/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/180927.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 Thursday, September 27, 2018, Vol. 21, No. 192 Headlines A U S T R A L I A ALL CITY: First Creditors' Meeting Set for Oct. 5 DARBY'S FRESH: Faces Liquidation; More Than 100 Jobs Axed INDEPENDENT BULK: First Creditors' Meeting Set for Oct. 8 MESOBLAST LIMITED: Tasly Gets All Approvals for Investment Deal MORE THAN PRINT: Second Creditors' Meeting Set for Oct. 4 VILLIERS FAMILY: Second Creditors' Meeting Set for Oct. 8 VIRGIN AUSTRALIA 2013-1: Fitch Affirms BB+ Rating on Cl. C Notes C H I N A CBAK ENERGY: Stockholders Elected Five Directors JILIN LIYUAN: Suspends Bond Trade After Interest Default NEOGLORY HOLDINGS: Defaults on Exchange-Traded Bond Payments YUZHOU PROPERTIES: Fitch Affirms BB- LT IDR, Outlook Stable I N D I A AADYA PLAST: CARE Assigns B+ Rating to INR5.43cr LT Loan ADISH MINERALS: CRISIL Assigns B Rating to INR8cr Proposed Loan AGARWAL'S CARRIERS: CARE Reaffirms B+ Rating on INR7.03cr Loan ANAND EDUCATIONAL: CARE Lowers Rating on INR8cr LT Loan to D APEX SURATGARH: CARE Assigns B+ Rating to INR8.94cr LT Loan C.P. ISPAT: CARE Lowers Rating on INR14.50cr Loan to D COUPLE INTERNATIONAL: CARE Migrates D Rating to Not Cooperating INFRASTRUCTURE LEASING: SIDBI Files Insolvency Case vs. Firm INNOVA FABTEX: CRISIL Lowers Ratings on INR10cr Loans to D JIWANRAM SHEODUTTRAI: CRISIL Hikes Ratings on Two Tranches to C JUPITER SOLAR: CARE Lowers Rating on INR117.09cr LT Loan to D KARTHIK ALLOYS: CARE Migrates D Ratings to Not Cooperating KISHORI INDUSTRIES: CRISIL Hikes Rating on INR15cr Loan to B+ MANCHAL AGRO: CARE Assigns B+ Rating to INR11.70cr LT Loan MANIKYAM POULTRY: CARE Assigns B+ Rating to INR10cr LT Loan NAKODA TECHNOFIBE: CARE Assigns B Rating to INR8.99cr LT Loan NILACHAL CARBO: CARE Lowers Rating on INR9cr ST Loan to D OM ENERGY: CRISIL Reaffirms B+ Rating on INR38.35cr Term Loan R M ENTERPRISE: CARE Lowers Rating on INR7.50cr LT Loan to D RAJ CONSTRUCTION: CRISIL Maintains B+ Rating in Not Cooperating RUTUJA INDUSTRIES: CRISIL Hikes Rating on INR16cr Loan to B+ S. K. TEXTILES: CRISIL Lowers Ratings on INRcr Loans to D SARDAR POULTRY: CARE Assigns B+ Rating to INR5.48cr LT Loan SHAH GROUP: CARE Lowers Rating on INR135cr LT Loan to D SHITALPUR MOHINDER: CARE Reaffirms B Rating on INR8.16cr Loan SHIV COTTON: CARE Lowers Rating on INR5.40cr LT Loan to 'D' SHIV JYOTI: CRISIL Maintains D Rating in Not Cooperating SHIV JYOTI RICE: CARE Lowers Rating on INR6.48cr LT Loan to B- SHRI VAIJANATH: CARE Migrates 'D' Rating to Not Cooperating SP ACCURE: CRISIL Migrates Rating to B/Stable Not Cooperating SREE BHARATI: CARE Migrates D Rating to Not Cooperating Category SRI LAXMI: CRISIL Assigns 'B' Rating to INR10cr Term Loan TAMILNADU JAIBHARATH: CRISIL Reaffirms D Rating on INR26cr Loan TRANSPORT SOLUTIONS: CRISIL Maintains D Rating in Not Cooperating TRANS TECH: CRISIL Maintains D Rating in Not Cooperating UDAY AUTOLINK: CRISIL Maintains C Ratings in Not Cooperating VAKRANGEE PACKAGING: CARE Lowers Rating on INR8.25cr Loan to B VDV INFRAVENTURES: CRISIL Cuts Rating on INR10cr Term Loan to B+ VIDEO PLAZA: CRISIL Maintains B Ratings in Not Cooperating VISHAL CHAIN: CRISIL Maintains B Rating in Not Cooperating VRUNDAVAN CERAMIC: CRISIL Maintain D Rating in Not Cooperating WONDERVALUE REALTY: CARE Lowers Rating on INR300cr LT Loan to D J A P A N MITSUI OSK: Moody's Puts Ba1 CFR on Review for Downgrade M A L A Y S I A UTUSAN MELAYU: Offers Voluntary Separation Scheme to Workers N E W Z E A L A N D MANAWATU TV: Brendon Gilbert Buys Audio Services Shop - - - - - ================= A U S T R A L I A ================= ALL CITY: First Creditors' Meeting Set for Oct. 5 ------------------------------------------------- A first meeting of the creditors in the proceedings of All City Recyclers Pty Limited will be held at the offices of Amos Insolvency, at 25/185 Airds Road, in Leumeah, NSW, on Oct. 5, 2018, at 11:00 a.m. Peter Andrew Amos of Amos Insolvency was appointed as administrator of All City on Sept. 24, 2018. DARBY'S FRESH: Faces Liquidation; More Than 100 Jobs Axed --------------------------------------------------------- Matthew Elmas at SmartCompany reports that more than 100 employees have been left without jobs after food business Darby's Fresh Bake was forced to close its 27 stores in New South Wales on Sept. 24. SmartCompany relates that the business, which was originally established in 1969, has had a tumultuous year battling declining sales and has finally decided to close its doors. It sold a range of baked goods, including pies and cakes, and employed 105 people. According to the report, owner Victor De Vries had only recently gained back control of the business after it fell into administration in March but was subject to a Deed of Company Arrangement. Bradd Morelli of Jirsch Sutherland is the deed administrator for the company and will now oversee a process he says will likely end in the company's liquidation, relates SmartCompany. Mr. Morelli told SmartCompany some employees were in tears on Sept. 24 when they were informed of the news, but Mr. De Vries is working with them to secure new employment. "They're upset over the whole thing," the report quotes Mr. Morelli as saying. "It's very disappointing." "The main focus now is assisting the employees, it's a large number." The business owes around $1 million to creditors, the largest of which is the Australian Tax Office, SmartCompany discloses. According to Mr. Morelli, a meeting of creditors will take place in two weeks, although while there are assets to realise, the business operated through lease arrangements and has no outstanding property on its books. It is hoped employees will receive all outstanding entitlements owed to them. SmartCompany adds that Mr. Morelli explains while Darby's was compliant with the terms of its Deed of Company Arrangement, the owner reached a view that the business was not viable as a going concern. Poor foot traffic in regional shopping centres, where many Darby's stores are located, was a contributing factor to the company's woes, SmartCompany understands. INDEPENDENT BULK: First Creditors' Meeting Set for Oct. 8 --------------------------------------------------------- A first meeting of the creditors in the proceedings of Independent Bulk Network Pty Ltd, trading as Savco Logistics, will be held at the offices of Worrells Brisbane, Level 8, 102 Adelaide Street, in Brisbane, Queensland, on Oct. 8, 2018, at 10:30 a.m. Nikhil Khatri and Chris Cook of Worrells Solvency were appointed as administrators of Independent Bulk on Sept. 25, 2018. MESOBLAST LIMITED: Tasly Gets All Approvals for Investment Deal --------------------------------------------------------------- Tasly Pharmaceutical Group has successfully obtained all necessary approvals, including the Safe Administration of Foreign Exchange, required for closing the investment agreement and the development and collaboration agreement with Mesoblast Limited to commercialize cell therapies for cardiovascular diseases in China. About Mesoblast Headquartered in Melbourne, Australia, Mesoblast Limited (ASX:MSB; Nasdaq:MESO) -- http://www.mesoblast.com/-- is a global developer of innovative cell-based medicines. The Company has leveraged its proprietary technology platform to establish a broad portfolio of late-stage product candidates with three product candidates in Phase 3 trials - acute graft versus host disease, chronic heart failure and chronic low back pain due to degenerative disc disease. Through a proprietary process, Mesoblast selects rare mesenchymal lineage precursor and stem cells from the bone marrow of healthy adults and creates master cell banks, which can be industrially expanded to produce thousands of doses from each donor that meet stringent release criteria, have lot to lot consistency, and can be used off-the- shelf without the need for tissue matching. Mesoblast has facilities in Melbourne, New York, Singapore and Texas and is listed on the Australian Securities Exchange (MSB) and on the Nasdaq (MESO). Mesoblast reported a net loss attributable to the owners of Mesoblast of US$35.29 million for the year ended June 30, 2018, compared to a net loss attributable to the owners of Mesoblast of US$76.81 million for the year ended June 30, 2017. As of June 30, 2018, Mesoblast had US$692.4 million in total assets, US$146.4 million in total liabilities and US$546.0 million in total equity. PricewaterhouseCoopers, in Melbourne, Australia, the Company's auditor since 2008, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended June 30, 2018. The auditors noted that the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. MORE THAN PRINT: Second Creditors' Meeting Set for Oct. 4 --------------------------------------------------------- A second meeting of creditors in the proceedings of More Than Print Pty Limited has been set for Oct. 4, 2018, at 11:00 a.m. at Level 5, 34 Queen Street, in Melbourne. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Oct. 3, 2018, at 4:00 p.m. Trajan John Kukulovski of Chan & Naylor were appointed as administrators of More Than Print on Sept. 10, 2018. VILLIERS FAMILY: Second Creditors' Meeting Set for Oct. 8 --------------------------------------------------------- A second meeting of creditors in the proceedings of Villiers Family Pty. Ltd. has been set for Oct. 8, 2018, at 10:30 a.m. at the offices of PKF Melbourne, Level 13. 440 Collins Street, in Melbourne. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Oct. 5, 2018, at 4:00 p.m. Petr Vrsecky and Glenn J. Franklin of PKF Melbourne were appointed as administrators of Villiers Family on Aug. 31, 2018. VIRGIN AUSTRALIA 2013-1: Fitch Affirms BB+ Rating on Cl. C Notes ---------------------------------------------------------------- Fitch Ratings has affirmed the following ratings on Virgin Australia Holdings Limited's (VAH, not rated) enhanced equipment notes (EEN) series 2013-1 (VAH 2013-1): -- Class A notes (expected maturity October 2023) at 'A+'; -- Class B notes (expected maturity October 2020) at 'A-'; -- Class C notes (expected maturity October 2018) at 'BB+'. The ratings cover approximately $204.9 million of outstanding senior and subordinated notes. KEY RATING DRIVERS The ratings of the A-tranche and B-tranche notes are primarily driven by a top-down analysis which evaluates the level of overcollateralization and likely recovery in a stress scenario. Key ratings considerations include the quality of the aircraft collateral, significant overcollateralization, the Australian and New Zealand insolvency regimes coupled with the transaction's underlying structure, the liquidity facility, VAH's credit quality, and various additional structural elements. Positive credit factors include the absence of balloon payments for the A and B tranches, short remaining expected maturity for the C tranche, and rapid amortization of the notes resulting in expected LTV improvements for all tranches within the next several years, until some aircraft fall out of the collateral pool, as described. The ratings for the class A and the class B notes are primarily based on collateral coverage in a stress scenario. The analyses utilize a top-down approach assuming a rejection of the entire pool in a severe global aviation downturn. The scenarios incorporate a full draw on the liquidity facility, and an assumed repossession/remarketing cost of 5% of the total portfolio value. Fitch then applies significant haircuts to the collateral value. The earlier vintage 737-800s (2003 and 2004) in the pool receive a 25% haircut in Fitch's 'A' stress scenario representing the mid-range of Fitch's stress ranges reflecting the firm's view of these models as a good quality tier 1 aircraft. The later vintage 737-800s (2010 and 2011) receive a 20% haircut in the 'A' stress scenario, representing the low end of Fitch's stress ranges. The 777-300ER received a 30% haircut in the 'A' stress scenario. Both A-tranche and B-tranche remain sufficiently overcollateralized to pass Fitch's 'A' level stress tests when incorporating the latest available aircraft appraisal data. This suggests that both the class A and the class B noteholders would be expected to achieve full principal recovery prior to the expiration of the transaction's liquidity facility even in a harsh downturn scenario. The maximum loan to value (LTV) produced by Fitch's 'A' level stress scenario for the class A notes and the class B notes are 76.0% and 86.1%, respectively, which implies a material amount of cushion for both tranche holders. The maximum LTV in Fitch's stress scenario has increased incrementally from its last review, driven by deterioration of the aircraft appraised values compared to its previous expectations. Unlike many other EETC transactions that feature smooth and constant LTV declines, LTV values of VAH 2013-1 are expected to increase on several occasions as older vintage aircraft are paid off and removed from the collateral pool. The largest increase in LTV is expected to occur in October 2018 when seven earlier vintage 737-800s and the 777-300ER will be fully paid off. The eight aircraft will represent approximately 50% of the pool's value and their exclusion from the collateral will increase Fitch's forecasted 'A' level stressed LTV for both the class A notes and the class B notes to 76.0% and 86.1% as of Oct. 23, 2018, respectively, up from 57.2% and 64.6% as of July 23, 2018. The two-notch differentiation between the class A and the class B notes is driven by a higher level of overcollateralization and corresponding lower stressed LTV of the class A notes, and the subordinated position of the class B notes in relation to the class A notes. The rating for the C-tranche is driven by Fitch's view of VAH's corporate credit profile, a high affirmation factor, superior recovery prospects driven by current collateral coverage and the rights of the C class note holders to purchase all of the senior notes in certain cases. The affirmation factor for this pool is considered high because both aircraft types in the transaction are core to VAH's fleet plan. The relatively large percentage of the company's primary aircraft type contained in this transaction makes it unlikely that the company would reject the pool in the case of administrative proceedings, in Fitch's view. The ratings are also supported by a strong collateral package consisting of Tier 1 aircraft, an 18-month liquidity facility for class A and class B notes provided by Natixis S.A (Natixis, A/F1/Positive), cross-collateralization/cross-default features, and Fitch's assessment of the Australian insolvency regimes. The rating incorporates a secondary dependence on Fitch's assessment of the credit quality of VAH. VAH 2013-1 is the first EETC-type transaction relying on the Australian insolvency regime, which is different in key aspects compared to Section 1110 and the Cape Town Convention (CTC, which incorporates most elements of Section 1110 protection in countries that have ratified the treaty) legal frameworks seen in most EETCs. Even though Australia ratified the CTC Alternative A on Sept. 1, 2015, the CTC rules do not apply retroactively, and Fitch expects VAH 2013-1 notes will be governed under the Australian insolvency law until maturity. At the inception of the transaction, the pool contained six aircraft leased in New Zealand, a CTC signatory, and were covered by the CTC. In 2015, these aircraft were transferred to Virgin Australia International Airlines Pty Ltd, a subsidiary of VAH, and are currently governed by the Australian insolvency regime. Fitch believes Australia's legal framework, combined with the structure of this transaction, create a situation similar to Section 1110/CTC as it allows creditors access to collateral in the event of insolvency. DERIVATION SUMMARY Unlike the majority of the EETC transactions rated by Fitch, VAH 2013-1 does not have large balloon payments for senior and subordinated tranches and amortizes rapidly. As a result, debt amortization significantly outpaces the depreciation of the asset values. This differentiates VAH 2013-1 from the majority of Fitch rated EETC transactions. The 'A+' ratings on the class A notes is higher than the ratings of the class A notes for the majority of EETC transactions rated by Fitch driven by higher overcollateralization. The class A notes' LTV is comparable with those of 'AA' rated class AA certificates issued by both American Airlines (2017-2) and United Airlines (2016-1 and 2016-2), but the class A notes of VAH 2013-1 are not eligible for 'AA' category ratings per Fitch's criteria. Fitch expects transactions rated in the 'AA' rating category not only to withstand the 'AA' level stress but also to exhibit certain qualitative characteristics including the expectation that a collateral pool backing a transaction will consist of 10 aircraft in all-narrowbody pools. Unlike the majority of EETC transactions, the VA 2013-1 collateral pool will decrease in size as the paid off aircraft are removed from the collateral pool. As a result, the collateral pool will fall below the 10 aircraft threshold by the end of 2019, rendering the transaction ineligible for the 'AA' category rating. Similarly, the 'A-' ratings for the class B notes are higher than the ratings of the class B notes for the majority of EETC transactions rated by Fitch. The LTV of the class B notes of VAH 2017-1 transaction is comparable with those of 'A' rated class A certificates issued by both American Airlines (2017-2) and United Airlines (2016-1 and 2016-2). Fitch has derived the ratings of the class B notes utilizing a top-down approach that is a variation to Fitch's criteria, as described. The 'BB+' rating on the class C certificates is the highest rating assigned to a class C tranche by Fitch and is one notch higher than the class C certificates of two EETC transactions issued by Air Canada (AC 2015-1). The notching differential between the VAH 2013-1 class C notes and AC EETC class C certificates is driven by differences in recovery prospects (significantly higher for VAH). The ratings of the class C notes/certificates for both VAH and AC are also based on high affirmation factors. Variation to Criteria: Fitch may utilize either a bottom-up or top-down approach when initially rating senior subordinated tranches. Per Fitch's EETC criteria, for consecutive rating review purposes, Fitch will generally continue to rate a given sub-tranche by whichever method the initial ratings were assigned (i.e. a sub-tranche initially rated via the top-down approach will be rated via the same approach). In 2016, Fitch changed the approach for rating the B tranche of the VAH 2013-1 transaction to top-down from the bottom-up approach utilized when Fitch initially rated the tranche B notes. Fitch utilized a bottom-up approach when the transaction was reviewed in 2014 and 2015. The rapid amortization of the transaction has resulted in significant and uncharacteristic overcollateralization of the class B notes, warranting a change in the rating approach for the senior subordinated tranches to a top-down approach. Fitch does not anticipate a change in approach for the majority of the other Fitch-rated senior subordinated tranches during subsequent reviews. The change in the approach results in a two notch upgrade of the class B notes to 'A-' from 'BBB', while the bottom-up approach would have resulted in an affirmation of the notes at 'BBB'. KEY ASSUMPTIONS Ratings for this transaction are primarily driven by Fitch's assertion that the key nature of the aircraft collateral to the underlying airline effectively reduces the probability of default for the certificates due to the likelihood that VAH would affirm its obligations on these aircraft if it were to file bankruptcy (i.e. the affirmation factor). Fitch's recovery analysis gauges the transactions' recovery prospects if the aircraft were to be rejected amidst a harsh aviation downturn. The recovery analysis incorporates a full draw on the 18-month liquidity facility plus an assumption for repossession and remarketing costs of the aircraft. RATING SENSITIVITIES Senior tranche ratings are primarily driven by a top-down analysis based on the value of the collateral. Therefore, a negative rating action could be driven by an unexpected decline in collateral values. For the 737-800s in the deal, values could be impacted by the entrance of the 737-8 MAX, or by an unexpected bankruptcy by one of its major operators. Fitch does not expect to upgrade the ratings of the senior tranche and senior subordinate tranche above the 'A+' and 'A-' levels, respectively. The rating of the junior subordinated tranche is influenced by Fitch's view of VAH's corporate credit profile. Fitch will consider either a negative or a positive rating action if VAH's credit profile changes in Fitch's view. Additionally, the ratings of the junior subordinated tranches may be changed should Fitch revise its view of the currently incorporated affirmation factor. LIQUIDITY Liquidity Facility: The class A notes and the class B notes of VAH 2013-1 feature an 18-month liquidity facility provided by Natixis, sufficient to cover six quarterly interest payments. Transaction Overview / Debt Structure: VAH issued enhanced equipment notes (EEN) into the market to refinance a pool of owned Boeing aircraft. The initial collateral consisted of 21 Boeing 737-800s, two Boeing 737-700s and one Boeing 777-300ER and was sized at $797.3 million. In addition, the original transaction consisted of A, B, C and D tranches, however the D tranche was paid in full in the fourth quarter of 2016. The class C notes will be repaid on Oct. 23, 2018. ========= C H I N A ========= CBAK ENERGY: Stockholders Elected Five Directors ------------------------------------------------ CBAK Energy Technology, Inc. held its annual meeting of stockholders on Sept. 21, 2018, at which the stockholders elected Yunfei Li, Simon J. Xue, Martha C. Agee, Jianjun He and Guosheng Wang as members of the Board of Directors of the Company to serve until the 2019 annual meeting of stockholders. The Company's stockholders also ratified the selection of Centurion ZD CPA Limited as the Company's independent registered accounting firm for the fiscal year ending Dec. 31, 2018. About CBAK Energy Dalian, China-based CBAK Energy Technology, Inc., formerly China BAK Battery, Inc. -- http://www.cbak.com.cn/-- is engaged in the business of developing, manufacturing and selling new energy high power lithium batteries, which are mainly used in the following applications: electric vehicles; light electric vehicles; and electric tools, energy storage, uninterruptible power supply, and other high power applications. CBAK Energy reported a net loss of US$21.46 million for the year ended Dec. 31, 2017 compared to a net loss of US$12.65 million for the year ended Sept. 30, 2016. As of June 30, 2018, the Company had US$135.68 million in total assets, US$139.20 million in total liabilities and a total deficit of US$3.51 million. Centurion ZD CPA Limited, in Hong Kong, China, the Company's auditor since 2016, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended Dec. 31, 2017 stating that the Company has a working capital deficiency, accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of Dec. 31, 2017. All these factors raise substantial doubt about its ability to continue as a going concern. JILIN LIYUAN: Suspends Bond Trade After Interest Default -------------------------------------------------------- Reuters reports that Jilin Liyuan Precision Manufacturing said on Sept. 25 it has suspended trade of its single outstanding bond after defaulting on an interest payment. In a filing on the website of the Shenzhen Stock Exchange, the company said it was unable to make the interest payment of CNY51.8 million (US$7.56 million) due to cash flow issues, and was in material default, according to Reuters. Reuters relates that the company said it would be suspending trade in its 2019 7% puttable bond from Sept. 25 because of its inability to make bond payments and to "protect the interests of investors." It said it would apply for a resumption of trading after "relevant circumstances" had been addressed, Reuters says. Reuters adds that the company warned last week that it would miss the payment. Jilin Liyuan raised CNY1 billion (US$145.74 million) through the bond issue in 2014, Reuters recalls. Last year, investors exercised their right to sell bonds worth CNY260 million back to the company, the report says. Jilin Liyuan Precision Manufacturing Co., Ltd. manufactures and sells industrial and architectural aluminum profiles, special profiles, mechanical machining and assembling aluminum alloy parts, and railcar engine and body manufacturing parts in China. It also exports its products to 18 countries and regions. The company was formerly known as Jilin Liyuan Aluminum Co., Ltd. and changed its name to Jilin Liyuan Precision Manufacturing Co., Ltd. in November 2013. NEOGLORY HOLDINGS: Defaults on Exchange-Traded Bond Payments ------------------------------------------------------------ Reuters reports that Neoglory Holdings Group has defaulted on payments on an exchange-traded bond, the company said. In a statement posted to the website of the Shanghai Stock Exchange on Sept. 25, the company said it was unable to pay back principal to bondholders exercising put options on bonds worth CNY1.74 billion (US$253.20 million), out of an initial issuance of CNY2 billion, Reuters relates. According to the report, the company said it was also unable to make interest payments totalling CNY130 million due Sept. 25. Neoglory also defaulted on a commercial paper issue due Sept. 25. The Shanghai Clearing House said on Sept. 25 it had received only interest and partial principal payments on the maturing instrument, Reuters relays. Chinese companies have defaulted on 41 bonds worth a combined CNY45.6 billion as of early September, Reuters discloses. While Chinese regulators have said the default rate remains much lower than in many other countries, the rise in bond defaults has highlighted risks to China's economy as growth slows and amid an intensifying trade war with the United States. Neoglory Holdings Group Co. Ltd. operates in the jewelry, manufacturing, real estate, finance, Internet, investment, and other sectors in China and internationally. It engages in the commercial, tourism, and residential real estate development business, as well as garden landscape, architectural decoration, and other businesses. The company also researches, designs, and manufactures slewing bearings; and invests in banking, insurance, and microfinance companies, as well as in commercial factoring, capital management, and funded and other licensed financial institutions. In addition, it offers investment, wealth management, inclusive finance, and consumer financial services; and operates Poly-Cloud, Poly-Weaving Cloud, Poly Tong Yun, VORES, and other enterprise-level service platforms. YUZHOU PROPERTIES: Fitch Affirms BB- LT IDR, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed Yuzhou Properties Company Limited's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-'. The Outlook is Stable. Fitch has also affirmed Yuzhou's senior unsecured rating and the ratings on its outstanding US dollar bonds at 'BB-'. Yuzhou's ratings are supported by strong contracted sales growth and regional diversification. The company has a good-quality low- cost land bank, which upholds its favourable margin compared with peers. Yuzhou's active land acquisition approach will increase its contracted sales in the medium term, though it may drive leverage, as defined by net debt/adjusted inventory, up to above 40% by end-2018. Fitch believes leverage of 40%-45% is reasonable as the company's operating scale will be larger. Fitch's assessment of Yuzhou's ratings will depend on whether it can manage its contracted sales growth without significantly impairing leverage and margins. KEY RATING DRIVERS Well-Managed Expansion: Yuzhou continued to expand its land bank outside its well-established Yangtze River Delta and West Strait Economic Zone, with more than 110 projects spread across 17.3 million square metres of land bank in 25 cities as of June 2018. Contracted sales from the Greater Bay area started in 2017 and Fitch expects some sales from central China in the short term, as 5% of its land bank is located in Wuhan. Fitch believes Yuzhou's land acquisitions will enhance its geographical diversification, as they include properties in three cities where it does not yet operate; Beijing, Foshan and Chongqing. The acquisitions will also enable Yuzhou to expand into northern China, as some properties are in Tianjin and Shenyang. Expansion Pressures Leverage: Fitch believes a rise in leverage, as defined by net debt/adjusted inventory, to 40%-45% (end-2017: around 40%) in the short term would still be reasonable due to its good quality land purchases. Fitch expects Yuzhou to use an average of 55% of its annual presale proceeds to acquire land. The company remains in expansion mode and is increasing its investment in joint ventures. Yuzhou's total contracted sales increased by 73.7% to CNY40.3 billion in 2017, driven by similar growth in gross floor area sold and average selling prices; among which 60% was from Yangtze River Delta, 35% from the West Strait Economic Zone and 5% from the Bohai Rim region. Slowing Land Acquisition: Yuzhou's 2017 attributable land acquisition cost of CNY14.9 billion accounted for only 49% of its attributable contracted sales during the year, compared with 86% in 2016. Fitch expects it to lower its land bank life to three to four years, from nearly five years at end-2016, to better utilise its resources to control leverage. The company spent 35% of its attributable contracted sales, totalling CNY5.7 billion, on land bank acquisitions in 1H18. Yuzhou's management plans to spend no more than CNY25 billion on land acquisitions in 2018. Better-than-Peer Margin: Yuzhou is cautious on cost control amid its national expansion. Fitch expects its 2018 land acquisition costs to stay below 50% of contracted sales, partially due to the low average land cost it paid for the August 2018 acquisition of seven projects in China from Coastal Greenland Limited. Fitch expects its land cost to remain at around 30% of its average selling price. Yuzhou's strength is its good quality land, with 70% of its land bank in Tier 1 and 2 cities. Fitch expects its EBITDA margin to be around 28%-31%, which is high relative to peers rated in the 'BB-' category, due to its good-quality land purchases and low selling, general and administrative expenses. DERIVATION SUMMARY CIFI Holdings (Group) Co. Ltd. (BB/Stable) is Yuzhou's closest peer in terms geography, as both companies focus on the Yangtze River Delta region, although Yuzhou is also strongly positioned in the West Strait Economic Zone and has less exposure to the Bohai Rim region. CIFI has a higher attributable contracted sales and lower leverage, which explains the one notch rating difference against Yuzhou. CIFI has higher sales efficiency than Yuzhou but a lower EBITDA margin. In terms of scale, Times China Holdings Limited (BB-/Stable) had a similar level of 2017 attributable contracted sales as Yuzhou, at around CNY30 billion. Times China is focussed in the Greater Bay area, while Yuzhou is focussed in the Yangtze River Delta and West Strait Economic Zone. Times China has adopted a faster churn strategy and thus its EBITDA margin is lower than that of Yuzhou, as is its leverage. KWG Group Holdings Limited (BB-/Stable) has marginally smaller attributable contracted sales than Yuzhou. KWG's focus is in Guangzhou, although both companies have some exposure to Suzhou, Shanghai and Tianjin. KWG has a slower churn model than Yuzhou, which explains its slightly higher EBITDA margin. KWG's leverage is rising towards the level of Yuzhou. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: - Consolidated contracted sales at CNY37 billion-59 billion a year in 2018-2021 (2017: CNY29 billion) - Contracted average selling price to drop by 15% in 2018 then rise by 5% each year in 2019-2021 (2017: 33% rise) - Contracted gross floor area sold to rise by 50% in 2018 and then 10% on average in 2019-2021 (2017: 30% rise) - Land acquisition costs to account for 48%-58% of total contract sales in 2018-2021 (2017: 49%) - Land costs to fall by 20% in 2018 and rise with inflation by 3% per year in 2019-2021 (2017: 31% fall) RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - Attributable contracted sales sustained above CNY30 billion (2017: CNY30.3 billion) - Proportionally consolidated net debt/adjusted inventory sustained below 40% (2017: 39.7%) - Proportionally consolidated contracted sales/gross debt sustained above 1.2x (2017: 1.0x) - EBITDA margin sustained above 25% (2017: 33.7%) Developments that May, Individually or Collectively, Lead to Negative Rating Action - Proportionally consolidated net debt/adjusted inventory above 45% for a sustained period - Proportionally consolidated contracted sales/gross debt below 1.0x for a sustained period - EBITDA margin below 20% for a sustained period LIQUIDITY Healthy Liquidity: Yuzhou has a healthy liquidity position. It had unrestricted cash of CNY16 billion and CNY12 billion in uncommitted undrawn facilities at end-2017, which is supported by its planned expansion and is enough to cover short-term debt of CNY17 billion, of which CNY10 billion is in puttable corporate bonds, with 20% due in 2018, 50% due in 2019 and 30% due in 2020. Yuzhou stepped up the coupon rate for the puttable bond to 6.99% from 6.70% in 2017, to 6.99% from 6.28% in June 2018 and to 7.7% from 5.3% on August 24, 2018, and thus did not need to repay the principal. Management is confident bondholders will agree to accept for the coupon rate to be stepped up to a similar extent in 2019, meaning Yuzhou would not need to repay the principal. The company has diversified funding channels to ensure sustainable liquidity; besides bank loans, it has established channels for onshore and offshore bond issuance as well as equity placements. Yuzhou issued USD350 million of five-year offshore senior notes at a coupon rate of 6.000% and senior perpetual securities of USD300 million at a coupon rate 5.375% in 2017. In 2018, Yuzhou issued USD375 million of three-year senior notes at a coupon rate 6.375% and USD625 million three-year senior notes at a coupon rate 7.900%. Yuzhou exercised early redemption of USD300 million of offshore senior notes at a coupon rate 8.625% and USD250 million offshore senior notes at a coupon rate 9.000% in 2017. It issued CNY1 billion in onshore bond at 7.850% on August 29, 2018 to partially replace its CNY2 billion bonds that matured in October 2018. ========= I N D I A ========= AADYA PLAST: CARE Assigns B+ Rating to INR5.43cr LT Loan -------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Aadya Plast (AAP), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank Facilities 5.43 CARE B+; Stable Assigned Detailed rationale and key rating drivers The ratings assigned to the bank facilities of AAP are constrained by the limited experience of the promoters in the pet preform industry, small scale of operations and leveraged capital structure. The ratings are further constrained on account of raw material price volatility, working capital intensive nature of operations and highly competitive industry. The ratings, however, draw comfort from growing scale of operations, moderate profitability and coverage indicators. Going forward, ability of the firm to improve its scale of operations, capital structure, and profitability margins and to effectively manage its working capital requirements shall be its key rating sensitivity. Detailed Description of Key Rating Drivers Key Rating Weakness Limited experience of the promoters in pet preform industry: AAP commenced its operations in October 2014 and is currently being managed by Mr. Vinod Kumar Rungta, Mr. Ankit Rungta and Mr. Gaurav Rungta. This is a new venture for the firm as the partners do not have any prior experience in this plastic industry. Mr. Vinod Kumar Rungta and Mr. Ankit Rungta are postgraduates by qualification and have an experience of four decades and around a decade respectively through their association in various trading business. Mr. Gaurav Rungta is CA by qualification and has one and half decade experience in trading business. Small scale of operations: The scale of operations was small marked by total operating income and gross cash accruals of INR13.44 crore and INR0.75 crore respectively during FY18. The small scale limits the firm's financial flexibility in times of stress and deprives it from scale benefits. Leveraged capital structure: The capital structure of the firm stood leveraged mainly on account of low capital base coupled with high reliance on external borrowings to meet capex and working capital requirements. Overall gearing ratio stood around 4x as on the balance sheet date of the past two financial years i.e. FY17-FY18. Raw material price volatility: PET resin, is the main raw material used for the production of pet preform which the firm will procure domestically. Since it is a petrochemical derivative, AAP is exposed to the risk of volatility in the prices of crude oil / natural gas. However the risk is partially mitigated by the fact that AAP passes on the rise in the prices of the raw material to its end consumers. Working capital intensive nature of operations: The operations of the firm stood working capital intensive in nature marked by an operating cycle of 84 days in FY18. Being a highly competitive business, the firm offers credit period of around two months to its customers. Further, the firm usually pays its suppliers within a month resulting in average payable period of 18 days in FY18. The firm is maintaining an adequate inventory in the form of raw material for smooth running of its production processes and finished goods to meet the immediate demand of the customers resulting in inventory holding of 37 days during FY18.The working capital limits remained almost fully utilized for the past 12 months, period ending August 31, 2018. Highly competitive industry: AAP operates in a highly competitive market for PET bottles marked by the presence of a large number of players in the unorganized sector, which accounts for more than 70% of the total domestic turnover. The industry is characterized by low entry barriers due to low technological inputs and easy availability of standardized machinery for the production. This further leads to high competition among the various players and low bargaining power with suppliers. Key Rating Strengths Growing scale of operations: Aadya Plast (AAP) has witnessed growth in its total operating income over the past three years (FY16-FY18) at a compounded annual growth rate (CAGR) of 65%. During FY18, the firm registered growth of 62.7% in its total operating income which stood at INR13.44 crore as against INR8.26 crore in FY17. The growth was attributed due to increase in quantity sold to new and existing customers. Furthermore, the firm has achieved total operating income of INR7.50 crores during 5MFY19 (period from April 01 to August 31; based on provisional results). Moderate profitability margins and coverage indicators The profitability margins of the firm stood moderate owing to sales being made to reputed clients like Bisleri, Rail Neel etc. as marked by PBILDT which stood around 10% for the past two financial years i.e. FY17-FY18. However high interest cost resulted in PAT margin of 0.88% in FY18. Further, owing to moderate profitability the debt service coverage indicators marked by interest coverage and total debt stood moderate at 2.23x and 7.60x for FY18 respectively. Uttar Pradesh based Aadya Plast (AAP) was established in 2014 as a partnership firm and is currently being managed by Mr. Vinod Kumar Rungta, Mr. Ankit Rungta and Mr. Gaurav Rungta sharing profit and loss in 51%, 45% and 4% respectively. The firm is engaged in manufacturing of pet preform with an installed capacity of 130 tonnes pet perform per month as on August 31, 2018 at its manufacturing location in Khalilabad (Uttar Pradesh). It caters to the packaging needs of distillery, beverages and other similar sectors. The main raw material for manufacturing of pet preform is pet resin which firm procures from traders located in Haldia and Panipat. ADISH MINERALS: CRISIL Assigns B Rating to INR8cr Proposed Loan --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Adish Minerals Private Limited (AMPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Proposed Term Loan 7 CRISIL B/Stable (Assigned) Proposed Working Capital Facility 8 CRISIL B/Stable (Assigned) The rating reflects the company's exposure to project-related risks and its expected working capital-intensive operations. These weaknesses are partially offset by the extensive experience of its promoters. Key Rating Drivers & Detailed Description Weaknesses: * Exposure to project-related risk: The company faces significant implementation risk and has already had a time overrun in its project. With operations set to commence in fiscal 2019, successful and timely ramp-up of operations will remain key rating sensitivity factors. * Working capital-intensive operations: Operations are likely to be moderately working capital intensive, with gross current assets expected at 100 days over the medium term. Strength: * Extensive experience of the promoters: The promoters' experience of two decades in diversified industries has helped them develop business relationships. Moreover, increasing demand for chromium concentrate will provide fillip to the company's business risk profile over the medium term. Outlook: Stable CRISIL believes AMPL will benefit from its promoters' extensive industry experience and their funding support. The outlook may be revised to 'Positive' if high revenue growth and profitability lead to better-than-expected cash accrual. The outlook may be revised to 'Negative' if the financial risk profile, particularly capital structure, and liquidity are considerably weak because of lower-than-expected sales or profitably leading to low cash accrual, or stretched working capital cycle. Incorporated in 2018 and promoted by Mr Nrusingha Charan Parida and Mr Narayan Chandra Parida, AMPL is setting up a chrome ore beneficiation plant in Odisha for manufacturing chrome concentrate with installed capacity of 120,000 tonne per annum. AGARWAL'S CARRIERS: CARE Reaffirms B+ Rating on INR7.03cr Loan -------------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Agarwal's Carriers Corporation Of India (ACCI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 7.03 CARE B+; Stable Reaffirmed Short-term Bank Facilities 7.87 CARE A4 Reaffirmed Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of ACCI is constrained on account of fluctuating and modest scale of operations, moderate and fluctuating profit margin and working capital intensive nature of operation. The ratings are also constrained on account of its presence in highly competitive industry, susceptibility of margins to volatility in fuel prices and constitution of entity being proprietorship firm. The ratings however, derive strength from long track record of operation and experienced and resourceful proprietor, reputed client base and comfortable capital structure and moderate debt coverage indicators. The ability of ACCI to increase its scale of operations and improvement in profitability margins along with efficient management of working capital cycle are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Modest scale of operations: The firm has posted total operating income of INR64.65 crore in FY18 (Prov.) (vis-a-vis INR52.02 crore FY17). An average project tenure of ACCI goes for an year and it follows the cash basis accounting system due to which ACCI has got orders in FY17 but it got executed in FY18 hence it has booked revenue in FY18 due to which it shows significant growth in sales during FY18. Despite of improvement in scale of operations in FY18 it continues to remains small with the total income and GCA stood at INR64.65 crore and INR6.96 crore in FY18. During Q1FY18 it made sales of INR10.38 crore. Leverage capital structure and weak debt coverage indicator: Capital structure deteriorated further in FY18 and overall gearing stood at 3.47x in FY18 (vis-a-vis 1.32x in FY17). Debt coverage indicator stood weak marked by total debt/GCA stood at 2.58x in FY18 (vis-a-vis 0.92x in FY17) due to increase in unsecured loan infused to support business operations. Further there is improvement in interest coverage ratio stood at 3.50x in FY18 (vis-a-vis 1.57x in FY17) on account of increase in operating profit and reduction in interest cost. Working capital intensive nature of operations: ACCI's operations are working-capital-intensive mainly to fund its receivable cycle. Due to inherent nature of its operations, the firm has to make upfront payment for the services it avails (material handling, fuel, tyre, octroi and such other charges), however it, has to provide credit period of around 60 days due to low bargaining power and intense competition in the low barrier industry. Moreover due to cash basis accounting system followed by ACCI, debtor and creditor is NIL. Further the liquidity position of the firm remains moderate with current ratio and quick ratio stood at 0.87x in FY18 respectively. Volatile nature of fuel prices: Being into transport industry major cost is incurred on fuels whose prices are very volatile in nature on account of demand and supply factor. Further to it, in absence of escalation clause ACCI was not able to pass on the fluctuation in prices of diesel to customer which may affect the profitability of the firm. Present in competitive nature of industry: The Company is in the business of providing logistic services which is highly competitive in nature due to presence of large number of players. This leads to price competition which can have an effect on profitability margins & cash flows of ACCI. However, comfort can be drawn from the fact that ACCI has been in this business for about four decade and have established relationship with its customers. Key Rating Strengths: Experienced and resourceful proprietor and strong second line of management: Proprietor Mr. Rajkumar Agarwal has about four decades of experience into logistic management and standardized surface transportation. Further ACCI has experienced and specialized second line of management who are specialized in respective fields to carry out day to day activities. Long track record of operation and reputed clientele base: The extensive experience of proprietor in transportation industry with its existence since 1980, have helped to developed business relationship with existing as well as new clients & have generate sizeable business on continual basis. Over the years they have developed established strong relationship with the reputed customers from varied industries. Agarwal's Carriers Corporation Of India (ACCI) is a proprietorship firm established by Mr. Raj Kumar Agarwal in 1980, and is engaged into providing road and water transportation services (loading, transportation of goods from one place to other and unloading of goods). ACCI has fleet size of 250 Hydraulic Axle, 23 Puller and 1 Barge. It provides logistics services to various industries, primarily petrochemical, refineries and fertilizer industry. It has own land at Shilfata, Kalyan wherein the axles are parked. The entity has 23 drivers, 23 operators and 56 helpers to carry out the business operations. The entity is registered with and is a member of Bombay Goods Transport Association & All India Motor Transport Congress. ANAND EDUCATIONAL: CARE Lowers Rating on INR8cr LT Loan to D ------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Anand Educational Society (AES), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 8.00 CARE D; ISSUER NOT COOPERATING; Facilities Revised from CARE BB-; Stable on the basis of best available information. Detailed Rationale & Key Rating Drivers CARE has been seeking information from AES to monitor the rating(s) vide e-mail communications/letters dated August 14, 2018, August 3, 2018, etc and numerous phone calls. However, despite CARE's repeated requests, the society has not provided the requisite information for monitoring the ratings. In-line with the SEBI guidelines, CARE has reviewed the rating on the basis of publicly available information which however, In CARE's opinion is not sufficient to arrive at fair rating. The rating on Anand Educational Society's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The rating has been revised on account of ongoing delays in meeting the debt servicing. Ghaziabad, Uttar Pradesh based Anand Educational Society (AES) was established in 2001 with an objective to provide education services. The society is managed by Mrs Savitri Devi (chairman), Mr Vihang Gard (Vice Chairman) and Mr Anand Prakash (Secretary). The trust operates a college under the name of 'Hi-Tech Institute of Engineering & Technology' (HIET) offering varied undergraduate and post-graduate courses in various fields of Engineering, Computers and Management. HIET has a total strength of 1,306 students in college in the academic session (AS) 2016-17. APEX SURATGARH: CARE Assigns B+ Rating to INR8.94cr LT Loan ----------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Apex Suratgarh Multispecialty Hospital Private Limited (ASMHPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 8.94 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of ASMHPL is constrained on account of short track record of operations with overall weak financial risk profile marked by operational losses, leveraged capital structure, weak debt coverage indicators and working capital intensive nature of operations in FY17 (FY refers to the period April 1 to March 31). The rating further remains constrained on account of challenges of attracting and retaining quality doctors and medical professionals in the competitive healthcare industry. The rating, however, derives strength from well-qualified and experienced promoters addressing various healthcare segments along with positive long-term outlook for the healthcare sector in India. ASMHPL's timely achievement of break-even of recently completed debt funded expansion project with an ability to increase its scale of operations along with an improvement in overall financial risk profile would be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Short track record of operations with overall weak financial risk profile marked by operational losses, leveraged capital structure, weak debt coverage indicators and working capital intensive nature of operations in FY17: ASMHPL commenced the operations from December 2016 onwards. The reported total operating income (TOI) for its four months of operations in FY17 stood small at INR2.54 crore, while it booked operational losses of INR0.38 crore and net losses stood of INR0.69 crore during FY17. The capital structure as marked by overall gearing ratio stood leveraged at 4.52 times as on March 31, 2017, while the debt coverage indicators of the company as marked by total debt to GCA and interest coverage ratio also stood weak as on March 31, 2017 owing to operational losses booked in FY17. The operations of the company are working capital intensive in nature as marked by below unity current ratio of 0.46 times as on March 31, 2017. Average utilization of working capital borrowings remained high at 85% during past 12 months ended February, 2018. Challenges of attracting and retaining quality doctors and medical professionals in the competitive healthcare industry: Success of a new hospital project or expansion of existing facilities requires availability of adequate trained doctors and medical personnel. Due to the scarcity of trained medical persons, including doctors, owing to intense competition in the healthcare sector, it becomes relatively difficult to attract and retain a skilled pool of medical personnel. Further, the ability of the company to retain its current medical fraternity would be a key differentiator. Key Rating Strengths Well-qualified and experienced promoters addressing various healthcare segments: The key Promoters of ASMHPL, Dr. Sachin Jhanwar, Dr. Vijay Beniwal, Dr. Sanjay Bajaj and Dr. Rajendra Kumar Chhabra are qualified medical practitioners with an experience in the medical field for around more than two decades. Dr. Sachin Jhanwar and Dr. Vijay Beniwal have specialization in different surgeries, while Dr. Sanjay Bajaj and Dr. Rajender Kumar Chhabra are physicians. ASMHPL was incorporated in 2014 and started operations from December 2016. ASMHPL has been promoted by Dr. Sachin Jhanwar, Dr. Vijay Beniwal, Dr. Sanjay Bajaj, Dr. Rajender Kumar Chhabra and Mr. Arvind Bansal. The company operates a hospital providing quality services and patient care to the people in the vicinity of Sriganga Nagar (Rajasthan). The hospital has specialized departments in Cardiology, Endoscopy, Radiology, Cytology, Histopathology and few others for its patients and visitors. The hospital has 100 beds and 1 rented ambulance, while the average occupancy rate for in-patient department has remained between 35- 40% during 11MFY18. C.P. ISPAT: CARE Lowers Rating on INR14.50cr Loan to D ------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of C.P. Ispat Private Limited (CPIPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 14.50 CARE D Revised from CARE B; Facilities Stable Detailed Rationale & Key Rating Drivers The revision in the long term rating assigned to the bank facilities of CPIPL is mainly on account of ongoing delays in debt servicing. Going forward, the ability of the company to regularize the debt servicing obligations and timely repayment of debt will be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Ongoing delays in debt servicing: As reported by the banker, as on September 7, 2018, there are on-going delays in the account. The banker has confirmed that there is continuous overdrawal in the cash credit account for more than 30 days. C.P. Ispat Pvt. Limited (CPIPL), incorporated in the year 2006, was initially promoted by the Kolkata-based Chawla family and was earlier managed by Mr. Amarjeet Chawla. CPIPL commenced commercial production in July 2009 at its facility in Bankura, West Bengal. However, in September 2013, the Chawla family leased out the plant to the Durgapur-based Jayshree group owned by Mr. Amit Agarwal and his family. Since September 15, 2013, operations of the plant have been managed by the Jayshree group. In February 2014, the Jayshree group entered into an agreement with the Chawla family to purchase CPIPL with effect from April 2014. CPIPL is engaged in the manufacturing of sponge iron at its plant located at Barjora, Bankura with a current installed capacity of 60,000 metric tonne per annum (MTPA). COUPLE INTERNATIONAL: CARE Migrates D Rating to Not Cooperating --------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Couple International Private Limited (CIPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 8.70 CARE D; ISSUER NOT COOPERATING; Facilities Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from CIPL to monitor the rating(s) vide e-mail communications/letters dated August 10, 2018, August 6, 2018, July 30, 2018, July 20, 2018, and July 6, 2018 etc. and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Couple International Private Limited's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating assigned to bank facilities of Couple International Private Limited (CIPL) remained constraint on account of ongoing delays in meeting debt obligations, leveraged capital structure and weak coverage indicators. The rating is further constrained by working capital intensive nature of operations, foreign exchange fluctuation risk along with highly fragmented industry resulting in intense competition from both organized and unorganized players. The ratings however, derive strength from experienced promoters and moderate profitability margins. Detailed Description of Key Rating Drivers At the time of last rating on November 1, 2017, the following were the rating weaknesses and strengths. Detailed description of the key rating drivers Key rating weaknesses Ongoing delays in meeting debt servicing: There are ongoing delays in relation to the servicing of principal installment and interest payments. The delays are on account of liquidity stress and cash flow miss match arising out of delay in realization from customers. Leveraged capital structure and weak coverage indicators: The capital structure of the company stood leveraged owing to low networth base coupled with high reliance on external borrowings to meet working capital requirements. Furthermore, owing to high debt levels, the debt service coverage indicators marked by interest coverage and total debt to GCA stood weak at 1.59x and 24.11x respectively, during FY17. Working capital intensive nature of operations: The operations of the company are working capital intensive in nature marked by an operating cycle of 237 days in FY17. The company maintains high inventory holdings in form of raw materials for smooth execution of its production process and in form of work in progress and finished goods inventory to meet immediate demand of its customers. Further, the company has elongated collection period mainly on account of delay in realization from its customers. On the contrary, the average creditor's period stood at 85 days for FY17. Foreign exchange exposure: CIPL is mainly focused in the export market and the raw material is mostly procured from domestic markets. With initial cash outlay for procurement in domestic currency and significant chunk of sales realization in foreign currency, the company is exposed to the fluctuation in exchange rates. Though, the company has a policy of hedging its export receivables to an extent. Nonetheless, it will remain exposed towards any sharp appreciation in the value of rupee against foreign exchange currency for the uncovered portion. Highly fragmented industry resulting in intense competition from both organized and unorganized players: The readymade garment industry in India is highly fragmented and dominated by a large number of independent and small scale unorganized players leading to high competition among the industry players. Smaller companies/firms in general are more vulnerable to intense competition due to their limited pricing flexibility, which constrains their profitability as compared with larger companies who have better efficiencies and pricing power considering their scale of operations. Key Rating Strength Experienced promoters coupled with long track record of operations: CIPL is being directed by Mr. Rituraj Gupta and Ms. Kavita Vardhan who have considerable experience in textile industry through their association with this entity. Both the directors are graduates by qualification and look after the overall operations of the company. Moderate profitability margins: The company manufactures wide range, design and customized nature of products. PBILDT margin of the company continues to remain moderate as the company is engaged in sales of designer clothes bearing better profitability. The PAT margin stood at 1.38% in FY17 as against 1.73% in FY16 owing to higher interest cost. New Delhi based CIPL was incorporated in 1998. The company is currently being managed by Mr. Rituraj Gupta and Ms. Kavita Vardhan. CIPL is engaged in the manufacturing of garments and accessories (scarfs). INFRASTRUCTURE LEASING: SIDBI Files Insolvency Case vs. Firm ------------------------------------------------------------ Bloomberg News reports that a creditor is seeking to push India's troubled Infrastructure Leasing & Financial Services Ltd. into insolvency, risking regulators' efforts to calm financial markets and the group's attempts to independently restructure its borrowings. According to Bloomberg, Small Industries Development Bank of India (SIDBI) on Sept. 25 filed an insolvency application against IL&FS and its unit at the National Company Law Tribunal in Mumbai, people familiar with the matter said. Separately, IL&FS's biggest shareholder, Life Insurance Corp. of India, won't rule out raising its stake in the beleaguered company, LIC Chairman V.K. Sharma said. Bloomberg says defaults by the IL&FS group, a systemically important non-bank lender, have rattled India's investors this month with anxiety levels in the equity market rising to a seven- month high and companies finding it harder to close bond sales. SIDBI is the first lender to seek resolution of the IL&FS group's debt under the Insolvency and Bankruptcy Code, India's first consolidated bankruptcy law that was passed in 2016, the report relates. "Considering how deeply integrated the group is into the country's financial system, a forced liquidation under bankruptcy law could trigger mayhem," Bloomberg quotes Pooja Dutta, a managing partner at Mumbai-based law firm Astute Law, as saying. "Even if the court admits the case, there will be still time for IL&FS group and its stakeholders to work out a resolution plan." Bloomberg relates that government-backed SIDBI is seeking to recover INR4.5 billion ($62 million) from the parent company and about INR5 billion from unit IL&FS Financial Services Ltd., said the people, asking not to be identified as the information isn't public. People familiar with the matter said earlier this month that SIDBI had sought a repayment plan from IL&FS, Bloomberg says. According to Bloomberg, the IL&FS group, which had total debt of $12.6 billion as of March 31, has missed payment on more than five obligations this year, including those to SIDBI. The distressed group had filed an application with the National Company Law Tribunal seeking some accommodations for itself and 40 units under the Companies Act to reach a compromise with creditors outside the insolvency courts, FE relates citing an exchange filing. "The compromise formula needs to be proposed by IL&FS and then put to vote," Bloomberg quotes Amit Agarwal, head of corporate practice at law firm SNG & Partners, as saying. "It will require the approval of both the creditors and the shareholders. If the creditor does not like the plan, they have the right to reject it and file a complaint," in court, he said. IL&FS's woes and a weakening rupee have led to three Indian companies pulling INR58 billion of debt sales this month, the most in at least a decade, according to data compiled by Bloomberg. Most of the creditors to the beleaguered group are local institutions which limits the fallout to the South Asian nation's credit market, Bloomberg notes. "In the near term, investors would be cautious," Bloomberg quotes Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance, as saying. "At this stage no issuer is sure of what quantum of funds they can raise in the local credit market." About IL&FS Infrastructure Leasing & Financial Services Limited (IL&FS) operates as an infrastructure development and finance company in India. It focuses on the development and commercialization of infrastructure projects, and creation of value added financial services. The company operates in Financial Services, Infrastructure Services, and Others segments. Its Financial Services segment engages in the commercialization of infrastructure; investment banking, including corporate finance, advisory, capital market, and other financial services; and securities trading, venture capital, and trusteeship operations. As reported in the Troubled Company Reporter-Asia Pacific on Sept. 20, 2018, India Ratings and Research (Ind-Ra) has downgraded Infrastructure Leasing & Financial Services Limited's (IL&FS) Long-Term Issuer Rating to 'IND D' from 'IND BB' and Short-term Issuer Rating to 'IND D' from 'IND A4+' while resolving the Rating Watch Negative (RWN). The instrument-wise rating actions are: -- INR93,600.8 bil. Long-term debt (Long-term) downgraded, off RWN with IND D rating; -- INR1.0 bil. Subordinated debt (Long-term) downgraded, off RWN with IND D rating; -- INR12.25 bil. Short-term debt (Short-term) downgraded, off RWN with IND D rating; and -- INR3.0 bil. Bank loans (Long-term) downgraded, off RWN with IND D rating. The downgrade reflects IL&FS's delays in meeting its debt servicing obligations due to sharp deterioration in the liquidity profile of the group. The company is planning to raise INR45 billion of equity through a rights issue and INR35 billion of long-term debt from its shareholders. However, the emergency shareholders meeting remained inconclusive on providing liquidity support to IL&FS, which aggravated the liquidity situation. In absence of immediate support from the shareholders, IL&FS's ability to timely honor its forthcoming repayments commitments is highly susceptible. INNOVA FABTEX: CRISIL Lowers Ratings on INR10cr Loans to D ---------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Innova Fabtex Private Limited (Innova) to 'CRISIL D' from 'CRISIL BB-/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 3 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Long Term Loan 1 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Proposed Long Term Bank Loan Facility 6 CRISIL D (Downgraded from 'CRISIL BB-/Stable') The rating downgrade reflects the delay in the repayments of its term loans due to stretched liquidity and elongated receivables. Analytical Approach For arriving at the rating, CRISIL has combined the business and financial risk profiles of Innova and S. K. Textiles (SKT). That's because both the entities, together referred to as the S.K. group, are in a similar line of business, have a common management and centralized treasury operations. Key Rating Drivers & Detailed Description * Delay in term loans: Large receivables caused stretched liquidity, resulting in delay in of repayment of its term loans. Weakness * Modest scale of operations: Revenue was modest at INR31.35 crore for fiscal 2018. * Modest profitability: Profitability was modest in the range of 4.8-7.7% over 3 years ended fiscal 2018. Intense competition and limited integration in the textile value chain constrains profitability. Strength * Extensive industry experience of the key promoter and established relationships with customers and suppliers: The promoter has an industry experience of 15 years, over which he has developed a strong relationship with core suppliers of the group, thus supporting the business risk profile. SKT was established in 2006 by Mr Sunil Kukreja. The firm manufactures and trades in fabrics, mainly cotton, polyester, and cotton-polyester fabrics. Later on in 2014, he along with his wife, Mrs Lisha Kukreja, set up Innova in 2014; which is also engaged in the same line of business. JIWANRAM SHEODUTTRAI: CRISIL Hikes Ratings on Two Tranches to C --------------------------------------------------------------- CRISIL has migrated the ratings on bank facilities of Jiwanram Sheoduttrai Industries Private Limited (JSIPL) from 'CRISIL D/CRISIL D Issuer Not Cooperating' to 'CRISIL C/CRISIL A4'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.25 CRISIL A4 (Migrated from 'CRISIL D ISSUER NOT COOPERATING') Foreign Bill 15.00 CRISIL A4 (Migrated from Discounting 'CRISIL D ISSUER NOT COOPERATING') Letter of Credit 1 CRISIL A4 (Migrated from 'CRISIL D ISSUER NOT COOPERATING') Packing Credit 15 CRISIL A4 (Migrated from 'CRISIL D ISSUER NOT COOPERATING') Proposed Long Term 35.14 CRISIL C (Migrated from Bank Loan Facility 'CRISIL D ISSUER NOT COOPERATING') Term Loan 1.2 CRISIL C (Migrated from 'CRISIL D ISSUER NOT COOPERATING') Due to inadequate information, CRISIL, in line with SEBI guidelines, had migrated the rating of JSIPL to 'CRISIL D/CRISIL D Issuer Not Cooperating'. However, the management has subsequently started sharing requisite information, necessary for carrying out comprehensive review of the rating. Consequently, CRISIL is migrating the ratings on bank facilities of JSIPL from 'CRISIL D/CRISIL D Issuer Not Cooperating' to 'CRISIL C/CRISIL A4'. The migration reflects timely servicing of debt by the company. The rating also factors in extensive experience of the promoters in the leather industry ensuring repeat orders from its customers. These strengths are partially offset by large working capital requirement and constrained financial risk profile because of high gearing and weak debt protection metrics. Key Rating Drivers & Detailed Description Weakness * Large working capital requirement: The operations are working capital intensive as reflected from gross current asset (GCA) days of around days as on March 31, 2018. The high GCA days is primarily on account of delayed realization of bills during the last two fiscals which has improved in fiscal 2019. CRISIL believes time realization of debtors would remain the key rating driver over the medium term. * Below average financial profile: Financial profile is below average as reflected from gearing of around 2.1 times as on March 31, 2018. Debt protection metrics are weak with interest coverage ratio and net cash accruals to total debt (NCATD) of around 0.7 time and 0.02 time respective in fiscal 2018. Strengths: * Extensive experience of the promoters: The promoter of the company has been in the line of business for around 2 decades and has over the years developed good understanding with the suppliers and customers. CRISIL believes the business profile of the company would continue to benefit over the medium term backed by longstanding experience of the promoters. JSIPL was incorporated in 1997 and promoted by Mr. Alok Prakash. The Kolkata-based company manufactures and processes leather- based protective gloves, garments, and accessories. JUPITER SOLAR: CARE Lowers Rating on INR117.09cr LT Loan to D ------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Jupiter Solar Power Limited (JSPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 117.09 CARE D Revised from CARE BB-; Facilities Stable Short-term Bank 68.44 CARE D Revised from CARE A4 Facilities Detailed Rationale & Key Rating Drivers The revision in the ratings assigned to the bank facilities of JSPL takes into account the ongoing delays in debt servicing. Detailed Description of key rating drivers Key Rating Weaknesses Ongoing delays in debt servicing: There are ongoing delays in debt servicing by the company. The liquidity position of the company has been impacted due to losses incurred in FY18. Deterioration in financial performance in FY18: The company's total income declined from INR290.92 crore in FY17 (refers to the period April 1 to March 31) to INR235.79 crore in FY18 (Prov). It incurred loss at PBILDT level due to lower capacity utilisation and significant dip in realisation on account of intense competition from imported solar cells. JSPL incurred loss of INR34.86 crore in FY18 (Prov) as against PAT of INR39.23 crore in FY17. JSPL, promoted by the Garodia family of Kolkata, was incorporated in 2006. JSPL commenced commercial operations from March 2010 by setting up capacity of 32MW for manufacturing solar photo voltaic (SPV) cells at Baddi, Himachal Pradesh. The capacity was enhanced to 48 MW in April 2011 and subsequently to 133 MW in March 2015 by technological upgradation of existing facilities. Due to significant deterioration in the financial risk profile of the company in FY12 with huge losses on account of substantial decline in demand of SPV cells, the company was referred to the CDR cell in October 2011 for restructuring of its bank facilities. The restructuring proposal was approved under CDR Mechanism in August, 2012. KARTHIK ALLOYS: CARE Migrates D Ratings to Not Cooperating ---------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Karthik Alloys Limited (KAL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 12.00 CARE D; Issuer not cooperating; Facilities Based on best available information Short-term Bank 33.96 CARE D; Issuer not cooperating; Facilities Based on best available Information CARE has reaffirmed the ratings CARE D; Issuer Not Cooperating based on best available information. However, despite CARE's repeated requests via email dated August 10, 2018, August 8, 2018 and August 6, 2018 and numerous phone calls, the company has not provided the requisite information for monitoring the ratings and the management has remained non cooperative. The current rating action taken by CARE is based on best available information. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on KAL, bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Karthik Alloys Limited (KAL) was incorporated as a private limited company in February 1992, and was later reconstituted as a public limited company in December 1992. KAL is engaged in manufacturing of 'Low/ Medium Carbon Silico Manganese' which is a Ferro Alloy used in the manufacturing of Stainless Steel. KAL has two manufacturing units located at Cuncolim, Goa and Durgapur, West Bengal with an installed capacity of 6,500 Metric Tonnes Per Annum (MTPA) and 19,000 MTPA respectively. KAL was referred to Board of Industrial and Financial Reconstruction (BIFR) in the year 2002 as the accumulated losses of the company were more than the net worth. KISHORI INDUSTRIES: CRISIL Hikes Rating on INR15cr Loan to B+ ------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Kishori Industries (KI) to 'CRISIL B+/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 15 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The upgrade reflects increase in revenue to an estimated INR91 crore in fiscal 2018 from INR63 crore in the previous fiscal. Turnover is expected to grow moderately over the medium term. Ramp up in scale and moderate operating profitability are expected to result in higher cash accrual over the medium term, thereby improving liquidity. Regular equity infusion by promoters will further support liquidity. The rating reflects RI's below-average financial risk profile and large working capital requirement. These weaknesses are partially offset by the extensive experience of its promoters and their funding support. Analytical Approach Unsecured loans of INR3.5 crore as of March 2017 are treated as 75% equity and 25% debt as these are subordinated to bank borrowings and are expected to remain in business over the medium term. Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile: Debt protection metrics were subdued, with estimated interest coverage and net cash accrual to total debt ratios of 1.3 times and 0.04 time, respectively, in fiscal 2018. * Large working capital requirement: Gross current assets are estimated at 152 days as on March 31, 2018, because of sizeable inventory of 135 days. Strength * Extensive experience of promoters: The firm's promoters have been in the cotton industry for around 15 years and have supported operations by continuously infusing funds in the form of unsecured loans. Outlook: Stable CRISIL believes KI will continue to benefit from promoters' extensive experience. The outlook may be revised to 'Positive' if substantial increase in revenue and profitability and improved working capital cycle strengthen financial risk profile. The outlook may be revised to 'Negative' if considerable decline in revenue and profitability, stretch in working capital cycle, higher than expected capital withdrawals or debt-funded capital expenditure further financial risk profile, especially liquidity. Established in 2003 as a partnership firm by Mr Sharad Sarda and Mr Rameshlal Sarda, KI gins and presses cotton and extracts cotton seed oil at its unit in Beed. MANCHAL AGRO: CARE Assigns B+ Rating to INR11.70cr LT Loan ---------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Manchal Agro and Poultry Farm Private Limited (MAPFPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 11.70 CARE B+; Stable Assigned Detailed Rationale& Key Rating Drivers The rating assigned to the bank facilities of MAPFPL are tempered by small scale of operations with declining total operating income during the review period, financial risk profile marked by a leveraged capital structure, working capital intensive nature of operations and thin PAT margins, highly fragmented industry with intense competition from large number of players, profitability margins are vulnerable to volatility in raw material prices and project implementation risk. The rating however derives the strength from the established track record and experience of the promoters more than two decades in Poultry business, satisfactory operating cycle during FY17, and Stable outlook demand of poultry products. Going forward, the ability of the company to increase its scale of operations and improve profitability margins in competitive environment, the ability of the company to improve its capital structure, debt coverage indicators and manage its working capital requirements efficiently and the ability of the company to execute the project as planned, without any time and cost overruns. Detailed description of the key rating drivers Key Rating Weaknesses Small scale of operations with declining total operating income during the review period: MAPFPL was incorporated in the year 2011. Further, the scale of operations of the company remained small marked by Total operating income (TOI) at INR10.68 crore in FY17 coupled with low net worth base of INR0.95 crore as on March 31, 2017 as compared to other peers in the industry. In the year FY15, the company had net losses to a tune of INR0.03 crore due to under absorbed overheads. However, in the year FY16, the company turned profitable, due to decrease in interest expenses and depreciation provisions. The TOI of the company has been declining on a y-o-y basis from INR14.49 crore in FY15 to INR10.68 crore in FY17, due to decrease in orders from the customers. However, in FY18 (Provisional), the company achieved a TOI of INR18.68 crore. Financial risk profile marked by a leveraged capital structure, stressed liquidity position and fluctuating profitability Margins: MAPFPL had a leveraged capital structure during review period. The Long-term debt-equity ratio and overall gearing ratio of the company improved y-o-y from 7.52x as on March 31, 2015 to 3.39 as on March 31, 2017 due to repayment of term loan and vehicle loan. However, the capital structure remained leveraged due to a low net worth base at INR0.95 crore. In FY17, the debt profile of the company only consisted of unsecured loans to a tune of INR3.21 crore. The liquidity position of the company as marked by current ratio at 0.93x remained stressed, due to low level of inventory when compared to relatively higher creditors outstanding as on March 31st 2017. The company had high outstanding creditors relating to purchases from group concerns. Further, the profitability margins of the company remained fluctuating during the review period. In FY16, the PBILDT margin deteriorated to 6.82% from 8.94% in FY15, due to increase in cost of raw material consumed. However, the same improved to 9.04% in FY17, on the back of decline in employee cost. The APAT margins fluctuated more or less in line with the PBILDT margins. In FY17, the APAT margin was marked at 0.53%. Working capital intensive nature of operations: The company operates in a working capital intensive business; however, operating cycle of the entity stood satisfactory during FY17. The company had a high inventory period of 237 days in FY17, as the company was required to maintain high inventory level of parent bird and raw material stock to feed the birds in different growing stages and to mitigate fluctuation in raw material prices. The company generally receives payment from its customers within a week. The raw material for feeding the birds was procured from its group firm RVV Agri Feeds Private Limited, resulting in a high credit period to MAPFPL. Due to a high creditor's period, the company had a satisfactory operating cycle during FY15-FY17, despite having operations in an industry where, operating cycle days are usually elongated in nature. Notwithstanding the above, the average CC utilization for last twelve months ended July 31, 2018 remained at high at 90%. Highly fragmented industry with intense competition from large number of players: MAPFPL faces stiff competition in the poultry business from large number of established and unorganized players in the market. Competition gets strong with the presence of unorganized players leading to pricing pressures. However, improved demand scenario of poultry products in the country enables well for the entity. Profitability margins are vulnerable to volatility in raw material prices: Maize is relatively a small scale crop in India and being a rain-fed crop, any monsoon failure will affect its harvest. The Poultry industry consumes more than 50% of the domestic maize production and its demand is expected to exceed the overall supply in the future. As the poultry industry is virtually a buyers' market, any sharp increase in raw material prices may not be fully passed on to the consumers thereby affecting the profit margin of the company. Project implementation risk: The company has borrowed a term loan of INR6.40 crore in FY18, in order to construct a 4 layer shed and purchase cages for storing birds. The total cost of the project is INR8.57 crore, the promoter's contribution being INR2.17 crore. As on August 30th 2018, the company has incurred a project cost of INR3.50 crore. (funded by term loan-Rs. 3 crore and promoters INR0.50 crore). The project is expected to be completed by October 2018. Key Rating Strengths Established track record and experience of the proprietor more than two decades in Poultry business: MAPFPL was incorporated on February 25, 2011 by the Reddy family. The company is promoted by Mr. Chandra Sekhar Reddy and his wife Mrs. Shalini Reddy, who have more than two decades of experience in the poultry business. Due to long term presence in the market, the promoters have established good relations with suppliers and customers resulting into established customer base which helps in securing regular orders from existing customers. Stable demand outlook of poultry products: Poultry products like eggs have large consumption across the country in the form of bakery products, cakes, biscuits and different types of food dishes in home and restaurants. The demand has been driven by the rapidly changing food habits of the average Indian consumer, dictated by the lifestyle changes in the urban and semi-urban regions of the country. The demands for poultry products are sustainable and accordingly, the kind of industry is relatively insulated from the economic cycle. Manchal Agro and Poultry Farms Private Limited (MAPFPL) was incorporated on February 25, 2011 by Mr. Reddy & family. The firm is engaged in farming of egg, laying poultry birds (chickens) and trading of eggs and cull birds. The firm sells its total products like eggs and cull birds to customers in and around Hyderabad, Telangana. The firm mainly buys most of the chicks from Venkateshwara Hatcheries. MANIKYAM POULTRY: CARE Assigns B+ Rating to INR10cr LT Loan ----------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Manikyam Poultry Farm (MPF), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 10.00 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of MPF is tempered by small scale of operations along with fluctuating total PAT margins, financial risk profile marked by leveraged capital structure and weak debt coverage indicators, highly fragmented industry with intense competition from large number of players and partnership nature of constitution with inherent risk of withdrawal of capital. The rating, however, derives strength from experience of the partners for more than two decade in poultry business, satisfactory working capital cycle, growth total operating income and stable outlook demand of poultry products. Going forward, ability of the firm to increase its scale of operations and improve the profitability margins, the ability of the company to improve its capital structure and debt coverage indicators are the key rating sensitivities. Detailed Description of the key rating drivers Key Rating Weaknesses Small scale operations along with thin PAT Margins: MPF was established in the year 2007. Further, the scale of operations of the entity remained small marked by Total operating income (TOI) of INR54.90 crore in FY18. The PBILDT margin of the firm has been fluctuating during the review period although remained satisfactory. However, the PBILDT margin declined from 7.22% in FY16 to 6.44% in FY18 due to competitive nature of business along with increase in employee cost and overheads. Financial risk profile marked by leveraged capital structure and weak debt coverage indicators: The firm has leveraged capital structure marked by overall gearing during the review period. However, the overall gearing has been improving year-on-year from 10.42x as on March 31, 2016 to 3.63x as on March 31, 2018 due to increase the net worth at the back of infusion of capital by the partners during review period coupled with accretion of profits year on year. The partners have infused capital to the tune of INR1.57 crore during FY17 and FY18. The debt coverage indicators of the firm also remained weak during the review period. However, total debt/GCA marginally improved from 11.98x in FY16 to 11.02x in FY18 due to decrease in total debt level at the back of repayment of term loans. However, interest coverage ratio remained moderate during the review period, though deteriorated from 1.80x in FY16 to 1.57x in FY18 due to increase in interest expenses. Highly fragmented industry with intense competition from large number of players: MPF faces stiff competition in the poultry business from large number of established and unorganized players in the market. Competition gets strong with the presence of unorganized players leading to pricing pressures. However, improved demand scenario of poultry products in the country enables well for the company. Constitution of the entity as a partnership firm: MPF being a partnership firm is exposed to inherent risk of the partner's capital being withdrawn at time of personal contingency and firm being dissolved upon the death/retirement/insolvency of the partners. Moreover, partnership firm business has restricted avenues to raise capital which could prove a hindrance to its growth. Key Rating Strengths Experience of the partner for more than two decades in Poultry business: MPF was established as partnership firm in the year 2007 by Mr. I. Siva Koti Reddy, K.Rama Mohan Rao and others. Mr.I.Siva koti reddy is a graduate by qualifiacation and has around thirty years of experience in the poultry business. Mr. K. Rama Mohan Rao is also a graduate by qualification and has around fifteen years experience in poultary business. Due to long term presence in the market, the partners have good relations with suppliers and customers. Satisfactory working capital Cycle: The MPF working capital cycle is satisfactory during review period due to cash and carry operations. The firm is required to keep high inventory level of parent bird and raw material stock feed the birds in different growing stages and to mitigate fluctuation in raw material prices. Growth in total operating income: The total operating income of MPF has been on increasing trend over the last three years from Rs 44.20 crore in FY16 to Rs 54.90 crore in FY18 registering a CAGR of 11.45% on account of increasing demand for its products from existing and new customers. The firm has long standing relationship with of its clients, M/s Shakthi Egg Center 50% (Goa), M/s Mandi Peer Egg Centre 10% (Belgaum) and Kumar Shan Egg Center 10% (Mumbai) from whom it gets repeated orders. During 4MFY19, the firm achieved total sales of Rs 18.5 crore. Stable demand outlook of poultry products: Poultry products like eggs have large consumption across the country in the form of bakery products, cakes, biscuits and different types of food dishes in home and restaurants. The demand has been driven by the rapidly changing food habits of the average Indian consumer, dictated by the lifestyle changes in the urban and semi-urban regions of the country. The demands for poultry products are sustainable and accordingly, the kind of industry is relatively insulated from the economic cycle. Manikyam Poultry Farm (MPF) was established in the year 2007 by Mr. I. Siva Koti Reddy, K.Rama Mohan Rao and others. The firm is engaged in farming of egg, laying poultry birds (chickens) and trading of eggs, cull birds and their manure. The firm sells its products such as eggs and cull birds to retailers through own sales personnel as well as through dealers in the states of Mumbai, Goa, Belgaum and Bangalore. The firm mainly buys chicks (small chickens) and inputs for feeding of birds like rice broken, maize, sun flower oilcake, shell grit, minerals and soya from local traders. NAKODA TECHNOFIBE: CARE Assigns B Rating to INR8.99cr LT Loan ------------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Nakoda Technofibe Private Limited (NTPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 8.99 CARE B; Stable Assigned Detailed Rationale & Key rating Drivers The rating assigned to the bank facilities of NTPL is primarily constrained on account of its financial risk profile marked by nascent stage of operations with operating loss and net loss, leveraged capital structure, weak debt coverage indicators and working capital intensive nature of operations. The rating is, further, constrained on account of vulnerability of margins to volatile raw material prices and its presence in cyclical, highly fragmented and competitive cotton industry. The rating, however, derives strength from the experienced management and location advantage. The ability of the company to increase its scale of operations along with improvement in its profitability in light of the competitive nature of the industry as well as volatile raw material prices and improvement in the solvency position is key rating sensitivities. Detailed description of the key rating drivers Key Rating Weakness Nascent stage of operations with operating loss, weak solvency and stressed liquidity position: It has started commercial operations from FY17 and FY18 is first full year of operations of the firm. It has registered Total Operating Income (TOI) of INR0.70 crore with operating loss and net loss of INR0.01 crore and INR0.25 crore respectively as per audited result of FY17. During FY18, it has registered TOI of INR30.13 crore. The capital structure of NTPL stood highly leveraged with an overall gearing of 10.94 times as on March 31, 2017. Further, the debt coverage indicators of the company stood weak with negative total debt to GCA and negative interest coverage in FY17. The business of NTPL is working capital intensive in nature marked by almost full utilization of its working capital limit (95-100%) in the last 12 months ended July, 2018. It maintains inventory of two months and gives credit period of 2 months to its customers whereas get credit period from suppliers of 15 days. Presence in the lowest segment of the textile value chain and in a highly fragmented cotton ginning industry: High proportion of small scale units operating in cotton ginning and pressing industry has resulted in fragmented nature of industry leading to intense competition amongst the players. As NTPL operates in this highly fragmented industry wherein large numbers of un-organized players are also present, it has very low bargaining power against both its customers as well as its suppliers. This coupled with limited value addition in cotton ginning process results in the firm operating at very thin profitability (PAT) margins. Key Rating Strengths Vast experience of promoters in cotton industry: Mr. Anand Jain (Director) has experience of more than two decade in the industry and look after overall activities of the company. Mr. Mridul Doshi and Mr. Sawan Doshi have experience of 10 and 15 years and look after purchase and production activities of the company respectively. Mr. Sushil Doshi, M.Com by qualification, has experience more than three decades and looks after selling activities of the company whereas Mr. Prem Chand Doshi, has experience of more than 3 decades and looks after marketing activities of the company. Strategically located in the cotton growing region: Gujarat, Maharashtra, Andhra Pradesh, Haryana, Madhya Pradesh and Tamil Nadu are the major cotton producers in India. The plant of NTPL is located in one of the cotton producing belt of Madhya Pradesh in India. The presence of NTPL in cotton producing region results in benefit derived from lower logistics expenditure (both on transportation and storage), easy availability and procurement of raw materials at effective price. Indore (Madhya Pradesh) based NTPL was incorporated in 2014 by Mr. Anand Jain and other relatives. NTPL is engaged in the business of cotton ginning, pressing activities and trading of cotton seeds and bales. The processing plant of the company is located at Indore and has total production capacity of 75 bales per day as on March 31, 2018. It procures raw cotton from local farmers. After getting raw cotton, the company does ginning and pressing activities and after processing it sells cotton seeds to oil mill in Madhya Pradesh. Further, it sells cotton bales to the textile mill, suit mill and thread mill to Vardhman and Trident group and others. NILACHAL CARBO: CARE Lowers Rating on INR9cr ST Loan to D --------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Nilachal Carbo Metalicks Private Limited (NCMPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 6.00 CARE D Revised from CARE B; Stable Short-term Bank Facilities 9.00 CARE D Revised from CARE A4 Detailed Rationale and Key Rating Drivers The revision in rating assigned to bank facilities of NCMPL takes into account of the weak liquidity position leading to delay in servicing of debt obligation availed by the company. The rating continue to be constrained by small scale of operation, weak financial risk profile, profitability susceptible to volatility in raw material prices and forex fluctuations, working capital intensive nature of operation and cyclicality associated with the steel industry. The ratings are however; derive strength from long experience of the promoter in coal and coke industry, diversified application of its product with close linkages with steel sector, favourable location of the plant with close proximity to Paradip port. Going forward, the ability of the company to increase its scale of operation while maintaining profitability margin and ability to maintain capital structure will continues to remain the key rating sensitivities. Detailed Description of Key Rating Drivers Key Rating Weakness Ongoing delay in servicing of term loan obligation: Based on interaction with one of the lenders, there are ongoing delays in servicing of debt obligation. Weak financial risk profile: The total operating income of the company has remained erratic over the last 4 years. In FY16 (refers to the period April 1 to March 31) the total operating income declined by 31.37% from FY15 levels on account of cessation of one of the large contracts due to which the company also incurred losses. Thereafter the turnover witnessed continued improvement since FY17 due to volume growth. The company reported a loss at PBILDT level and extraordinary loss of INR33 crore mainly on account of cessation of one of the contract which resulted in write off of slow/non-moving inventory. Due to high losses, the company's networth was eroded and it was unable to service the debt obligation on time and the account was classified NPA by SBI in March 2016. In March 2018, the company has done an OTS with SBI by virtue of which its debt of INR65 crore has been settled for INR26.5 crore and the same has to be paid off by March 2019 resulting in weak debt protection metrics. Small scale of operation: With an installed capacity of 72,000 MTPA NCMPL is relatively small player. With its small size, the company does not get benefit from economies of scale and during financial stress it may impact the business as compared to large players in same industry. Volatility in the prices of raw material and finished goods: The coking coal prices are highly volatile in nature due to commodity nature of product, whose prices are determined based on global demand supply. Given that any sharp decline in raw-material prices needs to be immediately passed on to consumers whereas any sharp increase in finished goods prices are passed to the consumers with a certain time lag, the profitability of the company is susceptible to fluctuation in raw-material prices. Customer concentration risk: Majority of the revenue for the company is derived from few players in FY18, NCMPL derived around 98% of its revenue from top 5 customers and around 68% in FY17, which shows indicates customer concentration risk. Cyclical nature of steel industry: NCMPL is in the business of manufacturing and trading of LAM coke which is required in the manufacturing of steel products like pig iron, ferro alloys metals etc. so there is a high degree of dependence on the fortunes of the steel industry, which is cyclical in nature. Key Rating Strength Considerable experience of the promoters in coke industry: Nilachal Carbo Metalicks Private Limited (NCMPL) commenced its operation in 2003 under Dr. B D Chatterjee along with Mr. Bibhudatta Panda. Subsequently the entire stake was bought by Mr. Panda. Mr. B .D Panda, started his career as a trader of imported minerals and coal before venturing into LAM coke manufacturing and having 27 years of overall experience. Strategic location of the plant: Company imports its cooking coal from Australia and its manufacturing unit is located at Chadeidhara (Kalinganagar) Odisha near to Paradip port which reduces the transportation cost. Diversified application of NCMPL's product with close linkages with steel sector: LAM coke is used in the production of steel and ferro alloy. It is also used as a fuel for various iron/steel foundries for lead smelting, non-ferrous metal casting etc. Further it is also used by secondary steel producers, chemical plants and pig iron producers. Nilachal Carbo Metalicks Private Limited (NCMPL) was incorporated in 2003 by Dr. B D Chatterjee along with Mr. Bibhudatta Panda. NCMPL produces and sells sized coke - nut coke and coke fines with the present installed capacity of 72,000 MTPA at Chadeidhara (Kalinganagar) Odisha. The day to day operation of the company led by Mr. Panda with the help of Mr. S.C Naik, Ex Executive Director SAIL and Ex- Director Operations, Jindal Stainless Limited. The management team includes another eight professionals from diverse field of operations and management. OM ENERGY: CRISIL Reaffirms B+ Rating on INR38.35cr Term Loan ------------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long- term bank facilities of OM Energy Generation Private Limited (OEGPL). The rating continues to reflect the company's exposure to risks related to implementation of its project for setting up a hydropower plant. This weakness is partially offset by the extensive experience of the top management in setting up hydropower projects and expected support from the parent group. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Proposed Long Term Bank Loan Facility 1.65 CRISIL B+/Stable (Reaffirmed) Rupee Term Loan 38.35 CRISIL B+/Stable (Reaffirmed) Key Rating Drivers & Detailed Description Weakness * Risks related to implementation of project for setting up a hydropower plant: OEGPL's hydropower project is exposed to moderate project implementation risk, accentuated by the fact that civil construction is going on, with work on excavation completed. The risk is mitigated as the company has obtained all the necessary approvals. Strengths * Extensive experience of the top management in setting up hydropower projects and expected support from the parent group: The director Mr. Dalip Dua (who is also the managing director of Krishna Hydro Projects Pvt Ltd [KHPPL]) has extensive experience in setting up projects of a similar kind. OEGPL is also likely to benefit significantly from its parent group, primarily because its plant will be a captive power plant and will supply to group companies. Outlook: Stable CRISIL believes OEGPL will continue to benefit over the medium term from the favourable demand prospects for power, especially renewable energy. The outlook may be revised to 'Positive' if the company stabilises operations earlier than expected and within the budgeted cost, resulting in large cash accrual, and hence, a better financial risk profile. The outlook may be revised to 'Negative' if there is a significant time or cost overrun in the project, leading to delay in commencement of operations, and consequently, to low cash accrual and weakening of the financial risk profile. OEGPL, part of the OPG group, was incorporated in 2010 to execute a 7-megawatt hydropower project in Chamba (Himachal Pradesh). The company is promoted by Mr Ravi Gupta and his family members. Its daily operations will be managed by director Mr Dalip Dua. OEGPL is expected to commence commercial operations in April/May 2019. R M ENTERPRISE: CARE Lowers Rating on INR7.50cr LT Loan to D ------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of R M Enterprise (RME), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 7.50 CARE D; Issuer not cooperating; Facilities Revised from CARE B+; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers Ongoing delay in debt servicing: The revision in the rating assigned to the bank facilities of RME is primarily due to irregularity in servicing its debt obligations. CARE has been seeking information from R M Enterprise to monitor the ratings vide e-mail communications/letters dated April 4, 2018, May 14, 2018, June 27, 2018, July 25, 2018, July 26, 2018, July 30, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings on R M Enterprise's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Surat (Gujarat) based, RME was established as a partnership firm in 2015. RME is currently executing a residential with 3 BHK 51 flats at Surat named 'Kusum Heights' which comprises of 13 floors involving development of 1895.16 Square Feet area. The project implementation commenced in October 2015 and till April 2017, RME has incurred the total cost of INR8.81 crore (45% of total project cost) out of the total cost of INR19.43 crore. RME has received approvals for land and other relevant clearances for the project. RAJ CONSTRUCTION: CRISIL Maintains B+ Rating in Not Cooperating --------------------------------------------------------------- CRISIL said the rating on bank facilities of Raj Construction (RC) continues to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 7.5 CRISIL A4 (ISSUER NOT COOPERATING) Cash Credit .5 CRISIL B+/Stable (ISSUER NOT COOPERATING) Proposed Long Term 2.0 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING) CRISIL has been consistently following up with RC for obtaining information through letters and emails dated Feb. 28, 2018 and Aug. 31, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 RC, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on RC is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the rating on bank facilities of RC continues to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. RC, established in 2007, is a partnership firm that executes civil construction projects. The firm primarily undertakes the construction of buildings for various government departments. Mr. Anil Kumar Singh, Mr. Ranjeet Kumar Singh, Mr. Sanjay Kumar Singh, Ms. Neelam Singh and Ms. Geeta Singh are the partners. However, the operations are primarily managed by Mr. Ranjeet Kumar Singh. The firm is a registered Class 1A contractor with the Jharkhand government. RUTUJA INDUSTRIES: CRISIL Hikes Rating on INR16cr Loan to B+ ------------------------------------------------------------ CRISIL has upgraded its rating on the long-term bank facility of Rutuja Industries (RI) to 'CRISIL B+/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 16 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The upgrade reflects estimated increase in revenue to INR81 crore in fiscal 2018 from INR68 crore in the previous fiscal. Turnover is expected to continue to grow at a moderate pace over the medium term. Ramp up in scale and moderate operating profitability are expected to result in higher accrual over the medium term, thus improving liquidity. Steady equity infusion by promoters also supports liquidity. The rating reflects RI's below-average financial risk profile and large working capital requirement. These weaknesses are partially offset by the extensive experience of its promoters and their funding support. Analytical Approach Unsecured loans of INR9.9 crore as on March 31, 2018, are treated as 75% equity and 25% debt as these are subordinated to bank borrowing and are expected to remain in business over the medium term. Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile: Gearing was high at 5 times as on March 31, 2018, while debt protection metrics were subdued, with interest coverage and net cash accrual to total debt ratios of 1.2 times and 0.02 time, respectively, in fiscal 2018. * Large working capital requirement: Gross current assets were 195 days as on March, 2018, because of sizeable inventory of 180 days. Strength * Extensive experience of promoters: The firm's promoters have been in the cotton industry for around 15 years and have regularly infused funds. Outlook: Stable CRISIL believes RI will continue to benefit from its promoters' extensive experience. The outlook may be revised to 'Positive' if substantial increase in revenue and profitability leads to better-than-expected cash accrual, or sizeable capital infusion strengthens financial risk profile. The outlook may be revised to 'Negative' if considerable decline in revenue and profitability, higher than expected capital withdrawals, stretch in working capital cycle, or debt-funded capital expenditure further weakens financial risk profile, especially liquidity. Set up as a partnership firm in 2003 by Ms Sangita Sharad Sarda, Mr Narsing Somani, and Mr Sachin Musale, SI gins cotton and extracts and refines cotton seed oil at its unit in Beed, Maharashtra. S. K. TEXTILES: CRISIL Lowers Ratings on INRcr Loans to D --------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facility of S. K. Textiles to 'CRISIL D' from 'CRISIL BB-/Stable. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 6 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Long Term Loan 1 CRISIL D (Downgraded from 'CRISIL BB-/Stable') The rating downgrade reflects the delay in the repayments of its term loans due to stretched liquidity and elongated receivables. Analytical Approach For arriving at the rating, CRISIL has combined the business and financial risk profiles of Innova Fabtex Pvt Ltd (Innova) and SKT. That's because both the entities, together referred to as the S.K. group, are in a similar line of business, have a common management and centralized treasury operations. Key Rating Drivers & Detailed Description Strengths * Delay in term loans: Large receivables caused stretched liquidity, resulting in delay in of repayment of its term loans. Weakness * Modest scale of operations: Revenue was modest at INR31.35 crore for fiscal 2018. * Modest profitability: Profitability was modest in the range of 4.8-7.7% over 3 years ended fiscal 2018. Intense competition and limited integration in the textile value chain constrains profitability. Strength * Extensive industry experience of the key promoter and established relationships with customers and suppliers: The promoter has an industry experience of 15 years, over which he has developed a strong relationship with core suppliers of the group, thus supporting the business risk profile. SKT was established in 2006 by Mr Sunil Kukreja. The firm manufactures and trades in fabrics, mainly cotton, polyester, and cotton-polyester fabrics. Later on in 2014, he along with his wife, Mrs Lisha Kukreja, set up Innova in 2014; which is also engaged in the same line of business. SARDAR POULTRY: CARE Assigns B+ Rating to INR5.48cr LT Loan ----------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Sardar Poultry Farm (SPF), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5.48 CARE B+; Stable Assigned Detailed Rationale and key rating drivers The rating assigned to the bank facilities of SPF is primarily constrained by its small scale of operation with moderate profitability margins, presence in highly competitive and fragmented industry with risk of outbreaks of bird flu and highly price sensitive consumer segment and leveraged capital structure coupled with working capital intensive nature of operation. The rating, however, derives strength from its experienced proprietor with long track record and satisfactory demand outlook for the poultry sector. Going forward, the ability of the firm to improve its scale of operation along with profitability margins and efficient management of working capital are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Small scale of operation with moderate profitability margins: SPF is a small player in poultry farming business with total operating income of INR7.28 crore and PAT of INR0.18 crore, respectively, in FY17. Furthermore, the total capital employed was also modest at INR5.54 crore as on March 31, 2017. The small scale restricts the financial flexibility of the firm in times of stress. Furthermore, the profitability margin was also moderate as PBILDT margin was at 11.60% and PAT margin was at 2.46% during FY17. During FY18, the firm has achieved total operating income of INR12.00 crore. Presence in highly competitive and fragmented industry with risk of outbreaks of bird flu and highly price sensitive consumer segment: The poultry farming sector is exposed to inherent risks associated with the industry, like bird flu, extreme weather conditions and contamination by pathogens. The outbreak of bird flu leads to a fall in demand and consequent sharp crash in poultry's prices. This apart, egg is the major raw material for poultry farming, the price of which is volatile as the price of the egg is derived by National Egg Co-ordination Committee (NECC) on daily basis based on the demand-supply dynamics. On the other hand, poultry feed industry is highly price sensitive on account of its intensely competitive and fragmented nature due to presence of many regional unorganized players. This apart, availability of cheaper substitutes (like cotton seedcake, copra etc.) further induce pricing and profitability pressures. Leveraged capital structure coupled with working capital intensive nature of operation: The financial risk profile of the firm is weak. The capital structure of the firm is leveraged marked by high debt-equity ratio and overall gearing ratio as on last three account dates. Both the ratios have deteriorated as on March 31, 2017 on account of availment of term loan to fund the expansion project already completed. However, debt protection indicators, marked by interest coverage ratio, were satisfactory at 7.78. Total debt to GCA was at 5.80x during FY17. Current ratio was below unity at 0.96x as on March 31, 2017. Furthermore, SPF's business is working capital intensive. During FY17, operating cycle was 50 days due to high inventory stocked by the firm. The aforesaid reason led to high utilization of its bank borrowing at around 85% during the last 12 months ended May 2018. Key Rating Strengths Experienced proprietor with long track record: SPF is currently managed by Mr. Bhupindra Kaur, proprietor, having over three decade of experience in similar line of business. This apart, the firm has a track record of one and half decade of operation. Satisfactory demand outlook for the poultry sector: Poultry products like eggs have large consumption across the country in the form of bakery products, cakes, biscuits and different types of food dishes in home and restaurants. The demand has been driven by the rapidly changing food habits of the average Indian consumer, dictated by the lifestyle changes in the urban and semi-urban regions of the country. The demands for poultry products are sustainable and accordingly, the kind of industry is relatively insulated from economic cycle. As per Agricultural and Processed Food Products Export Development Authority (APEDA), poultry is one of the fastest growing segments of the agricultural sector in India. Currently, India is the world's fifth largest egg producer and the eighteenth largest producer of broilers. The potential in the poultry sector is increasing due to a combination of factors - growth in per capita income, growing urban population and falling poultry prices. Also poultry meat is the fastest growing component of global meat demand, and India, one of the world's fastest growing countries is experiencing a rapid growth in its poultry sector. Sardar Poultry Farm (SPF) established during February 2008 by one Mr Bhupindra Kaur of Bilaspur. SPF is engaged in the business of layer poultry farming and involved in sales of eggs and birds. The farming facility of the firm is located near Bilaspur in Chhattisgarh. The day-to-day affairs of the firm are looked after by Mr. Bhupindra Kaur with adequate support from a team of experience personnel. SHAH GROUP: CARE Lowers Rating on INR135cr LT Loan to D ------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Shah Group Builders Limited (SGBL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 135.00 CARE D; ISSUER NOT COOPERATING; Facilities Revision from CARE D; ISSUER NOT COOPERATING; Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from SGBL to monitor the rating(s) vide e-mail communications vide e-mail communications dated November 1, 2017, December 2, 2017, February 7, 2017, June 5, 2018, letter dated June 6, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on SGBL's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating in March 16, 2017, the following were the rating strengths and weaknesses: The ratings of SGBL's factors in ongoing delays in servicing of the Bank facilities by the company, due to weak liquidity profile of the company. Shah Group Builders Limited (SGBL) is closely held public limited company incorporated in June 26, 2006. SGBL is wholly owned subsidiary of Shah Group Builders & Infraprojects Ltd.(SGBIL). Shah Group through SGBIL has successfully implemented several projects in Navi Mumbai. The group had developed about 97,600 sq. ft. of area as on January 31, 2016. SGBL is currently implementing a commercial cum residential complex "SHAH KINGDOM" spread over a land area of 14,028 Sq. Mtrs. at Sector-20 Kharghar, Navi Mumbai. Project details 'SHAH KINGDOM': The project comprises five towers on a plot of 14028.38 sq. mtrs.; which will comprise of commercial on ground floor plus 2 level podium parking plus 1 level podium with garden, gymnasium, health club, swimming pool plus 24 residential floors. The sizes of the apartments would range from 2 BHK to 5 BHK along with duplexes on the upper floors. SHITALPUR MOHINDER: CARE Reaffirms B Rating on INR8.16cr Loan ------------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Shitalpur Mohinder Kalimata Himghar Pvt. Ltd. (SMKHPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 8.16 CARE B; Stable Reaffirmed Detailed Rationale & Key Rating Drivers The rating for bank facilities of SMKHPL continues to remain constrained by its small size of operations, regulated nature of business, competitive scenario, seasonality of business with susceptibility to vagaries of nature, working capital intensive nature of business, high leverage ratios and risk of delinquency in loans extended to farmers. The rating, however, derives strength from its experienced management and proximity to potato growing area. Going forward, ability to increase its scale of operation and profitability margins and ability to manage working capital effectively are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Strengths Experienced promoters: The company has been promoted by Mr. Tarun Kanti Ghosh (aged about 59 years), has about three decades of experience in similar line of business. He is being duly supported by the other director Mr. Arun Ghosh (Director, Age: 62 years), Mr. Bimalendu Ghosh (Director, Age: 50 years), Mr. Biswanath Das (Director, Age: 53 years) and Mr. Krisna Chandra Nayek (Director, Age: 45 years) and a team of experienced personnel. Proximity to potato growing area: SMKHPL's storing facility is situated in the Hooghly district of West Bengal which is one of the major potato growing regions of the state. The favorable location of the storage unit, in close proximity to the leading potato growing areas provides it with a wide catchment and making it suitable for the farmers in terms of transportation and connectivity. Key Rating Weaknesses Small size of operations: The company is a relatively small player in cold storage business with revenue and PAT of INR3.23 crore and INR0.14 crore respectively in FY18 Provisional. Furthermore, the total capital employed was also modest at INR11.51 crore as on March 31, 2018. The small scale restricts the financial flexibility of the company in times of stress. Regulated nature of business: In West Bengal, the basic rental rate for cold storage operations is regulated by state government through West Bengal State Marketing Board. Due to ceiling on the rentals to be charged it is difficult for cold storage units to pass on increase in operating costs. Seasonality of business with susceptibility to vagaries of nature SMKHPL's operation is seasonal in nature as potato is a winter season crop with its harvesting period commencing in March. The loading of potatoes in cold storages begins by the end of February and lasts till March. Additionally, with potatoes having a preservable life of around eight months in the cold storage, farmers liquidate their stock from the cold storage by end of season i.e., generally in the month of November. The unit remains non-operational during the period between December to February. Furthermore, lower agricultural output may have an adverse impact on the rental collections as the cold storage units collect rent on the basis of quantity stored and the production of potato is highly dependent on vagaries of nature. Risk of delinquency in loans extended to farmers: Against the pledge of cold storage receipts, SMKHPL provides interest bearing advances to the farmers & traders. Before the closure of the season in November, the farmers & traders are required to clear their outstanding dues with the interest. In view of this, there exists a risk of delinquency in loans extended, in case of downward correction in potato or other stored goods prices, as all such goods are agro commodities. Competition from other local players: In spite of being capital intensive, the entry barrier for new cold storage is low, backed by capital subsidy schemes of the government. As a result, the potato storage business in the region has become competitive, forcing cold storage owners to lure farmers by providing them interest bearing advances against stored potatoes which augments the business risk profile of the companies involved in the trade. Working capital intensive nature of business: SMKHPL is engaged in the cold storage business, accordingly its operation is working capital intensive. The same is reflected by the higher working capital requirement for the company and the average utilization for the same remained at about 95% during the last 12 months ended August 31, 2018 Leveraged capital structure and moderate debt coverage indicators: The overall gearing ratio of the company, deteriorated to 3.33x in FY18 from 1.57x as on March 31, 2017. Moreover, total debt to GCA has also deteriorated to 15.38x in FY18 from 6.26x in FY17. Furthermore, interest coverage ratio has also declined to 1.79x in FY18 from 2.17x in FY17. Shitalpur Mohinder Kalimata Himghar Pvt. Ltd. (SMKHPL) was incorporated on May 6, 2011 by Mr. Tarun Kanti Ghosh, Mr. Arun Ghosh, Mr. Bimalendu Ghosh, Mr. Biswanath Das and Mr. Krisnachandra Nayek of Hooghly West Bengal to provide cold storage services with the facility being located at Dhaniakhali, Hooghly, West Bengal. The company commenced commercial operation since April, 2012. SMKHPL is currently engaged in the business of providing cold storage facility at the same location primarily for potatoes and is operating with a storage capacity of 1,98,450 quintals. Besides providing cold storage facility the unit also works as a mediator between the farmers and marketers of potato, to facilitate sale of potatoes stored and it also provides interest bearing advances to farmers for farming purposes of potato against potato stored. Mr. Tarun Kanti Ghosh (MD) looks after the day to day operations of the unit. SHIV COTTON: CARE Lowers Rating on INR5.40cr LT Loan to 'D' ----------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Shiv Cotton Industries (SCI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 5.40 CARE B; Issuer Not Cooperating, Facilities Revised from CARE B+; Issuer Not Cooperating Detailed Rationale& Key Rating Drivers CARE has been seeking information from SCI to monitor the ratings vide e-mail communications/letters dated September 3, 2018, September 4, 2018 and September 5, 2018 and numerous phone calls. However, despite CARE's repeated requests, the entity has not provided the requisite information for monitoring the ratings. In line with extant SEBI guidelines, CARE has reviewed the rating on the basis of publicly available information which however in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Shiv Cotton Industries' bank facilities will now be denoted as CARE B; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating done on May 10, 2017, the following were the rating strengths and weaknesses: Key Rating Weaknesses Fluctuating scale of operations while profit margins continue to remain very low: SCI reported de-growth of 15.14% in its TOI to INR47.32 crore during FY15 due to decline in price of cotton. PBILDT margin has improved by 68 bps but remained low at 2.18% during FY15. Further, due to low value addition nature of business operations, profit margins and cash accruals remained very low during FY15. Moderately leveraged capital structure and moderate debt coverage indicators: Capital structure of SCI improved and remained moderately leveraged as on March 31, 2015 as reflected by debt equity ratio of 0.94 times and overall gearing ratio of 1.36 times. On account of decline in total debt level, TD/GCA improved to 8.95 times in FY15, however, higher interest costs led to decline in interest coverage ratio to 2.04 times during FY15. Moderate liquidity profile: Liquidity position remained moderate as marked by moderate current ratio and below unity quick ration as on March 31, 2015 indicating high inventory maintained by the firm owing to seasonal nature of business operations. Working capital borrowings fluctuates because SCI is engaged in cyclical nature of business. Presence in highly fragmented industry with limited value addition: SCI is engaged in the ginning and pressing of cotton which involves very limited value addition and hence results in thin profitability. Moreover, on account of large number of units operating in cotton ginning business, the competition within the players remains very high resulting in high fragmentation and further restricts the profitability. Thus, ginning players have very low bargaining power against its customer as well as suppliers. Partnership nature of its constitution: Constitution as partnership restricts SCI's overall financial flexibility in terms of limited access to external funds for any future expansion plans. Further, there is inherent risk of possibility of withdrawal of capital and dissolution of the firm in case of death/insolvency of partner. Key Rating Strengths Promoters experience in cotton ginning business: SCI's operations are jointly managed by five partners of the firm. Majority of the partners have prior experience in cotton ginning and pressing industry through their earlier employment with other entities having same business. Strategically located within the cotton producing area: SCI's plant is located in cotton producing belt of Gujarat region which is the largest producer of raw cotton in India. Hence, SCI's presence in cotton producing region results in benefit derived from lower logistics expenditure (both on transportation and storage), easy availability and procurement of raw materials at effective prices and consistent demand for finished goods resulting in sustainable revenue visibility. Shiv Cotton Industries (SCI) was established in November 2011 as a partnership firm by 12 partners for setting up of new ginning and pressing unit with the installed capacity of 7,668 MT per annum. The manufacturing plant is situated at Babara (District: Amreli), Gujarat. SCI commenced its operations from July 2012 onwards. SHIV JYOTI: CRISIL Maintains D Rating in Not Cooperating -------------------------------------------------------- CRISIL said the rating on bank facilities of Shiv Jyoti Furnace Private Limited (SJFPL) continues to 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4.5 CRISIL D (ISSUER NOT COOPERATING) Long Term Loan 1.75 CRISIL D (ISSUER NOT COOPERATING) Proposed Long Term Bank Loan Facility 3.75 CRISIL D (ISSUER NOT COOPERATING) CRISIL has been consistently following up with SJFPL for obtaining information through letters and emails dated Feb. 28, 2018 and Aug. 31, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 SJFPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on SJFPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the rating on bank facilities of SJFPL continues to 'CRISIL D Issuer not cooperating'. Incorporated in 2010 by Mr. Harikishan Goel and Mr. Gurvinder Garg, SJFPL manufactures mild steel ingots. Its manufacturing facility is in Abu Road (Rajasthan). SHIV JYOTI RICE: CARE Lowers Rating on INR6.48cr LT Loan to B- -------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Shiv Jyoti Rice Mills (SJRM), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 6.48 CARE B-; Stable; ISSUER NOT Facilities COOPERATING; Revised from CARE B; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from SJRM to monitor the rating(s) vide e-mail communications/letters dated May 8, 2018, May 15, 2018 and May 31, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Further, SRJM has not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. The rating on SJRM's bank facilities will now be denoted as CARE B-; Stable; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating on June 2, 2017, the following were the rating strengths and weaknesses. Key Rating Weakness Modest scale of operations and constitution as a partnership concern: The scale of operations of the firm stood modest with TOI decreased by 25% over FY15 mainly on account of decrease in the prices of rice. The low net worth base makes its operations highly susceptible to any business shock, thereby limiting its ability to absorb losses or financial exigencies. Furthermore, its constitution as a partnership concern led to risk of withdrawal of capital. Moderate profitability margins, weak solvency position and working capital intensive nature of operations: Due to agro commodity nature of the business, the profitability of the firm stood moderate. During FY16, the PBILDT margin of the firm improved over FY15. The capital structure of the firm stood highly leveraged with an overall gearing stood very high as on March 31, 2016, deteriorated as against FY15 mainly on account of disbursement of new term loan as well as higher utilization of working capital bank borrowings. The business of the firm is working capital intensive nature of operations being present in the processing of agriculture commodities industry. The operating cycle of the firm stood elongated in FY16, due to increase in inventory holding period. Key Rating Strengths Experienced partners in the agro processing industry: Mr Chiman Lal Garg and Mr Vijay Kumar Goyal, key partners of the firm, have more than three decades of experience in the processing and trading of agricultural commodities industry. They look after overall affairs of the firm and are assisted by experienced management team. With the long-standing presence of the partners in the industry, the partners have established relationship with the customers as well as suppliers. Hanumangarh-based (Rajasthan) SJRM was formed in July, 1999 as a partnership concern by three partners who are sharing profit & loss equally. SJRM is mainly engaged in the processing of basmati and non-basmati paddy. The processing plant of the firm has an installed capacity of 4 tons per hour (TPH) for processing of paddy as on March 31, 2017. The firm purchases paddy from traders as well as mandis and sells rice (both basmati and non-basmati rice) to exporters located in Delhi and Punjab. It also markets rice under the brand name of "Mastani". During FY16 (FY refers to the period April 1 to March 31), SJRM reported a Total Operating Income (TOI) of INR17.01 crore (FY15: INR22.76 crore) with a PAT of INR0.02 crore (FY15: INR0.02 crore). As per FY17 provisional results the firm has reported TOI of INR32.61 crore. SHRI VAIJANATH: CARE Migrates 'D' Rating to Not Cooperating ----------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Shri Vaijanath Industries Private Limited to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 2.00 CARE D; Issuer not cooperating; Facilities based on the basis of best available information. Long term Bank 4.10 CARE D; Issuer not cooperating; Facilities based on the basis of best available information. Short term Bank 0.31 CARE A4; Issuer not cooperating; Facilities based on the basis of best available information. Detailed Rationale & Key Rating Drivers CARE has been seeking information from Shri Vaijanath Industries Private Limited to monitor the rating vide e-mail communications/ letters dated April 30, 2018, May 10, 2018, May 14, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of best available information which however, in CARE's opinion is not sufficient to arrive at fair rating. The rating on Shri Vaijanath Industries Private Limited's bank facilities will now be denoted as CARE C; Issuer not Cooperating/ CARE D; Issuer not Cooperating/CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers The rating assigned to the bank facilities of Shri Vaijanath Industries Private Limited continues to be tempered by small scale of operations; weak financial risk profile marked by inadequate capital structure and weak debt coverage indicators and elongated operating cycle. The rating also takes into account the marginal increase in total operating income and increase in PBILDT margin in FY17 (refers to the period April 1 to March 31). The rating however continues to draw its strength from experienced promoters. Key Rating Weakness Small Scale of operations: The total operating income of the company is small at INR 12.28 crore in FY17 (refers to the period April 1 to March 31) when compared to other peers in the industry. Weak financial risk profile marked by inadequate capital structure, weak debt coverage indicators and elongated. Operating cycle: The company has inadequate capital structure during review period. The debt equity ratio and overall gearing ratio of the SVIPL remained negative respectively at -1.80x and - 7.93 as on March 31, 2017, due to erosion of net worth on account of accumulated losses. The company has weak debt coverage indicators marked by total debt to GCA and PBILDT interest coverage ratio are respectively at 40.79x and 1.21x in FY17 on account of low gross cash accruals (GCA) levels. SVIPL has elongated operating cycle during review period and remained at 100 days in FY17. Key Rating Strengths Experienced promoters: SVIPL was incorporated in the year 2008 by the Huddar family. The promoters of the company Mr. Parashram, Mr. Girish and Mr. Namdev have 30yrs experience each supported by professionals with adequate experience. Increase in total operating income and improved profitability margins: The total operating income of the company increased from INR11.15 crore in FY16 to INR12.28 crore in FY17. The PBILDT margin of the company increased from 3.93% in FY15 to 8.11 in FY17 due to decrease in raw material costs. Shri Vaijanath Industries Pvt. Ltd was incorporated on 13th July 2008, it is involved in the business of forging. It started its commercial production in 2010. The company has its own manufacturing unit in Kolhapur. Total installed capacity of the unit is 3000MTPA. It has 2 Induction Machines, heat treatment furnace, ISO furnace, 2-Tons hammer and 1-Ton hammer installed in its Kolhapur unit. The products of the company find their application in automobiles and CNC machines. In FY17, SVIPL had a net loss of INR0.29 crore on a total operating income of INR12.28 crore, as against net loss and TOI of INR0.55 crore and INR12.09 crore, respectively, in FY16. SP ACCURE: CRISIL Migrates Rating to B/Stable Not Cooperating ------------------------------------------------------------- CRISIL had migrated the rating of SP Accure Labs Private Limited (SP) to 'CRISIL B/Stable Issuer Not Cooperating'. However, the Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 7.5 CRISIL B-/Stable (Revised from 'CRISIL B/Stable ISSUER NOT COOPERATING' to 'CRISIL D' and simultaneously migrated to 'CRISIL B-/Stable') Long Term Loan 10.0 CRISIL B-/Stable (Revised from 'CRISIL B/Stable ISSUER NOT COOPERATING' to 'CRISIL D' and simultaneously migrated to 'CRISIL B-/Stable') The rating migrated to 'CRISIL B-/Stable' from 'CRISIL D', reflects CRISIL's belief that there has been no overdrawal in CC account since February 2018 and there is no irregularity in any of the facilities in the past three months. Due to inadequate information, in line with Sebi guidelines, CRISIL had migrated the rating of SP to 'CRISIL B/Stable Issuer Not Cooperating'. However, the management has subsequently started sharing requisite information, necessary for carrying out comprehensive review of the rating. The rating revision to 'CRISIL D', takes into account past instance of delay in interest of Working capital facility (cash credit) The rating migrated to 'CRISIL B-/Stable' from 'CRISIL D', reflects CRISIL's belief that there has been no overdrawal in CC account since February 2018 and there is no irregularity in any of the facilities in the past three months. The ratings reflect an below average financial risk profile because of a modest net worth, high gearing, low debt protection metrics, and weak liquidity. The ratings also factor in large working capital requirement, and susceptibility of the operating margin to volatility in raw material prices. These weaknesses are partially offset by the extensive experience of the promoters in the pharmaceutical industry and established customer relationship. Key Rating Drivers & Detailed Description Weaknesses * Below average financial risk SP's gearing is estimated to remain moderate at 1.73 times as on March 31, 2018. Modest net worth: SP's financial risk profile is constrained by its net worth of INR21.6 cr as on March 31, 2018. The net worth has remained modest because of the firm's scale of operations and low accretions to reserves. SP has low debt protection metrics, as reflected in its estimated net cash accruals to total debt ratios and interest coverage ratio of 0.03 times and 1.61times, respectively, for 2017-18. * Large Working capital requirements SP has large working capital requirements, as reflected in its gross current assets of around 248 days as on March 31, 2018, driven by large debtors of around 151 days and creditors of 143 days. To increase its sales, the company extends credit of about 90-120 days to domestic customers and makes export sales on cash against delivery basis. On the purchases front, the company gets credit of around 90-120days. The credit available from suppliers will remain a rating sensitivity factor, as any decline in credit from suppliers will increase reliance on external debt * Susceptibility of the operating margin to volatility in raw material prices SP's limited bargaining power with key customers and exposure to intense competition in the fragmented pharmaceutical industry constrain the company's ability to pass on raw material price increases entirely to customers. Hence, the company's profitability is susceptible to any sharp increase in raw material prices. Competition from major players, as well as many local and small unorganised players affecting its profitability margins. Strengths * Promoters' extensive industry experience SP acuure labs Private Limited is expected to benefit from promoters' extensive industry experience. The management has extensive experience in manufacturing of bulk drugs. The promoter of the company Mr. K.vijay Prakash has experience of more than two decades in ocology manufacturing industry. Outlook: Stable CRISIL believes SP will continue to benefit from the extensive industry experience of its promoters and its established relationship with customers. The outlook may be revised to 'Positive' if there is sustained improvement in the working capital cycle, or a substantial increase in networth most likely due to sizeable equity infusion. The outlook may be revised to 'Negative' in case of a steep decline in profitability margins, or significant deterioration in the capital structure caused most likely by a stretched working capital cycle. Incorporated in 2013 and based in Hyderabad, SP is promoted by Mr K Vijay Prakash. The company sells and distributes pharmaceutical formulations, mainly oral solids and injectables, with specialisation in the oncology segment. SREE BHARATI: CARE Migrates D Rating to Not Cooperating Category ---------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Sree Bharati Bio Genetics Private Limited (SBBGPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 6.00 CARE D Stable; Issuer not Facilities cooperating; based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from SBBGPL to monitor the rating vide e-mail communications/letters dated August 13, 2018, August 20, 2018, August 21, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the rating. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of publicly available information which however, in CARE's opinion is not sufficient to arrive at fair rating. The rating on Sree Bharati Bio Genetics Private Limited's bank facilities will now be denoted as CARE D; Issuer not Cooperating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers The rating assigned to the bank facilities of Sree Bharati Bio Genetics Private Limited continues to be tempered by small scale of operations, ongoing delays in servicing debt obligation due to delay in realizing debtors, weak financial risk profile marked by leveraged capital structure, weak debt coverage indicators and presence in a fragmented industry with intense competition. The rating however continues to draw its strength from the experience of the promoters in the industry. Key Rating Weakness Short track record, small scale of operations and low networth base: The company has incorporated in the year in 2013 and commercial operations started from March 2015. The total operating income of the company stood small at INR1.79 crore in FY17 when compared to INR1.04 crore in FY16. The tangible net worth continue to remain low at INR0.31 crore as on March 31, 2017 on account of accumulated losses over the last two years. Ongoing delays in servicing debt obligation due to delay in realizing debtors: The company is delaying servicing of interest obligation on term loan account as the company has started its commercial operation from April 2016, resulted in under absorption overheads and further leads to delay in meeting its interest in timely manner. Due to the above said factor, the company is unable to make the timely payment of debt obligation. Leveraged capital structure and weak debt coverage indicators: The capital structure continue to remain leveraged marked by overall gearing of 24.18x as on March 31, 2017 as against 38.17x as on March 31, 2016. The debt coverage ratios continue to remain weak marked by TD/GCA and interest coverage ratio of 15.44x and 1.66x respectively in FY18. Presence in a fragmented industry with intense competition: The company is engaged in drying of maize which involves limited value addition and hence results in thin profitability. Moreover, on account of large number of units operating in similar business, the competition among the players remains very high resulting in high fragmentation and further restricts the profitability. Key Rating Strengths Experience of Promoters: Sree Bharati Bio Genetics Private Limited (SBBGPL) was established in the year 2013 and promoted by Mr.Rama Krishna Reddy along with his family members. Mr. Rama Krishna Reddy is a qualified graduate and having seven years of experience in drying of maize business. Sree Bharati Bio Genetics Private Limited (SBBGPL) was incorporated in the year 2013 and the company started its commercial operations from March 2015. SBBGPL is promoted by Mr. Rama Krishna Reddy along with his family members. SBBGPL is engaged in drying of maize on job work basis. Its peak processing capacity is 6000 MT per season. The company undertakes the job work from the companies like VNR Seeds, Vaishnavi Agro Industries Private Limited and other customers who are located in the state of Telangana, Andhra Pradesh, and Maharashtra. In FY17, SBBGPL reported a net profit of INR0.09 crore on a total operating income of INR1.79 crore. SRI LAXMI: CRISIL Assigns 'B' Rating to INR10cr Term Loan --------------------------------------------------------- CRISIL has assigned 'CRISIL B/Stable' rating to the bank facility of Sri Laxmi Narasimha Homes Private Limited (SLNHPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Proposed Term Loan 10 CRISIL B/Stable (Assigned) The rating reflects the modest scale of operations and exposure to risks related to salability of its projects. The rating weaknesses are partially offset by the extensive experience of its promoters in the construction business. Key Rating Drivers & Detailed Description Weaknesses: * Modest scale in the competitive real estate industry: The company's scale is modest exposing itself to intense competition from other major players in the market. * Susceptibility to risks related to salability of its projects: The company majorly undertakes residential projects and is therefore exposed to risks related to salability. Also, the residential real estate segment is susceptible to cyclicality on account of macro-economic factors and income level of individuals. The industry is also subject to governmental regulations which could affect the business profile. Strengths: * Extensive experience of its promoters in the real estate business: The company's promoters has an experience of over two decade in the construction business backed by strong domain experience. Outlook: Stable CRISIL believes that SLNHPL will continue to benefit over the medium term from its promoters' extensive experience in the construction industry. The outlook may be revised to 'Positive' in case of a considerable increase in bookings of units and in receipt of customer advances, leading to substantial cash inflows. Conversely, the outlook may be revised to 'Negative' if SLNHPL faces significant pressure on its liquidity because of low customer bookings or delayed receipt of customer advances for its ongoing as well as new projects and substantial increase in debt. Established in 2015, SLNHPL is engaged in real estate development. The company is currently undertaking one residential project in Vijayawada. The company is promoted by Mr. P. Narasimha Raju, who has been in the industry for more than 2 decades. TAMILNADU JAIBHARATH: CRISIL Reaffirms D Rating on INR26cr Loan --------------------------------------------------------------- CRISIL ratings on the bank facilities of Tamilnadu Jaibharath Mills Limited (TNJBL) continues to reflect delays in repayment of term loan due to weak liquidity marked by high bank limit utilization and sizeable working capital requirement. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.5 CRISIL D (Reaffirmed) Cash Credit 26.0 CRISIL D (Reaffirmed) Key Loan 10.0 CRISIL D (Reaffirmed) Letter of Credit 4.5 CRISIL D (Reaffirmed) Long Term Loan 14.0 CRISIL D (Reaffirmed) Proposed Long Term Bank Loan Facility 25.45 CRISIL D (Reaffirmed) Key Rating Drivers & Detailed Description Weakness: * Weak financial risk profile: Financial risk profile is weak marked by interest coverage of less than 1 time, for fiscal 2018, due to high reliance on bank borrowing to fund its working capital requirement. Further, continued losses have resulted in erosion of net worth as on 31 March, 2018. * Weak liquidity: Liquidity is weak marked by highly utilized bank line and subsequently delay in repayment of term loan. Strengths: * Extensive experience of promoters: Promoters experience in the textile industry will support the business risk profile of the company. Set up in 1989, TNJBL is part of the Ramalinga group of companies, which has diversified interests in businesses such as spinning and cargo transportation. The company manufactures cotton yarn and operations are currently managed by Mr TR Dhinakaran and his son, Mr D Senthilkumar. TRANSPORT SOLUTIONS: CRISIL Maintains D Rating in Not Cooperating ----------------------------------------------------------------- CRISIL said the rating on bank facilities of Transport Solutions India Private Limited (TSIPL; part of the TSI group) continues to 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 20 CRISIL D (ISSUER NOT COOPERATING) Proposed Long Term 5 CRISIL D (ISSUER NOT Bank Loan Facility COOPERATING) CRISIL has been consistently following up with TSIPL for obtaining information through letters and emails dated Feb. 28, 2018 and Aug. 31, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 TSIPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on TSIPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the rating on bank facilities of TSIPL continues to 'CRISIL D Issuer not cooperating'. The TSI group was established in 2006 and manufactures carriers used in logistic services. It manufactures tippers and trailers under TSIPL, car and truck carriers under LIAPL, and refrigerated carriers under HIPL. Its promoters have industry experience of over four decades. TRANS TECH: CRISIL Maintains D Rating in Not Cooperating -------------------------------------------------------- CRISIL said the rating on bank facilities of Trans Tech Turnkey Private Limited (TTTPL) continues to be 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 35 CRISIL D (ISSUER NOT COOPERATING) Letter of credit & Bank Guarantee 195 CRISIL D (ISSUER NOT COOPERATING) Proposed Long Term Bank Loan Facility 5 CRISIL D (ISSUER NOT COOPERATING) Proposed Short Term Bank Loan Facility 10 CRISIL D (ISSUER NOT COOPERATING) Term Loan 5 CRISIL D (ISSUER NOT COOPERATING) CRISIL has been consistently following up with TTTPL for obtaining information through letters and emails dated Feb. 28, 2018 and Aug. 31, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 TTTPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on TTTPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Set up by Mr. Suranjan Chatterjee, Mr. Sugato Majumdar, Mr. A N Ghosh, and Mr. Ulhas V Pradhan, TTTPL offers engineering, procurement and construction services, ranging from design and civil construction to mechanical, electrical, and plumbing work. Its large-scale turnkey division caters to industrial units and commercial buildings, while its heating, ventilation, and air conditioning division provides design and engineering, supply, and installation services, mainly to pharmaceutical and chemical companies. UDAY AUTOLINK: CRISIL Maintains C Ratings in Not Cooperating ------------------------------------------------------------ CRISIL the rating on bank facilities of Uday Autolink Private Limited (UAPL) continues to 'CRISIL C Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Drop Line 8 CRISIL C (ISSUER NOT Overdraft Facility COOPERATING) Electronic Dealer 6 CRISIL C (ISSUER NOT Financing Scheme COOPERATING) (e-DFS) Term Loan 24.8 CRISIL C (ISSUER NOT COOPERATING) CRISIL has been consistently following up with UAPL for obtaining information through letters and emails dated Feb. 28, 2018 and Aug. 31, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 UAPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on UAPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the rating on bank facilities of UAPL continues to 'CRISIL C Issuer not cooperating'. UAPL, set up in 2012, is an authorised dealer for Maruti Suzuki India Ltd (MSIL). UAPL operates a 50,000-square-foot sales, services and spares (3S) showroom in eastern Ahmedabad. The operations are managed by the promoters, Mr. Uday Bhatt, his brother, Mr. Nilesh Bhatt, and son, Mr. Hemant Bhatt. VAKRANGEE PACKAGING: CARE Lowers Rating on INR8.25cr Loan to B -------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Vakrangee Packaging LLP (VPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 8.25 CARE B; Stable; Issuer not Facilities cooperating; Revised from CARE B+; Stable; on the Basis of best available information. Detailed Rationale & Key Rating Drivers CARE has been seeking information from VPL to monitor the ratings vide letters/e-mails communications dated May 23, 2018, June 5, 2018, June 26, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requiste information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the ratings on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings on VPL's bank facilities will now be denoted as CARE B; Stable; ISSUER NOT COOPERATING. Users of these ratings (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. Detailed description of the key rating drivers At the time of last rating on July 7, 2017, the following were the rating strengths and weaknesses. Key Rating Weaknesses Lack of partners' operational experience: The key partner Mr Nilay Singh (aged about 23 years) has no experience in this industry. He is looking after the day to day operations of the firm supported by other partner. However, Mr Singh has taken industrial training from Central Institute of Plastics Engineering & Technology and the firm is deriving benefits out of the same. Nascent stage with operations stabilization risk: VPL has set up a manufacturing plant for polypropylene bags with aggregate cost of INR10.23 crore funded at a debt-equity of 1.57x. The plant became operational from May 2017 onwards. Therefore, the firm has an extremely short track record of operations. Since, the plant is already operational the project execution risk is mitigated. However, there exists risk relating to stabilization of operations at the newly commissioned unit and off-take of its products. Going forward, the ability of the firm to achieve revenue and profit margins as envisaged will be critical for the firm. Volatility in prices of raw materials: The key raw materials for VML are adhesives, PP granules, etc., the prices of which are highly volatile in nature. Any upward movement in the prices of raw materials and the firm's inability to pass on the entire increase to its customers in a highly competitive industry scenario might impact its profit margins going forward. Working capital intensive nature of operations: The operation of the firm is expected to be working capital intensive in nature as the firm will hold adequate inventories of raw materials for smooth functioning of production process. Furthermore, it is estimated to hold inventory of finished goods for timely supply to its customers. Furthermore, the firm being new in the industry will provide credit to its customers of around two months and it needs to pay upfront to its suppliers. Therefore the average utilization of fund based limit is expected to remain on the higher side. Fragmented and highly competitive industry: The PP woven sacks industry has limited restriction in terms of entry barriers for new players given lower government regulations and technological dependence. The industry is very competitive with the unorganized sector dominating the market and is highly fragmented in nature. Therefore, being a new entrant in the market, the firm is exposed to intense competition from other established players operating in the industry. Key Rating Strengths Locational advantages: VML's plant has set up at Raipur, Chhattisgarh keeping logistics and target market in mind. Raipur is an industrial city in the state of Chhattisgarh and is well connected through roads and railways. The firm is deriving benefit out of its strategic location of the plant as major cement plants are located in the state of Chhattisgarh which consumes its products. Diversified use and favorable demand in end user industries: Polypropylene (PP) has high tensile strength and plastic woven sacks are much cleaner both in use and production and resist fungal attack. Air permeable sacks made from PP are suitable for the packaging of diversified products like cement, fertiliser, other chemical products, food grains, oil seeds, sugar, salt etc. Due to numerous advantages of PP woven sacks over jute sacks, these are finding more and more applications in packaging of a wide range of products of various industries. VPL was established in February 2016 by Mr Nilay Singh and Mrs Bhawna Bohra for setting up a manufacturing unit of polypropylene sack bags which find applications in cement, fertiliser, other chemical products, food grains, oil seeds, sugar and salt industries. The firm has set up its manufacturing plant at aggregate cost of INR10.23 crore which was funded at a debt- equity of 1.57x. The manufacturing plant of the firm is located at Raipur, Chhattisgarh with an aggregate installed capacity of 3350 metric ton per annum. The plant became operational from May 2017 onwards. VDV INFRAVENTURES: CRISIL Cuts Rating on INR10cr Term Loan to B+ ---------------------------------------------------------------- CRISIL has downgraded its rating to the long-term bank facility of VDV Infraventures Private Limited (VDV) to 'CRISIL B+/Stable' from 'CRISIL BB-/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Term Loan 10 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects the delay in the completion of project and lower bookings resulting in skewed cashflows. Any further delay in completion of project over the medium term will remain key rating sensitivity factor. The rating also reflects promoters' extensive experience in the real estate industry and prudent funding mix. These strengths are partially offset by moderate off-take risk and susceptibility to cyclicality in real estate industry. Key Rating Drivers & Detailed Description Strengths * Promoters' extensive experience in real estate industry: VDV's promoters have been in the real estate industry for 2 decades and have successfully completed several projects, leading to established presence and brand name. * Prudent funding mix: Prudent funding mix on account of large infusion of promoter funds and the comfortable maturity profile of its existing debt lends supports to the credit profile of VDV. Weakness * Moderate off-take risk: A large portion of the project is yet to be sold, which leads to a moderate demand risk. Any delay in inflow of customer advances or bookings from current and future customers may impact liquidity. * Susceptibility to cyclicality in real estate industry: The real estate sector in India is cyclical and is marked by sharp movements in prices and a highly fragmented market structure. The overall uncertain economic climate, and higher caution by banks towards exposure to real estate sector, can also impact demand for projects and hence their credit risk profile. Outlook: Stable CRISIL believes that VDV will benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if timely execution and significantly better-than-expected bookings lead to higher cash flow generation and improvement in financial risk profile. Conversely, the outlook may be revised to 'Negative' if the cash flow is significantly below expectations, either due to lower bookings or delayed receipt of advances, thereby impacting the debt servicing ability. VDV, incorporated in 2013 at Meerut, promoted by Mr. Vikas Tyagi, Mr. Davendra Nirwan and Mr. Dinesh Tyagi. It is undertaking development of a residential project 'Maple Heights' at Shastri Nagar, Meerut. VIDEO PLAZA: CRISIL Maintains B Ratings in Not Cooperating ---------------------------------------------------------- CRISIL said the rating on bank facilities of Video Plaza (VIPL) continues to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4.05 CRISIL B/Stable (ISSUER NOT COOPERATING) Proposed Long Term 2.95 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING) Term Loan 3 CRISIL B/Stable (ISSUER NOT COOPERATING) CRISIL has been consistently following up with VIPL for obtaining information through letters and emails dated Feb. 28, 2018 and Aug. 31, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 VIPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on VIPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the rating on bank facilities of VIPL continues to 'CRISIL B/Stable Issuer not cooperating'. Set up in 1989 as a partnership between Mr. Kabi Dutta and Ms. Rikta Dutta, VP trades in electronic goods, runs a hotel (Citi Residenci), operates a foreign liquor 'Off' shop and rents out properties in Durgapur, West Bengal. VISHAL CHAIN: CRISIL Maintains B Rating in Not Cooperating ---------------------------------------------------------- CRISIL said the rating on bank facilities of Vishal Chain and Jewellery Private Limited (VCJ) continues to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 10 CRISIL B/Stable (ISSUER NOT COOPERATING) Proposed Long Term 15 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING) CRISIL has been consistently following up with VCJ for obtaining information through letters and emails dated Feb. 28, 2018 and Aug. 31, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. 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 VCJ, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on VCJ is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the rating on bank facilities of VCJ continues to 'CRISIL B/Stable Issuer not cooperating'. Incorporated in 2000, VCJ is engaged in manufacturing of, and wholesale trading in, gold ornaments, particularly gold chains. The company operates from Karol Bag (Delhi). The promoter's family has over 15 years of experience in the jewellery business and a customer base across northern India. VRUNDAVAN CERAMIC: CRISIL Maintain D Rating in Not Cooperating -------------------------------------------------------------- CRISIL said the rating on bank facilities of Vrundavan Ceramic Private Limited (VCPL) continues to 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 2.25 CRISIL D (ISSUER NOT COOPERATING) Cash Credit 9.75 CRISIL D (ISSUER NOT COOPERATING) Funded Interest 3.30 CRISIL D (ISSUER NOT Term Loan COOPERATING) Proposed Long Term .70 CRISIL D (ISSUER NOT Bank Loan Facility COOPERATING) Working Capital 9.00 CRISIL D (ISSUER NOT Term Loan COOPERATING) CRISIL has been consistently following up with VCPL for obtaining information through letters and emails dated Feb. 28, 2018 and Aug. 31, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. '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 VCPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on VCPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the rating on bank facilities of VCPL continues to 'CRISIL D/CRISIL D Issuer not cooperating'. VCPL, incorporated in Morbi (Gujarat) as a limited company in 2000, was promoted by Mr. O T Patel. It was reconstituted as a private limited company in 2003. VCPL manufactures floor and wall tiles that are sold under the Vrundavan and Spaniso brands. Gangotri is a partnership firm engaged in the same line of business. WONDERVALUE REALTY: CARE Lowers Rating on INR300cr LT Loan to D --------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Wondervalue Realty Developers Private Limited (WRDL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 300.00 CARE D; ISSUER NOT COOPERATING; Facilities Revision from CARE D; ISSUER NOT COOPERATING; Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from WRDL to monitor the rating(s) vide e-mail communications vide e-mail communications dated November 1, 2017, December 2, 2017, February 7, 2017, June 5, 2018, letter dated June 06, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on WRDL's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating in April 10, 2017, the following were the rating strengths and weaknesses: The ratings of WRDL's factors in ongoing delays in servicing of the Bank facilities by the company, due to weak liquidity profile of the company. Incorporated in September 2008, WRDL is promoted by HBS Realtors Pvt. Ltd. (HBS, holding 50.01% stake) and IIRF India Realty XI Ltd. (IIRF-XI) & IL&FS Trust Company Ltd. (ITCL) (holding 49.99% stake). WRDL is developing a residential redevelopment project spread over 3.61 acres (157,074 sq ft) of land in Worli, Mumbai, currently owned by Maharashtra Housing and Area Development Authority (MHADA). Total permissible Floor Space Index (FSI) is 2.5x for the proposed development. Considering the FSI available, the total area proposed to be developed is 695,127 sq ft. The above area is split into built up area of 362,847 sq ft to be used for the Rehab Towers and the balance built up area of 342,431 sq ft would be available to WRDL for commercial sale (free sale area). Based on the Development Agreement entered into by the company with the two Societies, ie, ShivShahi Cooperative Housing Society Limited (ShivShahi) and Shivaji Nagar ShivPrerana Cooperative Housing Society Limited (ShivPrerana), WRDL is required to construct and develop a 38-storey tower having 317,060 sq ft of built-up area and 205,862 sq ft of car park area for the tenants of ShivShahi, and construct a 14-storey tower having 45,787 sq ft of built-up area and 23,250 sq ft of car park area for the tenants of ShivPrerana. The company plans to construct two high rise residential towers of 40 storeys each for Free Sale. Each building would have 12 storeys of multi-level car park area and amenity space, residential units spread across 13th to 40th storey with requisite allowance for refuge area as per local bye laws. The estimated cost of the project is INR866 crore and it is to be funded with debt of INR280 crore (already tied-up), equity of INR206.34 crore and customer advances of INR379.66 crore. During FY16 (refers to the period April 01 to March 31), WRDL posted total operating income of INR1.54 crore (vis-a-vis INR0.38 crore in FY15) and PAT of INR0.70 crore (vis-a-vis INR0.04 crore in FY15). ========= J A P A N ========= MITSUI OSK: Moody's Puts Ba1 CFR on Review for Downgrade -------------------------------------------------------- Moody's Japan K.K. has placed Mitsui O.S.K. Lines, Ltd.'s (MOL) Ba1 corporate family rating on review for downgrade. RATINGS RATIONALE "We expect MOL's leverage will likely stay at its high level of above 7.5x for the next several years and surpass its downgrade trigger of 7.0x," says Motoki Yanase, a Vice President and Senior Credit Officer. Moody's said this debt/EBITDA leverage metric does not appear likely to improve materially without substantial efforts to reduce debt. Without debt reduction, Moody's forecasts MOL's retained cash flow/net debt will stay in the single digit, compared to 9.2% during fiscal 2017 ended on March 31, 2018. Moody's expects the merger of the containership businesses of Nippon Yusen Kabushiki Kaisha (NYK), MOL, and Kawasaki Kisen Kaisha, Ltd., which started operation in April 2018, will likely realise some cost saving and margin improvements for the new entity, Ocean Network Express (ONE). With the inception of ONE, MOL has deconsolidated its containership business. The deconsolidation of this long unprofitable business will temper MOL's earnings volatility, though it will take time to bear out its effect on credit metrics. Moody's expects that MOL, as a 31% shareholder of ONE after NYK's 38%, will remain exposed to the credit risks originating from the containership business. Although MOL will report its share of profit and loss in ONE under the equity method. The ONE-related assets and liabilities will remain on MOL's balance sheet since MOL will on-lend containerships it owns to ONE. MOL expects that its revenue for the fiscal 2018, after deconsolidation of the containership business, will decline by approximately 30%. Moody's review will focus on (1) MOL's plan for managing future debt, including how this could be managed with asset sales and vessel turnover in the next several years; (2) the progress of the integration of containership business under the new company and related cost synergies; and (3) how the company's other businesses -- such as dry bulk, energy and car carrier -- will trend and help support MOL's future profits. The rating for MOL currently reflects a degree of deleveraging, and a downgrade is possible if there is little prospect of deleveraging. In particular, Moody's could downgrade the rating if it believes that (1)debt/EBITDA will remain materially above 7.0x; or (2) (funds from operations + interest expense)/interest expense below 4.5x for a prolonged period. Given the review for downgrade, an upgrade of MOL's rating is unlikely in the foreseeable future until the company materially reduces leverage and ONE establishes a profitable track record. The principal methodology used in this rating was Shipping Industry (Japanese) published in January 2018. Headquartered in Tokyo, Mitsui O.S.K. Lines, Ltd., is one of the world's largest shipping companies by fleet size with about 850 vessels, including spot-chartered ships and vessels covering all shipping segments: containerships, dry bulkers, car carriers, tankers and LNG carriers. =============== M A L A Y S I A =============== UTUSAN MELAYU: Offers Voluntary Separation Scheme to Workers ------------------------------------------------------------ theedgemarkets.com reports that the Umno-controlled media group Utusan Melayu (Malaysia) Bhd is offering a voluntary separation scheme (VSS) to more than half of its 1,500 workers as part of its restructuring exercise to reduce overall costs due to the company's financial constraints, according to sources. theedgemarkets.com has learned that the decision came following a closed-door briefing held between the group's executive chairman Datuk Abd Aziz Sheikh Fadzir and its staff on Sept. 21 at its headquarters in Jalan Utusan, Off Jalan Chan Sow Lin, here. "The workers will be let off (in stages). About 800 staff (members) at Utusan have received the letters and they have the option to either accept it or not," the report quotes one of the sources with direct knowledge of the matter as saying. Speaking on condition of anonymity, the person said the details on the offer in terms of the duration period and payment structure to the staff are yet to be known at the moment, relates theedgemarkets.com. "The offer started today but I'm not sure on the details as until when will they (Utusan Melayu) offer this VSS and how much will Utusan Melayu pay," the person, as cited by theedgemarkets.com, said. This measure will also apply to the group's four key newspapers, Utusan Malaysia, Mingguan Malaysia, Kosmo! and Kosmo! Ahad, as well as its top four magazines, namely Mastika, Saji, Infiniti and Wanita, theedgemarkets.com adds. According to its Annual Report, the Practice Note 17 (PN17) company's total liabilities stood at RM328.17 million as at Dec 31, 2017, as compared to RM302.2 million in the previous year, theedgemarkets.com discloses. According to Utusan Melayu Utusan Melayu (Malaysia) Berhad engages in the publication, printing and distribution of newspapers. The Company's segments include Publishing, distribution and advertisements, which is engaged in publishing and distribution of newspapers, magazines and books, and also indoor and outdoor advertising; Printing, which is engaged in printing of magazines and books; Information technology and multimedia, and Investment holding, management services and others. It publishes newspapers, which include Utusan Malaysia, Mingguan Malaysia, Kosmo! and Kosmo! Ahad. Its magazines include Mastika, Saji, Infiniti and Wanita. The Company, through its subsidiary, publishes educational books that cover all levels of education, from pre-school to university. It also publishes children's books and other general titles covering subjects, such as religion and women's titles. Its other services include transportation, audio video production and series, and archive and research information services. Utusan Melayu was classified as a PN17 company on Aug. 21, as it had failed to provide a solvency declaration to Bursa Malaysia after defaulting on its principal and profit payment to Maybank Islamic Bhd and Bank Muamalat Malaysia Bhd. On Aug. 30, Utusan Melayu said it will have the Corporate Debt Restructuring Committee (CDRC), under the purview of Bank Negara Malaysia, mediate between the group and its respective financiers. ==================== N E W Z E A L A N D ==================== MANAWATU TV: Brendon Gilbert Buys Audio Services Shop ----------------------------------------------------- Paul Mitchell at Stuff.co.nz reports that an iconic Palmerston North audio services shop is being reborn in the hands of a new owner who grew up visiting the store to build wishlists of audio equipment he thought he could never afford. Manawatu TV and Sound Services, on the south-west corner of The Square, went into liquidation in April, almost exactly 51 years after James "Jim" Bulloch started the company. According to the report, BDO New Zealand liquidators Iain Shephard and Jessica Kellow's final report was released on Sept. 24, and in the final accounting the store was NZ$630,000 in debt. Stuff relates that the liquidators kept the doors open for a while but ultimately the store closed, until it was sold for NZ$45,000 in July to Brendon Gilbert - who has revived the store as the Manawatu Sound Hub. Stuff says Mr. Gilbert moved down from Tauranga in July after running a successful audio services store there for 20 years. He had grown up in Manawatu, and he wanted to be back home closer to his family in Levin and Feilding. He said Manawatu TV and Sound Services was a Palmerston North icon, Stuff relays. "I remember always coming in to look at all the [top-range equipment] that I wanted, but I could never afford." Mr. Gilbert spent two months refitting and restocking the store, before it reopened in August. In its heyday, Manawatu TV and Sound Services employed 90 people, in seven stores and had an annual turnover of well over $10 millon, Stuff recalls. But in recent years, the market had shifted and the company shrunk to a single struggling store. The bulk of the company's debt was owed to Bulloch's estate, and "family trust interests," Mr. Shephard, as cited by Stuff, said. Mr. Bulloch had put NZ$532,000 of his own money into the business to keep it afloat, and with the 76-year-old's death in January the trustees of his estate decided the store was unsustainable. Between the company accounts, and the sale of the company, Manawatu TV and Sound had NZ$163,000 to cover its debts. Each of the store's three employees received NZ$22,160 in redundancy packages, in addition to their wages for the period the store remained open during the liquidation. Stuff relates that the liquidators also paid out NZ$4,200 to three secured creditors. There was not enough left over to cover NZ$5,700 or the 16 unsecured creditors -- however, Bulloch and the family trust's loans to the business account for all but NZ$20,000 of that, Stuff discloses. ********* 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. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2018. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***