Sicirec Rating for Financial Security

Financial Security (F)

Introduction

Rating and company age

It is, in general, more difficult to acquire a high rating on the financial variables for very young plantations and/or sales companies than for older companies. To a high degree, good quality has to prove itself in time. Many of the variables are even directly related to the period of time still to be covered until the first revenues can be expected.

Prospects of growth

Since the prospects of growth of the trees has an overruling influence on potential revenues, this aspect (F.1) is weighed as an absolute condition for any revenues. Therefore it is weighed mathematically as a factor of the total score, not as a term in a sum.

Managerial parameters

Since the quality of the management (F.4) is also a condition for good financial performance, it is also weighed as a factor and not as a term in a sum.

Growth conditions (F.1) as well as managerial competence (F.4) are both preconditions for financial performance. By applying those variables as factors, both can in principle reduce the revenues to be expected to zero.

The other variables, maintenance reserves (F.2), rights of investors (F.3) and information transparancy (F.5) are applied as terms in a sum. They all add to the likelihood of revenues, but are no strict (pre-)conditions for any revenues at all.


 * F.1 Quality of terrain, maintenance, climate and logistics [factor (F1/20)]
 * F.1.1 Growing conditions [factor ((F.1.1.1 * F.1.1.2) / 36)]
 * F.1.1.1 Quality of soil and conditions of terrain [maximum score 6]
 * F.1.1.2 Climate appropriateness [maximum score 6]
 * F.1.2 Method of planting and level of maintenance [maximum score 10]
 * F.1.4 Logistics [maximum score 5]
 * F.1.5 Quality of maintenance planning [maximum score 5]
 * F.2 Maintenance reserves [maximum total score 20]
 * F.2.1 How are financial reserves secured? [maximum total score 8]
 * F.2.1.1 Type of construction [maximum score 4]
 * F.2.1.2 Quality of control [maximum score 4]
 * F.2.2 For how many years still needed? [maximum score 8]
 * F.2.3 Financial reserves [maximum total score 4]
 * F.2.3.1 Sufficiency (for whole period in US dollars) [maximum score 2]
 * F.2.3.2 Liquidity (funds and assets) [maximum score 2]
 * F.3 Securing rights of investors [maximum total score 21]
 * F.3.1 Ownership of company or shareholdership [maximum score 21]
 * F.3.2 No ownership of company nor shareholdership [maximum total score 21]
 * F.3.2.1 Ownership of land [maximum score 6]
 * F.3.2.2 Quality of Contracts [maximum score 6]
 * F.3.2.3 Usufruct [maximum score 5]
 * F.3.2.4 How is usufruct secured? [maximum score 4]
 * F.4 Management [factor: (F.4 / 8)]
 * F.4.1 Quality [maximum total score 4]
 * F.4.1.1 Quality of management [maximum score 3]
 * F.4.1.2 Co-operation with governmental organizations and scientific institutes [maximum score 1]
 * F.4.2 Continuity [maximum total score 4]
 * F.4.2.1 Present managerial spread [maximum score 2]
 * F.4.2.2 Structure of measures for continuity [maximum score 2]
 * F.5 Information transparency [maximum total score 13]
 * F.5.1 Contractual guarantees for information [maximum score 8]
 * F.5.2 Present de facto information situation [maximum score 5]