Professional Documents
Culture Documents
CPP Report
Titled
Submitted by:
The director
Name
: Beena devi
Roll No. : 44
Registration No:14UMI16
Batch
: 2014-15
ACKNOWLEDGEMENT
It is great pleasure to express my sense of gratitude to MR.J.K CHANDEL, I.M.S
K.U.K , Kurukshetra , without whose valuable guidance generous help and constant
enthusiastic inspiration this assignment titled Credit analysis research ltd would
have never been a success.
I was almost convinced that I was aware of the business & market forces that drive the
Banking industry. However, once I started out working on the same, I realized how
grossly inadequate my knowledge had been. I thank sir for giving me all the valuable
inputs all along and guiding me to once again explore the sector I so much feel a part of.
BEENA DEVI
MBA (5yrs) 2nd sem.
Roll No. 44
Declaration
I Beena Devi, hereby declare that the project entitled CARE Ltd., assigned by
Institute of Management Studies for the fulfilment of MBA 5 year course from
Institute of Management Studies Kurukshetra University.
This project report has not been submitted to any other Institute or University for
award of any other degree.
Beena Devi
Roll No. 44
CONTENTS
Chapter No.
1
2
C. Financial Analysis
a. Profit & Loss analysis
b. Capital analysis
c. Assests & Liabilities analysis
D. Other important Information
a. Achievements
4
5
Reference
CHAPTER: 1
4
Page No.
Credit rating agencies have been around for the better part of the 20th century, and have
played a key role in the financial world by providing ratings on the creditworthiness of
bonds and other debt instruments.
These ratings are invaluable tools for investors looking to get a better sense of whether
a debt instrument is worth investing in. Therefore, when assessing the level of risk
associated with a bond, investors will typically look at its credit rating.
Since most investors are looking for a tradeoff between risk and return on their
investments, they are typically going to demand a higher interest rate for bonds that
have poorer credit ratings. As a result, rating agencies play an important role in setting
interest rates on debt securities.
1. Fitch
The Fitch Publishing Company was founded in 1913 by John Knowles Fitch, a 33-yearold entrepreneur who had just taken over his fathers printing business. Fitch had a
unique goal for his company: to publish financial statistics on stocks and bonds.
In 1924, Fitch expanded the services of his business by creating a system for rating debt
instruments based on the companys ability to repay their obligations. Although Fitchs
rating system of grading debt instruments became the standard for other credit rating
agencies, Fitch is now the smallest of the big three firms.
2. S&P
Henry Varnum Poor was a financial analyst with a similar vision to John Knowles
Fitch. Like Fitch, Poor was interested in publishing financial statistics, which inspired
him to create H.V. and H.W. Poor Company.
Luther Lee Blake was another financial analyst interested in becoming a financial
publisher. In order to achieve this dream, Blake founded Standard Statistics in 1906, just
a year after Poors death. Standard Statistics and H.V. and H.W. Poor published very
similar information.
Hence, it made sense for the two companies to consolidate their assets, and they merged
in 1941 to form the Standard and Poors Corporation.
Today, Standard and Poors not only provides ratings but also offers other financial
services, such as investment research, to investors. They are now the largest of the big
three rating agencies.
7
3. Moodys
John Moody founded the financial holding company, Moodys Corporation, in 1909.
Although Moodys provides a number of services, one of their largest divisions is
Moodys Investor Services. While Moodys has conducted credit ratings since 1914,
they only conducted ratings of government bonds until 1970.
Moodys has grown significantly over the years. Presently, Moodys is the second
largest of the big three firms.
Purpose of Credit Rating Agencies
Credit rating agencies assign ratings to any organization that issues debt
instruments, including private corporations and all levels of government. Due to the fact
that investors need to know they are receiving adequate compensation for the risk they
are taking by holding an investment, the ratings the agencies issue are essential to the
financial industry.
8
The interest rate attached to a debt is inversely related to its level of risk. Therefore,
since investors use the opinions of rating agencies as metrics for the level of risk
attached to a debt instrument, credit ratings play a key role in the interest rates of
different debt securities.
How Credit Rating Agencies Work
Debtors want investors to have a good idea of how creditworthy their securities are.
Of course, investors are looking for an unbiased idea of a companys ability to repay
debt. Therefore, companies will often hire a credit rating agency to rate their debt.
After the company solicits a bid, the credit rating agency will evaluate the institution
as carefully as possible. However, there is no magic formula to determine an
institutions credit rating; the agency must instead conduct a subjective evaluation of the
institutions ability to repay its debts.
When conducting their assessment, the credit rating agencies will look at a number of
factors, including the institutions level of debt, its character, a demonstration of its
willingness to repay its debt, and its financial ability to repay its debt. Although many of
these factors are based on information found on the institutions balance sheet and
income statements, others (such as an attitude towards repaying debt) need to be
scrutinized more carefully.
For example, in the recent national debt ceiling debacle, S&P downgraded the U.S.
sovereign debt rating because they felt the political brinkmanship of the federal
government was not consistent with the behavior of a AAA institution.
When they assess an institutions credit rating, the agencies will classify the debt as one
of the following:
1. High grade
2. Upper medium grade
They Help Good Institutions Get Better Rates Institutions with higher grade credit
ratings are able to borrow money at more favorable interest rates. Accordingly, this
rewards organizations that are responsible about managing their money and paying off
their debt. In turn, they will be able to expand their business at a faster rate, which helps
stimulate the economys expansion as well.
10
2 . They Warn Investors of Risky Companies Investors always want to know the level
of risk associated with a company. This makes rating agencies very important, as many
investors wish to be forewarned of particularly risky investments.
3.
The Provide a Fair Risk-Return RatioNot all investors are opposed to buying risky
debt securities. However, they want to know that they are going to be rewarded if they
take on a high level of risk. For this reason, credit rating agencies will inform them of
the risk levels for every debt instrument and help ensure that they are properly
compensated for the level of risk they take on.
4.
They Give Institutionsan Incentivet Improve A poor credit rating can be a wake-
up call for institutions that have taken on too much debt or havent demonstrated that
they are willing to be responsible about paying it back. These institutions are often in
denial of their credit problems, and need to be alerted of any potential problems from an
analyst before they make the necessary changes.
Disadvantages of Credit Rating Agencies
Unfortunately, although credit rating agencies serve a number of purposes, they are not
without flaws:
1.
credit rating; instead, credit rating agencies use their best judgement. Unfortunately,
they often end up making inconsistent judgments, and the ratings between different
credit rating agencies may vary as well.
For example, there was much talk about the S&P downgrade when the United States
lost its AAA credit rating. Regardless of the S&P decision, the other two major credit
rating agencies still give the U.S. the highest grade rating possible.
2.
There can be conflict of interest .The credit rating agencies usually provide ratings
11
unsolicited evaluations on companies and sell the ratings to investors, they usually are
paid by the very same companies they are rating.
Obviously, this system can lead to serious conflicts of interest. Since the company pays
the rating agency to determine its rating, that agency might be inclined to give the
company a more favorable rating so as to retain their business. The Department of
Justice has started investigating the credit rating agencies for their role in the mortgagebacked securities that collapsed in 2008.
3.
Ratings Arent Always Accurate Although credit rating agencies offer a consistent
rating scale, that does not mean that companies are going to be rated accurately. For
many years, the credit ratings of these agencies were rarely questioned. However, after
rating agencies provided AAA ratings for the worthless mortgage-backed securities that
contributed to the recession, investors dont have nearly as much faith in them. Their
ratings are still referenced by almost everyone, but their credibility has taken a serious
hit
MEANINGS
12
Treasury Bonds are not rated because they are backed by the "full faith and credit" of
the United States government. They are considered the safest of investments because
the government has the power to levy taxes in order to pay its debts.
Final Word
Credit rating agencies have played a significant role in the financial community over the
past century. Throughout their existence, they have helped investors identify levels of
risk; otherwise, the investing community would be in a world of chaos as it tried to
determine risk levels and appropriate interest rates. However, at the end of the day,
rating agencies evaluations need to be taken with a grain of salt. Although their
opinions are based off of highly educated professionals, they are still opinions.
Investors should take a credit rating under advisement, but they should also use their
own judgment when they decide whether to purchase a debt instrument at a certain price
or interest rate. If you are investing in a security, consider how much debt the firm
13
holds, its revenue, and the assets it has withstanding. Although these are some of the
same factors a rating agency looks at, investors should come to their own conclusion on
the level of investment risk associated with a security.
14
1.Crisil Limited
15
16
Equifax Inc started operations in 1899 and has managed to be among the top credit
rating agencies in India and at global level. Equifax Inc provides information
management services that process thousands of records of its members which can
be used by them for various purposes and to supply risk management solutions,
credit risk management and analysis, fraud detection triggers, decision
technologies, marketing tools etc.
18
6.ICRA Limited
7. ONICRA
19
22
Experian
Equifax
Call credit
Whats in your credit report?
Your credit report typically holds the following information.
A list of all your credit accounts. This includes bank and credit card accounts as
well as other credit arrangements such as outstanding loan agreements or those with
your utility company. They will show whether you have made repayments on time
and in full. Items such as missed or late payments will stay on your credit report
for at least six years. So too do court judgments for non-payment of debts,
bankruptcies and individual voluntary arrangements.
Details of any people who are financially linked to you, which means youve
taken out joint credit
23
If youve committed a fraud (or someone has stolen your identity and committed
fraud) this will be held on your file under the CIFAS section
Your credit report doesnt carry other personal information such as your salary,
religion or any criminal record.
24
CHAPTER:2
CREDIT ANALYSIS AND RESEARCH LIMITED
2.1 INTRODUCTION
CARE Ratings commenced operations in April 1993 and over nearly two
decades, it has established itself as the second-largest credit rating agency in India. With
the rating volume of debt as Rs. 68.08 lakh crore (as of March 31st, 2015), CARE
Ratings is proud of its rightful place in the Indian capital market built around investor
confidence. CARE Ratings has also emerged as the leading agency for covering many
rating segments like that for banks, sub-sovereigns and IPO gradings.
CARE Ratings provides the entire spectrum of credit rating that helps the
corporates to raise capital for their various requirements and assists the investors to
form an informed investment decision based on the credit risk and their own risk-return
expectations. Our rating and grading service offerings leverage our domain and
analytical expertise backed by the methodologies congruent with the international best
practices.
With majority shareholding by leading domestic banks and financial institutions in
India, CAREs intrinsic strengths have also attracted many other investors.
CAREs registered office and head office, is located at 4th floor, Godrej Coliseum,
Somaiya Hospital Road, Sion (East), Mumbai 400 022. In addition, CARE has regional
offices at Ahmedabad, Bangalore, Chennai, Hyderabad, Jaipur, Kolkata, New Delhi,
Pune and international operation in Male in the Republic of Maldives. With independent
and unbiased credit rating opinions forming the core of its business model, CARE
Ratings has the unique advantage in the form an External Rating Committee to decide
on the ratings. Eminent and experienced professionals constitute CAREs Rating
Committee.
25
VISION
"To be
a respected company that provides best - in its field - quality and value services
MISSION
market
To build a pre-eminent position for ourselves in India in securities analysis,
professional excellence
To remain deeply committed to our internal and external stakeholders
To apply the best possible tools & techniques for securities analysis aimed to
VALUE
dealings.
Pursuit of Excellence: Committed to strive relentlessly to constantly improve
ourselves.
Fairness: Treat clients, employees and other stakeholders fairly.
Independence: Unbiased and fearless in expressing our opinion.
Thoroughness: Rigorous analysis and research on every assignent that we take.
What is Corporate Governance Rating
26
27
Shareholder;
Employees;
Lenders/ Creditors;
Suppliers;
Customers; and
Society.
The emphasis will be to assess sustainable value creation and distribution and hence
the analysis will not only examine the past but evaluate the future as well.
2.2 HISTORY
28
29
30
2009-10 :
Established CARE Knowledge Centre at Ahmedabad Commenced providing
technical assistance to credit rating agency in Ecuador
2010-11:
Acquired license to operate credit rating operations in Maldives. Launched
new products including equigrade, ESCO grading, RESCO grading and
financial strength grading of shipyards, edugrade and real estate project star
ratings
Rated a perpetual bond issued by a non financial services corporate company.
2012 :
Acquisition of 75.13% of the issued and paid up equity share capital of
Kalypto. -Acquired indirect recognition as an external credit assessment
institution from Hong Kong Monetary Authority
2013:
Credit Analysis and Research Ltd has proposed a Final Dividend of Rs. 8 per
share and have declared an Interim Dividend of Rs. 6/- per equity share of Rs.
10/- each.
2014 :
CARE Ratings as knowledge partner @ CIMSME - MSME Banking
Excellence Awards in Delhi on 9th Jan 2014.
31
Credit rating
Information services
Advisory services
1. Advisory Services:
Credit Reports - CARE offers credit reports on companies based on published
information and CARE's in-house data base. These confidential credit reports are useful
to entities considering financing options, joint ventures, acquisitions and collaborations
with Indian companies.
Sector Studies - CARE from time to time conducts studies on select sectors of the
Indian economy, particularly those which were largely government controlled and
funded till recently, but have been thrown open for private investment. Studies on the
Indian Power Sector, Fertilizer Industry and Municipal Finances have been completed.
CARE has also prepared reports on twelve of the larger states of the Indian Union,
which account for the bulk of foreign direct investment into India. CARE also regularly
prepares reports on important segments of the Indian economy. These reports are used
by industry participants, financial intermediaries and also by analysts in CARE for their
rating reports.
Project Advisory Services - For financing its infrastructure, India is increasingly
relying on private sector participation. CARE uses the expertise gained in evaluating the
32
credit risk of projects in areas such as roads, ports, power and telecom to advise
investors and banks about the regulatory framework, the specific project risks and the
ways of risk mitigation. CARE has helped independent power producers in India
understand the functioning of the principal power purchasers, the State Electricity
Boards and evaluate options for mitigating purchaser risk. CARE has also worked
closely with project sponsors to structure their debt securities based on estimates of cash
flows.
Financial Restructuring - The business risk faced by Indian companies increased
following the liberalisation of Indian economy in 1991. To compete in the changed
environment, companies have had to reassess their capital structures. CARE uses its
knowledge about various industry sectors to advise companies about the optimal capital
structure and the financial restructuring options.
Valuation - CARE carries out enterprise valuations for company managements,
prospective and exisiting business partners or large investors. The Disinvestment
Commission, Government of India, has used CARE's services for valuing 20 state
owned enterprises.
Credit Appraisal Systems - CARE helps banks and non banking finance companies to
set up or modify their credit appraisal systems.
Debt Market Review - CARE's Advisory division also publishes a monthly bulletin
"debt market review" on the happenings in the debt market and general development in
the economy in the previous month.
Credit Rating Services
CARE's Credit Rating is an opinion on the relative ability and willingness of an
issuer to make
timely payments on specific debt or related obligations over the life of the instrument.
33
CARE rates rupee denominated debt of Indian companies and Indian subsidiaries of
multinational companies.
CARE undertakes credit rating of all types of debt and related obligations (all types
of medium and long term debt securities such as debentures, bonds and convertible
bonds and all types of short term debt and deposit obligations such as commercial
paper, inter-corporate deposits, fixed deposits and certificates of deposits).
CARE also rates quasi-debt obligations such as the ability of insurance companies to
meet policyholders obligations.
CARE's preference share ratings measure the relative ability of a company to meet its
dividend and redemption commitments.
Other Rating / Grading Services : IPO Grading
CARE's IPO grading is a service aimed at facilitating the assessment of equity issues
offered to public.
CARE's IPO grading is an independent and professional opinion on the fundamentals of
the issuer.
The grade assigned to any individual issue represents a relative assessment of the
'fundamentals' of that issuer.
Utility to market participants
- CAREs IPO grading would help the investors particularly the retail investors better
appreciate the meaning of the disclosures in the issue document to the extent that
they affect its fundamentals. IPO grading is expected to be one of the inputs in the
investors decision making process.
- Moreover, such a service would be particularly useful for assessing the offerings of
companies accessing the equity markets for the first time where there is no track
34
record of their market performance. Issuers would also benefit from CARE's IPO
grading as it would help them in benchmarking themselves in the market place.
35
He has been associated with our Company as an Independent Director since May 12, 2006.
Bharti Prasad is an Independent and Non-Executive Director of our Company. She holds a
Master's degree in Arts and an M.Phil degree from Punjab University, Chandigarh. She has more than
39 years of experience in finance, accounts, audit, oversight and administration. She was a member of
the Indian Audit & Accounts Service and retired as Deputy Comptroller & Auditor-General. She has
held various positions including Principal Accountant-General, West Bengal, Joint Secretary
Department of Expenditure, Ministry of Finance, Director, National Academy of Audit & Accounts,
Shimla and Accountant-General, Uttar Pradesh. She has also worked with United Nations Children
Fund, New York. She was a member of the Advisory Group on Evaluation and Audit of the
International Civil Aviation Organization, Montreal, Canada and, member of the International Public
Sector Accounting Board (IPSASB), New York. She is Independent Monitor to the Ministry of
Defence and to the Ministry of Food Processing Industries. She has been associated with our
company as an Independent Director since July 29, 2010.
Mr. D. R. Dogra
D. R. Dogra is the Managing Director and Chief Executive Officer of our Company. He holds a
Bachelor's and a Master's degree in agriculture from Himachal Pradesh University and a Master's
degree in business administration (FMS), from University of Delhi. He is a certified associate of the
Indian Institute of Bankers. He has more than 35 years of experience in the financial sector and in
credit administration. Prior to joining our Company, he was associated with Dena Bank. He is a
member of Western Region Economic Affairs, Sub-Committee of Confederation of Indian Industry,
Federation of Indian Chamber of Commerce and Industry, executive body of Swayam Siddhi College
of Management & Research and board of governance of Universal Business School, Mumbai. He is
37
an expert member of Academic Advisory Committee in Finance at Dr. L Ramani Birla Institute of
Technology. He is on Board of Directors with Association of Credit Ratings Agencies in Asia, Manila,
Philippines, ARC Ratings Holdings Pvt Ltd, Singapore, CARE Kalypto Risk Technologies and
Advisory Services Pvt Ltd., Public interest Director at MCX Stock Exchange Ltd. and ARC Ratings,
SA, Portugal. He has been associated with our Company since 1993 and was appointe
the Board on June 30, 2008
38
CHAPTER : 3
ANALYSIS AND DISCUSSION
3.1 OPERATIONAL ANALYSIS
PROCESS
The rating process takes about two to three weeks, depending on the complexity of
the assignment and the flow of information from the client. Ratings are assigned by the
Rating Committee.
39
3.2) HR STRATEGIES
RECUITMENT, SELECTION AND TRAINING
CARE Ratings commenced operations in April 1993 and over nearly two decades,
it has established itself as the second-largest credit rating agency in India. With the
rating volume of debt of around Rs.45,901 bn (as on December 31, 2012) , CARE
Ratings is proud of its rightful place in the Indian capital market built around investor
confidence. CARE Ratings has also emerged as the leading agency for covering many
rating segments like that for banks, sub-sovereigns and IPO gradings.CARE Ratings
provides the entire spectrum of credit rating that helps the corporates to raise capital for
their various requirements and assists the investors to form an informed investment
decision based on the credit risk and their own risk-return expectations. Our rating and
40
grading service offerings leverage our domain and analytical expertise backed by the
methodologies congruent with the international best practices.
With majority shareholding by leading domestic banks and financial institutions in
India, CAREs intrinsic strengths have also attracted many other investors.CAREs
registered office and head office, is located at 4th floor, Godrej Coliseum, Somaiya
Hospital Road, Sion (East), Mumbai 400 022. In addition, CARE has regional offices at
Ahmedabad, Bangalore, Chennai, Hyderabad, Jaipur, Kolkata, New Delhi, Pune and
international operation in Male in the Republic of Maldives. Eminent and experienced
professionals constitute CAREs Rating Committee
Table 3.3(a)
Mar13 Mar12
Mar11
Mar10
Net current assets
Current assets, loans & advances
58.95
75.83
104.94
35.78
30.48
93.84
93.19
51.05
29.17
30.84
-34.89
-17.35
53.89
6.61
-0.36
484.31
423.90
377.11
302.75
213.50
3.3)FINANCIAL ANALYSIS
41
To
Class Of Authorized
Issued
Paid Up
Year
Year
Share
Capital
Capital
Face
Paid Up
Capital
Equity
2013
2014
Share
30.00
29.00
28999122
10
29.00
30.00
28.55
28552812
10
28.55
30.00
28.55
28552812
10
28.55
Equity
2012
2013
Share
Equity
2011
2012
Share
It is interpreted from the above table 3.3B that the issued capital in 2013 -2014 has
increased by 0.45. The no. of paid up shares has increased by 446,310 in 2013-2014 .
42
3.4 ACHIEVMENTS
1997-2000
Launched CARE Loan Ratings for rating term loans
Ventured into Advisory business and bagged 13 assignments
Initially started rating for Debt Mutual Funds
Obtained registration with SEBI when rating agencies came under its purview
2001-2004
Founding member of Association of Credit Rating Agency in Asia (ACRAA)
Launched Corporate Governance and Value Creation Rating
Signed MOU with NSIC for empanelment as an approach rating agency for small scale
industries
2005-2008
Founding member of Association of Credit Rating Agency in Asia (ACRAA)
43
2009-2012
Founding member of Association of Credit Rating Agency in Asia (ACRAA)
Launched Corporate Governance and Value Creation Rating
Signed MOU with NSIC for empanelment as an approach rating agency for small scale
industries
2013-ONWARDS
Obtained a license for doing business in Mauritius and will operate under the banner
of CARE Ratings (Africa) Private Limited (CRAF). CRAF was launched on 3rd August
2015.
Empanelled by Government of Karnataka for rating of Tourism sector in the state
Rated the first Green Infrastructure bond
Launched rating of Real Estate Investment Trusts (REITs)
Developed and launched a Debt Quality Index called CDQI. The Index denotes the
quality of debt in the country that can be interpreted over time and juxtaposed with
other developments in the financial sector.
In terms of rating business penetration attained highest share in BS top 1000 companies
(45%), ET top 500 companies (54%) and FE top 500 companies (52%).
44
Partnered with four other domestic credit rating agencies in Brazil, Malaysia, Portugal
and South Africa, to form an international credit rating agency called ARC
Ratings.ARC Ratings was launched on January 2014 in London
Assigned rating to Indias first Alternate Investment Fund (AIF)
Rated Indias First Securitization Transaction backed by Mortgage Guarantee
Chapter: 4
SWOT Analysis, Suggestions and Conclusion
4.1 SWOT Analysis
4.1(A) Strengths
Strong Management
Customer Loyaltyx
Brand Name
Strong management
Strong management can help reach its potential Strong Management "has a significant
impact, so an analyst should put more weight into it.
Customer Loyalty
When given a choice, customers are loyal to CARE Instead of targeting all customers
CARE, only needs to target new customers in order to grow their business.
Brand Name
45
A strong brand name is a major strength of CARE. This gives CARE the ability to
charge higher prices for their products because consumers place additional value in the
brand
4.1 ( b)Opportunities
Emerging Markets
New Markets
New Products
Emerging Markets
Emerging markets are fast growing regions of the world that enable CARE to quickly
expand.
New Markets
New markets allow CARE to expand their business and diversify their portfolio of
products and services.
New Products
New products can help CARE to expand their business and diversity their customer
base.
4.1(c) Weakness
Tax structure
Tax structure
Tax structure has been increasing continuously from 2007 to 2014 (59.35 in
2007,
46
131.10 in 2010, 265.48 in 2011, 372.68 ion 2012 and 429.51 in 2015).
4.1(d)Threats
Bad Economy
Intense Competition
Bad Economy
A bad economy can hurt CAREs business by decreasing the number of potential
customers
Intense Competition
Intense completion can lower CAREs profits, because competitors can entice
consumers away with superior products.
47
4.2 CONCLUSION
Credit analysis is the method by which one calculates the creditworthiness of a business
investments that carry some risk of defaultreflect credit analysis by financial market
participants.
Before approving a commercial loan, a bank will look at all of these factors with the
primary emphasis being the cash flow of the borrower. A typical measurement of
repayment ability is the debt service coverage ratio. A credit analyst at a bank will
measure the cash generated by a business (before interest expense and
excluding depreciation and any other non-cash or extraordinary expenses). The debt
service coverage ratio divides this cash flow amount by the debt service (both principal
and interest payments on all loans) that will be required to be met. Commercial bankers
like to see debt service coverage of at least 120 percent. In other words, the debt service
coverage ratio should be 1.2 or higher to show that an extra cushion exists and that the
business can afford its debt requirements.
49
4.3 SUGGESTION
The weakest point discovered in care is the heavy tax imposed by it on their employees.
Tax structure has been increasing continuously from 2007 to 2014 (59.35 in 2007,
131.10 in 2010, 265.48 in 2011, 372.68 ion 2012 and 429.51 in 2015). As CARE
Ratings provides the entire spectrum of credit rating that helps the corporates to raise
capital for their various requirements and assists the investors to form an informed
investment decision based on the credit risk and their own risk-return expectations
50
51
At last, I want to thank Mr. J.K Chandel(prof.) IMS, KUK, for giving me the
opportunity to prepare report. This report provided me a complete study about Credit
analysis research ltd.
REFERNCES
http://www.careratings.com
http://www.mindtools.com
http://www.careratings.com/market-segments/corporates-governancerating.aspx
52
ANNEXURE
Table3.3(A)
Profit loss account(2010-14)
(Rs crore)
Mar ' 14
Mar ' 13
Mar ' 12
Mar ' 11
Mar ' 10
Income
Operating income
229.46
198.77
178.08
170.87
136.20
Material consumed
Manufacturing expenses
1.05
60.60
50.65
42.24
30.51
21.57
Expenses
Personnel expenses
53
Mar ' 14
Selling expenses
Mar ' 13
Mar ' 12
Mar ' 11
Mar ' 10
22.23
13.18
12.65
9.90
6.79
82.83
64.88
54.89
40.41
28.36
146.64
133.88
123.18
130.46
107.84
35.66
28.63
28.21
5.76
15.82
182.30
162.51
151.39
136.22
123.66
2.89
2.63
1.88
2.21
1.40
179.40
159.88
149.51
134.01
122.26
50.73
46.55
41.97
43.15
36.57
128.67
113.33
107.54
90.86
85.69
0.09
128.67
113.33
107.54
90.96
85.69
401.30
354.17
286.03
205.67
85.69
67.18
57.11
23.92
5.18
Adminstrative expenses
Expenses capitalized
Cost of sales
Operating profit
Other recurring income
Adjusted PBDIT
Financial expenses
Depreciation
Other write offs
Adjusted PBT
Tax charges
Adjusted PAT
Equity dividend
54
Mar ' 14
Preference dividend
Dividend tax
Retained earnings
Mar ' 13
Mar ' 12
Mar ' 11
Mar ' 10
13.75
9.44
4.63
1.00
320.37
287.62
257.47
199.49
85.69
Table 3.3(B)
Balnace sheet(2010-2014)
(Rs crore)
Mar '
Mar '
Mar '
Mar '
Mar '
14
13
12
11
10
Sources of funds
Owner's fund
Equity share capital
29.00
28.55
28.55
9.52
9.52
455.32
395.34
348.56
293.24
203.98
55
Mar '
Mar '
Mar '
Mar '
Mar '
14
13
12
11
10
Secured loans
Unsecured loans
484.31
423.90
377.11
302.75
213.50
61.26
58.88
54.36
46.50
27.82
7.72
6.02
4.44
51.50
51.16
48.34
42.05
27.82
0.04
467.70
390.06
274.88
254.09
186.03
58.95
75.83
104.94
35.78
30.48
93.84
93.19
51.05
29.17
30.84
-34.89
-17.35
53.89
6.61
-0.36
484.31
423.90
377.11
302.75
213.50
Total
Uses of funds
Fixed assets
Gross block
Less : revaluation reserve
Less : accumulated depreciation
9.76
Net block
Capital work-in-progress
Investments
Net current assets
56
Mar '
Mar '
Mar '
Mar '
Mar '
14
13
12
11
10
Notes:
Book value of unquoted investments
117.39
111.52
173.27
227.96
61.39
358.40
292.18
106.37
26.29
126.93
1.14
2.29
2.66
1.26
289.99
285.53
285.53
95.18
95.18
Contingent liabilities
Number of equity sharesoutstanding
(Lacs)
57
58