Wegagen Bank, Credit Appraisal Team Date: April 2024

Customer Information:
Borrower/Applica: AAMT Trading PLC
Branch: Stadium
Business Address: Addis Ababa
Sub City: Bole Wereda: 03 Tel No.0934665515
Date Business Established: 2006E.C
Date Credit Relationship Started: -
Total Applicant’s Credit Exposure:- 35million
Sister Company/s Credit Exposure:-NIL
Credit Exposure Grand Total:-23.3

Customer Classification: Previous Credit Risk Grade: c

Corporate Current Credit Risk Grade:
x
Commercial Risk grade of sister company(s): -
Reason for change of Grade (in short): Previously
he was new customer
Ownership: PLC Collateral to loan ratio: 0
Business/Economic Sector: Import & wholesale trade Credit Facility Utilization:
Policy Exception:
Business type/Line: Import trade in machinery Yes No
x
If Yes state Briefly:
Trade License No.: MT/AA/14/14/673/746882/2010 ______________________________________
Renewed up to: 2016 E.C
TIN: 0044206944 PERFORMERS :
Financial Statement:
CRM :Almaz W/Giorgis
Audited up to: 07/07/23
CA : Nigussie Tadesse
interim for: 07/03/2024
Credit Approving Committee II
Opinion: Unqualified Qualified Disclaimer
x x CAC –1 CAC –2 CAC –3
CAC –4 LoanWorkout
x x
As At: 07/07/23
Date Application Received:
Paid up Capital: 6,670,000  By CRM : 16/04/2024
Capital Employed: 9,012,000.00  By CA: 18/04/2024
Tangible Net Worth: 9,012,000.00
Sales : 2,086,560.00 Decision Date:
Operating Profit ratio: -10.88%
Net profit ratio: -10.88%
Current Ratio: 425.26:1
Bank Debt/TNW ratio: - na
Total liability/TNW ratio: na
Net Profit/Loss (-227,000.00)
Working Capital Requirement/Birr Sales: 3.55:1

AAMT TRADING PLC STADIUM Branch Annex to LAF No. WB/CRM/AL/005/2024 1

Wegagen Bank, Credit Appraisal Team Date: April 2024

1. Current Request:
The applicant has requested the bank an overdraft facility of birr 35 million for a period of one
year and a WRT TL of birr 10 million for a period of 3 years to be repaid on quarterly mode of
repayment both against two residential building having a total estimation value of birr
68,610,832.74.
2. Purpose:
 To curb working capital shortage for its Import and wholesale business.
3. Collateral:
a) Building
The applicant has pledged two building having total estimation value of birr 68,610,832.74 as
stated below with detail:-
Estimated Value of the Collateral
Security Description Construction Date Est. Est. by
Location Total
value
14,529,186.00 24,554,440.29
G+1 Under construction Building 10,025,254.29
owned by Ato Melkamu Tegie 59% 100%
41%
under LHC
(After Discounting 07/11/202 Behailu
no.ለ/ኩራ 3/18/2/22529/2857/00 location value by 3 Girma
located at Addis Ababa city, Lemi 10%)
10,025,254.29 23,101,521.69
Kura sub city, Woreda-03, 13,076,267.40
459 sq.m area. 43% 100%
57%

G+3 Residential building owned by 13,777,968.75 30,278,423.70 44,056,392.45 7/11/2023 Behailu

Ato Melkamu Tegie under LHC Girma
69% 100%
No.ቦሌ 9/64/3/1/248522/249543/03 31%
located in Bole Sub-city Woreda 09,
with area of 250m2.
Total 67,157,914.14

The building with LHC No. ለ/ኩራ 3/18/2/22529/2857/00 is only 75%.

The collateral is marketable, developing, accessible and developing as per remark of the engineer.
3.1. Collateral coverage ratio:-
Total collateral value after location discounted……………………………67,157,914.14
Existing TL O/S balance as of 17/04/24………………………………..….23,345,412.96
Requested OD facility………………………………………………………..35,000,000.00
WRT TL requested ……………………………………..……………………10,000,000.00
Total facility requested and existing facility…………………………….. 68,345,412.96
Collateral to facility Gap…………………………………………………… (1,187,498.82)
Collateral to requested and existing ratio……………………………………=0.98:1=98%

AAMT TRADING PLC STADIUM Branch Annex to LAF No. WB/CRM/AL/005/2024 2

Wegagen Bank, Credit Appraisal Team Date: April 2024

4. Back ground of the Business:-

4.1. Establishment and Business Objective
The business is established on 2008 E.C by two shareholders with an initial capital of birr
3,240,000.00 and currently the paid up capital of the business rose to birr 6,670,000.00.
The business is located at Addis Ababa city bole sub-city woreda -03 H.No.1/413.
The business is mainly engaged in import trade in industrial, agricultural and machinery,
Equipment and supplies.
In addition the business also engaged in retail trade of construction machineries,
commission/brokerage activities, import trade of rubber, plastic products and etc.
The details of the shareholders are tabulated below.
Name of share
shareholders Number of shares Par Value Total capital %age
Ato Melkamu Tegie 3,794 1,000 3,794,000 57%
W/ro Freweyni Abreha 2,876 1,000 2,876,000 43%
Total 6,670 6,670,000.00 100%
4.2. Management/Board Profile
As per the due delegacy report Ato Melkamu Tegie is the shareholder and the manager of the
business has sufficient years of experience in line of the business.

The due diligence of the business verifies as the G/Manager Ato Melkamu Tegie with other
supporting staff effectively manage the business efficiently.
4.2.1 List of management profile with business related experience
Sr.no name position Educational Relevant
qualification experience
1 Ato Melkamu Tegie G/Manager BSC-Water enginering 13 years
2 W/ro Freweyni Abreha Business Manager BA- in law 10 Years
3 Ato Dawit Walle Marketing BSC-Chemical Engineering 15 years
Manager
4 W/t Yodit Birhane Finance BA- Accounting 3 years
Thus the above listed business staffs having diversified field of education with ample business
experience assumed to manage the business easily.

AAMT TRADING PLC STADIUM Branch Annex to LAF No. WB/CRM/AL/005/2024 3

Wegagen Bank, Credit Appraisal Team Date: April 2024

4.3. Current Business Activities

Currently, the applicant is engaged in:
 Import trade in industrial, agricultural and Construction machinery.
 Import trade in rubber, plastics and plastic products and batteries
 Commission/brokers business activities
 Whole and retail trade of in rubber plastics and plastic products.
5. Key Customers and Suppliers of the Business:
The main customers of the applicant are different government and non government organization,
individual customers and etc.
6. Credit Exposure:
Type of facilities Amount approved granted date O/S balance Expiry date Status
17/04/2024

MDTL 35,000,000.00 18/10/2022 23,345,412.96 18/10/2025 Pass

Total 35,000,000.00 23,345,412.96

7.1 With our bank

7.2 With other banks
As per the Credit information enquiry ID No 2210806, 2210808 and 2210809 dated
17/04/2024, the applicant business, both and both share holders has no either active or settled
credit relationship with other banks.
7. Account Performance:
7.1. Account Movement;
At Our Bank
The applicant business has opened current account at our bank Stadium branch on July 27,20222
and has the following account transaction from April 01,2023 to April24,2024 for the past one
years with the following credit turnover.
period highest credit total credit turnover Total Debit turnover.
April 01,2023 4,088,298.31 16,595,000.00 16,603,882.11
to 4,012,229.89

April24,2024 3,986,363.31

At Other Banks

AAMT TRADING PLC STADIUM Branch Annex to LAF No. WB/CRM/AL/005/2024 4

Wegagen Bank, Credit Appraisal Team Date: April 2024

The applicant has an account at CBE with total credit turnover of birr 2,237,738.83 for a period
between 18/04/2023 to 18/04/2024 and his account utilization for the last one year.
Period Account Highest Credit Lowest Credit Debit turn
Credit Turnover over
1,176,184.48 18,753.61
18/04/2023
Current 1,171,295.45 26,397.87 2,237,738.83 2,205,583.41
to 18/04/2024
1,021,295.45 36,012.34
The account performance of the business relative to its sale seems nice.
7.2. Import performance
Bank Reference FCY LCY Date
ZB ZBIBCLCY01238/2021 30,000.00 1,357,482.00 24/07/2021
WB 089IBLS230480006 43,164.00 2,362,252.97 16/12/2023
BERH BIB/FBD/01-00263/2022 38,450.00 2,019,424.76 18/05/2022
30,000.00 1,357,482.00

8. Condition of Fixed Asset:

As per the interim financial statement yekatit 30, 2016 the applicant has fixed assets such as
office furniture and equipment, with other investment has a total estimation value of Birr
12,139,041.67.
9. Financial statements Analysis.

The applicant has presented provisional and audited financial statement for one year ended July 7,
2020, 2021, 2022 and for the year ended July 07, 2023 and for the interim financial statement
ended Yekatit30, 2016 business period the applicant generates total revenue income (net profit) of
birr 1,169,000.00, loss of birr (215,765.00), loss of birr (226,702) and profit of birr 1,408,000.00
respectively.

AAMT TRADING PLC STADIUM Branch Annex to LAF No. WB/CRM/AL/005/2024 5

Wegagen Bank, Credit Appraisal Team Date: April 2024

Activity Ratio
PERIOD
ENDED 7/7/2020 7/7/2021 7/7/2022 7/7/2023 7/3/2024
PERIOD
LENGTH
(DAYS) 365 365 365 365 240
Net Sales
2,861 3,270 7,785 2,087 61,241
Sales Growth
14.30% 138.07% -73.19% 4362.74%
The sales growth rate for the year ended July 7, 2020 to July07,2023 shows a unstable sales
growth, even with loss status for 2023.
Liquidity Ratio
PERIOD
ENDED 7/7/2020 7/7/2021 7/7/2022 7/7/2023 7/3/2024
PERIOD
LENGTH
(DAYS) 365 365 365 365 240
Current Ratio 0.92 97.28 10.16 425.26 0.96
Quick ratio 0.73 97.28 10.16 277.00 0.96
An average current ratio of 177.57 shows that, the applicant is able to back up its currently
maturing financial obligations from its current asset. Moreover the applicant has also birr -
8,061,000 net working capital that implies as the business is currently liquid enough.
Leverage Ratio
PERIOD
ENDED 7/7/2020 7/7/2021 7/7/2022 7/7/2023 7/3/2024
PERIOD
LENGTH
(DAYS) 365 365 365 365 240
Tangible Net
Worth (133) (133) 7,040 9,012 11,601
Total
Liabilities/TNW 0.11 0.00 1.32
As can be seen from the trend the company’s indebtedness is low across the period under review.
The company has negative tangible net worth for 2020& 2021 later since then the tangible net
worth for each birr is improved and now become a positive 7,040,000 in 2022 and positive birr
9,012,000.00 for 2023. So the company is seems less indebted

AAMT TRADING PLC STADIUM Branch Annex to LAF No. WB/CRM/AL/005/2024 6

Wegagen Bank, Credit Appraisal Team Date: April 2024

Profitability Ratio

PERIOD ENDED 7/7/2020 7/7/2021 7/7/2022 7/7/2023 7/3/2024

PERIOD LENGTH (DAYS) 365 365 365 365 240

Net profit (1,169) (216) 1,208 (227) 1,408

Gross Profit Margin (%): 13.67% 36.73% 39.37% 46.33% 18.77%

Op. Profit Margin (%): -40.86% -6.61% 24.82% -10.88% 2.90%

Net Profit Margin (%): -40.86% -6.61% 15.52% -10.88% 2.30%

The company realized a gross profit margin of 13.67 from its total sales of Birr 2,861,000.00 million
during the year 2019. It’s operating profit margin and net profit margin is -40.86 each which implies the
company is running in loss. Starts earning of birr 1.2 million in 2022 and again incurs loss of birr
227,000.00 in 2023.
10. Request Assessment, working capital determination and Risk Assessments.
10.1 Request Assessment:
The applicant has requested the bank an overdraft facility of birr 35 million for a period of one year and a
WRT TL of birr 10 million for a period of 3 years to be repaid on quarterly mode of repayment both
against two residential building having a total estimation value of birr 68,610,832.74.
10.2 Working Capital Determination
a) Based on Forecasted Cost of Goods Sold
Actual Sales for July 07, 2023……………………………………………………2, 086,560.00
Average sales growth for the past three consecutive years……………………..26%
Market price inflation as per current government data is ……………………….26%
Projected sales for the coming year (52%)…………………………………………3,171,571.20
Average cost of goods sold (60%) ……………………………………………….1, 902,942.72
Average Administration expenses (38%)…………………………………………….1, 205,197.056
Total working capital required for annum……………………………………………3, 108,139.776
Assuming the business cycle two times per annum
Required working capital for once cycle ……………………………………….1, 554,069.90
Less: Less: NWC (CA-CL)………………………………………………………. (538,133.77)
Required working capital to run the business EXCESS ……………………….2, 092,203.67
Therefore the applicant business has excess working capital of birr 2,092,203.97 at hand with the
proving evidence of average liquidity position of 177:1 and leverage ratio of 0.06:1 as its gearing
position is almost nil.

AAMT TRADING PLC STADIUM Branch Annex to LAF No. WB/CRM/AL/005/2024 7

Wegagen Bank, Credit Appraisal Team Date: April 2024

b) Based on submitted business plan

Planed import purchase…………………………………………….140, 051,600.00
Required working capital per cycle (based on semi- annual cycle….70, 025,800.00
Less: NWC (CA-CL)………………………………………………….. (538,133.77)
: Existing Facility……………………………………….……… 35,000,000.00
Working capital required to operate the business based on business plan is birr ........... 35,563,933.77

10.3 Risk Assessment

a) Ownership Risk
The business is plc that has almost nill leverage position.
Since the owners of the business has contributed the significant amount of capital towards the
business entity and the leverage position is found very small the ownership risk seems low.
b) Management Risk
As per the due diligence report, the applicant Ato Melkamu Tegie , is business person who
has been in the engaged in import and varied business lines for several years. Furthermore,
the applicant employed other qualified supporting staffs. Thus, management risk to be faced
is found minimal.
c) Credit Risk Assessment
The applicant’s credit risk grade is c, which entails moderate risk to the Bank.
General Observation:-
The applicant has a deceiving character that misleads to wrong decision making shat has shown on his
exaggerating its sales performance on his interim/provisional Financial statement repeatedly. To verify this
fact in evidence:-
a) The applicant submitted provisional financial statement having sales volume of birr 78,514,000.00
for financial period of Sene30,2014 E.C in which it could granted DTS TL of birr 35 million as
per LAF No.WB/CRM/AL/006/2022. However, when the applicant business is audited the real
sales volume of the business was only birr 7,784,655.00 only
b) With similar approach the applicant last year 2015E.C with sales volume of birr 2,086,560.00 has
exaggerated to the interim financial statement of yekatit30, 2016 as it is birr 61,240,920.00 with
sales growth of 4362.74% which couldn’t through miracle.

AAMT TRADING PLC STADIUM Branch Annex to LAF No. WB/CRM/AL/005/2024 8

Wegagen Bank, Credit Appraisal Team Date: April 2024

11. Recommendation:

11.1. Bases for Recommendation;

Strong Points
 The applicant has acquired sufficient experience in the line of the business.
 The applicant has very good account turnover at our bank relative to its sales.
 Has very good liquidity and gearing position
 Has good loan repayment manner.
Weak Points
 The applicant’s sales show unstable sales growth.
 The company incurs loss frequently for the audited years
 The pledged collateral is insufficient coverage to requested and existing facilities.
11.2. Recommendation;
Based on the forgoing analysis, I don’t recommend both the requested working capital OD and
TL requests.

Prepared by Reviewed by

-------------------------- ------------------------------
Nigussie Tadesse Michael H/giorgis
Sr. Credit Analyst Manager Credit Analysis

AAMT TRADING PLC STADIUM Branch Annex to LAF No. WB/CRM/AL/005/2024 9