I. STATEMENT ON RATING
Slovak rating agency, Inc. grants following ratings to the company PALMA - TUMYS Inc.:
| Long-term local currency rating | BBB (stable outlook)
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| Long-term foreign currency rating | BB (stable outlook)
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| Short-term rating | S2
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The long-term rating in the category of transactions in Slovak crowns BBB (stable outlook) is two degrees below the rating of the Slovak Republic ( A - stable outlook). In the category of transactions in foreign currencies the rating BB (stable outlook) has been granted to the company PALMA - TUMYS Inc., which is below the risk level of the Slovak Republic (BBB- positive outlook). Short-term rating of PALMA - TUMYS Inc. is S2, which is the best possible short-term rating for the entities attaining long-term rating BBB.
Rationale:
- The company PALMA -TUMYS Inc. is an important Slovak producer of vegetable oils and fats with a dominant position on the Slovak market. Palma-Tumys Inc. is one of the companies in which the shareholders structure is composed by the employees of the company cooperating actively in meeting the strategic targets of the company.
- The company applies division system of management of the company, planning, control and management mechanisms are supported by control and decision competences of the Supervisory Board. We highly appreciate the management of subsidiaries, the activities of which are directly connected to the activities of the parent company, while the activities of subsidiaries are complementary with the activities of the parent company Palma - Tumys.
- The company manages assets in the total volume of SKK 3 333 million. The revenues (in Slovak crowns) reached the amount of SK 3 336 million in 2001, while the production volume shows ascending trend. We evaluate positively the stability in the management and in achieved efficiency of business activities of the company. At average, the profit represents 3 % of revenues. Total indebtedness of the company is affected by the necessity of pre-financing of agricultural producers of basic raw material - colza and sunflower, whereby the company is constraint to accept the outside capital. If only the financing of own needs of the company would exist, the indebtedness of the company could decrease by around 34 %. So, the indicator would achieve the level of 40,45 %.
- Since 1994, PALMA-TUMYS carries on business in untraditional manner in the agriculture in the form of support of agricultural primary production by harvest pre-financing (fertilisers, seed, chemical treatment of plants). So, it eliminates the affects of the state policy in this area and guarantees high quality of its entry raw materials as result of technological discipline. The risk could be the possible lack of raw material, in fact resulting either from bad harvest or the decision of agricultural producers to export the production abroad for better price. PALMA - TUMYS is able to solve such dropouts by imports, despite the fact that the raw materials are significantly limited by defined quotas, high customs duties and other tools. The company eliminates the risk of raw material dropout by conclusion of yearly contracts on delivery of entry raw materials.
- In the area of personal management, the company has well-developed social program, defines yearly education program for the employees and is also focussed on training of own staff, while there is close cooperation with the Economic University in Bratislava and Chemical-technological faculty of the Slovak Technical University in Bratislava. The goal of the company in personal area is to develop corporate culture in order to incorporate all employees into business processes of the company.
- In this year, the company successfully recertified the quality management system according to the new standard ISO 9001:2000 and The system of environmental management and the system of security and health protection management are defined so that the activities of particular divisions being a part of the system of environmental management, are in accordance with all requirements of the standard ISO 14001/OHSAS 18001. As for the quality, the products of the company have been awarded few times the prestigious Slovak Gold Trademark Quality Certificate.
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Slovak Rating Agency
Bratislava, 26 November 2002