Two plantation firms get risky rating

"The rating also factors in uncertainty associated with the quality and quantity of agricultural produce and their inherent vulnerability to climatic conditions and vagaries of nature," Crisil said.

GDIL is a Chandigarh-based plantation company primarily engaged in the business of growingseasonal crops like wheat, rice, maize, sunflower, vegetables etc. poplar plantations and nurseries. The company was promoted by Vinod Mahajan and Lambher Singh in December 1988 and is one of the oldest plantation companies in the country.

The financial risk profile of GDIL is adverse on account of a skewed capital structure, low cash inflows from operations and high development expenses resulting in cash losses and repayment liabilities which are significantly higher than agricultural income expected over the short to medium term. The collective investment schemes of Timberworld Resorts & Plantation India Ltd (TRPL) have been assigned a "Grade V" rating. The rating indicates high uncertainty that collective investment schemes will provide the assured returns in the form of produce and/or cash.

The rating reflects a high dependence on investor funds to meet its operational expenses and repayment obligations in the short to medium term, high financial risk characterised by low capitalisation level, highcost of raising investors funds and low operational cash inflows. TRPL is a Delhi based company, incorporated in 1994 for the purpose of carrying out commercial plantation of teak, orange and poplar. The company has been promoted by two bothers, Ashwani Sud and Rajesh Sud along with their business associates A K Mahindra. TRPL has its orange and teak plantations in Amaravati district of Mahrashtra and poplar nursery in Bareilly in Uttar Pradesh. The total land area aggregated 379 acres (306 acres in Mahrashtra and 50 acres in UP.