appointed Chairman of the EMEA and APAC regions, to expand the firm's global network. "We are excited to welcome Quentin to Ankura and are confident he will be an excellent addition to our growing international team," said Simon Michaels. "With a track record of success and robust experience serving clients across Asia-Pacific, as well as throughout Europe, Quentin's expertise and knowledge will be invaluable as we continue to expand and invest in our capabilities and strategies to serve clients on a global scale." "Having worked with Quentin in the past, I can personally attest to his level of dedication to clients and we are pleased to officially welcome him to the Ankura team," said Kevin Lavin, Co-President and Global Head of Turnaround & Restructuring at Ankura. "Quentin is a recognized leader in the Australian turnaround and restructuring market and is another key addition as we continue to develop and strengthen our capabilities on a global basis." Prior to joining Ankura, Mr. Olde served as a senior managing director in the Corporate Finance and Restructuring practice at a global consulting firm, where he assisted clients in private equity transactions, financial restructurings, strategic workouts, formal insolvencies, distressed debt-trading transactions, dispute resolution and operational restructurings. Mr. Olde has led many significant and notable restructuring and operational turnaround assignments in the Australian market including in the retail, property, mining, mining services, technology and hospitality sectors. Previously, Mr. Olde served as a senior partner at Taylor Woodings, where he led the firm's Sydney practice and spearheaded the sale of the company to a multinational consulting firm. "I am incredibly excited to work with my colleagues to position Ankura at the forefront of global advisory services," said Mr. Olde. "The culture of collaboration that exists at the company is a defining part of the Ankura way. It's what drives the delivery of creative and innovative solutions for clients, and it is what sets Ankura apart from its competitors." Given the recent consolidation activity in the Australian professional services market, Mr. Olde's hire will complement Ankura's capabilities in the region as well as strengthen its global restructuring presence. "To have a quality team in place, with a proven local track record and the strength of the Ankura global platform behind us, we will have the ability to employ a more outcome-focused and collaborative approach to meet the needs of Ankura clients," continued Mr. Olde. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2019. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***