/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/170609.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 Friday, June 9, 2017, Vol. 20, No. 114 Headlines A U S T R A L I A ALLIANZ METRO: Contempt Charges Issued as ASIC Probe Continues ASPHALT MAN: Second Creditors' Meeting Set for June 20 CHIDLEY HOLDINGS: Clifton Hall Appointed as Liquidators GROUP UNDERWRITERS: Unable to File Reports; ASIC Cancels License ICE BOX: First Creditors' Meeting Scheduled for June 15 MACRO GROUP: ASIC Seeks to Appoint Liquidators to 19 Assoc. Cos. MOSCOU HOLDINGS: First Creditors' Meeting Set for June 16 PASSIONE TOSCANA: First Creditors' Meeting Set for June 14 UTICA HOLDINGS: In Liquidation; First Meeting Set for June 16 I N D I A ABACUS: CRISIL Downgrades Rating on INR3.10MM Cash Loan to 'B' ADPRO CERAMICS: CRISIL Cuts Rating on INR2.75MM Cash Loan to B AGGARWAL INDUSTRIES: CRISIL Cuts Rating on INR7.5MM Loan to 'B' AL AMMAR: CRISIL Lowers Rating on INR9.5MM Term Loan to 'B' AMIT CAPACITORS: CRISIL Cuts Rating on INR10MM Cash Loan to 'B' AURO SUNDRAM: CRISIL Assigns 'B' Rating to INR30MM Cash Loan BHAVESH GINNING: CRISIL Reaffirms 'B' Rating on INR8MM Cash Loan BMW ENTERPRISES: Ind-Ra Affirms 'BB' Long-Term Issuer Rating BUXA DOOARS: CRISIL Lowers Rating on INR4MM Cash Loan to 'D' DARON ENGINEERING: Ind-Ra Lowers Long-Term Issuer Rating to 'D' FRESH CHICKEN: CRISIL Assigns B+ Rating to INR3.25MM LT Loan G.S. ALLOY: CRISIL Reaffirms 'B' Rating on INR5.0MM Cash Loan GANGAPUR CITY: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating GLOBSYN TECHNOLOGIES: CRISIL Cuts Rating on INR8.4MM Loan to B HARIYANA SHIP: CRISIL Reaffirms B+ Rating on INR400MM Loan HERITAGE LIFESTYLES: Ind-Ra Puts 'BB' Rating to Non-cooperating HINDAUN CITY: Ind-Ra Assigns 'BB' Long-Term Issuer Rating JOYFUL PLASTICS: Ind-Ra Migrates 'BB-' Rating to Non-Cooperating LANCY CONSTRUCTIONS: CRISIL Cuts Rating on INR13MM Loan to D M. E. ENERGY: CRISIL Reaffirms B+ Rating on INR8MM Cash Loan MAGNEWIN ENERGY: CRISIL Reaffirms 'D' Rating on INR1.68MM Loan MANIPAL ENERGY: CRISIL Lowers Rating on INR5MM Loan to 'B' MEGASOFT LTD: Ind-Ra Migrates 'B+' Rating to Non-Cooperating PADDINGTON RESORTS: Ind-Ra Assigns 'B+' Long-Term Issuer Rating QUEST INFOSYS: Ind-Ra Migrates 'B' Rating to Non-Cooperating RELIANCE COMM: Rejects Moody's, Fitch's Rating Downgrades S. K. MASALA: CRISIL Assigns B+ Rating to INR5.6MM Cash Loan SAMRAT VIJAY: CRISIL Lowers Rating on INR19.85MM Demand Loan to D SATYA WAREHOUSE: CRISIL Reaffirms D Rating on INR12.5MM Term Loan SAVORIT LIMITED: CRISIL Assigns B+ Rating to INR3.9MM Term Loan SHAARC PROJECTS: Ind-Ra Migrates 'BB' Rating to Non-Cooperating SHREE BHATTER: CRISIL Lowers Rating on INR7MM Cash Loan to 'D' SHREE VAISHNAV: CRISIL Reaffirms 'D' Rating on INR31.27MM Loan SHREYAS ENTERPRISES: CRISIL Reaffirms B+ Rating on INR9.25MM Loan SHREYAS SORTEX: CRISIL Raises Rating on INR25MM Cash Loan to BB- SREE DURGA: CRISIL Lowers Rating on INR2MM Cash Loan to 'B' SREE SHANMUGA: Ind-Ra Assigns 'BB' Long-Term Issuer Rating SREE VEERA: CRISIL Reaffirms B- Rating on INR6.5MM Cash Loan SRI LAKSHMI: CRISIL Reaffirms B+ Rating on INR7MM Loan SRI SAINADH: CRISIL Reaffirms B+ Rating on INR6MM Cash Loan STRANDS TEXTILE: Ind-Ra Migrates 'BB' Rating to Non-Cooperating SUBASREE JEWELLERS: CRISIL Assigns B- Rating to INR2.29MM Loan SUNDARAM MAHADEO: CRISIL Reaffirms 'B' Rating on INR4.5MM Loan SWASTIK PANELS: CRISIL Reaffirms 'B' Rating on INR3MM Cash Loan THIRUMATHI MUTHAMMAL: CRISIL Cuts Rating on INR4.88MM Loan to B TITAN ANTONY: CRISIL Assigns B+ Rating to INR5.0MM Term Loan TRANSNATIONAL: CRISIL Cuts Rating on INR2.5MM Cash Loan to 'B' TRISTAR GLOBAL: CRISIL Reaffirms D Rating on INR15.5MM Loan VGN DEVELOPERS: CRISIL Downgrades Rating on INR400MM Loan to D VOORA SHREERAM: CRISIL Lowers Rating on INR8MM Cash Loan to 'B' WAGAD INFRAPROJECTS: CRISIL Cuts Rating on INR10MM Loan to 'B' YAZDANI STEEL: Ind-Ra Assigns 'D' Long-Term Issuer Rating J A P A N JAPAN DISPLAY: Mulls Deeper Overhaul, Capital Tie-up with a Peer TOSHIBA CORP: Aims to Name Winning Bidder for Chip Unit Next Week N E W Z E A L A N D PROPERTY VENTURES: Liquidator Must Put Up Security of Costs P H I L I P P I N E S * PDIC Raises PHP13.7M from Public Bidding of Closed Banks Assets S O U T H K O R E A UIJEONGBU LIGHT: Seoul Court Declares Firm Officially Bankrupt - - - - - ================= A U S T R A L I A ================= ALLIANZ METRO: Contempt Charges Issued as ASIC Probe Continues -------------------------------------------------------------- The Australian Securities and Investments Commission has issued an application for contempt charges arising out of proceedings commenced against Allianz Metro Pty Ltd and other entities concerning the operation of binary trading websites. On May 1, 2016, ASIC commenced Federal Court proceedings against various entities including Eustace Senese; his son, Cameron Senese; and associated companies Allianz Metro Pty Ltd, Transcomm Global Pty Ltd and Bianco Pty Ltd, in relation to the websites www.titantrade.com and https://tradettn.com. On July 26, 2016, the Court made freezing orders prohibiting those defendants from dealing with their assets. ASIC alleges that those defendants and Melbourne-based law firm, Kalus Kenny Intelex (Kalus Kenny), the former solicitors for some of the defendants, have breached the freezing orders by wrongfully dealing with assets. The matter returns to court on Aug. 31, 2017, for further directions. ASIC applied for the freezing orders under sections 1323 and 1324 of the Corporations Act 2001 after identifying that Australian users of the Titantrade websites had deposited funds into an Australian bank account owned by Allianz Metro Pty Ltd. The orders are designed to protect "aggrieved persons" and the frozen funds may be drawn upon if the Court determines that the defendants are liable to pay money or damages. On various occasions since July 2016, the Court has allowed the defendants to use some of the frozen funds to cover living and legal expenses. In the contempt application, ASIC alleges that certain defendants and Kalus Kenny have breached an order that stated the first to eleventh defendants "be prohibited from selling, transferring, encumbering, disposing of or otherwise dealing with any assets or property". Kalus Kenny was retained by nine of the eleven defendants in ASIC's proceeding, however, since May 2, 2017, the firm only acts on behalf of the defendants IMC Holdings Pty Ltd and Yoav Ida. Subsequent to the freezing orders made in July 2016, ASIC issued a Public Warning Notice on August 4, 2016, in relation to Titantrade. ASPHALT MAN: Second Creditors' Meeting Set for June 20 ------------------------------------------------------ A second meeting of creditors in the proceedings of The Asphalt Man Pty. Limited has been set for June 20, 2017, at 11:00 a.m. at the offices of PKF, 755 Hunter Street, in Newcastle, West New South Wales. 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 June 19, 2017, at 4:00 p.m. Simon Thorn of PKF was appointed as administrator of Asphalt Man on May 16, 2017. CHIDLEY HOLDINGS: Clifton Hall Appointed as Liquidators ------------------------------------------------------- Mark Hall of Clifton Hall was appointed Liquidator of Chidley Holdings Pty Ltd on June 7, 2017 by Order of the Federal Court of Australia. GROUP UNDERWRITERS: Unable to File Reports; ASIC Cancels License ---------------------------------------------------------------- The Australian Securities and Investments Commission has cancelled the Australian financial services (AFS) licence of Sydney-based Group Underwriters & Managers Pty Ltd (GUM) for failing to lodge financial statements and auditor reports. GUM's AFS license has been suspended since November 2016 for failing to meet its financial services licensee obligations for consecutive years. After not lodging the financial statements and auditor reports during the suspension period, ASIC cancelled GUM's AFS licence on May 15, 2017. ASIC first suspended GUM's license on Nov. 16, 2016, for a period of three months, for failing to lodge financial reports and audit reports for the financial years ended June 30, 2013, June 30, 2014 and June 30, 2015. The license was further suspended on February 15, 2017, and again on March 20, 2017, giving GUM an opportunity to address the outstanding lodgements for June 30, 2014 and June 30, 2015, as the June 30, 2013 lodgement had been complied with. Following GUM's failure to the lodge the outstanding financial statements and auditor reports for June 30, 2014 and June 30, 2015, its License was cancelled. ASIC Deputy Chair Peter Kell said, 'Licensees are required to lodge financial statements and auditor reports with ASIC to demonstrate their capacity to provide financial services.' 'Failure to comply with reporting obligations can be an indicator of a poor compliance culture. ASIC won't hesitate to act against licensees who do not meet these important requirements.' GUM have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision. GUM provides general financial product advice only for general insurance and life insurance products and has held its Australian financial services licence since June 2012. The annual lodgment of audited accounts is an important part of a licensee demonstrating it has adequate financial resources to provide the services covered by its license and to conduct the business in compliance with the Corporations Act 2001. ASIC will continue to contact AFS licensees who have not lodged audited financial statements and take appropriate action if they fail to lodge these statements. The cancellation of GUM's license is part of ASIC's ongoing efforts to improve standards across the financial services industry. ICE BOX: First Creditors' Meeting Scheduled for June 15 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Ice Box Refrigerated Couriers Pty Ltd will be held at the offices of Greengate Advisory, Suite 20, Level 1, 330 Wattle Street, in Ultimo, NSW, on June 15, 2017, at 11:00 a.m. Patrick Loi of Greengate Advisory NSW was appointed as administrator of Ice Box on June 7, 2017. MACRO GROUP: ASIC Seeks to Appoint Liquidators to 19 Assoc. Cos. ---------------------------------------------------------------- The Australian Securities and Investments Commission has applied to the Federal Court of Australia for the appointment of liquidators to 19 'special purpose vehicle' companies associated with the Macro Group, all of which have Desiree Veronica Macpherson as a director. These are: AGKM Green Pty Ltd; BA Sullivan Pty Ltd; Christians Holdings WA Pty Ltd; Ferrous Ferric Pty Ltd; Macpherson Realty Options Pty Ltd; Splendiferous Enterprises Pty Ltd; Aiple Enterprises Pty Ltd; Brayst WA Pty Ltd; Chippere Pty Ltd; EDWA14 WA Pty Ltd; MCKST Pty Ltd; Newkins WA Pty Ltd; Kurst WA Pty Ltd; MacOften Pty Ltd; MRF Kurra Pty Ltd; Dee Vee Enterprises Pty Ltd; Hedland Projects Pty Ltd; Macro Projects TS PH Pty Ltd; and Prime Holdings Group Pty Ltd. ASIC alleges that the 'special purpose vehicle' companies are connected with fundraising efforts for property developments associated with the Macro Group, including The Newman Estate. ASIC alleges in its application for the appointment of liquidators that: * the companies have been involved in multiple contraventions of corporations legislation and are not complying with their obligations under that legislation; and * the companies are not being properly managed and are suspected to be insolvent. ASIC seeks orders from the Court appointing Mr. Hayden White and Mr. Matthew Woods of KPMG as liquidators of the companies. ASIC's application has been listed for hearing in the Federal Court of Australia at Perth on Tuesday, July 18, 2017. ASIC had previously obtained orders appointing Mr. White and Mr. Woods as liquidators of six central companies within the Macro Group, being: Macro Realty Developments Pty Ltd; Macro Realty Developments AFSL Pty Ltd; Macro All State Investments and Securities Ltd; Pilbara Property Developments Pty Ltd; Macro Realty Pty Ltd, and 511 GTN Pty Ltd (refer: 17-161MR). The orders are sought as part of ASIC's ongoing investigation into a number of land developments in the Pilbara region of Western Australia, particularly one known as 'The Newman Estate' that was subject to ASIC action and Federal Court permanent restraint orders in May 2016. MOSCOU HOLDINGS: First Creditors' Meeting Set for June 16 --------------------------------------------------------- A first meeting of the creditors in the proceedings of Moscou Holdings Pty Ltd, as trustee for The Penguin Trust formerly trading as Penguin International, will be held at the Conference Room, Plaza Level, BGC Centre, 28 The Esplanade, in Perth, WA, on June 16, 2017, at 2:00 p.m. Clifford Stuart Rocke and Jeremy Joseph Nipps of Cor Cordis were appointed as administrators of Moscou Holdings on June 6, 2017. PASSIONE TOSCANA: First Creditors' Meeting Set for June 14 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Passione Toscana Pty Ltd, trading as Davvero Caffe, will be held at the offices of Worrells Solvency & Forensic Accountants, Level 3, 15 Ogilvie Road, in Mount Pleasant, WA, on June 14, 2017, at 10:30 a.m. Mervyn Jonathan Kitay -- mervyn.kitay@worrells.net.au -- of Worrells was appointed as administrator of Passione Toscana on June 6, 2017. UTICA HOLDINGS: In Liquidation; First Meeting Set for June 16 ------------------------------------------------------------- Timothy Clifton and Simon Miller of Clifton Hall were appointed as Joint and Several Liquidators of Utica Holdings Pty Ltd, formerly trading as Imperial Digital Video Systems, on June 6, 2017. A meeting of creditors will be held at 10:30 a.m. on June 16, 2017 at Clifton Hall, Level 3, 431 King William Street, in Adelaide. ========= I N D I A ========= ABACUS: CRISIL Downgrades Rating on INR3.10MM Cash Loan to 'B' -------------------------------------------------------------- CRISIL has been consistently following up with Abacus for obtaining information through letters and emails dated January 19, 2017, and February 9, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1.1 CRISIL A4 (Issuer Not Cooperating; Rating Reaffirmed) Cash Credit 1.55 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') Proposed Cash 3.10 CRISIL B/Stable (Issuer Not Credit Limit Cooperating; Downgraded from 'CRISIL B+/Stable') Term Loan 2.35 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Abacus.This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Abacus is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL B' category or lower. Based on the last available information, CRISIL has downgraded the rating at 'CRISIL B/Stable/CRISIL A4'. Set up in 2009 as a partnership firm, Abacus currently runs 16 retail outlets of ready-made garments in Utter Pradesh. It sells clothes for men and women manufactured by United Colors of Benetton and Arvind Ltd. Mr. Sunit Mishra and his wife, Ms. Kalpana Mishra, are partners in the firm. ADPRO CERAMICS: CRISIL Cuts Rating on INR2.75MM Cash Loan to B -------------------------------------------------------------- CRISIL has been consistently following up with Adpro Ceramics India Private Limited (ACIPL) for obtaining information through letters and emails dated January 19, 2017, and February 9, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 0.25 CRISIL A4 (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') Bill Purchase 2.00 CRISIL A4 (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') Cash Credit 2.75 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') Letter of Credit 1.20 CRISIL A4 (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') Term Loan 0.80 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Adpro Ceramics India Private Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Adpro Ceramics India Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL B' category or lower. Based on the last available information, CRISIL has downgraded the long term rating at 'CRISIL B/Stable' & Reaffirmed short term rating 'CRISIL A4'. Established in 2006 by Mr. Manish Jalan and his mother Smt. Sita Devi Jalan, ACIPL manufactures transmission line and substation equipments such as post insulator, disc insulator, pin insulator, and transformer bushing. The manufacturing facility is in Jaipur. AGGARWAL INDUSTRIES: CRISIL Cuts Rating on INR7.5MM Loan to 'B' --------------------------------------------------------------- CRISIL has been consistently following up with Aggarwal Industries (AI) for obtaining information through letters and emails dated January 19, 2017, and February 9, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 7.5 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Aggarwal Industries. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Aggarwal Industries. is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL B' category or lower. Based on the last available information, CRISIL has downgraded the rating at 'CRISIL B/Stable'. AI, a partnership firm set up in 1977, by Mr. Suresh Jain and Mr. Sudesh Jain, trades in writing and printing paper. AL AMMAR: CRISIL Lowers Rating on INR9.5MM Term Loan to 'B' ----------------------------------------------------------- CRISIL has been consistently following up with Al Ammar Frozen Foods Exports Pvt. Ltd (AFEPL) for obtaining information through letters and emails dated January 19, 2017, and February 9, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 9.5 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Al Ammar Frozen Foods Exports Pvt. Ltd. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Al Ammar Frozen Foods Exports Pvt. Ltd is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL B' category or lower. Based on the last available information, CRISIL has downgraded the rating at 'CRISIL B/Stable'. AFEPL, incorporated in June 2014, is in the process of setting up a buffalo meat processing unit for the export market. The plant in Aligarh (Uttar Pradesh) is expected to commence operations by March 2016. The company is promoted by Mr. Mohammad Atif and Mr. Asif Qureshi. AMIT CAPACITORS: CRISIL Cuts Rating on INR10MM Cash Loan to 'B' --------------------------------------------------------------- CRISIL has been consistently following up with Amit Capacitors Limited (ACL) for obtaining information through letters and emails dated January 19, 2017, and February 9, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting 1.5 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL BB-/Stable') Cash Credit 10.0 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL BB-/Stable') Letter of Credit 6.0 CRISIL A4 (Issuer Not Cooperating; Downgraded from 'CRISIL BB-/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Amit Capacitors Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Amit Capacitors Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL B' category or lower. Based on the last available information, CRISIL has downgraded the rating at 'CRISIL B/Stable/CRISIL A4'. ACL was incorporated in 1982, promoted by Mr. Ashok Kumar Tibrewala. The company manufactures electric capacitors that are used in the electronics, electrical, and agricultural industries. It sells products under the Concap and Amcap brands. Manufacturing facilities are in Hyderabad and Goa. AURO SUNDRAM: CRISIL Assigns 'B' Rating to INR30MM Cash Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facility of Auro Sundram International Private Limited (ASIL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 30 CRISIL B/Stable The rating reflects the company's exposure to start-up nature of operations and to project implementation-related risks, and expected average financial risk profile because of debt-funded project. These weaknesses are partially offset by the experience of its promoters and their funding support. Analytical Approach Unsecured loans of INR1.19 crore (as on March 31, 2017) from promoters have been treated as neither debt nor equity since these are subordinated to bank debt and are expected to remain in the business. Key Rating Drivers & Detailed Description Weaknesses * Start-up phase: Since maize trading activity began in May 2017, revenue is expected to be INR70-90 crore during fiscal 2018, resulting in small scale of operations in a competitive industry. * Expected average financial risk profile: Total outside liabilities to tangible networth ratio is likely to remain at 0.5-1.5 times over the medium term, while networth is estimated at INR19.5 crore as on March 31, 2017. However, interest coverage ratio is expected to be weak at 1.3 times as on March 31, 2018. * Exposure to implementation risk: The company is setting up a unit to manufacture maize starch and liquid glucose at a total cost of INR200 crore, which is being funded through a mix of share capital and unsecured loans. The unit is likely to commence operations from fiscal 2021. However, only 15-20% of work has been completed till date. Strengths * Experience of promoters and their funding support: The promoters have been in the maize industry for a decade and are also diversifying revenue profile by setting up a maize starch powder and liquid glucose facility. Also, till March 31, 2017, promoters had infused equity of INR17.85 crore and extended unsecured loans of INR1.19 crore. They are expected to continue to extend need-based financial aid. Outlook: Stable CRISIL believes ASIL will benefit over the medium term from its promoters' funding support. The outlook may be revised to 'Positive' in case of higher-than-expected cash accrual and efficient working capital management, or if project is commissioned on time and unit demonstrates substantial capacity utilisation, leading to higher scale of operations. The outlook may be revised to 'Negative' if significant cost or time overrun in project execution or delays in stabilising operations weakens debt-servicing ability. Incorporated in November 2006 and promoted by Mr. Anil Kumar Choudhary and his brother Mr. Ashok Kumar Choudhary, ASIL is setting up a starch and liquid glucose manufacturing facility in Forbesganj, Bihar. Currently, the company trades in maize. BHAVESH GINNING: CRISIL Reaffirms 'B' Rating on INR8MM Cash Loan ---------------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facility of Bhavesh Ginning Industries (BGI) at 'CRISIL B/Stable'. The rating reflects a modest scale of operations in the highly fragmented cotton ginning industry, and vulnerability to changes in cotton prices. These rating weaknesses are partially offset by the extensive industry experience of the partners. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 8 CRISIL B/Stable (Reaffirmed) Analytical Approach For arriving at the rating, CRISIL has treated unsecured loans from the partners as neither debt nor equity,as the loans are at a lower-than-the-market interest rate and should remain in the business over the medium term. Key Rating Drivers & Detailed Description Strengths * Small scale of operations in a highly fragmented industry Entry barriers are low on account of limited capital and technology requirement and low differentiation in end products. Furthermore, fragmentation limits the pricing and bargaining power, leading to subdued profitability. That's reflected in the firm's operating margin of around 1.98% estimated for fiscal 2017. * Vulnerability to changes in cotton prices As cotton is an agricultural commodity, its availability is highly dependent on the monsoon. Furthermore, government interventions and fluctuations in global cotton output have resulted in sharp fluctuations in cotton prices. Finished cotton prices declined and have remained volatile. Such fluctuations are likely to impact the margins of cotton ginners. An ability to manage volatility in cotton prices will remain a key sensitivity factor. Strengths * Extensive industry experience of the partners The partners have an experience of more than 15 years in the cotton ginning industry. This has enabled them to understand the dynamics of the local market, and established relationships with customers and suppliers. Outlook: Stable CRISIL believes BGI will continue to benefit from the extensive industry experience ofits partners. The outlook may be revised to 'Positive' in case of substantial revenue along with improved profitability and capital structure. The outlook may be revised to 'Negative' if there is a considerable decline in revenue and profitability, deterioration in working capital management, or large, debt-funded capital expenditure, weakening the financial risk profile, particularly liquidity. BGI was established as a partnership firm in 2005. Its operations are managed by MrAnandgiri Swami and his family. The firm has an installed capacity of 200 bales per day for ginning and pressing cotton in Patan, Gujarat. In fiscal 2017, net profit was INR0.14crore on operating income of INR22.25crore, against INR0.19crore and INR36.15crore, respectively, in fiscal 2016. BMW ENTERPRISES: Ind-Ra Affirms 'BB' Long-Term Issuer Rating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed BMW Enterprises' (BMWE) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR420 mil. Fund-based limits affirmed with 'IND BB/Stable' rating; and -- INR20 mil. Non-fund based limits affirmed with 'IND A4+' rating KEY RATING DRIVERS The ratings continue to reflect BMWE's moderate credit profile, despite it being the sole project distributor of Tata Steel Limited's ('IND AA'/RWE) thermo-mechanically treated (TMT) bars in Bihar, due to the trading nature of operations. Provisional results for FY17 indicate around 5% yoy decline in the revenue to INR2.2 billion (FY16: down 7% yoy) due to a continued fall in realizations of TMT bars even as the volumes increased. However, the profitability and credit metrics for FY17 are likely to have remained stable at FY16 levels. EBITDA margins increased to 3.5% in FY16 (FY15: 2.8%) due to higher volumes, leading to EBITDA interest coverage increasing to 1.6x (1.5x) and net leverage reducing to 5.5x (6.1x). The entity's overall liquidity position is moderate. While the utilization of the channel finance facilities was nearly full, the utilization of the cash credit limits was low as the latter carries a higher interest rate. Cash flow from operations turned positive in FY16 (INR9.3 million), due to an increase in EBITDA. The ratings remain constrained by the proprietorship nature of the organization. The ratings, however, continue to benefit from the support extended by the BMW Group in the form of unsecured loans (FYE16: INR27 million) and a letter of comfort provided by the group's flagship entity BMW Ventures Ltd, which is under the same management and operates in the same line of business as BMWE. Also, BMWE's management has a two-decade-long experience in the steel industry. RATING SENSITIVITIES Positive: A sustained improvement in its liquidity and EBITDA interest coverage could lead to a positive rating action. Negative: Sustained deterioration in the EBITDA interest coverage could lead to a negative rating action. COMPANY PROFILE Started in 2005, BMWE has a corporate office in Kolkata and registered office in Patna. It has a 35,000 sf stock yard and 60MT capacity weigh bridge in Patna. Its proprietor is Jai Basukinath Traders Private Limited, which has been a consignment agent for Tata Steel for two decades. BUXA DOOARS: CRISIL Lowers Rating on INR4MM Cash Loan to 'D' ------------------------------------------------------------ CRISIL has downgraded its ratings on the bank facilities of The Buxa Dooars Tea Co. India Limited (TBD) to 'CRISIL D/CRISIL D ' from 'CRISIL B-/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1 CRISIL D (Downgraded from 'CRISIL A4') Cash Credit 4 CRISIL D (Downgraded from 'CRISIL B-/Stable') Cash Credit & Working 1.2 CRISIL D (Downgraded from Capital demand loan 'CRISIL B-/Stable') Proposed Cash Credit 2.0 CRISIL D (Downgraded from Limit 'CRISIL B-/Stable') Proposed Long Term 3.0 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B-/Stable') Term Loan 5.8 CRISIL D (Downgraded from 'CRISIL B-/Stable') The downgrade reflects the company's irregular interest payment on its term loan and cash credit facility, and delay in meeting principal obligation. Key Rating Drivers & Detailed Description Weakness * Delays in servicing debt because of stretched liquidity Weak liquidity because of low accrual and large working capital debt has resulted in the company delaying its debt obligation. Strengths * Experience of promoter in tea industry: The experience of promoter, Mr. Roshanlal Agarwala, in the tea industry helped the company acquire the tea gardens of Raimatang and Kalchini near Siliguri in West Bengal. The promoter has provided need-based financial support through group company Mars Plywood Industries Pvt Ltd. Through rigorous re-plantation of tea bushes, he has scaled up TBD's operations. TBD, incorporated in 1975, owns two tea gardens, Raimatang and Kalchini, near Siliguri. The operations are managed by Mr. Roshanlal Agarwal. Profit after tax was INR0.30 crore against revenue of INR20.93 crore in fiscal 2016, against INR0.13 crore and INR21.54 crore, respectively, in fiscal 2015. DARON ENGINEERING: Ind-Ra Lowers Long-Term Issuer Rating to 'D' --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Daron Engineering Private Limited's (DEPL) Long-Term Issuer Rating to 'IND D' from 'IND B-'. The Outlook was Stable. The instrument- wise rating actions are: -- INR59.4 mil. (increased from INR35) Term loans (Long term) lowered to 'IND D' rating'; and -- INR20.0 mil. Fund-based facilities (Long term/ Short term) lowered to 'IND D/IND D' rating KEY RATING DRIVERS The downgrade reflects DEPL's defaults on debt obligations during the 12 months ended April 2017, due to tight liquidity. RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months could result in a positive rating action. COMPANY PROFILE Incorporated in 2011, DEPL offers complete turnkey solutions from conceptualization to designing and building structures for industrial usage with top to bottom erection processes. FRESH CHICKEN: CRISIL Assigns B+ Rating to INR3.25MM LT Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facilities of Fresh Chicken Trading (FCT). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 1.75 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 3.25 CRISIL B+/Stable The rating reflects the firm's modest scale of operations; and its exposure to risks inherent in the poultry industry, to intense competition, and to geographic concentration risk. The rating also factors below-average financial risk profile because of small networth and high total outside liabilities to adjusted networth (TOLANW) ratio. These weaknesses are partially offset by the extensive experience of the firm's proprietor in the poultry industry, and its established relationships with customers and suppliers. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations, and exposure to risks inherent in the poultry industry and to intense competition FCT is a small player in the large Indian poultry industry, with net sales of INR25 crore estimated for fiscal 2017. The firm's business risk profile is susceptible to risks inherent in the poultry industry and to intense competition. * Geographic concentration in revenue FCT derives its entire revenue from Maharashtra, mainly Mumbai. * Below-average financial risk profile Networth was small, estimated at INR1.24 crore, and TOLANW ratio was high, at 3.9 times, as on March 31, 2017. Strengths * Proprietor's extensive experience in the poultry industry and established relationships with customers and suppliers Ms Nasreen Abdul Shaikh has been in the poultry industry for over 2 decades. The firm benefits from her extensive experience and understanding of the dynamics of the local market, and established relationships with suppliers and customers. Outlook: Stable CRISIL believes FCT will benefit from its proprietor's extensive industry experience. The outlook may be revised to 'Positive' if a substantial increase in revenue or profitability leads to higher-than-expected cash accrual, or if the capital structure improves on account of significant equity infusion. The outlook may be revised to 'Negative' if profitability declines steeply because of intense competition, or if the capital structure weakens because of increase in working capital debt. Set up in 1993, FCT is a proprietorship firm of Ms Nasreen Abdul Shaikh. It trades in poultry. Profit after tax (PAT) was INR0.16 crore on net sales of INR23.6 crore in fiscal 2016, vis-a-vis INR0.14 crore and INR20.63 crore, respectively, in fiscal 2015. G.S. ALLOY: CRISIL Reaffirms 'B' Rating on INR5.0MM Cash Loan ------------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B/Stable/CRISIL A4' ratings on the bank facilities of G.S. Alloy Castings Limited (GSAC). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee .25 CRISIL A4 (Reaffirmed) Cash Credit 5.00 CRISIL B/Stable (Reaffirmed) Letter of Credit .25 CRISIL A4 (Reaffirmed) The ratings continue to reflect GSAC's exposure to intense competition in the castings industry, susceptibility to volatility in raw material prices, and large working capital requirement. These weaknesses are partially offset by the extensive experience of its promoter. Key Rating Drivers & Detailed Description Weakness * Exposure to intense competition in the castings industry The castings and fabrication industry is highly fragmented with over 200 players due to low entry barriers on account of limited capital requirement. Fragmentation and intense competition limit bargaining power with customers and suppliers. * Susceptibility to volatility in raw material prices Prices of key raw materials, steel and scrap, are volatile and affect operating profitability, which has remained volatile at 8.8-11.5% over the three fiscals through 2017. * Large working capital requirement Operations are working capital intensive as reflected in gross current assets of 179 days estimated as on March 31, 2017, mainly due to stretched receivables. Strengths * Extensive experience of promoter in the castings industry The promoter, Mr. Prasada Rao, with over two decades of experience in the alloy castings industry, has developed healthy relationships with customers. Outlook: Stable CRISIL believes GSAC will continue to benefit over the medium term from the promoter's extensive experience and established relationships with customers. The outlook may be revised to 'Positive' in case of higher-than-expected cash accrual because of ramp-up of operations or improvement in working capital cycle. Conversely, the outlook may be revised to 'Negative' if the financial risk profile, particularly liquidity, weakens, most likely because of decline in profitability, stretch in the working capital cycle, or larger-than-expected, debt-funded capital expenditure. Established in 1987 by Mr. Prasad Rao, GSAC manufactures alloy and steel castings that are used in the heavy engineering industry. Its plant is in Vijayawada, Andhra Pradesh. In fiscal 2016, profit after tax (PAT) was INR0.1 crore on net sales of INR46.6 crore, against a net loss of INR0.9 crore on net sales of INR55.3 crore in fiscal 2015. GANGAPUR CITY: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Gangapur City Municipal Council (GcMC) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. KEY RATING DRIVERS The rating reflects GcMC's inconsistent financial performance, as reflected in its fluctuating operating margins which ranged between negative 11.65% and 73.19% over FY11-FY15. The council's credit profile is constrained by the small proportion of its own revenue. GcMC's revenue receipts increased to INR279.681 million in FY15 from INR40.577 million in FY11 (CAGR of 62.47%). Being a municipal council, GcMC's revenue sources comprise tax revenue and non-tax revenue. The council collected only urban development tax over FY11-FY15. It reported a revenue deficit during FY11-FY12 and a capital deficit over FY11-FY15 except FY12. It is largely dependent on the government of Rajasthan (GoR) for revenue. Gangapur is well connected with other cities through roads and railways. However, the city does not have an underground sewerage system and a sewage treatment plant. Also, the lack of an adequate water supply, drainage network, proper solid waste management and collection facilities hinders the economic growth potential of the city. The lack of these adequate basic civic services as reflected by Service Level Benchmark reports calls for an immediate attention and affects GcMC's credit profile. Under Atal Mission for Rejuvenation of Urban Towns (AMRUT), INR2.042 billion will be incurred to improve these civic services. Urban civic services delivery in the Gangapur city is hampered by the multiplicity of authorities providing these services. Besides GcMC, the other agencies involved in delivering civic services are the GoR agencies - public health engineering department, public works department, Urban Improvement Trust, etc. The transfer of some of the services from these agencies to the council can help speed up improvement in service delivery. GcMC has high dependence on the GoR (compensation in lieu of Octroi and revenue grants and contributions), which makes its finances vulnerable to the GoR's economic and fiscal performance. Octroi compensation and revenue grants cumulatively contributed 81.17% to the total revenue income during FY11-FY15. Ind-Ra believes that the goods and services tax (GST) is likely to be implemented from FY18. Nearly 60% revenue income of GcMC is in the form of octroi compensation grants from the GoR. Presently, the treatment of octroi compensation grants in the proposed GST is unclear. If the octroi compensation grants disbursal method undergoes a change in GST regime, the credit profile of GcMC will depend on the buoyancy of the new method of compensation from the GoR. GcMC's debt-free position supports its credit profile. However, the city requires huge investments to improve the quality of its civic services. Ind-Ra believes while the projects proposed under AMRUT will help in improving the quality of civic services in the city, it will exert pressure on the fragile fiscal profile of Gangapur City. A majority of city's population depends on agricultural activities. The major crops cultivated in the region are wheat, millet, maize, mustard, cluster bean, ground nut, gooseberry, lemon, potato, gram, and barley. GcMC should make efforts to organize trade markets for agricultural produce and encourage setting up of agricultural industries to accelerate economic growth of the city. RATING SENSITIVITIES Positive: A significant improvement in GcMC's operating performance without any negative impact on its debt metrics and rolling out of the AMRUT reforms within the stipulated timeframe, would positively impact the rating. Negative: Additional burden on the finances of the council in the form of debt and withdrawal of revenue support without a suitable compensatory plan would trigger a negative rating action. COMPANY PROFILE Gangapur is a city and GcMC is a municipal council in the Sawai Madhopur District of Rajasthan. The city runs parallel to the Aravalli and Vindhya mountain ranges. Gangapur is primarily known for being an important part of the West Central Railway. The city is located at a distance of 37km from the famous holy temple Kailadevi (Kaurali) and 43km from Manmohan Ji Mandir. GcMC is responsible for the provisioning and governance of civic services in the Gangapur city. GLOBSYN TECHNOLOGIES: CRISIL Cuts Rating on INR8.4MM Loan to B -------------------------------------------------------------- CRISIL has been consistently following up with Globsyn Technologies Limited (GTL) for obtaining information through letters and emails dated January 23, 2017, and February 13, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Overdraft 8.4 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Globsyn Technologies Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Globsyn Technologies Limitedis consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with Crisil B Rating category.or Lower' Therefore, on account of inadequate information and lack of management co-operation, CRISIL is Downgrading the rating at 'CRISIL B/Stable'. GTL was set up in 1995 by the Kolkata (West Bengal)-based Mr. Bikram Dasgupta. Since 2002, the company operates a management institute named Globsyn Business School at Sector-V in Kolkata. It offers post-graduate management degree course. HARIYANA SHIP: CRISIL Reaffirms B+ Rating on INR400MM Loan ---------------------------------------------------------- CRISIL's rating on the bank facilities of Hariyana Ship Breakers Limited (HSBL; part of the Hariyana group) reflects deterioration in Hariyana group's business profile marked by weakened operating profitability. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Letter of Credit 400 CRISIL B+/Stable (Reaffirmed) Additionally, the operating margin is expected to continue to remain weak over the medium term driven by oversupply of steel and subdued demand conditions prevailing globally. The lower price realization of its products, procured against letters of credit (LCs), constrains its credit profile, particularly its liquidity. The liquidity is further constrained by loans to third parties remaining at the same level, as against expectations of a decline in their quantum. The receipt of the loans continues to remain a key rating sensitivity factor affecting the group's credit profile, especially liquidity over the medium term. Analytical Approach For arriving at the ratings, CRISIL has combined the business and financial risk profiles of HIPL, Hariyana Ship Demolition Ltd (HSDL), Hariyana Ship Breakers Ltd (HSBL), and Inducto Steel Ltd. This is because these entities, collectively referred to as the Hariyana group, have significant operational linkages and fungible cash flows, and are under a common management. Key Rating Drivers & Detailed Description Strengths * Exposure to risks inherent in ship breaking, steel trading, and money lending businesses The Hariyana group derives majority of its revenues and profits from ship breaking, steel trading and money lending activities. While revenues from ship breaking and steel trading are volatile in nature, its money lending activities expose it to substantial risks related with recoverability, especially during a downturn in the market. The Hariyana group's earnings from ship breaking are volatile in nature and are based on freight rates and industry cycles. The cost of ships for demolition varies considerably, depending on the freight index and cost of melting scrap. Ship prices have a direct bearing on the performance of players in the ship breaking sector as it is not viable to buy costly ships, which may not fetch the expected prices for scrap sales after demolition. While the revenues from steel trading are relatively steady, it exposes the group to fluctuations in steel prices, since it has to maintain inventory of about one and a half month on an average. The company's procurement is also not backed by orders. However, this segment does provide relative stability to the group's overall revenue stream. The group also has a large money lending portfolio, which stood at an estimated INR.3.5 billion as on December 31, 2015. The group mostly lends these funds to real estate developers known to the promoters. This exposes the group to risks related to recoverability, especially during any slowdown or downturns in the sector. While the group also takes charge of assets funded by these loans in return, it does not entirely eliminate risks related to recoverability. Such large and increasing exposure towards money lending could substantially impact the group's credit risk profile in case of non-recoverability. However, CRISIL expects the money lending portfolio to reduce gradually over the medium term, reducing risks pertaining to this segment. CRISIL believes that the Hariyana group's revenues will remain volatile over the medium term because of significant dependence on ship breaking activity. * Group's extant investments in unrelated businesses such as real estate The Hariyana group's aggressive growth strategy has resulted in unrelated diversifications in the real estate and construction industry, and money lending activities. The management frequently resorts to inter-company borrowings; the group companies have fungible cash flows, depending on business requirements. Since 2004, when the ship breaking business was on the decline, the Hariyana group has focussed on financing activities, and extended large loans to corporate entities and partnership firms engaged in the real estate business. Although the money lending activities have been curtailed by the group and no fresh money is being lent, the outstanding exposure in money lending continues to be large. The Hariyana group has partnerships with real estate developers for development of residential projects in Bangalore for a stake of 40 to 50 per cent. Although the group's foray into the real estate development business exposes it to the risks and cyclicality inherent in the sector, the management's experience in real estate development through associate concerns mitigates this risk. However, the group remains exposed to risks inherent in the real estate business and its success in these ventures remains a key rating sensitivity factor. CRISIL believes that the Hariyana group's unrelated diversifications into real estate and financing activities expose the group to risks inherent in these sectors and will continue to influence the group's future credit risk profile. Weakness * Moderate financial risk profile The Hariyana group has a moderate financial risk profile marked by healthy net worth, low gearing. The net worth and gearing stood at an estimated INR.226 crores and 0.14 time respectively as on March 31, 2016. The net cash accruals to total debt ratio and interest coverage ratio are estimated at 171 per cent and 3.48 times respectively for 2015-16. However, the interest income on its money lending portfolio is not entirely received by the company and is accrued, which further results in lower adjusted debt protection metrics. The absence of capex plans and healthy accretion to reserves supports the financial risk profile. Moreover, the company's borrowings are predominantly short term in nature, with low maturing debt obligations vis-a-vis estimated cash accruals. CRISIL believes that the Hariyana group will maintain its moderate financial risk profile over the medium term, on the back of steady revenues and moderate capex plans. * Established market position in ship breaking industry The Hariyana group was established in 1976 by Mr. Shanti Sarup Reniwal, who is presently the chairman of the group. The group has been engaged in the ship breaking business for over three decades, and has accumulated a strong knowledge of the industry over the years. It has demolished more than 100 ships during its tenure of ship breaking activity. The group has demonstrated expertise in demolishing various types of ships such as passenger, tankers, and navy destroyers. It is equipped to break and demolish large vessels and very large crude carriers (VLCCs); it demolished Pacific Blue, which had a capacity of about 50,000 tonnes, one of the largest vessels ever demolished in the country. The Hariyana group's management has demonstrated its ability to maintain its growth in adverse business conditions. The group has diversified into related business domains, such as sponge iron manufacturing and steel trading. These are contra-cyclical to ship breaking activity and ensure stability in revenues. CRISIL believes that the Hariyana group will leverage on its management's experience for strengthening its market position over the medium term. Outlook: Stable CRISIL believes that Hariyana group will remain exposed to risks inherent in ship-breaking. The outlook may be revised to 'Positive' if the group recovers its funds advanced to third parties sooner than expected or achieves significantly higher profitability or revenue growth thereby improving its liquidity profile. Conversely, the outlook may be revised to 'Negative' if Hariyana group incurs losses in its money-lending businesses, witnesses a steep decline in its revenues, or weakens its capital structure by undertaking a larger-than-expected debt-funded capital expenditure programme. The Hariyana group, promoted by Mr. Shanti Sarup Reniwal, is primarily into ship breaking and steel trading. The group also undertakes inter-corporate lending activities, and develops residential real estate projects. Hariyana group generated net sales of INR.866 crores in 2015-16 (Refers to financial year from 1st April 2015 to 31st March 2016) with Profit after Tax of INR11.45 crores as compared to net sales of INR759 crores with Profit after Tax of INR21.83 crores in 2014-15. HERITAGE LIFESTYLES: Ind-Ra Puts 'BB' Rating to Non-cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Heritage Lifestyles and Developers Pvt. Ltd.'s (HLDPL) 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: -- INR203.7 mil. term loan migrated to non-cooperating category; Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 3, 2015. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. KEY RATING DRIVERS COMPANY PROFILE Incorporated in 1994, HLDPL primarily undertakes real estate redevelopment projects. The company has completed 15 redevelopment projects with a total saleable area of 224,825 square feet mainly in the Chembur area. HLDPL is executing four redevelopment projects across Chembur (three) and Bhandup (one). Two of its four ongoing projects are in the completion phase: Mahalaxmi Heritage and Amar Villa Heritage. HINDAUN CITY: Ind-Ra Assigns 'BB' Long-Term Issuer Rating --------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Hindaun City Municipal Council (HcMC) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The rating reflects HcMC's inconsistent financial performance, as reflected in its fluctuating operating margins which ranged at negative 6.54% and 53.12% over FY11-FY15. HcMC's revenue receipts increased to INR97.707 million in FY15 (INR185.40 million as per FY16 budget estimates - BE) from INR37.521 million in FY11 (CAGR of 27.03%). As HcMC is a municipal council, its revenue comes from tax and non-tax sources. HcMC collected only house tax/urban development tax during FY11-FY15. This increased at a CAGR of 23.77% over FY11-FY15 and contributed only 0.40% on average to the council's total revenue. HcMC reported a revenue deficit in FY11 and FY12 as well as a capital deficit in FY14 and FY15. HcMCs credit profile is constrained by the small proportion of its own revenue. It is largely dependent on the government of Rajasthan (GoR) for revenue. Hindaun has good connectivity in terms of roads and railways. However, the absence of an underground sewage network, lack of proper drainage, solid-waste-management and collection facilities and septage treatment hinders the city's economic growth potential. The lack of these basic civic services, as reflected by service level benchmark reports, calls for immediate attention and affects HcMC's credit profile. Under the Atal Mission for Rejuvenation of Urban Towns (AMRUT), INR1.516.4 billion will be spent to improve these civic services. The delivery of urban civic services such as water supply has been hampered as there are multiple authorities that provide these services. This deters any improvement in service delivery. Others engaged in civic services are GoR agencies such as the Public Health Engineering Department (PHED), Public Works Department (PWD) and Urban Improvement Trust (UIT). The transfer of responsibility from these agencies to HcMC to execute some services could help speed up improvement service delivery. HcMC is highly dependent on GoR (for compensation in lieu of octroi as well as revenue grants and contributions) and this makes its finances vulnerable to GoR's economic and fiscal performance. Octroi compensation and revenue grants cumulatively contributed 60.17% to HcMC's total revenue during FY11-FY15. Ind-Ra believes that the goods and services tax (GST) is likely to be implemented from FY18. Nearly 51.77% of HcMC's revenue income is in the form of octroi compensation grants from GoR. Currently, the treatment of octroi compensation grants in the proposed GST Bill is unclear. If the disbursal method of octroi compensation grants undergoes a change in the new GST regime, HcMC's credit profile strength will depend on the buoyancy of the new method of compensation from GoR. HcMC's debt-free position supports its credit profile. However, the council requires a large number of investments to improve the quality of its civic services. Ind-Ra believes that while the projects proposed under the Atal Mission for Rejuvenation of Urban Towns (AMRUT) will help improve the quality of civic services in Hindaun, it will exert pressure on its fragile fiscal profile. Hindaun is known for businesses such as the trade of stones as well as agricultural products. It has a number of wholesale and retail markets, which act as distribution centres for such businesses. Markets for these products have been established along State Highway 22 and In-Ra believes these should be further promoted in an organized manner to accelerate economic growth. RATING SENSITIVITIES Positive: Significant improvement in operating performance without affecting debt metrics and rolling out AMRUT reforms within the stipulated timeframe, would positively impact the rating. Negative: Additional burden on HcMC's finances in the form of debt, withdrawal of revenue support without a suitable compensatory plan, would trigger a negative rating action. COMPANY PROFILE Hindaun City is located in the Karauli district of Rajasthan. It acts as a sub-divisional headquarters of the district and is an important economic center for the state. The city is famous for its red stone trading business. HcMC is responsible for the provisioning and governance of civic services in Hindaun. JOYFUL PLASTICS: Ind-Ra Migrates 'BB-' Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Joyful Plastics Pvt. Ltd's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the surveillance 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: -- INR15.76 mil. Term loan migrated to non-cooperating category; and -- INR49.5 mil. Fund-based limit migrated to non-cooperating category Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 3, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1995, Joy manufactures plastic products such as schoolware, officeware, baby products, kitchenware and home utilities. The company's manufacturing facility is located in Daman. LANCY CONSTRUCTIONS: CRISIL Cuts Rating on INR13MM Loan to D ------------------------------------------------------------ CRISIL has downgraded its rating on the long-term bank facility of Lancy Constructions (LC) to 'CRISIL D' from 'CRISIL B- /Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Overdraft 13 CRISIL D (Downgraded from 'CRISIL B-/Stable') The downgrade reflects overdrawn draft limit for more than 30 days due to weak liquidity following sustained stretch in working capital cycle. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations With revenue of INR6.3 crore in fiscal 2016, scale remains small in the competitive ready-made concrete (RMC) segment. Competition tends to be regional due to high transportation costs and strict timeline for delivery. Also, since RMC is mainly used in the construction sector, the firm remains exposed to cyclicality inherent in that industry. * Working capital-intensive operations Stretched receivables and increased work-in-progress inventory led to fully utilised bank limit. Working capital requirement will remain large over the medium term and will continue to constrain business risk profile. * Weak financial risk profile Net worth was small at INR8 crore as on March 31, 2016, and liquidity weak because of stretched working capital cycle. Financial risk profile will remain subdued over the medium term. Strength * Extensive experience of proprietor The firm's proprietor has around three decades of experience in the real estate segment and has constructed churches, education institutions, and residential and commercial complexes. Set up in 1973 in Mangalore as a proprietorship firm by Mr. Lancy Mascarenhas, LC manufactures RMC for the construction industry and also undertakes civil construction projects. For fiscal 2016, profit after tax was INR0 crore on net sales of INR6.3 crore, against INR0 crore and INR6.8 crore, respectively, for fiscal 2015. M. E. ENERGY: CRISIL Reaffirms B+ Rating on INR8MM Cash Loan ------------------------------------------------------------ CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on the bank facilities of M. E. Energy Private Limited (MEPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10 CRISIL A4 (Reaffirmed) Cash Credit 8 CRISIL B+/Stable (Reaffirmed) Foreign Letter of Credit 1.5 CRISIL B+/Stable (Reaffirmed) The ratings reflect a modest scale, and working capital intensive nature, of operations in the thermal engineering segment, subdued operating profitability, and below-average debt protection metrics. These rating weaknesses are mitigated by the extensive industry experience of the promoter and a moderate capital structure. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations and subdued operating profitability: Revenue was around INR26.9 crore in fiscal 2016, declining from INR41.6 crore in the previous fiscal. Decline in revenue amid high fixed costs led to a significant reduction in operating profitability. Although profitability is expected to improve in fiscal 2017 on the back of modest revenue growth and controlled fixed costs, the scale will remain modest. * Working capital-intensive operations: Gross current assets were high, at 287 days as on March 31, 2016, driven by a moderate work-in-progress inventory, large receivables, and sizeable margin money deposits. * Below-average debt protection metrics: The interest coverage ratio was below 1 time in fiscal 2016, and is expected to improve to just over 1.5 times in fiscal 2017. Strengths * Extensive industry experience of the promoter: The key promoter, Mr. K V Kartha, has over 25 years of experience in the engineering industry and has developed a strong relationship with customers and suppliers. * Moderate capital structure: The gearing was low, at 0.93 time as on March 31, 2016, because of a moderate networth of INR11.6 crore and the absence of any major debt-funded capital expenditure (capex). Outlook: Stable CRISIL believes MEPL will continue to benefit from the extensive industry experience of its promoter. The outlook may be revised to 'Positive' in case of significant and sustained improvement in revenue and profitability, leading sizeable cash accrual. The outlook may be revised 'Negative' if the financial risk profile, particularly liquidity, weakens because of low cash accrual, a stretched working capital cycle, or any debt-funded capex. MEPL, established in 1998 and promoted by Mr. K V Kartha, designs, manufactures and installs energy-saving projects, heating and cooling systems, and equipment. Its manufacturing facility is in Pune, Maharashtra. Helix Investment Company, a private equity firm, acquired a 36.36% stake in the company in 2012. MEPL had a net loss of INR77 lakh on revenue of INR26.97 crore in fiscal 2016, against a net profit of INR4.41 lakh on revenue of INR41.67 crore in fiscal 2015. MAGNEWIN ENERGY: CRISIL Reaffirms 'D' Rating on INR1.68MM Loan -------------------------------------------------------------- CRISIL has been consistently following up with Magnewin Energy Private Limited ((MEPL)) for obtaining information through letters and emails dated January 27, 2017, and February 28, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 0.25 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Cash Credit 1.50 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Letter of Credit 1.5 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Long Term Loan 1.68 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Standby Line of 0.20 CRISIL D (Issuer Not Credit cooperating; Rating Reaffirmed) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Magnewin Energy Private Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Magnewin Energy Private Limited is consistent with 'Scenario1' outlined in the 'Framework for Assessing Consistency of Information with Crisil B Rating category or Lower'.' Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL D/ CRISIL D'. Incorporated in 1991, MEPL manufactures electrical capacitors'special-purpose capacitors, and high- and low-tension capacitors'used for compensating transmission line losses and power factor improvement. These capacitors are primarily used by utility companies and the defence sector; the capacitors also find application in industries such as textiles, coal, chemicals, and sugar. Set up as Magnewin Magnetics, the company was reconstituted as a private limited company in September 2009. MANIPAL ENERGY: CRISIL Lowers Rating on INR5MM Loan to 'B' ---------------------------------------------------------- CRISIL has been consistently following up with Manipal Energy and Infratech Limited (MEIL) for obtaining information through letters and emails dated January 19, 2017 and February 09, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Overdraft 5 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Manipal Energy and Infratech Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Manipal Energy and Infratech Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with Crisil B Rating category or Lower' Based on the last available information, CRISIL has downgraded the rating to 'CRISIL B/Stable'. MEIL was incorporated in 2011, promoted by Mr. T.Gautam Pai. The company undertakes projects involving erection, installation, commissioning, and maintenance of power lines, trading in fabricated electrical components, and executing infrastructure projects in Karnataka. MEGASOFT LTD: Ind-Ra Migrates 'B+' Rating to Non-Cooperating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Megasoft Ltd's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the surveillance 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 B+(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR150 mil. Fund-based limit migrated to non-cooperating category; and -- INR 70 mil. Non-fund-based limit migrated to non-cooperating category Note: ISSUER NOT COOPERATING: The ratings were last reviewed on March 23, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1999, Megasoft (represented by its telecom brand, XIUS) is engaged in the sale of lizences for products related to pre-paid billing, mobile commerce, mobile roaming and mobile advertising to telecom operators. Its head office and development centre are located in Hyderabad. PADDINGTON RESORTS: Ind-Ra Assigns 'B+' Long-Term Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Paddington Resorts a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR87.7 mil. Term loans assigned with 'IND B+/Stable' rating; and -- INR2.5 mil. Fund-based facilities assigned with 'IND B+/Stable/IND A4' rating KEY RATING DRIVERS The ratings reflect Paddington Resorts' weak credit profile. Although the firm started its operations in October 2015, FY17 was its first full year of operations. According to the provisional FY17 financials, the revenue increased to INR13 million (FY16: INR3 million) at approximately 55% occupancy, while EBITDA margin declined 33.0% (58.1%) on account of an increase in variable expenses, EBITDA interest coverage (operating EBITDA/gross interest expense) was 0.5x (0.3x) and net financial leverage (Ind-Ra adjusted net debt/operating EBITDAR) was 19.2x (58.0x). Leverage improved sharply due to scheduled loan repayments. Moreover, the firm has a tight liquidity position with 90.4% average utilization of the fund-based facilities over the 12 months ended April 2017. The ratings, however, are supported by the firm's promoters' 10 years of experience in the hotel industry. RATING SENSITIVITIES Positive: A substantial improvement in the revenue and EBITDA margin leading to a sustained improvement in the credit metrics will be positive for the ratings. Negative: Any deterioration in the EBITDA margin leading to sustained deterioration in the credit metrics could be negative for the ratings. COMPANY PROFILE Paddington Resorts is a four-star hotel at Coorg in Karnataka, founded by Mr. T L Praveen. It was converted into a partnership firm in 2012. The resort has a total of 15 cottages and 15 rooms. Mr. T L Praveen, Mr. T N Laxman and Mrs Padmini are the promoters of the firm. QUEST INFOSYS: Ind-Ra Migrates 'B' Rating to Non-Cooperating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Quest Infosys Foundation's bank loans 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 B(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR57 mil. term loan migrated to non-cooperating category; and -- INR40 mil. Fund-based working capital migrated to non- cooperating category Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 7, 2016. Ind-Ra is unable to provide an update as it do not have adequate information to review the rating. COMPANY PROFILE Quest Infosys Foundation established the Quest Group of Institutions in 2009-2010. QGI offers Bachelor of Technology and Master of Business Administration courses and is situated in Mohali, Punjab. The society is chaired by Mr. Dipinder Singh Sekhon. RELIANCE COMM: Rejects Moody's, Fitch's Rating Downgrades --------------------------------------------------------- The Times of India reports that Reliance Communications on June 7 rejected credit rating cuts by Moody's and Fitch as the agencies' views apply only on its $300 million bonds, which are being serviced regularly. TOI relates that the company said that in May 2015, it had issued 6.5 per cent coupon bearing $ bonds, maturing in November 2020, for an aggregate amount of $300 million. "These bonds constitute about 4 per cent of the total debt of the company. The bonds have always been serviced regularly on the due dates and are fully current in servicing, as on date . . . the ratings by Moody's and Fitch apply only to these $ bonds. We respectfully disagree with the recent rating actions by both these agencies, and believe that these rating actions do not reflect the servicing track record of the company," TOI quotes RCom as saying. RCom, in its notice to stock exchanges on May 24, 2017, had said that the company will continue to pay interest on the respective due dates, and the bonds will be repaid on the due date of November 6, 2020, TOI relays. About Reliance Communications Based in Mumbai, India, Reliance Communications Ltd (BOM:532712) -- http://www.rcom.co.in/Rcom/personal/home/index.html-- is a telecommunications service provider. The Company operates through two segments: India Operations and Global Operations. India operations segment comprises wireless telecommunications services to retail customers through global system for mobile communication (GSM) technology-based networks across India; voice, long distance services and broadband access to enterprise customers; managed Internet data center services, and direct-to- home (DTH) business. Global operations comprise Carrier, Enterprise and Consumer Business units. It provides carrier's carrier voice, carrier's carrier bandwidth, enterprise data and consumer voice services. The Company owns and operates Internet protocol (IP) enabled connectivity infrastructure, comprising over 280,000 kilometers of fiber optic cable systems in India, the United States, Europe, Middle East and the Asia Pacific region. As reported in the Troubled Company Reporter-Asia Pacific on June 8, 2017, Moody's Investors Service has downgraded Reliance Communications Limited's (RCOM) corporate family rating and senior secured bond rating to Ca from Caa1. The outlook is negative. This concludes the review of the ratings initiated by Moody's on May 30, 2017. The TCR-AP reported on June 8, 2017, that Fitch Ratings downgraded India-based Reliance Communications Limited's (Rcom) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to 'RD' from 'CCC'. Fitch has also downgraded the rating on Rcom's USD300 million 6.5% senior secured notes due 2020 to 'C/RR4' from 'CCC/RR4'. The downgrade follows Rcom's June 2, 2017 announcement that all of its bank lenders are prepared to waive debt service obligations until end-2017 to provide time for the company to lower its debt through two proposed transactions and present a plan demonstrating how the debt can be serviced over the long term. Under Fitch ratings definitions this situation constitutes a restricted default, as multiple waivers or forbearance periods have been extended in parallel following a non-payment event. S. K. MASALA: CRISIL Assigns B+ Rating to INR5.6MM Cash Loan ------------------------------------------------------------ CRISIL has assigned 'CRISIL B+/Stable' rating to the long-term bank facility of S. K. Masala and Foods Limited (SK Masala). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5.6 CRISIL B+/Stable The rating reflects improving, yet modest scale of operations, average financial risk profile marked by small networth, average capital structure and stretched liquidity and presence in the fragmented and competitive spice and packaged foods industry. These weaknesses are partly offset by the extensive industry experience of promoters, their funding support and moderate operating efficiency. Key Rating Drivers & Detailed Description Weakness * Improving yet modest scale of operations and presence in the competitive spice and food manufacturing industry Although revenue grew at a compound annual rate of 31% during the four fiscals through 2017, it remained modest at an estimated INR21.15 crore for fiscal 2017. That's because of intense competition in the industry due to the presence of a large number of players owing to low entry barriers and capital requirement, and company's limited geographical reach. * Working capital intensive operations coupled with stretched liquidity Gross current assets were high at 273 days as on March 31, 2016, driven by high receivables and inventory of 161 and 97 days, respectively, which has resulted into stretched liquidity marked by full bank limit utilisation for previous 12 months through March 2017. * Average financial risk profile Financial risk profile is average marked by estimated modest networth of INR3.59 crore and gearing of 1.93 times as on March 31, 2017. The expected capital infusion of INR0.75 crore and successful raising of capital through SME IPO remains critical for improvement in overall financial risk profile and liquidity. Strengths * Extensive experience of promoters and established relationship with customers and suppliers SK Masala benefits from the four-decade long experience of the promoters in the spices and food industry and their established relations with suppliers and customers. * Moderate operating efficiency: Operating margin remained moderate at 8.4-9.5% for over four years through fiscal 2017 and return on capital employed continued to be at over 17% reflecting moderate operating efficiency. Outlook: Stable CRISIL believes SK Masala will benefit from the extensive industry experience of its promoters and their established customer and supplier relationships. The outlook may be revised to 'Positive' if its revenue and profitability significantly improve, leading to higher-than-expected cash accruals or capital structure and liquidity improves because of fresh infusion of capital and better working capital management. The outlook may be revised to 'Negative' in case of lower-than-expected accrual or further deterioration in working capital management or sizeable debt-funded capital expenditure, weakens financial risk profile, particularly liquidity. SK Masala was established as a partnership firm named M/s S Khusaldas and Co. over four decades ago by Panjwani family and was reconstituted as a closely held limited company with the present name in March 2017. The company manufactures, processes and trades blended spices, grounded spices, flour, Instant ' ready mix food, pickle and ghee'sold under the brand name of 'SK Masala'. Operations are managed by Mr. Barkatali Panjwani, Mr. Salim Panjwani and family. Its manufacturing facility is located near Surat, Gujarat and has an installed capacity of 6 tonne per day. Operating income was INR14.96 crore and net profit was INR0.48 crore for fiscal 2016, against INR9.96 crore and INR0.28 crore, respectively, for fiscal 2015. SAMRAT VIJAY: CRISIL Lowers Rating on INR19.85MM Demand Loan to D ----------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Samrat Vijay Construction Pvt Ltd (SVCPL) to 'CRISIL D' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term .15 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B/Stable') Working Capital 19.85 CRISIL D (Downgraded from Demand Loan 'CRISIL B/Stable') The downgrade reflects the company's delay of two months in paying interest on its working capital demand loan due to stretched liquidity. Key Rating Drivers & Detailed Description Weakness * Delays in interest payment: Low accrual and large working capital debt resulted in stretched liquidity, resulting in delay in meeting interest obligation on working capital demand loan by two months. Strengths * Experience of the promoters in the civil construction industry: Presence of over a decade in the civil construction business has enabled the promoters to develop healthy relationships with customers and raw material suppliers. Incorporated in 2008 in Chapra, Bihar, and promoted by Mr. Arjun Singh and his wife, Ms Babita Kumari, SVCPL is setting up a mall in Muzaffarpur, Bihar. Profit after tax (PAT) and net sales were INR0.01 crore and INR0.13 crore, respectively, for fiscal 2016, against a loss of INR0.09 crore and nil net sales in the previous fiscal. SATYA WAREHOUSE: CRISIL Reaffirms D Rating on INR12.5MM Term Loan ----------------------------------------------------------------- CRISIL has been consistently following up with Satya Warehouse (Satya) for obtaining information through letters and emails dated February 8, 2017 and March 26, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 12.5 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Satya Warehouse. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Satya Warehouse is consistent with 'Scenario1' outlined in the 'Framework for Assessing Consistency of Information with Crisil B Rating category or Lower'.' Based on the last available information, CRISIL has reaffirmed the rating at CRISIL D. Set up in 2012, Satya is a partnership firm promoted by Mr. Ram Kumar Yadav, Mr. Ashok Yadav, and their friends. The firm has constructed a warehouse with capacity of 70,000 tonne for agricultural products in Hisar (Haryana). It has signed a 10-year offtake agreement with HAFED. SAVORIT LIMITED: CRISIL Assigns B+ Rating to INR3.9MM Term Loan --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' rating to the bank facilities of Savorit Limited (Savorit). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 3.9 CRISIL B+/Stable Overdraft 19 CRISIL A4 Proposed Long Term Bank Loan Facility .1 CRISIL B+/Stable The rating reflects the company's below-average financial risk profile because of a highly leveraged capital structure and substantial exposure to group entities, and vulnerability of its operating profitability to volatility in raw material prices. These weaknesses are partially offset by its promoters' extensive experience and its established market position in the packaged food products industry. Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile and substantial exposure to group entities: Savorit's financial risk profile is constrained by high gearing of over 5 times as on March 31, 2017, and by exposure to group companies in the form of investments and loans and advances. Debt protection metrics are modest with interest coverage and net cash accruals estimated at around 1.52 times and 5 percent respectively for fiscal 2017. * Susceptibility to volatility in raw materials prices: Savorit depends on the domestic output of commodities such as wheat, which depends on the area under cultivation, monsoon, prices of other crops, and minimum support price and other incentives offered by the government of India. These factors also determine final crop prices which might impact the profitability. Strengths * Established market position and promoters' extensive experience in the packaged food products industry: Savorit has been manufacturing food products for over 20 years. Its promoters' extensive experience has helped the company establish itself in the highly competitive industry. Also, its Savorit brand has a strong reputation in South India, helping the company maintain its market position. Outlook: Stable CRISIL believes Savorit will continue to benefit from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if revenue and operating margin are higher than expected. The outlook may be revised to 'Negative' if revenue or operating profitability decline, or if more-than- expected exposure to group entities, or sizeable, debt-funded capital expenditure weakens the financial risk profile, especially liquidity. Pre-closure of a significant amount of term loans over the next twelve months will be a key determinant of the financial risk profile, particularly liquidity, over the medium term. Savorit was established in 1965 by Mr. Murugesan, as United India Roller Flour Mills Private Limited, and manufactured wheat flour. It integrated forward and started manufacturing vermicelli in 1995 under the Savorit brand, post which, it got its present name Savorit reported a profit after tax (PAT) of INR1.0 crore on an operating income of INR 213 crore for fiscal 2016 against a PAT of INR1.0 crore on an operating income of INR174 crore for fiscal 2015. SHAARC PROJECTS: Ind-Ra Migrates 'BB' Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Shaarc Projects Limited's (SPL) Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the ratings 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: -- INR25 mil. Fund-based limits migrated to non-cooperating category; and -- INR50 mil. Non-fund-based limits migrated to non-cooperating category Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 13, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 2011, SPL is engaged in civil construction projects such as roads, bridges, power infrastructure, pipeline works, steel plants, refineries and other infrastructure works. SHREE BHATTER: CRISIL Lowers Rating on INR7MM Cash Loan to 'D' -------------------------------------------------------------- CRISIL has been consistently following up with Shree Bhatter Industries (SIEPL) for obtaining information through letters and emails dated January 23, 2017 and February 13, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 7 CRISIL D (Issuer Not Cooperating; Downgraded from 'CRISIL B/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale CRISIL has downgraded its rating on the long-term bank facilities of SBI to 'CRISIL D (issuer not co-operating)' from 'CRISIL B/Stable.' The rating downgrade reflects delays by the firm, in servicing the debt obligation. CRISIL has held discussions with the bankers, who have confirmed the ongoing delay. Shree Bhatter Industries (SBI) was established in 2011 as a partnership firm based out of Jodhpur (Rajasthan). The firm is engaged in processing of guar seeds to produce guar gum splits and the bye-products, guar korma, and guar churi. The firm has an installed capacity to process about 40 tonnes per day (TPD). SHREE VAISHNAV: CRISIL Reaffirms 'D' Rating on INR31.27MM Loan -------------------------------------------------------------- CRISIL has been consistently following up with Shree Vaishnav Metal and Power Private Limited (SVMPPL) for obtaining information through letters and emails dated January 24, 2017 and February 14, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Cash Credit 15 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Letter of Credit 10 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Proposed Long Term 31.27 CRISIL D (Issuer Not Bank Loan Facility Cooperating; Rating Reaffirmed) Term Loan 22.73 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Shree Vaishnav Metal and Power Private Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Shree Vaishnav Metal and Power Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with Crisil B Rating category or lower.' Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL D/CRISIL D'. SVMPPL, incorporated in 2005 by the Agarwal family, is engaged in galvanisation and fabrication. Its manufacturing facilitates are in Wada (Maharashtra) and registered office is in Mumbai. SHREYAS ENTERPRISES: CRISIL Reaffirms B+ Rating on INR9.25MM Loan ----------------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facility of Shreyas Enterprises - Gorakhpur (SE) at 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 9.25 CRISIL B+/Stable (Reaffirmed) Net sales remained stagnant during fiscal 2017, on account of impact of demonetisation. CRISIL expects business risk profile to remain stable with revenue growth of 10% per fiscal over the medium term, while net profitability margin is likely to be at 0.15 -0.25% in line with past trend, susceptible to fluctuations in coal prices. Liquidity profile is marked by modest cash accrual and near full utilisation of bank limit over the 12 months ended March 31, 2017. However, absence of any term-debt and unsecured loans from partners (outstanding at INR1.85 crore on March 31, 2017) supports liquidity. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations: SE is a small player in the highly fragmented coal trading business, with estimated revenue of INR54.08 crore in fiscal 2017. The firm also undertakes brick manufacturing; which constitutes 20-25% of overall revenue. Scale of operations is expected to remain small amid industry competition. * Weak financial risk profile: Total outside liabilities to tangible networth (TOLTNW) ratio is high estimated at 7.48 times as on March 31, 2017, mainly due to small networth of INR1.55 crore. Debt protection metrics are weak: interest coverage was 1.14 time in fiscal 2017. Financial risk profile is expected to remain at similar level over the medium term on account of sizeable working capital debt and continued low operating profitability. Strengths * Extensive experience of partners: The partners' extensive experience in coal trading and brick manufacturing through family business has helped the firm to establish healthy relationship with clients'reflected in net sales of INR54.08 crore in fiscal 2017. Consequently, business risk profile will also remain supported over the medium term. * Moderately working capital requirement: Gross current assets (GCAs) were estimated at 84 days as on March 31, 2017, because of moderate inventory and low receivables of 78 and 2 days, respectively. Operations are likely to remain moderately working capital intensive over the medium term, with GCAs expected at 85- 90 days. Outlook: Stable CRISIL believes SE will maintain its business risk profile backed by the extensive industry experience of its partners. The outlook may be revised to 'Positive' if financial risk profile improves with enhancement in profitability and capital structure. The outlook may be revised to 'Negative' if increase in working capital requirement or constrained profitability margin or capital withdrawal exerts pressure on liquidity. Established in 2012, SE is a partnership firm started by Mr. Vinay Kumar Singh and Ms Tara Singh in Gorakhpur, Uttar Pradesh. The firm trades in coal and manufactures bricks. SE, on a standalone basis, had profit after tax (PAT) of INR0.13 crore on net sales of INR53.56 crore in fiscal 2016, vis-a-vis INR0.05 crore and INR22.82 crore, respectively, in fiscal 2015. SHREYAS SORTEX: CRISIL Raises Rating on INR25MM Cash Loan to BB- ---------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Shreyas Sortex Industries Private Limited (SSIPL) to 'CRISIL BB-/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 25 CRISIL BB-/Stable (Upgraded from 'CRISIL B/Stable') Term Loan 10 CRISIL BB-/Stable (Upgraded from 'CRISIL B/Stable') The upgrade reflects CRISIL's belief that the company will sustain its improved business risk profile over the medium term, driven by recent capacity expansion to 20 tonne per hour (tph) from 8 tph. Revenue is estimated at INR150 crore for fiscal 2017 (the first full year of commercial operations), as against INR30.65 crore in fiscal 2016. Revenue is expected to increase by 10-15% per fiscal over the medium term while the operating margin would be sustained at 4-5%. Despite working capital-intensive operations, as reflected in estimated gross current assets (GCAs) of 105 days as on March 31, 2017, the bank limit was moderately utilised at 87% over the 12 months through March 2017. Liquidity was also aided by infusion of capital and unsecured loans of INR8.0 crore and INR9.54 crore, respectively, in fiscal 2017, by the promoters. Consequently, the total outside liabilities to tangible networth (TOLTNW) ratio has improved, and is likely to remain below 1.5 times over the medium term. Furthermore, cash accrual is comfortable against repayment obligation and there are no significant capital expenditure (capex) plans over the medium term. Analytical Approach CRISIL has treated unsecured loans (Rs 15.21 crore outstanding as on March 31, 2017) extended by the promoters as neither debt nor equity in calculating the financial ratios. That's because these loans are interest-free and are expected to remain in the business over the medium term. Key Rating Drivers & Detailed Description Strengths * Above-average financial risk profile: The TOLTNW ratio was low, estimated at 1.18 times as on March 31, 2017. Debt protection metrics were above average, with interest coverage and net cash accrual to total debt ratios estimated at 3.29 times and 0.13 time, respectively, for fiscal 2017. The financial risk profile is likely to remain stable over the medium term on account of continued moderate operating profitability and absence of any major capex. * Moderately working capital-intensive operations: GCAs are estimated at 105 days, with inventory and debtors of 79 and 7 days, respectively, against nil payables, as on March 31, 2017. Operations are likely to remain moderately working capital intensive over the medium term as well, with GCAs expected at 100-105 days Weaknesses * Nascent stage and modest scale of operations in the highly fragmented rice industry: Operations began only in November 2015, and net sales are estimated at a modest INR150 crore for fiscal 2017. This, along with intense competition, limits bargaining power with suppliers and customers, leading to pressure on the operating margin. Although the scale of operations may improve gradually over the medium term, it will remain modest due to intense competition. Outlook: Stable CRISIL believes SSIPL will continue to benefit from the entrepreneurial experience of its promoters and their funding support. The outlook may be revised to 'Positive' in case of improvement in the credit risk profile on the back of an increase in revenue and cash accrual, while working capital is efficiently managed. The outlook may be revised to 'Negative' in case of lower-than-anticipated cash accrual or larger-than-expected working capital requirement, leading to deterioration in liquidity. SSIPL was incorporated in 2015, promoted by Mr. Vinay Kumar Singh and Mrs Tara Singh. The company processes parboiled rice at its plant at Gorakhpur, Uttar Pradesh. It has a total milling and sorting capacity of 20 tph. SSIPL started operations from November 2015. Profit after tax (PAT) was INR0.14 crore on net sales of INR30.65 crore in fiscal 2016. SREE DURGA: CRISIL Lowers Rating on INR2MM Cash Loan to 'B' ----------------------------------------------------------- CRISIL has been consistently following up with Sree Durga Cashew Factory (SDCF) for obtaining information through letters and emails dated January 23, 2017 and February 13, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 2 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL BB-/Stable') Packing Credit 14 CRISIL A4/Issuer Not Cooperating) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Sree Durga Cashew Factory. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Rashik Sree Durga Cashew Factory is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with Crisil B Rating category or lower.' Based on the last available information, CRISIL has downgraded the rating to 'CRISIL B/Stable/CRISIL A4' Set up in 1996, SDCF processes raw cashew nuts and exports cashew kernels. Proprietor Mr. D Pradeep Kumar manages its operations. SREE SHANMUGA: Ind-Ra Assigns 'BB' Long-Term Issuer Rating ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Sree Shanmuga Modern Rice Mills Private Limited (SSMRMPL) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. The instrument-wise rating action is: -- INR239.2 mil. Fund-based working capital limits assigned with 'IND BB/Stable/IND A4+' rating KEY RATING DRIVERS The ratings reflect SSMRMPL's volatile profitability and moderate credit metrics. According to provisional financials for FY17, EBITDA margin was 8.0% (FY16: 8.2%; FY15: 6.8%; FY14: 7.0%). The decline in EBITDA margin was due to fluctuations in costs of raw materials and an increase in manufacturing expenses. In FY17, net financial leverage (adjusted net debt/operating EBITDA) and interest coverage (operating EBITDA/gross interest expense) deteriorated to 6.3x (FY16: 6.1x) and 1.6x (1.7x), respectively, due to an increase in interest expenses incurred on a newly availed term loan. The ratings also reflect SSMRMPL's moderate, albeit rising, scale of operations and tight liquidity. Revenue rose at a CAGR of 13.61% to INR1,450 million over FY13-FY17, driven by an increase in order inflow from existing and new customers and high market demand. Moreover, an additional manufacturing unit commenced operations in December 2016. The company's average utilization of fund-based limits was 98.3% over the 12 months ended April 2017. The ratings, however, are supported by the promoter's three- decade experience in rice processing. RATING SENSITIVITIES Negative: A decline in revenue and profitability leading to deterioration in credit metrics could be negative for the rating. Positive: A significant increase in revenue and profitability leading to an improvement in credit metrics would be positive for the rating. COMPANY PROFILE Incorporated in 1993, SSMRMPL is based in Bangarpet, Karnataka. The company is engaged in the processing of paddy into raw rice, steam rice and parboiled rice. The company is headed by Mr. RN Shanmugam and Mr. RS Dilip Kumar. It owns five units, each of which has a production capacity of 29 tonnes per hour. SREE VEERA: CRISIL Reaffirms B- Rating on INR6.5MM Cash Loan ------------------------------------------------------------ CRISIL has reaffirmed its 'CRISIL B-/Stable' rating on the long- term bank facilities of Sree Veera Brahmendra Swamy Spinning Mills Pvt Ltd (SVPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6.5 CRISIL B-/Stable (Reaffirmed) Corporate Loan 5.4 CRISIL B-/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 2.11 CRISIL B-/Stable (Reaffirmed) The rating continues to reflect a below-average financial risk profile because of a small networth, high gearing, and weak debt protection metrics. The rating also factors in working capital- intensive operations, and susceptibility of profitability margins to volatile cotton prices and intense competition. These weaknesses are partially offset by the extensive experience of the promoters in the cotton-trading industry. Key Rating Drivers & Detailed Description Weakness * Below-average financial risk profile The networth is modest, estimated at INR4 crore, and gearing high, estimated at 4.6 times, as on March 31, 2017. The debt protection metrics were average in fiscal 2017. * Working capital-intensive operations Gross current assets were high, estimated at around 336 days, with inventory of 171 days, as on March 31, 2017. * Susceptibility of profitability margins to volatile cotton prices and intense competition Raw cotton constitutes 55-60% of total production cost, in line with other industry players. Cotton prices are volatile as the crop continues to be vulnerable to monsoon or even a pest attack. Also, cotton prices are largely affected by international demand. Volatility in the availability and prices of cotton affect margins of spinning companies. Strengths * Extensive industry experience of the promoters The promoters have an experience of over three decades in cotton trading, and have developed a healthy relationship with customers. Outlook: Stable CRISIL believes SVPL will continue to benefit from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' in case of a substantial and sustained increase in the scale of operations, while profitability margins are maintained, or significant improvement in the working capital cycle. The outlook may be revised to 'Negative' in case of a steep decline in profitability margins, or significant deterioration in the capital structure because of a stretch in the working capital cycle. Set up in 2006 by Mr. G Sundararamaiah and his family, SVPL manufactures cotton yarn at its plant in Guntur, Andhra Pradesh. In fiscal 2016, profit after tax (PAT) was INR2.4 crore on net sales of INR24.7 crore, against a PAT of INR0.3 crore on net sales of INR26.6 crore in fiscal 2015. SRI LAKSHMI: CRISIL Reaffirms B+ Rating on INR7MM Loan ------------------------------------------------------ CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on the bank facilities of Sri Lakshmi Constructions (SLC). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1 CRISIL A4 (Reaffirmed) Long Term Loan 2.5 CRISIL B+/Stable (Reaffirmed) Overdraft 7 CRISIL B+/Stable (Reaffirmed) The ratings continue to reflect the firm's modest scale of operations in the highly competitive civil construction industry, and its large working capital requirement. These weaknesses are partially offset by its partners' extensive industry experience and its moderate financial risk profile because of moderate gearing and debt protection metrics. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations in a highly competitive industry: SLC remains a small player in the intensely competitive civil construction industry, with an estimated operating income of INR15.4 crore in fiscal 2017. The industry is highly fragmented because of low entry barriers. * Working capital-intensive operations: Gross current assets are estimated at 212 days as on March 31, 2017, driven by large inventory, and considerable funds blocked as retention money. Strengths * Founder's extensive experience in the civil construction industry: Mr. C Viswanatha Naidu has experience of more than three decades in the civil construction industry, and have developed healthy relationships with customers. * Moderate financial risk profile: The financial risk profile is marked by modest networth estimated at INR3.0 crore as on March 31, 2017and moderate gearing of 2.9 times as on March 31, 2017, and adequate debt protection metrics. Outlook: Stable CRISIL believes SLC will continue to benefit from its promoters' extensive industry experience and established customer relationships. The outlook may be revised to 'Positive' if there is a substantial and sustained increase in revenue along with stable profitability, or a sizeable increase in networth supported by equity infusion. The outlook may be revised to 'Negative' if profitability declines steeply, or capital structure weakens because of large, debt-funded capital expenditure or a stretch in the working capital cycle. SLC (formerly C Viswanatha Naidu) was set up in 1980 as a proprietorship concern by Mr. C Viswanatha Naidu, and was reconstituted as a partnership firm in 2014. It constructs and repairs roads in Chittoor, Andhra Pradesh. In fiscal 2016, profit after tax (PAT) was INR1.1 crore on net sales of INR24.9 crore, against a PAT of INR1.0 crore on net sales of INR 22.5 crore in fiscal 2015. SRI SAINADH: CRISIL Reaffirms B+ Rating on INR6MM Cash Loan ----------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long- term bank facilities of Sri Sainadh Rice Industries (SSRI). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Open Cash Credit 6 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 1 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect the firm's modest scale of operations, and susceptibility to changes in government regulations and to volatility in raw material prices. These weaknesses are partially offset by its partners' extensive experience in the rice industry and established relationships with customers. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations in a highly fragmented industry: The firm has a small scale, reflected in estimated turnover of INR32 crore in fiscal 2017, and modest capacity. The rice industry is highly fragmented because of low capital requirement and limited value addition, resulting in low entry barriers. * Susceptibility to changes in regulations and to volatility in raw material prices: As raw material accounts for 90% of the firm's revenue, it is susceptible to volatility in raw material prices. Moreover, the domestic rice industry is highly regulated in terms of paddy prices, export/import policies, and rice release mechanism, which affects the credit quality of players. Strength * Partners' extensive industry experience and established customer relationships: The partners have experience of over two decades of in the rice milling business, and have developed healthy relationships with customers. Outlook: Stable CRISIL believes SSRI will continue to benefit from its partners' extensive industry experience. The outlook may be revised to 'Positive' if increase in revenue and operating margin strengthens the financial risk profile. The outlook may be revised to 'Negative' if profitability weakens due to increased competition, or if working capital management is inefficient. Set up in 2000 as a partnership firm, SSRI mills and processes paddy into rice, rice bran, broken rice, and husk. Its rice mill is in Nellore, Andhra Pradesh. Operations are managed by Mr. A V Subba Rao. In fiscal 2016, profit after tax (PAT) was INR0.02 crore on net sales of INR31.9 crore, against a PAT of INR0.02 crore on net sales of INR30.5 crore in fiscal 2015. STRANDS TEXTILE: Ind-Ra Migrates 'BB' Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Strands Textile Mills Pvt. Ltd.'s Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the surveillance 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: -- INR47.5 mil. Fund-based limit migrated to non-cooperating category Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 18, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 2006, Strands manufactures home textile products for exports, primarily to the US. Its unit is located at Kandla SEZ in Gujarat. The company manages the marketing and distribution of its products through a sales and marketing office in New York. SUBASREE JEWELLERS: CRISIL Assigns B- Rating to INR2.29MM Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' rating to the long-term bank facility of Subasree Jewellers (SJ). The rating reflects the modest scale of operations of the firm in the fragmented gold jewellery retailing industry, and below-average financial risk profile. These rating weaknesses are partially offset by the extensive experience of the promoter. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Working Capital Demand Loan 1.76 CRISIL B-/Stable Long Term Loan 2.29 CRISIL B-/Stable Bank Guarantee 1.85 CRISIL A4 Cash Credit 2.10 CRISIL B-/Stable Key Rating Drivers & Detailed Description Weakness * Modest scale of operations susceptibility to intense competition in fragmented gold wholesale industry: The scale of operations of the firm is modest with average revenues of INR11 crore in the past three fiscal years through 2017. The domestic jewellery industry is highly fragmented and largely dominated by the unorganized sector, as it is neither capital nor technology intensive. CRISIL believes SJ due to its small scale of operation will remain expose to competition in the fragmented jewellery industry. * Below-average financial risk profile: Modest networth and high gearing'estimated at INR1.4 crores and 5.8 times as on March 31, 2017 - may continue to constrain financial risk profile. Debt protection metrics are average: net cash accrual to total debt and interest coverage ratios were estimated around 1% and 1.13 times in fiscal 2017. Accruals are insufficient to be repayment obligations, which are met through promoter's fund support. Strengths * Extensive experience of the promoter: The promoter of SJ, Mr. K Vijayakumar, had been in the jewellery business over 3 decades and has gained insights about the industry over the years. The long experience of proprietor in the jewellery industry has enabled it to have strong relationship with its local clientele. Outlook: Stable CRISIL believes SJ will maintain a stable business profile over the medium term backed by the extensive experience of the promoter. The outlook may be revised to 'Positive' if increase in scale of operations or improved working capital management considerably strengthens business risk profile. Conversely, the outlook may be revised to 'Negative' if aggressive debt funded expansion, stretch in working capital cycle, or decline in profitability, weakens the financial risk profile. SJ retails in jewellery through its single showroom in Coimbatore. The firm is promoted by Mr.K Vijayakumar, a second generation entrepreneur. SJ booked Net Profit of INR16.35 lakhs on revenues of INR10.16 in fiscal 2016 against a Net profit of INR14.25 lakhs on revenues of INR11.19 crores in fiscal 2015. SUNDARAM MAHADEO: CRISIL Reaffirms 'B' Rating on INR4.5MM Loan -------------------------------------------------------------- CRISIL has reaffirmed its rating on the long term bank facilities Sundaram Mahadeo Autoworld Private Limited (SMAPL) at 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4.5 CRISIL B/Stable (Reaffirmed) Term Loan 2.5 CRISIL B/Stable (Reaffirmed) CRISIL's ratings on the bank facilities of SMAPL continue to reflect the modest scale of operations and its leveraged financial risk profile. These rating are partially offset by extensive entrepreneurial experience of the promoters. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations: SMAPL started its operations in May 2016. SMAPL is estimated to report operating income of INR36 crore in fiscal 2017. Scale up of operations to remain key rating sensitivity factor over medium term. * Leveraged financial risk profile: Modest networth and high total outstanding liabilities to adjusted networth (Rs 2.05 crore and 2.86 times as on March 31, 2016) represent leveraged financial risk profile. Strengths * Extensive entrepreneurial experience of the promoters: The promoters have extensive entrepreneurial experience in different businesses. Over the years, the promoters have established a healthy reputation in Assam. The promoters were initially engaged in the petroleum product trading business, later diversified into auto dealership of commercial vehicle of Tata Motors Limited (TML). Company is expected to benefit over medium term from promoters extensive entrepreneurial experience of the promoters. Outlook: Stable CRISIL believes that SMAPL will benefit from the promoters' extensive experience over the medium term. The outlook may be revised to 'Positive' if SMAPL generates higher -than 'expected revenue and profitability leading to higher cash accruals and improvement in financial risk profile. The outlook may be revised to 'Negative' in case the company generates lower-than expected cash accruals or additional debt funded capex, resulting in a pressure on its financial risk profile, particularly liquidity. Incorporated in June 2015, SMAPL is a dealer of commercial vehicle of TML and has a showroom at Tezpur, Assam. The company is promoted by Mr. Sumit Agarwal and Mr. Amit Agarwal. SWASTIK PANELS: CRISIL Reaffirms 'B' Rating on INR3MM Cash Loan --------------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of Swastik Panels Private Limited (SPPL) at 'CRISIL B/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL B/Stable (Reaffirmed) Letter of Credit 3 CRISIL A4 (Reaffirmed) Net sales increased marginally by around 2% in fiscal 2017, due to a slowdown in the end-user industry (construction) following demonetisation. Revenue growth is likely to remain muted at around 5% per fiscal over the medium term as well. Net profitability is likely to remain low at 0.3- 0.4% over this period, in line with the past trend. Liquidity is constrained by a fully utilised bank limit during the 12 months ended March 31, 2017. However, net cash accrual is expected to remain adequate to meet debt repayment obligation over the medium term. Also, support from the promoter in the form of unsecured loans (estimated at INR2.61 crore on March 31, 2017) supports liquidity. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations in the highly fragmented timber industry: Net sales are estimated at INR7.87 crore for fiscal 2017. Despite an expected increase in scale of operations, the company will remain a marginal player in the timber trading and processing business due to the fragmented nature of the industry. * Large working capital requirement: Gross current assets were sizeable, estimated at 508 days as on March 31, 2017, driven by high receivables and inventory of 303 days and 154 days, respectively. Operations are likely to remain working capital intensive over the medium term as well. * Weak financial risk profile: The total outside liabilities to tangible networth ratio was high, estimated at 5.48 times as on March 31, 2017, and debt protection metrics weak, with interest coverage and net cash accrual to total debt ratios at 1.40 times and 0.03 time, respectively, in fiscal 2017. The financial risk profile is expected to remain weak over the medium term on account of sizeable working capital debt and continued low accretion to reserves. Strengths * Extensive industry experience of the promoter and his funding support: Presence of more than four decades in the timber industry has enabled the promoter to establish a healthy relationship with key customers and suppliers, and develop industry insight. Benefits from this are expected to continue. The promoter has also supported the company through unsecured loans. Outlook: Stable CRISIL believes SPPL will continue to benefit from the extensive industry experience of the promoter and his funding support. The outlook may be revised to 'Positive' if there is a significant and sustained increase in cash accrual, coupled with improvement in the financial risk profile. The outlook may be revised to 'Negative' in case of a considerable decline in revenue or profitability, a stretch in the working capital cycle, or large, debt-funded capital expenditure, resulting in deterioration in the financial risk profile. Incorporated in 2002, SPPL is promoted by Mr. Ashok Jain (managing director). The company manufactures veneer and trades in timber. Its manufacturing facility is in Jaipur. Profit after tax (PAT) and net sales are estimated at INR0.03 crore and INR7.87 crore, respectively, for fiscal 2017; PAT was INR0.02 crore on net sales of INR7.74 crore in fiscal 2016. THIRUMATHI MUTHAMMAL: CRISIL Cuts Rating on INR4.88MM Loan to B --------------------------------------------------------------- CRISIL has been consistently following up with Thirumathi Muthammal Textiles Private Limited (TMTPL) for obtaining information through letters and emails dated January 19, 2017 and February 9, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee .08 CRISIL A4 (Issuer Not Cooperating; Downgraded from 'CRISIL A4+') Cash Credit 4.00 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL BB-/Stable') Cash Term Loan 4.88 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL BB-/Stable') Proposed Bank 0.55 CRISIL A4 (Issuer Not Guarantee Cooperating; Downgraded from 'CRISIL A4+') Proposed Long Term 0.49 CRISIL B/Stable (Issuer Not Bank Loan Facility Cooperating; Downgraded from 'CRISIL BB-/Stable') 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Thirumathi Muthammal Textiles Private Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Thirumathi Muthammal Textiles Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL B' category or lower. Based on the last available information, CRISIL has downgraded the rating at 'CRISIL B/Stable/CRISIL A4'. TMTPL, incorporated in 1980 by Mr. P Narayana Samy and his family members, is based in Trichy (Tamil Nadu). It manufactures polyester-cotton blended yarn. TITAN ANTONY: CRISIL Assigns B+ Rating to INR5.0MM Term Loan ------------------------------------------------------------ CRISIL has revoked the suspension of its rating on the bank facilities of Titan - Antony Aviation India Private Limited (TAAIPL), and assigned 'CRISIL B+/Stable' rating to the facilities. CRISIL had, on September 6, 2016, suspended the ratings as TAAIPL had not provided the necessary information for a rating review. The company has now shared the requisite information, enabling CRISIL to assign a rating. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4.5 CRISIL B+/Stable (Assigned; Suspension Revoked) Rupee Term Loan 5.0 CRISIL B+/Stable (Assigned; Suspension Revoked) The rating reflects TAAIPL's small scale of and working capital intensive operations; stretched liquidity marked by expected low cash accrual tightly matched with debt repayments. These weaknesses are partially offset by the extensive experience of its promoters and technical expertise in the aircraft refueling system and fabrication of oil tanks/ containers and moderate financial risk. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations: Scale of operations with operating income of INR17.9 crore in fiscal 2017 is likely to remain modest over the medium term. * Working capital intensive operations: Gross current assets (GCAs) were high at 291 days as on March 31, 2017, on account of high inventory and receivables of 192 and 111 days, respectively. Strengths * Promoters' extensive experience and technical expertise in specialised commercial vehicles (CV) industry: One of the promoters, Titan Aviation, is a global player in aircraft refuelling system for six decades; the other promoter Antony Motors is in the specialised CV industry for the past two decades. TAAIPL thus benefits from the established reputation, technical expertise and clientele of Titan Aviation and Antony Motors, which will help the company forge significant business relationships over and above the financial support it receives. * Moderate financial risk profile: Networth and gearing, estimated at a moderate INR14.3 crore and 0.67 time, as on March 31, 2017, respectively, should remain moderate over the medium term supported by the absence of any debt-funded capital expenditure. Outlook: Stable CRISIL believes TAAIPL will benefit from its promoters' extensive industry experience and technical expertise. The outlook may be revised to 'Positive' if high revenue growth and stable profitability strengthens cash accrual. The outlook may be revised to 'Negative' if low sales or profitability resulting in low cash accrual or stretch in working capital cycle weakens financial risk profile, particularly liquidity. Incorporated in 2005, TAAIPL manufactures all type of aircraft refueling equipment and motor body fabrication. The company is a joint venture promoted by Antony Motors Pvt Ltd (AMPL) from India and Titan Aviation from France. Mr. K Jose Antony and Mr. K Thomas Ouseph are the directors and manage operations. The manufacturing facility is at Patalganga Industries area of Panvel, Raigad. Profit after tax was INR 0.19 crore on net sales of INR 17.67 crore for fiscal 2017 against INR 0.34 crore and INR 15.17 crore for fiscal 2016. TRANSNATIONAL: CRISIL Cuts Rating on INR2.5MM Cash Loan to 'B' -------------------------------------------------------------- CRISIL has been consistently following up with Transnational for obtaining information through letters and emails dated January 19, 2017 and February 9, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 2.5 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') Letter of Credit 6.2 CRISIL A4 (Issuer Not Cooperating; Rating Reaffirmed) Proposed Buyer 1.0 CRISIL A4 (Issuer Not Credit Limit Cooperating; Rating Reaffirmed) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Transnational. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Transnational is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL B' category or lower. Based on the last available information, CRISIL has downgraded the long term rating to 'CRISILB/Stable and reaffirmed short term rating at CRISILA4'. Transnational is a partnership firm established by Mr. Pawan Kumar Agarwal in 2009. The firm trades in chemicals such as polyvinyl chloride resin, polyethylene, and ethylene vinyl acetate. It also trades in metals such as copper, scrap, iron, and mild steel plates. TRISTAR GLOBAL: CRISIL Reaffirms D Rating on INR15.5MM Loan ----------------------------------------------------------- CRISIL has been consistently following up with Tristar Global Infrastructure Private Limited (TGIPL) for obtaining information through letters and emails dated January 19, 2017 and February 9, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 15.5 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Cash Credit 5.0 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Letter of Credit 2.0 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Proposed Long Term 6.0 CRISIL D (Issuer Not Bank Loan Facility Cooperating; Rating Reaffirmed) Working Capital 14.5 CRISIL D (Issuer Not Term Loan Cooperating; Rating Reaffirmed) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Tristar Global Infrastructure Private Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Tristar Global Infrastructure Private Limited is consistent with 'Scenario1' outlined in the 'Framework for Assessing Consistency of Information with Crisil B Rating category or Lower'.' Based on the last available information, CRISIL has reaffirmed the rating at CRISIL D/ CRISIL D. TGIPL, incorporated in 1999, is owned and managed by Mr. Vijay Vasudeva and his family members. It is in the construction business, and executes specialised jobs such as waterproofing, installation of expansion joints, and roofing and related activities. Its corporate office is in Delhi. VGN DEVELOPERS: CRISIL Downgrades Rating on INR400MM Loan to D -------------------------------------------------------------- CRISIL has downgraded its rating on the non-convertible debentures (NCDs) of VGN Developers Private Limited (VGN) to 'CRISIL D' from 'CRISIL BB-(SO)/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Non Convertible 400 CRISIL D (Downgraded from Debentures 'CRISIL BB-(SO)/Stable') The downgrade reflects delays in debt servicing due to weak liquidity, following lower-than-expected sales in residential projects. Slowdown in sales was mainly on account of reduced demand faced by Chennai's residential real estate market, given weak consumer sentiment. The company has been monetising their land bank in order to manage cash flow mismatches; however, the funds are not coming in a timely manner to meet debt obligation. Analytical Approach The rating factors in the cash flows from VGN's Fairmont and Coasta projects, as the lenders only have charge on these cash flows. The projects are located in Guindy and East Coast Road (ECR), respectively, in Chennai. VGN maintains an escrow account over these projects' cash flows which are used as per the pre- agreed waterfall mechanism. Key Rating Drivers & Detailed Description Weakness * Delays in debt servicing: VGN witnessed delays in servicing its debt obligation, following lower-than-expected sales in the residential projects. While sales velocity was lower, the company maintained pace of construction to maintain collections, resulting in cash flow mismatches. Slowdown in sales was mainly on account of reduced demand faced by Chennai's residential real estate market, given weak consumer sentiment. The promoters have monetised the group's land bank and infused close to INR200 crore in the projects in fiscal 2017; asset monetisation will likely continue over the medium term. However, the funds are not coming in a timely manner to meet debt obligation. * Exposure to project implementation risks: VGN is exposed to project implementation risk, given the large size of the projects being currently undertaken by the company. While the total real estate projects completed by VGN is relatively low at 1.8 million square feet (sq. ft), the company is undertaking development of 5 million sq. ft. Coasta has progressed on the construction front with the building structure ready and finishing work going on. However, Fairmont, the largest project taken up by VGN till date, is at various stages between plinth and third floor for seven towers that have been launched. Hence, the company is exposed to project execution risks. * Susceptibility to cyclicality inherent in the real estate sector: Exposure to risks and cyclicality inherent in the real estate sector may result in volatility in both saleability and realisations and, hence, cash flow. The residential real estate sector has remained under pressure due to weak demand and bearish consumer sentiment over the past few years, resulting in refinancing needs. Impact on sales velocity will remain a key rating sensitivity factor. Strengths * Extensive experience of promoters and healthy market position in the Chennai real estate market: Though incorporated in 2009, VGN enjoys a strong brand franchise in the Chennai real estate market on the back of the VGN group of companies' track record of operations since 1942. The group has collectively completed a sizeable 16 million sq. ft of projects. VGN's track record of implementation of projects on schedule, coupled with complete in- house operating capabilities, enhances the company's brand reputation. Incorporated in 2009, VGN develops residential apartments and plots in Chennai. It is promoted by Mr. D Pratish, who holds a majority stake in it; the remaining stake is held by his wife Ms. Divya Veluri and mother Ms. D. Padma. VGN has developed 1.8 million sq. ft of projects and has 5 million sq. ft of projects under development. VGN's major projects are VGN Fairmont (1.8 million sq. ft) in Guindy, VGN Presidency (0.4 million sq. ft) in Nungambakkam, and VGN Coasta (0.3 million sq. ft) in ECR. Fairmont, at Guindy in Chennai, is a large residential project, with 1,300 saleable units expected to be launched in a phased manner. Coasta is a luxury residential project, situated at ECR in Chennai. The property has one tower comprising 16 floors; the project comprises units with three or four bedrooms, with a hall and kitchen. These projects are expected to be constructed at a total cost of around INR1600 crore. VOORA SHREERAM: CRISIL Lowers Rating on INR8MM Cash Loan to 'B' --------------------------------------------------------------- CRISIL has been consistently following up with Voora Shreeram Constructions Private Limited (VSCPL) for obtaining information through letters and emails dated January 19, 2017 and February 9, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 8 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL BB/Stable') 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Voora Shreeram Constructions Private Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Voora Shreeram Constructions Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with Crisil B Rating category.or Lower' Based on the last available information, CRISIL has downgraded the rating to 'CRISIL B/Stable'. VSCPL, incorporated in 2000, undertakes civil construction work for commercial, industrial, and residential projects. It is promoted and managed by Mr. A Shankar and Mr. Pavan Voora. WAGAD INFRAPROJECTS: CRISIL Cuts Rating on INR10MM Loan to 'B' -------------------------------------------------------------- CRISIL has been consistently following up with Wagad Infraprojects Private Limited (WIPL) for obtaining information through letters and emails dated January 19, 2017, and February 9, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10 CRISIL A4 (Issuer Not Cooperating; Downgraded from 'CRISIL BB/Stable') Cash Credit 10 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL BB/Stable') The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Wagad Infraprojects Private Limited. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for Wagad Infraprojects Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with Crisil B Rating category.or Lower' Therefore, on account of inadequate information and lack of management co-operation, CRISIL is Downgrading the rating at 'CRISIL B/Stable/ CRISIL A4'. WIPL, incorporated in 2010 by the Rajasthan-based Jain family, undertakes civil construction works and manufactures readymix concrete. The company's registered office is in Udaipur (Rajasthan). The operations are managed by Mr. Ashok Jain and his brother Mr. Vinod Jain. YAZDANI STEEL: Ind-Ra Assigns 'D' Long-Term Issuer Rating --------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Yazdani Steel & Power Limited (YSPL) a Long-Term Issuer Rating of 'IND D'. Instrument-wise rating actions are: -- INR434.9 mil. Term loan (Long-term) assigned with 'IND D' rating; -- INR180 mil. Fund-based limit (Long-term) assigned with 'IND D' rating; -- INR75.1 mil. Non-fund-based limit (Short-term) assigned with 'IND D' rating KEY RATING DRIVERS The ratings reflect continuous delays in term debt servicing by YSPL during the 12 months ended April 2017. RATING SENSITIVITIES Positive: Timely debt servicing for three consecutive months could result in a positive rating action. COMPANY PROFILE Incorporated in 2003, YSPL has set up an integrated steel project with captive power generation facilities at Kalinga Nagar Growth Centre near Jajpur Road in Odisha with a capacity to manufacture 60,000 MTPA of sponge iron, 72,000 MTPA of steel ingots/billets, 50,000 TPA of steel reinforcing bars and a captive power plant of 10MW capacity. ========= J A P A N ========= JAPAN DISPLAY: Mulls Deeper Overhaul, Capital Tie-up with a Peer ---------------------------------------------------------------- Nikkei Asian Review reports that Japan Display, the world's top producer of small and midsize LCD panels, is ditching a modest reform plan that failed to right the ship and embarking on a wholesale reorganization, revamping domestic production sites and even exploring a capital partnership with a peer. Nikkei says the liquid crystal display manufacturer was slow to adopt organic light-emitting diode technology, and its financial woes were made all the more treacherous by Apple's decision to switch to OLED panels for some of the upcoming iPhone models. According to Nikkei, the company will unveil a new medium-term plan by August under new management, to be appointed on June 21 at its annual shareholders meeting. Leading shareholder Innovation Network Corp. of Japan and the economy ministry in Japan, which oversees that public-private fund, pushed to bring in a new slate of managers. Likely steps include consolidating and reorganizing Japanese factories and redistributing staff, all designed to free Japan Display from the massive red ink it has been trapped under for years, the report notes. Nikkei relates that the Tokyo-based company is already seeking outside financial help for the overhaul, reaching out to the INCJ and other investment funds. Japan Display has also begun considering capital and business tie-ups with companies in Japan and abroad, the report states. According to the report, the display maker has established itself as the world's top producer of small and midsize LCD panels, used in devices such as smartphones, since its formation in 2012 in a merger of Toshiba, Sony and Hitachi's LCD panel operations. But heavy fixed costs inherited from those companies have dogged Japan Display ever since, helping hand the business its third straight annual net loss in the year ended March 31. Japan Display announced a strategic growth plan at the end of 2016 predicated on strengthening its OLED business, and even drew JPY75 billion ($685 million) in aid from the INCJ, the report discloses. This and other measures were seen expanding sales to JPY1.1 trillion by fiscal 2018, up from JPY884.4 billion in fiscal 2016, and raising operating profit from JPY18.5 billion to JPY88 billion. But orders for conventional LCD panels, still Japan Display's mainstay, remained sluggish in early 2017, deepening the company's cash crunch, which is only growing more severe in the slow April-June quarter, Nikkei notes. Japan Display Inc. (TYO:6740) is engaged in the development, design, manufacture and sale of small and medium-size displays and related products. The Mobile Field provides displays for mobile equipment, such as smart phone and tab terminals. The In- Vehicle Consumer and Industry (C&I) and Others Field provides in- vehicle equipment, including automobile dashboard and car navigation systems, consumer equipment, such as digital cameras, video cameras and mobile game machine, medical equipment such as x-ray photo interpretation monitors, as well as industrial machinery. TOSHIBA CORP: Aims to Name Winning Bidder for Chip Unit Next Week ----------------------------------------------------------------- Makiko Yamazaki, Liana B. Baker and Kentaro Hamada at Reuters Toshiba Corp aims to name a winner for its prized semiconductor business next week, people familiar with the matter said on June 7, as a row with one of the bidders over the sale appeared to escalate. Sources told Reuters the choice has narrowed to one bid from U.S. chipmaker Broadcom Ltd and U.S. tech fund Silver Lake and another from Toshiba chip partner Western Digital Corp and Japanese government-related investors. Reuters says Toshiba is rushing to find a buyer for the world's second-largest producer of NAND chips, which it values at $18 billion or more, to cover billions of dollars in cost overruns at its now-bankrupt U.S. nuclear business Westinghouse Electric Corp. The laptops-to-nuclear conglomerate will hold a board meeting on June 15 to decide on the preferred bidder, two sources said, declining to be identified as they were not authorized to speak to the media, according to Reuters. Reuters says Western Digital, which jointly operates Toshiba's main chip plant in Yokkaichi, western Japan, has complicated the sale effort with a legal challenge, accusing Toshiba of a serious breach of contract over the joint venture. It argues that the unit cannot be sold without its consent and has demanded exclusive negotiating rights. But in a letter seen by Reuters, Toshiba struck back, again asking Western Digital to stop challenging the plans. "Toshiba encourages Western Digital to redirect the considerable efforts that it has put into disrupting Toshiba's sale process into more productive channels." According to Reuters, Western Digital confirmed in a statement that it had received Toshiba's letter but added that any move by Toshiba to sell the unit without its consent "clearly violate the transfer restrictions in the joint venture agreements." Reuters relates that Western Digital said it was "best positioned to assist Toshiba in addressing its challenges and advancing its legacy of technological innovation in Japan." The Broadcom-Silver Lake bid is seen as attractive because of its higher price of JPY2.2 trillion ($20 billion), sources, as cited by Reuters have said. Western Digital by comparison has an offer of less than JPY2 trillion and could also face antitrust hurdles because the firm is the third-largest maker of NAND flash-memory chips. "Naturally, for the Toshiba corporate side, Broadcom is the best choice," one source said, Reuters relays. Other bidders include U.S. private-equity firm Bain Capital with South Korean chipmaker SK Hynix Inc, and Taiwan's Hon Hai Precision Industry Co Ltd with its Japanese unit Sharp Corp, Reuters notes. About Toshiba Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is a Japan-based manufacturer involved in five business segments. The Digital Products segment offers cellular phones, hard disc devices, optical disc devices, liquid crystal televisions, camera systems, digital versatile disc (DVD) players and recorders, personal computers (PCs) and business phones, among others. The Electronic Device segment provides general logic integrated circuits (ICs), optical semiconductors, power devices, large- scale integrated (LSI) circuits for image information systems and liquid crystal displays (LCDs), among others. The Social Infrastructure segment offers various generators, power distribution systems, water and sewer systems, transportation systems and station automation systems, among others. The Home Appliance segment offers refrigerators, drying machines, washing machines, cooking utensils, cleaners and lighting equipment. The Others segment leases and sells real estate. As reported in the Troubled Company Reporter-Asia Pacific on on March 21, 2017, that S&P Global Ratings has lowered its long- term corporate credit rating on Toshiba Corp. two notches to 'CCC-' from 'CCC+' and lowered the senior unsecured debt rating three notches to 'CCC-' from 'B-'. Both ratings remain on CreditWatch with negative implications. Also, S&P is keeping its 'C' short-term corporate credit and commercial paper program ratings on the company on CreditWatch negative. The long- and short-term ratings on Toshiba have remained on CreditWatch with negative implications since December 2016, when S&P also lowered the long-term ratings because of the likelihood that the company might recognize massive losses in its U.S. nuclear power business; S&P kept them on CreditWatch negative when it lowered the long- and short-term ratings in January 2017. ==================== N E W Z E A L A N D ==================== PROPERTY VENTURES: Liquidator Must Put Up Security of Costs ----------------------------------------------------------- BusinessDesk reports that the liquidator of Property Ventures (PVL) must put up $2.6 million as security of costs in its NZ$302 million lawsuit against PricewaterhouseCoopers and former directors of the failed property development company. BusinessDesk relates that Judge Graham Lang issued his ruling in a judgment from the High Court in Christchurch on June 6. BusinessDesk says the costs are less than the $3.6 million sought by the seven defendants, who include former chair Austin Forbes QC, discharged bankrupt David Henderson, and PWC. According to BusinessDesk, the substantive lawsuit brought by liquidators Robert Walker and John Scutter is set down for a 12- week trial starting in February 2018 and ahead of that, the defendants applied for security of costs, arguing that the case for such security was strengthened by the existence of litigation funder LPF Group, which is bankrolling the suit in return for 42.5 per cent of any settlement. BusinessDesk says the liquidators allege that if not for PWC giving clean audits and advising PVL how to skirt insolvency, the company would have been wound up sooner by its creditors with more value able to be recovered. Justice Lang takes the presence of a litigation funder into account in ordering security of costs, noting observations in a New South Wales Court of Appeal case that a court should be particularly concerned "that persons whose involvement in litigation is purely for commercial profit should not avoid responsibility for costs if the litigation fails," BusinessDesk relays. According to BusinessDesk, Justice Lang said this was the approach adopted by Judge Robert Dobson in Houghton v Saunders, in which former Feltex shareholders sought to sue directors over the failed carpet maker's prospectus. "I take a similar approach. The existence of a litigation funder in the present case is an important factor that influences the exercise of the discretion . . .," the report quotes Justice Lang as saying in his judgment. "Commercial ventures generally require an investor to take risks and to incur expenditure as the price to be paid for the chance of success." BusinessDesk relates that the liquidators' lawyer, Justin Smith QC, had argued against security of costs on the basis of the merits of the case and the amount of documentation already available to the defendants about the lawsuit. In reference to PWC, he said its behaviour as auditor and as a financial adviser to PVL "smacks of lack of professional scepticism and tends to suggest the auditor is assisting to obviate the problems." Mr. Smith argued that PWC "assisted the group to mask its underlying problems 'through the cross-selling of other services'," according to Justice Lang's judgment cited by BusinessDesk. But Justice Lang said the material before the court didn't allow him to make a meaningful assessment on the merits of the case, such as whether PWC ought to have responded differently "if and when it became aware that the PVL group was experiencing cashflow problems," BusinessDesk relays. To do that he would need to know PVL's overall position and the options it had to address its financial problems. Still, he said his "overall impression" was that PWC had "two areas of potential vulnerability", which were its alleged failure to ensure valuations ascribed to PVL's key assets "were robust and could be relied upon," especially in the case of undeveloped land, BusinessDesk says. "If PWC was placed on notice that PVL's valuations were questionable, it may be at risk of liability in some form for not drawing attention to this issue in its audit opinion," Justice Lang, as cited by BusinessDesk, said. Property Ventures Ltd was the largest asset of Hanover Finance, amounting to more than 20% of Hanover's assets, at the time the finance company's investors voted on a moratorium that led eventually to the sale of their debt of Allied Farmers. In 2008, PWC was the auditor of both PVL and another company in the group, Five Mile Holdings, while it was also advising the trustee of Hanover over the moratorium, the liquidator has alleged. BusinessDesk notes that after the judgment was released, Mr. Walker said in an emailed statement that he was "disappointed at the decision to award any security of costs to the defendants." "PWC is a well-resourced defendant, with professional indemnity insurance, and the security of costs application was yet another example of them testing our financial resolve in bringing this case on behalf of the out of pocket creditors and investors of PVL," BusinessDesk quotes Mr. Walker as saying. "The allegations made during the security of costs hearing in the High Court raise serious questions about the behaviour of PWC and the directors - neither PWC nor the directors of PVL have addressed the substantive allegations made in Court in any meaningful way." In a separate judgment given on May 24, liquidator Robert Walker was found to be in contempt of court for disclosing personal information on a laptop seized from Henderson. However, in that case, Justice Lang said the breach was inadvertent and he made no order for costs, BusinessDesk adds. Property Ventures (PVL), the central company of the David Henderson property development ventures, was put into receivership in March 2010, and then into liquidation in July the same year. ===================== P H I L I P P I N E S ===================== * PDIC Raises PHP13.7M from Public Bidding of Closed Banks Assets ----------------------------------------------------------------- The Philippine Deposit Insurance Corporation (PDIC) generated a total of PHP13.7 million from the sale of nine properties during the public bidding of corporate and closed banks' assets held on May 16, 2017 at the PDIC Office in Makati City. These properties are located in Valenzuela City, Bulacan, Pangasinan, Nueva Ecija, Ilocos Sur, Cavite, Quezon and Legazpi City. Total sales accounted for eight closed banks' properties and one corporate asset sold, ranging from PHP10,500 to PHP2.8 million, for an aggregate value of PHP12.5 million and PHP1.16 million, respectively. These consisted of residential lots, commercial lots, and a generator set. The bidding yielded a premium of PHP3.4 million from the combined minimum disposal price of PHP10.3 million. Proceeds from the sale of closed banks' properties are added to the pool of liquid assets of these banks for distribution to creditors and uninsured depositors in accordance with the rules on concurrence and preference of credits. Meanwhile, gains from the sale of corporate assets are added to the Deposit Insurance Fund, PDIC's fund source mainly for payment of valid deposit insurance claims. The expeditious liquidation assets is one of the strategic directions of PDIC, as statutory liquidator of closed banks. To help ensure that recoveries from closed banks' assets are maximized, PDIC sells assets via competitive biddings and auctions. After which, unsold assets may be acquired by interested parties via negotiated sale. Interested buyers are encouraged to visit the PDIC website at www.pdic.gov.ph and use PDIC's property finder for information on available inventory of assets for sale. Prospective buyers may also call the Asset Management and Disposal Group at (02) 841- 4387 for inquiries on assets for disposal. ==================== S O U T H K O R E A ==================== UIJEONGBU LIGHT: Seoul Court Declares Firm Officially Bankrupt -------------------------------------------------------------- Korea Joongang Daily reports that the Seoul Bankruptcy Court pronounced the Uijeongbu Light Rail Transit Company officially bankrupt on May 26, after the company ran up about KRW367.6 billion ($327.9 million) in debt since its establishment nearly five years ago. "The Uijeongbu Light Rail Transit Company's debt has surpassed its assets [220 billion won] and the rail line no longer provides a service of value," said the Seoul Bankruptcy Court in its ruling on May 26, the report relays. "It also failed to find a solution to address further losses down the road." The company filed bankruptcy in January, Joongang Daily relates. The Uijeongbu Light Rail Transit Company was established in July 2012 with government and private investments, and is the first such public-private enterprise to go bankrupt in South Korea, according to the report. The light rail trains, smaller in size and shorter than subway trains, run 11.1 kilometers (6.9 miles) from Balgok Station to Tapseok Station on the Uijeongbu Line, or U Line, in Uijeongbu, Gyeonggi. The line was expected to draw nearly 80,000 commuters a day in its first year, according to figures obtained by the company from a consulting agency, but it drew only around 12,000 per day, says Joongang Daily. "The Uijeongbu Light Rail Transit Company was the result of unrealistic planning and hopes of creating a publicly and privately invested enterprise," Joongang Daily quotes Lee Ui- hwan, the policy director of a civic group that is demanding an investigation into what went wrong with the enterprise, as saying. "The company's management structure was so inefficient in that it completely relied on the profit from the passengers to pay back the investments." The establishment of the Uijeongbu Light Rail Transit Company and its operations were led by the Uijeongbu city government, which gathered investments from private entities, the report notes. Joongang Daily says the project's seven private developers, including GS E&C and Korea Development Corporation, paid for 52 percent, or KRW385.2 billion, of the total KRW676.7 billion invested. The report relates that the central government paid KRW84.6 billion, the Gyeonggi provincial government KRW4.6 billion and the Uijeongbu city government KRW119.9 billion. The investors split and paid the remaining KRW82.4 billion together. According to the report, the Uijeongbu city government and the private developer had agreed that the city government would cover some of the losses if the number of passengers exceeded 50 percent of the expected level. Since this was not reached, the debt increased over time. In May and November 2014, the Uijeongbu city government tried to boost the number of passengers by holding events, providing free transportation for older adults and giving discounts to those transferring from other means of public transportation, Joongang Daily says. But after nearly five years of operation, the U Line drew only 30 percent of its initially expected traffic. "The government made a mistake in expecting more than the usual number of passengers for its rail line," the report quotes Kim Dong-seon, a professor of traffic science at Daejin University in Pocheon, Gyeonggi, as saying. "Usually, only 10 percent of the city's population uses a light rail transit. So in Uijeongbu's case, it should have expected that about 44,000 people would use the line daily, instead of twice that amount." Although the court has pronounced the light rail transit company bankrupt, it will continue operating until the city government announces another means of running the railway, Joongang Daily notes. "The city government will either run it itself or find another developer who can take charge," said Uijeongbu Mayor Ahn Byung- young in a press conference on on May 26, Joongang Daily relays. If the city government decides to run the railway operations itself, then it will have to pay for the annual operations cost of KRW5 billion as well as the KRW220 billion fee to the private developer for terminating the contract, Joongang Daily adds. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2017. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Joseph Cardillo at 856-381-8268. *** End of Transmission ***