Escolar Documentos
Profissional Documentos
Cultura Documentos
2009
CREDIT ANALYSIS
Name of company: S.C. CAFMIN S.R.L.
Rating: A (previously B)
Year established: 1995
How business referred to us: Branch marketing efforts Policy:
Relationship with the bank March 2007 Deviation from credit YES NO
since: policy:
Credit Officer: Istinie Florin Χ
6 PURPOSE
Facility I – 1.Prolongation of the Working Capital credit line in amount of RON 1.800.000 (427.391 EUR) for 12
months
2. Issuing of the LG (letter of guarantee) in order to participate to auction from unutilized limit of the
credit line, because:
Facility will be used for current activity (supplier’s payment and letters of guarantee issuing ).
The client request to prolongate the credit line in amount of RON 1.800.000 in order to satisfy the working capital need
resulted from the new contracts concluded at the beginning of 2008. The facilities will be reimbursed mainly from
incasing of these contracts.
Regarding the current credit line’s securities:
The existing guarantees were evaluated by Lero Advanced Consulting SRL, agreed PBR evaluator.
Existing facilities:
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Commissions: 0.25% min. 75EUR/trim at NBR exchange rate
Security:
1. Pledge on cash colateral amounting 51.263,16 RON, property of SC CAFMIN SRL, adjustment coeficient
95% according to PBR norm;maturity:22.09.2009
2.Pledge on current account opened at Piraeus Bank Romania, AEGRM registered
7 EXECUTIVE SUMMARY
8 Business Activity
Company business activity:
The company’s main object of activity was wholesale trade with food products (fruit and vegetable, meet cans, diary
produce). Starting with 2007 the company is involved in works in construction (services performed), thereby in year 2007,
from total turnover, about 96 % is represented by the incomes from constructions, and only 4% from trade.
Main developments over the last 5 months from the last credit approval/review
-during 2008 and 2009, the company continued to focus on the construction market;
- it strengthened its position on the local market as they concluded new contracts with Local Council, purchased specific
equipments.
Profitability
In the period Jan.2008-July 2009 the client routed over 22.469 k RON that means about 79% of banking turnover trough
PBR accounts. Since jan. 2008 the company paid interests amounting 489 k RON, commissions of 38 k RON. They also
have a performance guarantee account in amount of 413 k RON.
Market information
In this field the competition is very tough, but our client succeeded in developing the business, and implicitly earned an
important part of the market which is represented by the big corporation in Slatina with which they have contracts to
provide food for lunch. Also it succeeded to contract inner arrangements with Slatina Local Council (contracts with
periods between 3-12 months), contracts which are and not totally cashed. They realized the parking for Piraeus Bank
Slatina.
Cafmin srl has to collect in the next period 7.545 Kron especially from the Local Council and according to the turnover
clause 80% of the amounts are going to be collected through Piraeus Bank.So,that is a guarantee that the client is going to
pay its debts and bring important amounts as commissions and interests.
Checkes :
CIP consultation : According to the consultation made in 04.08.2009 there were no incidents registered in CIP.
CRB consultation:
The checking in records of CRB shows a period of one small delay of 1 day in the June 2006, due to the Summer
Holiday when Mrs. Tiganu Loredana was left abroad, the money arriving in Raiffeisen to late.
Ministry of Finance: According to the Fiscal Certificate from 14.07.2009 the client is not registered with towards to
the state budget.
Insolvency: According to the consultation made in 04.08.2009 the company isn’t registered in the Insolvency
Bulletin.
Forecasts
Romania is EU construction industry leader, in first place in terms of growth in the construction industry sector in the
November 2007 - November 2006 period, according to data provided by European statistics institute, Eurostat. However, it
should be mentioned that the Eurostat data did not include several European states.
In November 2007, the volume of constructed buildings increased year-on-year by 32.6 percent. Production in the EU’s
construction sector grew by an average 0.8 percent, although a 0.8 percent drop was reported for the Euro zone.
Moreover, Romania witnessed a 1.8 percent monthly increase, compared to October 2007, placing it second after Poland,
for which a 2.3 percent increase in construction production was reported.
According to National Institute of Statistics, the construction activity will continue to register a growing trend in nearby
future.
The prices of the construction works will increase (short-term balance +29%), but at a lower pace compared to the forecast
of previous month (short-term balance +39%).
According to the National Prognosis Commission, the growth of the construction market will lead to a growth of industrial
production, especially in the construction materials industry, the extractive industry and the metallic construction industry.
The entrepreneurs prefer local construction materials to build industrial and constructions, while imported materials are
preferred for building homes.
According to Associations of Construcions Companies, the constructions market could increase in this year to a 7 billion
EUR level. In 2006 the market of constructions materials grew due to extensive infrastructure works, and this trend will be
maintained in 2007-2009 period. The major driving force behind the construction market this period will be the public
works, big infrastructure projects such us highways, as well as local infrastructure projects, road upgrading, rehabilitation
of water networks and bridge repais works.
Gross average earnings in the construction sector will reach 500 EUR as late as 2010-2011, according ti field specialists.
The value is significantly below the level of wages in the countries with a developed construction segment. Beside the low
level of earnings in construction sector, the constructions market is also recording the strong migration of skilled labour
force to foreign market.
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9 GENERAL INFORMATION
The company was set up in 1995, having the HQ in Slatina. Initially, it has as sole shareholder Mrs. Mijlica Florentina.
During 2001, Mrs. Tiganu Loredana Minodora the company joined in and get out Mrs. Mijlica Florentina. There were no
other changes in company’s structure and management.
Ever since the beginning the company has carried on activities of whole trade and distribution with food goods, beverage
and tobacco. At the end of the year 2006 begun the constructions activity consisting in inner and out arrangements.
The business grew continuously with a descend in 2008 (with previsions of improvement in the next period because of the
concluded contracts), as shown in table below:
Average payable period: the negotiated payment terms are between 10-60 days.
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Company’s main CLIENTS are presented below:
Name Products Amount %
30.06.2009
SC SINAS SRL Food goods 222356 57.50%
SC INSTALATII SA Services performed in construction 72832 18.83%
CITY CONS SRL Services performed in construction 2856 0.74%
Others 88687 22.93%
TOTAL 386731 100.00%
Average collection period: The payment terms offered by the company are: 21– 90 days.
CAFMIN SRL considered that buying lands is the best investment taking into account that the plots achieved are in the
nearby of Slatina in a developing industrial zone and it fits with the future plans of the management concerning the
expansion of company’s affairs.
Employees: presently speaking the company has 33 employees, out of which: 2 - managers, 3 people are dedicated to the
office activity. The rest of 28 employees: in construction.
SHAREHOLDERS/PARTNERS
Shareholders Ownership
/Percentage
Tiganu Loredana Minodora 100%
Dinca (former Tomescu) Adelina Violeta Financial Manager
Tomescu Constantin Cristian General Manager
Total 100%
Mrs. Tiganu Loredana Minodora – as sole shareholder and administrator of CAFMIN SRL– is an economist, previously
worked at SINAS SRL Slatina and she has been involved in CAFMIN since 2001.
Mrs. Dinca (former Tomescu) Adelina Violeta – as Financial Manager of CAFMIN – has economic studies. She is in
the firm for 10 years. She is the sister of the soleshareholder.
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11 INVESTMENTS
Group information: The Company is considered group with Real Cris because Real Cris is guarantor for the credit of
Cafmin at PBR.
12 FINANCIAL ANALYSIS
Income Statement
Sales had a strong ascendant trend in the period 2006-2007. In 2008, the company obtained a lower level of
turnover with 23.44% in comparison with the year 2007 (2.547 kEUR in 2007 vs 1950kEUR in 2008). This decrease is the
result of the the delayed collections of contracts concluded for 2008. In jun.2009 the client has an increase according to the
collection of those contracts and efficient, aggressive and constant promotion activity.
In the analysed period, in total turnover, about 97.87 % is represented by the incomes from services performed in
constructions and the rest of 2.13% being represented by incomes from commercial activities and rented spaces and
equipments.
The gross profit has decreased from 1.378 kEUR as of December 2007 to 550 kEUR as of dec 2008 because of
the same causes presented above, but we have an increase to 703 keur as of Jun.2009
In the expenses structure, direct costs (especially cost of goods and the expenses with subsidiary materials) have
the biggest share. In the indirect costs structure an important part is represented by expenses with thirds (which are
determined by the works executed for the headquarters). Selling expenses were also a big part in indirect costs structure.
The turnover’s evolution in previous year is presented comparative with the trend of inventories:
Medium monthly
Turnover - kEUR turnover -kEUR Inventories - kEUR
31-Dec-06 652 54.33 5
31-Dec-07 2547 212.25 17
31-Dec-08 1950 162.50 33
30-Jun-09 1072 178.67 59
As we can see, the trend of turnover was inferior to the trend of inventories during 2008. but in 2009, having in view the
existing contracts and the weather forecast the company’s turnover will is higher.
COGS In the last two years the level of COGS as weight in Sales increased from 45.9% in December 2007 to 71.8% in
2008 and decreased to 34.5% in jun.2009 because of the fluctuating prices of construction materials.
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General and administrative expenses increased their weight from 12% in December 2007 to 16.7% in December 2008,
being situated in jun.2009 at 11.4 % in total sales, as result of the increasing of entire activity and especially of the
increasing of services performed in construction activity. Higher amounts we have expenses with services executed by
third parties: EUR 84 k especially from services made by thirds taking into account that Cafmin SRL needs a wide range
of equipments in order to execute the required works and it doesn’t got all of them, expenses with rental of equipments:
EUR 379 as mentioned above and expenses with changes of places of the personnel in amount of 14 keur
Selling expenses are smaller as volume in comparison with previous intervals, as weight in total sales in analyzed period
we mention a slowly decrease (with 2%), due to decrease the number of employees from 45 in 2008 to 38 now
Depreciation & amortization increased year by year, from 31 KEUR as of December 2007 to 73 kEUR as of dec 2008
and to 39 keur in jun.2009 because of the acquisition of new construction equipments.
Interest and related expenses: are registered the expenses with related interest towards the loan granted by Piraeus Bank,
even if there were reimbursements of PBE facility on 17 oct 2008 .
Extraordinary income: there are no important changes vs previous years and under this position are registered discounts
from suppliers which are reflected into a/c 767 from trial balance and the incomes from asset’s sales. There are also
incomes from asset’s sales (book-kept in acc. 7583 – the company sold a vehicle) and subventions from AJOFM Olt.
Extraordinary expenses: is discounts to company’s clients, fares and penalties and a donation to Saint George Church..
Operating profit/loss: in 2007 the company registered an operating profit about 933 keur. In 2008 due to the economic
environment, the influence of exchange rate and increasing expenses of all kinds determined by the prices, the level of
interests the company registered an operational loss 29 keur and a total loss of 64 keur. The company covered the loss and
get profit in 2009 (473 keur) taking into account that has concluded important contracts and had the experience to fulfill
them.
Balance Sheet
Assets
Cash on hand/with banks decreased from 230 keur in 2007 to 191 keur in 2008 because of delays in collection
of contracts in 2008 but increased in jun.2009 to 372 keur. On 2007 and 2008 it represents 14% (230 KEUR and 191 keur)
from total assets, mainly due to the deposits on performing accounts and due to the cashing of some contracts with Local
Council. In jun.2009 represents an important part in total assets: 23 %, about 372 keur.
Accounts receivable: represents 6 % of total assets, about 92 keur in the analyzed period. The weight of account
receivable in total assets decreased from 37% in December 2007 to 10% in Dec.2008.
The main amounts to be received are from juridical bodies, the turnover of receivables is 16 days. The payments
instruments are PO, PN’s, cheques and cash from individuals.
Inventories: represent 4% of the total assets, that means 59 keur at 30.06.2009, and are represented by materials
needed in constructions. The turnover of inventories is about 29 days in jun.2009 compared with 9 days in 2008 and 5 days
in 2007.
The sum form acc. 409 in amount of 179 kron is represented by down payment for construction materials.
Other liquid assets are represented by the sum give to SC ACTIV UNICON SRL according to the contract
concluded between the two firms for 5 years. This sum is situated at 187 kRON in jun.2009.
SC ACTIV UNICON SRL is owned by the shareholder’s brother-in-law, it has as object of activity services performed in
constructions. The contract between the two firms is valid until 01.02.2012.
Fixed assets are represented by the land and construction in progress, in the account 231 is booked the
construction of the headquarters which is finalized, the land and deposit bought in 2007 which determine the increase of
fixed assets (this assets are guarantee the credit from PBR) , the equipments and the cars used for transport goods and
person.
Liabilities
Short term liabilities: decreasing from 886 kEUR in December 2007 to 807 kEUR in December 2008 and to 762 kEUR
in jun.2009. These amounts are represented mainly by accounts payable (145kEUR), due to banks – Piraeus Bank
(397kEUR).
Accounts payable: mainly amounts are payable to suppliers of goods. The average payable period is 72 days as of jun.
2009 (longer than in December 2008 when it was 49 days) because there were renegotiation of payments terms bigger and
for acquisition of materials.
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Due to banks: in amount of 397 kEUR represent the credits PBR. According to the customer declaration the credit has
been used for working capital and a part of its collections was used in buying new plots if land in Valea Mare –an
industrial zone in the nearby of Slatina where the company intends to expand its activity.
Accrued taxes payable – the company records current due debts towards state budget in amount of 155keur. These have
been paid according to fiscal certificate no.16938 from 13.07.2009
Long term liabilities are represented by the leasing contracts. In 2007 also represents a long term loan from Raiffeisen
(the long-term loan granted by Raiffeisen Bank was reimbursed in January 2008).
Current ratio of liquidity decreased from 1.18 in 2007 to 0.47 in 2008 and was about 0.75 in jun.2009 as the result of the
decreasing debts and the increasing of the current assets especially inventories and accounts receivable. That shows a
higher capacity to pay the short term liabilities than the previous period and is due to the fact that the buget was approved
so the main clients as The Local Council were able to pay the amounts due.
The working capital registers a negative value of 193 keur due to the the fact that the current liabilities in amount of 762
keur are higher than the current assets in amount of 569 keur This result is better then that from 2008 as a result of the
trend of current assets that have increase from 378 keur to 569 keur and mainly the decrease of cash on hand/with banks.
In the period Jan.2008-July 2009 the client routed over 22.469 k RON that means about 79% of banking turnover trough
PBR accounts. Since jan. 2008 the company paid interests amounting 489 k RON, commissions of 38 k RON. They also
have a performance guarantee account in amount of 413 k RON.
14 RATING – A (previous rating B) - the rating reflects the financial situation that is good (the liquidity is one
of them that increased from 0.47 in dec 2007 to 0.75 in jun.2009).Taking into account the management, the
contracts concluded, the amounts to be collected for the accomplished contracts the company is able to solve the
problems that the construction market is facing in present.
15 RISK ANALYSIS
Macroeconomic risk – inflation risk is growing considering the European economy registers an important inflation trend
the NBR target for 2009 is about 6.82%.
Interest rate risk – the expenses with the interest may vary / increase in time; they can mitigate this issue by having an
increased volume of activity – an increased profitability.
Branch Manager,
Liviu Urdes
Signature
Credit Officer
Florin Istinie
Signature
Date 04.08.2009
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