kingfisher airlines: modefinance credit limit

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KINGFISHER AIRLINESLIMITEDMonday, 14 November 2011

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D C CC CCC B BB BBB A AA AAA

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D C CC CCC B BB BBB A AA AAAnot

available

non return extremlypathological

pathological highdanger

weak sufficient adequate good very

strongextremely

strong

Company name KINGFISHER AIRLINES LIMITED

Identification number Not available

Country India

ZIP code and city 560 001 - BANGALORE

Address UB City, UB Tower, Level 12

+91 80 4158 5069

www.deccanair.com

Legal form

Account Consolidated

Incorporation date 1995

NACE 2 Sector 5110 - Passenger air transport

Listed

Status Active

MORE Credit limit Not eligible for credit on the base of the available informations

31/03/2010 30/06/2009 30/06/2008

Turnover (th e) 864,493 780,999 241,437

Rating CC CC CC

Probability of default 42.00% 42.00% 42.00%

Confidence Level 100% 100% 100%

Solvency ratios

Leverage ratio -2.96 -4.33 8.05

Total asset/Total liabilties 0.66 0.77 1.12

Liquidity ratios

Current Ratio 0.69 0.57 0.99

Quick Ratio 0.65 0.53 0.92

Profitability and economic equili-

brium ratios

Return on investement ROI (%) -17.39 -26.94 -33.60

Return on equity ROE (%) -42.56 -100.67 -94.60

Asset turnover 0.67 0.74 0.80

Interest paid weight -0.83 -0.41 -0.13

EBITDA/Sales 0.43 0.39 -0.42

Interest Coverage ratios

EBIT interest coverage ratio 1.80 2.40 -8.32

EBITDA interest coverage ratio 2.00 2.62 -7.85

Analysis and trend of financial

strength


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modeFinance TM srlVAT number [email protected]

Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741

Sector Analysis

Company Healthy Balanced Vulnerable Risky

Solvency ratios

Leverage ratio -2.96 0.56 2.40 4.74 -1.92

Total asset/Total liabilties 0.66 2.77 1.42 1.17 0.92

Liquidity ratios

Current Ratio 0.69 2.35 1.28 0.88 0.67

Quick Ratio 0.65 2.02 1.17 0.79 0.59

Profitability and economic equilibrium ratios

Return on investement ROI (%) -17.39 20.00 6.39 1.05 -19.55

Return on equity ROE (%) -42.56 23.37 10.40 -7.60 -108.80

Asset turnover 0.67 1.66 1.32 1.00 1.33

Interest paid weight -0.83 0.00 0.17 0.13 -0.10

EBITDA/Sales 0.43 0.15 0.08 0.04 -0.08

Interest Coverage ratios

EBIT interest coverage ratio 1.80 331.80 4.60 0.03 -8.53

EBITDA interest coverage ratio 2.00 231.80 7.83 1.65 -5.78

Cash Conversion Cycle (days)

Days Sales Of Inventory (DIO) 11 14 8 11 7

Days Sales Outstanding (DSO) 1 34 33 33 33

Days Payable Outstanding (DPO) 181 12 27 37 48

Cash Conversion Cycle (DIO + DSO - DPO) -169 36 20 9 -6

Numer of analyzed companies - 70 279 227 145

(Average) Rating CC A BB B CC

The sector has been chosen according to:

international companies in the sector NACE 2 5110 with financial data of year 2009.


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Sector Analysis - Graphs


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Balance Sheet

BALANCE SHEET (th e) 31/03/2010 30/06/2009 30/06/2008

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate INR - EUR 0.01644 0.01817 0.01745

Total assets 1,249,274 1,044,349 284,664

Fixed assets 845,394 744,452 180,337

Intangible fixed assets 3,951 4,299 1,593

Tangible fixed assets 412,753 468,647 97,266

Other fixed assets 428,690 271,505 81,479

Current assets 403,880 299,897 104,327

Stocks 27,101 21,719 7,694

Debtors 2,634 1,345 33

Other current assets 374,145 276,833 96,600

Cash & cash equivalent 33,937 25,350 44,306

Shareholders funds -636,198 -313,484 31,455

Capital 59,652 53,528 21,479

Other shareholders funds -695,850 -367,012 9,976

Total liabilities 1,885,471 1,357,833 253,209

Non current liabilities 1,302,257 835,658 147,789

Long term debt 1,302,257 835,658 147,789

Other non-current liabilities 0 0 0

Current liabilities 583,215 522,175 105,421

Loans 0 0 0

Creditors 427,806 418,055 64,287

Other current liabilities 155,409 104,120 41,134

Total shareh. funds & liab. 1,249,274 1,044,349 284,664

NET DEBT (th e) 31/03/2010 30/06/2009 30/06/2008

Short term debts 0 0 0

Long term debt 1,302,257 835,658 147,789

Cash & cash equivalent 33,937 25,350 44,306

Net debt 1,268,319 810,308 103,482

31/03/2010 30/06/2009 30/06/2008

Working capital -398,070 -394,991 -56,560

Net Current Assets -179,335 -222,278 -1,094

31/03/2010 30/06/2009 30/06/2008

Days Sales Of Inventory (DIO) 11 10 12

Days Sales Outstanding (DSO) 1 1 0

Days Payable Outstanding (DPO) 181 195 97

Cash Conversion Cycle (DIO + DSO - DPO) -169 -184 -85


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Income Statement

INCOME STATEMENT (th e) 31/03/2010 30/06/2009 30/06/2008

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate INR - EUR 0.01644 0.01817 0.01745

Sales 833,026 772,739 227,981

Revenues growth (%) 7.8 238.9 -

Other revenues +/- variation in inventories and contract in progress + Fixed assets

own construction capitalized31,467 8,260 13,456

Operating revenue / turnover 864,493 780,999 241,437

Total costs 504,703 480,133 338,164

Costs growth (%) 7 47 -

Service costs - - -

Material costs - - -

Costs of employees 123,334 130,094 38,923

EBITDA 359,789 300,866 -96,728

Depreciation 35,716 25,309 5,788

EBIT 324,073 275,557 -102,516

Financial P/L -721,512 -671,740 -5,448

Financial revenue 1,511 1,121 3,001

Financial expenses 723,023 672,862 8,449

Interest paid 180,235 114,835 12,318

P/L before tax -397,439 -396,184 -107,963

Extr. and other P/L 0 0 0

Extr. and other revenue - - -

Extr. and other expenses - - -

P/L before tax + Extr. and other P/L -397,439 -396,184 -107,963

Taxation -126,681 -80,589 -78,206

P/L for period -270,758 -315,594 -29,757

31/03/2010 30/06/2009 30/06/2008

Cash flow -235,042 -290,285 -23,969

Added value 195,209 35,233 105,478

31/03/2010 30/06/2009 30/06/2008

Number of employees - - -


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Evolutions and trends


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Qualitative information

Full overview It is a public company engaged in the provision of scheduled commercial passenger airline services in India. The

company was incorporated as Deccan Aviation Private Limited in June of 1995 and has its registered head office

located in Bangalore, India. It is listed on the Bombay Stock Exchange with stock code 532747. It also provides

helicopter and airplane chartering services. The company operates a fleet of more than 20 aircraft and approxima-

tely 10 helicopters. It provides various charter services which include heli - tourism packages for tourists to various

destinations, such as game sanctuaries and heritage sights, adventure sports flying, high net worth individual and

corporate executive travel, medical evacuation, emergency rescue and disaster management, and aerial surveys.

Other activities of the company include advertising, through the space on the interior and exterior of its aircraft;

provision of services for oil - extraction companies, including offshore oilfield logistic support, as well as religious

pilgrimage and customized services. In addition, it offers chartered long line geophysical heli - borne and banner -

towing services using helicopters. It maintains bases in Bangalore, Delhi, Hyderabad, Katra, Mumbai, Ranchi, and

Surat, as well as in Colombo, Sri Lanka. The company serves as India’s largest private sector charter aviation com-

pany with a network of bases spanning seven locations across the country. It is committed to provide unparalleled

services in the field of charter aviation.

History Not available.

Primary business line Engaged in the provision of scheduled commercial passenger airline services.

Secondary business line Not available.

Main activity Services.

Secondary activity Not available.

Main products and services Scheduled commercial passenger airline services.

Size estimate India’s largest private sector charter aviation company with a network of bases spanning seven locations across the

country.

Strategy, organization and policy To provide unparalleled services in the field of charter aviation.

Strategic alliances Not available.

Membership of a network Not available.

Main brand names Not available.

Main domestic country India.

Main foreign countries or regions Colombo; Sri Lanka.

Main production sites Not available.

Main distribution sites Not available.

Main sales representation sites Not available.


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Main customers Not available.

Auditor/Advisor/Bank

name type address

B.K.RAMADHYANI & CO. Auditor -

Board

name date of birth nationality function

Mrs Dr. Vijay Mallya 18/12/1955 - -

Dr. Naresh Kumar Trehan - - -

Mr Anil Kumar Ganguly - - -

Mr Ayani Kurussi Ravindranath Nedungadi 20/10/1957 - -

Mr. Diwan Arun Nanda 20/08/1943 - -

Mr. Ghyanendra Nath Bajpai - - -

Mr. Vijay Amritraj 14/12/1953 - -

Sharehoders (the first twenty shareholders ordered by Direct %))

UNITED BREWERIES (HOLDINGS) LIMITED Rating: BBB

Country ISO code IN Operating revenue (MIL $) 100

NACE Rev. 2, Core code - Total Assets (MIL $) 2,187

Direct % ?40.09 Number of Employees -

Total % - Information date 2011/03

Address: Not available

KINGFISHER FINVEST INDIA LIMITED Rating: -

Country ISO code IN Operating revenue (MIL $) -

NACE Rev. 2, Core code - Total Assets (MIL $) -

Direct % 23.00 Number of Employees -




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SCHEMES OF SUNDARAM BNP PARIBAS MUTUAL FUND Rating: -

Country ISO code - Operating revenue (MIL $) -





DR VIJAY MALLYA Rating: -






STATE BANK OF INDIA Rating: -

Country ISO code IN Operating revenue (MIL $) 17,814





UB OVERSEAS LTD Rating: -






SUNDARAM BNP PARIBAS MUTUAL FUND A/C SUNDARAMBNP PARIBAS TAX

SAVER (OPEN ENDED ) FUNDRating: -






DEEKSHA HOLDING LTD. Rating: A


NACE Rev. 2, Core code - Total Assets (MIL $) 35




WHITE GOLD PROPERTIES PVT LTD Rating: -







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RELIANCE CAPITAL TRUSTEE CO. LTD. A/C RELIANCE TAX SAVER (ELSS) FUND Rating: -






SUNDARAM FINANCE LTD via its funds Rating: -



Direct % - Number of Employees -

Total % 0.98 Information date 2011/03


GOVERNMENT OF NORWAY via its funds Rating: -

Country ISO code NO Operating revenue (MIL $) -





IAP GROUP LTD. via its funds Rating: -






INFRASTRUCTURE DEVELOPMENT FINANCE CO LTD - IDFC via its funds Rating: -



Direct % - Number of Employees 586



Subsidiaries (the first twenty subsidiaries ordered by Direct %)

VITAE INDIA SPIRITS LIMITED Rating: -

Country ISO code IN Operating revenue (MIL $) -





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NORTHWAY AVIATION LTD Rating: -

Country ISO code CA Operating revenue (MIL $) 6


Direct % MO Number of Employees 40


DECCAN AVIATION (LANKA) PRIVATE LIMITED Rating: -

Country ISO code LK Operating revenue (MIL $) -


Direct % - Number of Employees 200



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ASKMORE rating guide

General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of

an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk

factors.

The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial

companies by using data included in financial statements.

The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy

model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the

model are obtained by applying newly developed numerical methodologies, drawing together financial theory,

data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective

algorithm that produces a classification of each company, by taking into account any attributes (such as sector and

country) characterizing a firm.

The model gives the opportunity to assign a rating to a company even without considering a complete data analysis

and allows to process quality information. It induces a better understanding of a company’s strength and weakness

thanks to sophisticated data mining tools and taking into account the analyst knowledge.

The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the

rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium

between the different aspects, better will be the final rating.

This is done studying, evaluating and aggregating the most important sections of the financial and economic

behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.


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Rating scale

Rating class Rating macro class Assessment

AAA

Healthy

The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent

economic and financial flow and fund equilibrium.

AAThe company has very strong creditworthiness. It also has a good capital structure and economic and financial

equilibrium. Difference from AAA is slight.

AThe company has a high solvency. The company is however more susceptible to the adverse effects of changes in

circumstances and economic conditions than companies in higher rated categories.

BBB

Balanced

Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial

commitments could be affected by serious unfavourable events.

BBA company rated BB is more vulnerable than companies rated BBB. Furthermore the company faces major ongoing

uncertainties or exposure to adverse business, financial, or economic conditions.

B

Vulnerable

The company presents vulnerable signals with regards to its fundamentals. Adverse business, financial, or economic

conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments.

CCC

A company rated CCC has a dangerous disequilibrium on the capital structure and on its economic and financial

fundamentals. Adverse market events and an inadequate management could affect with high probability the

company’s solvency.

CC

Risky

The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the

company’s strong disequilibrium could increase.

CThe company shows considerable pathological situations. The company’s capacity to meet its financial

commitments is very low.

D The company has not any longer the capacity to meet its financial commitments.


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Fundamental Credit Rating Ratios

Analysis area Ratio Assessment

Solvency ratios

Leverage ratioThis measures the level of total liabilities of the company in comparison

with equity.

Assets to debtThis indicates company’s solvency. The company shows a level of deficit

when the value of this ratio is under one unit.

Financial ratios Fixed Assets coverage ratioThis is calculated only for holdings. It measures the capital structure i.e.

whether a company covers the fixed assets with long term capital.

Liquidity ratios

Current ratioThis measures whether a company has sufficient short-term assets to cover

its short-term liabilities.

Quick ratioThis compares current liabilities only to those assets that can be readily

turned into cash.

Profitability and economic ratios

Return on Investement(ROI)This measures the profitability of company investments without regard to

the way the investment is financed.

Return on Equity(ROE) This measures the profitability of the equity.

Asset turnover

This indicates the investments turnover with regards to sales. The level

assumed from the ratio depends on the sector in which the company

operates.

Profit margin This indicates the profitability of sales.

Interest coverage ratio Interest Paid coverage

This indicate the ability of the company to cover interest expenses through

the economic margins (Gross profit and EBIT) and through the cash flow

from operating activities.


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MORE Credit Limit, Probability of default and Confidence Level

MORE Credit Limit MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial

relationship with the analyzed company with an outlook of one year.

modeFinance used the following values associated with the company analyzed while computing the credit limit:

• Size;

• Years in Business;

• Average number of suppliers;

• Liquidity of the company and the comparison with its sector;

• The funds dedicated to be paid to suppliers;

• The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).

The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual

public data. This value should be reviewed by paying attention to the Confidence Level value and by using other

information such as other business information, news... etc; and private information such as the relationship with

client, history of payments, guarantees and the knowledge of the sector.

Probability of default e Confidence

Level

In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of

confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go

into default.

As the probability of default is strongly affected by the economic climate that the company is operating in,

companies in the same MORE class will not necessarily have the same probability of default.

The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:

Confidence =

∑Available Information∑

Total Information

The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in

availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the

MORE rating is able to take into account for each company.

For companies with fully populated records a confidence level of 100% would be applied: companies where no

financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.


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Notes and disclaimer

NOTES The present analysis was based on the company available financial statements as provided by Bureau Van Dijk

Electronic Publishing - ORBIS database (lack of both Notes to financial statements and Report on operations).

DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of

the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot

be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will

be based on information gathered in good faith from both primary and secondary sources, whose accuracy we

are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken

based on any information that may subsequently prove to be incorrect.

Contacts

Company modeFinance

Products MORE rating

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Info [email protected]

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Phone +39 040 3755337

kingfisher airlines: modefinance credit limit

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