MIRA
INFORM REPORT
|
Report Date : |
29.11.2008 |
IDENTIFICATION DETAILS
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Name : |
ESSEL PROPACK LIMITED |
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Registered Office : |
P.O. Vasind, Taluka -
Shahapur, Dist. Thane, |
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Country : |
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Financials (as on) : |
31.12.2007 |
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Date of Incorporation : |
22.12.1982 |
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Com. Reg. No.: |
11-28947 |
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CIN No.: [Company
Identification No.] |
L74950MH1982PLC028947 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUME01100B |
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PAN No.: [Permanent
Account No.] |
AAACE1568L |
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Legal Form : |
Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufactures and Sellers of Composite Laminated Collapsible Tubes, Laminates and Plastic Films. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 29000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company and a part of Excel
Group. The company is progressing well. Directors are reported as experienced
and respectable businessmen. Trade relations are reported as fair. Business
is active. Payments are usually correct and a s per commitments. Fundamentals are strong and healthy. The company can be considered normal for business dealings at usual
trade terms and conditions. The company can be regarded as a promising business partner in a
medium to long run. |
LOCATIONS
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Registered Office : |
P.O. Vasind, Taluka -
Shahapur, Dist. Thane- 421 604, |
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Tel. No.: |
91 – 22 – 2493 3280 / 3281 / 2493 9686 / 9689 |
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Fax No.: |
91 – 22 – 2496 3137/24935188 |
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E-Mail : |
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Website : |
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Head Office : |
3rd Floor, Satam
Estate, Above Bank of |
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Tel. No.: |
91-22-2821 5168,
2820 2108, 2820 2114 |
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Fax No.: |
91-22-2839 2259,
2837 5646 |
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E-Mail : |
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Administrative Office : |
135, |
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Tel. No.: |
91-22-56535653/ 56535700 |
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Fax No.: |
91-22-24963137 |
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Corporate Office : |
10th Floor, |
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Tel. No.: |
91-22-2481 9000 / 2481 9200 |
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Fax No.: |
91-22-2496 3137 / 2491 4649 |
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Factories : |
v
Vasind, Taluka Shahapur, District Thane, v
v
Silvassa, v
B-1/2, MIDC, Murbad, Dist. Thane - 421406, v
Village Vadali, P.O. Kudus, Taluka - Wada,
Dist. Thane - 421 312, |
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Rest are located at
: |
· Puducherry, · Uttarakhand, ·
Nalagarh, |
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Unit : |
912, Raheja
Centre, Free |
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Tel. No.: |
91-22-2288 1568, 2288
1569, 2288 4527, 2282 5163 |
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Fax No.: |
91-22-2282 5484 |
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E-Mail : |
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Factories
(Overseas) : |
·
·
·
·
·
·
·
·
·
·
·
·
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Overseas Offices : |
v
v
v
v
v
v
v
v
v
v
v
v
v
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v
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Factories (Overseas) : |
Essel Packaging ( Room 802, No.8 Building, Up Town, Essel Propack 203, Essel Propack UK
Limited |
DIRECTORS
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Name : |
Mr. Subhash Chandra |
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Designation : |
Chairman |
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Name : |
Mr. Cyrus Bagwadia |
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Designation : |
Managing Director |
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Date of Birth/Age : |
52 years |
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Qualification : |
B.Sc. (Hons.), DPM and DBM |
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Experience : |
29 years |
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Date of Appointment : |
17.11.1995 |
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Other Directorships : |
Du Pont (Far East |
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Name : |
Mr. Ashok Kumar Goel |
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Designation : |
Vice Chairman and Managing Director |
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Date of Birth/Age : |
38 years |
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Qualification : |
B.Com. |
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Experience : |
18 years |
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Date of Appointment : |
01.07.1988 |
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Name : |
Mr. J. M. Fernandes |
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Designation : |
Director |
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Date of Ceasing : |
14.03.2006 |
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Name : |
Mr. Vasant Kumar Badgamia |
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Designation : |
Director |
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Date of Ceasing : |
14.03.2006 |
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Name : |
Mr. Devendra Ahuja |
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Designation : |
Director |
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Name : |
Mr. Andreas Schwyn |
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Designation : |
Director |
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Name : |
Mr. Beat Buehlmann |
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Designation : |
Director |
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Date of Ceasing : |
07.12.2005 |
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Name : |
Mr. Boman Moradian |
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Designation : |
Additional Director |
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Date of Appointment : |
14.03.2006 |
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Name : |
Mr. Tapan Mitra |
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Designation : |
Director |
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Name : |
Mr. K V Krishnamurthy |
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Designation : |
Director |
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Name : |
Mr. Anand Deshpande |
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Designation : |
Director – Human Capital (Global) |
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E-Mail : |
KEY EXECUTIVES
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Name : |
Mr. Cherian Kenneth Thomas |
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Designation : |
Vice president – Marketing (AMESA), CEO and Whole Time
Director, Packaging Mr. Private Limited |
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E-Mail : |
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Name : |
Mr. R. Chandrasekhar |
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Designation : |
President – Medical Devices and Specialty Packaging |
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Name : |
Mr. M.R. Ramasamy |
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Designation : |
Director – Technology and New Projects |
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Name : |
Mr. Sanjay Bhasin |
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Designation : |
CEO – Tubes and Laminates Business |
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Name : |
Mr. A. V. Ganapathy |
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Designation : |
Chief Finance Officer (Global) |
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Name : |
Mr. Zoeb Adenwala |
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Designation : |
Chief Information Officer (Global) |
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Name : |
Mr. M.K. Banerjee |
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Designation : |
Director Creativity and Innovation (Global) |
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Name : |
Mr. Ernest Louis |
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Designation : |
Director – Human Capital (global) |
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Name : |
Mr. Ajay Nagle |
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Designation : |
Vice President – Legal and Company Secretary |
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Name : |
Mr. Edward Luo Zhiyong |
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Designation : |
Vice President – Tubes and Laminates Business ( |
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Email : |
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Tel. No.: |
86-21-62753814 |
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Name : |
Ms. Evelyn Tweedlie : |
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Designation : |
Vice President – Tubes and Laminates Business ( |
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Tel. No.: |
44-780-281-5399 |
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Name : |
Mr. Ted Sojourner |
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Designation : |
Vice President – Tubes and Laminates Business ( |
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Tel. No.: |
1-434-791-4530 |
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Name : |
Mr. Nitin Matani |
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Designation : |
CEO - Tacpro Inc. and Avalon Medical Services |
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Name : |
Mr. Vinay |
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Designation : |
Financial Controller (Global) |
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Name : |
Mr. Puneet Gandhi |
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Designation : |
Regional Vice President (Africa, Middle East, |
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Email : |
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Tel. No.: |
91-22-24819000 / 9200 |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders
(30.09.2008) |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group |
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Indian |
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Individuals/Hindu Undivided Family |
14615 |
0.009 |
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Bodies Corporate |
57937030 |
36.997 |
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Foreign |
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Individual (Non-Resident Individuals/Foreign Individuals) |
89305 |
0.057 |
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Bodies Corporate controlled by promoters
|
34228305 |
21.857 |
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Public shareholding |
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Institutions |
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Mutual Funds/UTI |
11344165 |
7.244 |
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Financial Institutions/Banks |
550 |
0.000 |
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Insurance Companies |
2756720 |
1.760 |
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Foreign Institutional Investors |
5909167 |
3.773 |
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Non-institutions |
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Bodies Corporate |
12486106 |
7.973 |
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Individuals – i. Individual shareholders holding nominal share capital up to Rs.
0.100 Million |
22541841 |
14.394 |
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ii. Individual shareholders holding nominal share capital in excess of
Rs. 0.100 Million |
6742288 |
4.305 |
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Non resident Individuals |
2309348 |
1.475 |
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OCB |
24800 |
0.016 |
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Trusts |
216890 |
0.138 |
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TOTAL |
156601130 |
100.000 |
Statement Showing Shareholding Of Person Belonging To The Category
“Promoter And Promoter Group” As On 30.09.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Packaging Products Investments Limited |
17158305 |
10.957 |
|
Lazarus Investments Limited |
17070000 |
10.900 |
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Premier Finance And Trading Company Limited |
8948675 |
5.714 |
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Premier Finance And Trading Company Limited |
1900000 |
1.213 |
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Ganjam Trading Company Private Limited |
10176800 |
6.499 |
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Churu Trading Company Private Limited |
8190390 |
5.230 |
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Rupee Finance And Management Private Limited |
8024525 |
5.124 |
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Briggs Trading Company Private Limited |
6208520 |
3.965 |
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Prajatma Trading Company Private Limited |
5953380 |
3.802 |
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Rama Associates Limited |
4086340 |
2.609 |
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Zee Telefilms Limited |
1813000 |
1.158 |
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Zee Telefilms Limited |
6000 |
0.004 |
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Zee Telefilms Limited |
3000 |
0.002 |
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Aqualand ( |
1570200 |
1.003 |
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Royal Tools Private Limited |
504000 |
0.322 |
|
Veena Investment Private Limited |
431000 |
0.275 |
|
Blue Line Moters Private Limited |
96000 |
0.061 |
|
Subhash Chandra |
88305 |
0.056 |
|
Subhash Chandra |
1000 |
0.001 |
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Pan India Paryatan Limited |
25200 |
0.016 |
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Kavita Ashok Goel |
10990 |
0.007 |
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Nand Kishore Goel |
3000 |
0.002 |
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Ashok Kumar Goel |
625 |
0.000 |
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Total |
92269255 |
58.92 |
Statement Showing Shareholding Of Person Belonging To The Category
“Public” And Holding More Than 1% Of The Total Number Of Shares As On
30.09.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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UTI – CCP Advantage Fund |
3314115 |
2.116 |
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UTI Master Value Fund |
3100000 |
1.980 |
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Sudarshan Shares And Stock Private Limited |
2100000 |
1.341 |
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Reliance Capital Trustee Company Limited |
2000000 |
1.277 |
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General Insurance Corporation Of |
1850150 |
1.181 |
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UTI Dividend Yield Fund |
1832232 |
1.170 |
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Total |
14196497 |
9.065 |
BUSINESS DETAILS
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Line of Business : |
Manufactures and Sellers of Composite Laminated Collapsible Tubes, Laminates and Plastic Films. |
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Products : |
v
Laminated Tubes v Seamless
Tubes (For high-end cosmetics) v Closures v
Webs
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PRODUCTION STATUS
(As on 31.12.2007):-
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Particulars |
|
Unit |
Installed
Capacity |
Actual
Production |
|
Laminated and Co-Extruded Tubes Nos. |
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Million Nos. |
2114 |
1769.88 |
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Laminates |
|
MT |
4000 |
7202.07 |
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Plastic Film |
|
MT |
6690 |
5376.78 |
GENERAL INFORMATION
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Customers : |
Some of its’ major
customers are :- v
Johnson and Johnson Limited v
Cavinkare Limited v
Balsara Hygiene Products Limited v
Duphar – Interfran Limited |
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No. of Employees : |
About 1200 |
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Bankers : |
v
State Bank of v Standard Chartered Grindlays Bank Limited v Banque National De Paris v Corporation Bank v HDFC Bank Limited v Credit Lynnais v BNP Paribas v BS Bank Limited v Standard Chartered Bank v DBS Bank Limited |
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Facilities : |
Secured Loans :
Notes :- 1. Term Loan from
Banks (i) Rupee Loan Secured by way of first charge ranking pari passu on the
entire fixed assets of the Company, both present and future excluding land at
(ii) Foreign
Currency Loan Secured by way of first charge ranking pari passu on the entire fixed assets of the Company. Charge is yet to be registered. (iii) Repayable
within one year Rs 433.188 millions
(Rs 216.600 millions) 2. Working Capital
Demand Loan/Cash Credit from Banks Secured by way of hypothecation of all inventories both on hand and in transit, book debts and other receivables of the Company. Also secured by way of second charge ranking pari passu on immovable properties of the Company at Wada and Vasind. 4.
Other
Secured Loan Secured by way of hypothecation of Vehicle. Unsecured Loans
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Banking
Relations : |
Good |
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Auditors : |
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Name 1 : |
M. G. Bhandari and Company Chartered Accountants |
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Name 2 : |
MGB and Company Chartered Accountants |
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Joint Ventures : |
·
P.T. · Essel Deutschland GmbH and Co., KG Germany ·
Essel Deutschland Management ·
Bericap India Private Limited, |
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Associates/Subsidiaries : |
Associates · Zee Telefilms Limited · Essel World ·
·
Essel Deutschland · Siticable Network Limited · Pan India Paryatan Limited ·
Aqualand ( · Briggs Trading Company Private Limited · Churu Trading Company Private Limited · Ganjam Trading Company Private Limited · Continental Drug Company Private Limited · Premier Finance and Trading Company Private Limited · Edison Continental Laboratories Company Private Limited ·
E-City Entertainment ( · Ayepee Lamitubes Limited · Dhariya Properties Private Limited · Metropolitan Leasing Limited · Supel Tex Limited · Uddar Trees Growing Private Limited · Pan India Infravest Network Private Limited ·
Essel Propack Philippines, Inc, ·
MIL de Panama ·
Packtech Limited, ·
Arista Tubes Limited, ·
Essel Propack UK Limited, ·
Essel Propack de Venezuela, ·
Essel de Mexico, S.A.de C.V., ·
Tubo pack de Colombia ·
Essel Propack LLC, ·
Avalon Medical Services Pte. Limited, ·
Essel Propack ·
Tacpro Inc., ·
Tactx Medical Inc., ·
Produxx Inc., ·
Arista Tubes Inc., ·
·
Packaging India Private Limited, ·
The Egyptian Indian Company for Modern
Packaging S.A.E., ·
Essel Propack MISR for Advanced Packaging
S.A.E., ·
Essel Packaging ( ·
·
Lamitube Technologies Limited, ·
Lamitube Technologies ( Subsidiaries ·
Essel Packaging ( ·
Egyptian Indian Company for Modern Packaging
S.A.E, ·
Essel Packaging ( · Lamitube Technologies Limited · Ayepee Lamitubes Limited, · Briggs Trading Company Private Limited, · ChuruTrading Company Private Limited, · Continental Drug Company Private Limited, · Pan India Network Infravest Private Limited, Essel Corporate · Resources Private Limited, · Ganjam Trading Company Private Limited, · Essel Infra Projects Limited (formerly Pan India Paryatan Limited), · Premier Finance and Trading Company Limited |
CAPITAL STRUCTURE
(As on
31.03.2007):-
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
200000000 |
Equity Shares |
Rs. 2/- each |
Rs.400.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
156601130 |
Equity Shares |
Rs. 2/- each |
Rs.313.202
millions |
Out of above:-
(i) 65166915 Equity Shares of Rs.2 each fully paid up are issued as Bonus Shares by Capitalisation of General Reserves and Securities Premium.
(ii) 34316610 Equity Shares of Rs.2 each fully paid up were allotted for consideration other than cash.
Less: Calls in Arrears (Other than Directors)
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.12.2007 |
31.12.2006 |
31.12.2005 |
|
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SHAREHOLDERS FUNDS |
|
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|
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1] Share Capital |
313.131 |
313.129 |
313.126 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
5313.559 |
5183.223 |
5129.804 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
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NETWORTH |
5626.690 |
5496.352 |
5442.930 |
|
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LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
1850.371 |
1684.147 |
1011.830 |
|
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2] Unsecured Loans |
2082.178 |
795.234 |
442.884 |
|
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TOTAL BORROWING |
3932.549 |
2479.381 |
1454.714 |
|
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DEFERRED TAX LIABILITIES |
129.810 |
148.801 |
150.917 |
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|
|
|
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TOTAL |
9689.049 |
8124.535 |
7048.561 |
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APPLICATION OF FUNDS |
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|
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FIXED ASSETS [Net Block] |
1523.462 |
1467.352 |
1412.554 |
|
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Capital work-in-progress |
155.662 |
164.509 |
97.703 |
|
|
|
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|
|
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INVESTMENT |
5744.316 |
5509.039 |
4881.941 |
|
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
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|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
451.135
|
430.434 |
364.226
|
|
|
Sundry Debtors |
593.330
|
420.586 |
298.780
|
|
|
Cash & Bank Balances |
55.836
|
34.605 |
32.872
|
|
|
Other Current Assets |
256.899
|
33.914 |
0.000
|
|
|
Loans & Advances |
1581.288
|
855.999 |
1088.948
|
|
Total
Current Assets |
2938.488
|
1775.538 |
1784.826 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
404.277
|
425.321 |
335.824
|
|
|
Provisions |
268.602
|
366.582 |
792.639
|
|
Total
Current Liabilities |
672.879
|
791.903 |
1128.463 |
|
|
Net Current Assets |
2265.609
|
983.635 |
656.363
|
|
|
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|
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
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|
|
|
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TOTAL |
9689.049 |
8124.535 |
7048.561 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.12.2007 |
31.12.2006 |
31.12.2005 |
|
|
Sales Turnover |
3114.702 |
2825.435 |
2528.959 |
|
|
Other Income |
197.212 |
114.206 |
87.820 |
|
|
Total Income |
3311.914 |
2939.641 |
2616.779 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
555.362 |
593.502 |
682.864 |
|
|
Provision for Taxation |
182.437 |
183.040 |
223.190 |
|
|
Profit/(Loss) After Tax |
372.925 |
410.462 |
459.674 |
|
|
|
|
|
|
|
|
Export Value |
266.355 |
284.509 |
368.157 |
|
|
|
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Imports : |
|
|
|
|
|
|
Raw Materials |
642.082 |
644.194 |
514.502 |
|
|
Stores & Spares |
57.476 |
54.640 |
65.587 |
|
|
Capital Goods |
107.512 |
311.792 |
414.365 |
|
Total Imports |
807.070 |
1010.626 |
994.454 |
|
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|
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Expenditures : |
|
|
|
|
|
|
Cost of Goods Sold |
1327.969 |
1190.198 |
335.117 |
|
|
Manufacturing Expenses |
424.431 |
383.019 |
139.811 |
|
|
Administrative Expenses |
172.736 |
184.223 |
1014.639 |
|
|
Salaries, Wages, Bonus, etc. |
NA |
NA |
218.145 |
|
|
Interest |
NA |
NA |
(20.959) |
|
|
Personnel Cost |
369.803 |
264.135 |
NA |
|
|
Selling and Distribution Expenses |
56.289 |
48.744 |
NA |
|
|
Power & Fuel |
199.915 |
57.469 |
NA |
|
|
Depreciation & Amortization |
200.827 |
205.935 |
209.693 |
|
|
Other Expenditure |
4.582 |
12.416 |
37.469 |
|
Total Expenditure |
2756.552 |
2346.139 |
1933.915 |
|
QUARTERLY RESULTS
|
PARTICULARS |
31.03.2008 |
30.06.2008 |
30.09.2008 |
|
Type
|
1st Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales Turnover |
756.000 |
783.900 |
908.100 |
|
Other Income |
0.000 |
86.100 |
13.600 |
|
Total Income |
756.000 |
870.000 |
921.700 |
|
Total Expenditure |
606.000 |
653.700 |
748.500 |
|
Operating Profit |
150.000 |
216.300 |
173.200 |
|
Interest |
52.000 |
62.300 |
67.700 |
|
Gross Profit |
98.000 |
154.000 |
105.500 |
|
Depreciation |
48.000 |
49.700 |
54.100 |
|
Tax |
16.000 |
36.100 |
01.100 |
|
Reported PAT |
34.000 |
68.200 |
50.300 |
KEY RATIOS
|
Year |
31.12.2007 |
31.12.2006 |
31.12.2005 |
|
Debt-Equity Ratio |
0.58 |
0.36 |
0.22 |
|
Long Term Debt-Equity Ratio |
0.39 |
0.29 |
0.18 |
|
Current Ratio |
1.22 |
1.17 |
1.44 |
|
TURNOVER RATIOS |
|||
|
Fixed Assets |
0.80 |
0.78 |
0.79 |
|
Inventory |
7.66 |
7.83 |
8.28 |
|
Debtors |
6.66 |
8.65 |
8.71 |
|
Interest Cover Ratio |
2.35 |
3.77 |
6.41 |
|
Operating Profit Margin(%) |
34.62 |
32.59 |
35.95 |
|
Profit Before Interest And Tax Margin(%) |
28.67 |
25.97 |
28.55 |
|
Cash Profit Margin(%) |
17.00 |
19.82 |
23.62 |
|
Adjusted Net Profit Margin(%) |
11.05 |
13.20 |
16.22 |
|
Return On Capital Employed(%) |
11.04 |
10.86 |
11.81 |
|
Return On Net Worth(%) |
6.71 |
7.51 |
8.20 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
The company was incorporated on 22nd December, 1982 at Thane
in
The company was promoted by Essel group and is the World's largest Packaging
Company in laminated tubes. The company provides packaging solutions to
toothpaste, cosmetics, pharmaceuticals sectors to top multinational customers.
The company was the first company to introduce laminated tubes in
In 1993 the company ventured to become a global player by setting its
first overseas venture in
In December, 2000 the company acquired the tubing operations of the
propack group. The company was the fourth largest laminated tube manufacturer
in the world with operations in
The company's tubes find their way into toothpaste's, cosmetics,
pharmaceuticals, foods, etc. More precisely, multinationals like Unilever,
Colgate-Palmolive, SmithKline Beecham, Proctor and Gamble, Kiwi TTI / Sara Lee,
Revlon, Oriflame, etc. are some of its esteemed customers. Besides
The acquisition of Propack Mauritius has been completed through
cash-cum-stock deal. The company made a preferential allotment of 6863222
equity shares to Arfen Hsu at a premium of Rs. 421/-
In January, 2001 the company has issued bonus shares in the ratio of 3:5
(i.e. 3 bonus shares for every 5 equity shares with held). Moreover as a
diversification plan the company has set up a 51:49 joint venture company with
Bericap Holding GmbH of Germany to manufacture hi-tech closures for Carbonated
Soft Drinks
The company started its operations 18 years ago with a single location,
producing 53 million tubes. Today, it
has the total capacity of around 3 billions tubes. It is currently present in 10 countries and
15 manufacturing locations.
Recently the company has entered into a five-year contract with Procter
and Gamble (P and G) in US for 100% of their requirements of tubes. For this the company will be setting up a wholly
owned subsidiary in US with an investment of about US $ 20.000 millions.
During 2004 the company has increased the installed capacity
of Laminated & Co-ex Tubes and Plastic Film by 62 Millions Nos and 3110 MT
respectively during 2004-05. With this expansion the total installed capacity
of Laminated & Co-ex Tubes and Plastic Film has increased to 1506 Millions
Nos and 6690 MT respectively
The company has commissioned and commenced its commerical
production of Caps & Closures manufacturing facility at
During 2004 the company has acquired Arista Tubes Limited UK which was in the
business of plastic tubes. Further the company has set up a green field
facility in
During 2005, the company has increased the installed capacity of Laminated
& Co-ex Tubes 122 Millions Nos. With this expansion the total Installed
capacity of Laminated & Co-ex Tubes has increased to 1628 Millions
Nos.
The Subsidiary Company Beri-Essel Closures Private Limited
(Joint Venture with Bericap Holding GmbH) has manufacture of Speciality
Closures in
The company has exploring different business opportunities which could be
conveniently combined with the current business. In this regard, the company
has considering entering into a new line of business. The company alteration of
the 'Object Clause' of the Memorandum of Association of the Company
incorporating the related Objects pertaining to the new business along with
commencement of new business.
BUSINESS
Subject is engaged in manufacturing and selling of Composite Laminated
Collapsible Tubes, Laminates and Plastic Film.
The year in review
In the face of an extremely
challenging business environment, the Company sustained the growth momentum
with total revenue for the year increasing to Rs. 12181 million, an increase of
18.4% over the previous year. Operating Cost was impacted by increased cost of
ramping up of new facilities in USA and Poland, from which significant revenue
stream is yet to start and as well as lag in passing through escalating raw
material costs. Consequently, Profit after Tax for the year is lower on
consolidated global operations at Rs.608 million compared to Rs.985 million of
previous year.
The Company's
revenues in
The Company continues to pro-actively identify the changing need of its
customers, develop tube solutions and encourage conversion from conventional
packaging solutions into tubes. The above strategy has seen more product categories
being launched in tube solutions format, for sectors such as pharmaceutical,
cosmetic and food. During the year, the Company successfully developed and
launched Oval tubes for the first time in Indian market.
The Company will continue to focus on efficiency improvement programmes and
capacity utilization to improve the quality of earnings.
Subsidiary Operations
During the year the
Company commissioned a state of the art plant in
A new plant was set up in
In the business of Medical Devices, the Company's state of art facility to
handle high volume manufacturing was started in
The Company presents Consolidated Financial Statements (CFS) encompassing all
its Subsidiaries based on uniform accounting policies. In this regard, for
purpose of alignment with the method followed in CFS, depreciation in respect
of one of the subsidiaries has been recomputed resulting in a lower
depreciation charge of Rs. 144. 594 millions (including Rs.16.018 millions for
this year) on consolidation.
As per Section 212 of the Companies Act, 1956, the Company is required to
attach the Directors' Report, Balance Sheet and Profit and Loss Account of its
subsidiaries. The Company had applied to the Government of India for and
obtained exemption from such attachment, since the audited consolidated
financial statements are presented in the Annual Report. Accordingly, the
Annual Report does not contain the financial statements of these subsidiaries.
The Company will make available the Audited Annual Accounts and related
information of the subsidiary companies, where applicable, upon request by any
Member of the Company. These documents will also be available for inspection by
any Member during business hours at the Company's Registered and Corporate
Office.
Ras Propack Lamipack Limited (RPL) and
Ras Extrusion Limited (REL)
During the year, the
Company has consented to participate in the rehabilitation and revival of RPL
and REL, both declared as "Sick industrial companies" under the Sick
Industrial Companies (Special Provisions) Act, 1985 (SICA). The Company has
agreed in principle to act as a Co-promoter in connection with the application
for approval of the scheme for revival and rehabilitation being submitted by
RPL and REL before the office of the Board of Industrial and Financial
Reconstruction (BIFR),
Management
Discussion and Analysis
FINANCIAL AND OPERATIONAL PERFORMANCE
Overview
The Company faced an
extremely challenging environment during the year 2007 on account of the
relentless increase in the raw material prices and heightened supply chain
demands posed by customers in the developed markets. Whilst strategically
addressing these key challenges, the Company's immediate priority was to
sustain the healthy growth momentum of the last few years. Consequently, the
consolidated sales revenue grew by 18%
Raw material cost was under pressure with polymer prices increasing by about
20% over the previous year (a large part of this materialized in the middle of
the year) spurred by 12% rise in the price of crude oil and supply constraints
in Ethylene, a key feed stock, due to strong global demand. The continuous
replenishment system implemented by their customers in respect of big retailers
in the developed markets further impacted the cost of servicing on account of
more change overs and higher inventories held to sustain service levels.
One-off production trial/stabilization costs incurred at the new Green-field
plants in the
Operating costs continued to be a focus area and the Company continued to
benchmark productivity across its global operations in order to reduce
expenses. However, higher power cost, certain one-off costs attributable to
transitioning plastic tubes manufacture in Europe from
Firming up of global interest rates during the year by 100150 bps coupled with
increased borrowings to fund the Green-field units and the recent acquisition
of Medical devices and Specialty packaging businesses, contributed to the
increase in interest cost. Consequently, the profit before tax for the year
(before exceptional item) is lower than last year by 28.6% and the Profit after
tax and minority interest is lower at Rs.608 million as compared to Rs. 985
million in the last year.
Tube Business
The business in all
the four regions grew strongly. Highlights of the performance by region are as
under:
New customer
development efforts continued in the
In regard to the plastic tubes, the various product trials and plant
certification work with potential key customers took longer than anticipated
but have been now successfully concluded. Operator training is complete, and
the new Plastic tube plant is poised to reach up to its installed capacity
during 2008.
The Mexican operations turned around during the year helped by high capacity
utilization.
The relocation to
Europe:
The laminate tube business in
The Arista plastic tube business grew by 18%. The new world-class Polish unit
went on stream during the last quarter and the transition of manufacturing
operations from
AMESA (Africa, Middle East and
The laminate tubes
business in
The plastic tube business in
The Company has also invested in the caps and closures business in
EAP: (
The laminate tube
business in
Forays are being made into the foods packaging segment and into the markets of
Speciality Packaging
The newly acquired
Specialty packaging business of Packaging India Private Limited grew strongly
by 20%. The facility in Puducherry has been further upgraded to improve the
product capability and offerings. New capacity has been established in
Uttarakhand to service the North based customers and to seize growth
opportunity in the rapidly growing foods segment in
Medical Devices Business
Acquired in 2006,
this business performed to expectation in both Sales and Profits. The business
continues to pursue the twin strategy of diversification of customer base and
expansion of catheter into peripheral (non cardiac) applications. The new
manufacturing facility in
Finance
The Company's
borrowings increased sharply to meet the substantial capital expenditure and
acquisition projects, the debt equity ratio has therefore increased to 0.86:1.
Given the stability of operational cash flows, this is considered quite
reasonable and conducive to improvement of shareholder value. The Company has
secured necessary approvals to make an issue of Foreign Currency Convertible
Bonds at opportune time to augment funds for its growth plans.
a) Raw material price
escalation & the lag effect in passing these on to customers:
The Arming up of
crude oil prices and constraints in ethylene capacity could continue for some
more time causing upward pressure on raw material prices.
The Company is
continuously fine-tuning its buying strategy as well as pricing terms to
customers in order to secure better purchase prices and minimise lag in passing
on raw material price increases to customers.
b) Attracting and retaining Talent in
the context of business growth plans:
The high demand for
talent globally impacts people turnaround.
The Company is
addressing this to the best possible extent by a mix of active career planning,
competitive remuneration policy and empowerment culture.
c) Currency volatility:
The global scale of
operations exposes the Company to multiple currencies. Fluctuations in exchange
rates could effect Company's performance and future.
Appropriate coverage clauses have been woven into the contract with customers
to offset the impact of currency fluctuations. The Company also systematically
hedges its exposures through forward contracts.
d) Higher debt-equity ratio:
In a period of
rising interest rates, higher debt could impact the profit.
Ramping up of new capacities in
Outlook
The Company's products enter the day to day needs of the people the world over.
Therefore they believe, based on their experience so far, that demand for their
products should not be impacted in any significant manner by volatility in
global financial market. On the contrary, the emerging markets will continue to
provide growth opportunity with increasing penetration of FMCG.
The continued
increase in raw material costs fuelled by commodity price increase and the
delay in the new feedstock capacities originally expected by mid 2008, are
challenges the Company is seized with. The Company is already focusing on the
productivity of capital and operational efficiencies in order to reverse the
impact of slow ramping up of its US and Poland facilities. In 2007 the Company
had invested in new big diameter laminate tube technology and high decoration
capability which added to costs. The early ramping up of its new facility in
Cautionary Statement
Statements in this
report, particularly those which relate to Management Discussion and Analysis,
describing the Company's objectives, projections, estimates and expectations
may constitute "forward looking statements" within the meaning of
applicable laws and regulations. Actual results might materially differ from
those either expressed or implied.
Subsidiary Operations
The Directors are of the opinion that since the Company is presenting
the Consolidated Financial Statements (CFS) of EP India and each of its
subsidiaries under AS—21 and also providing information as per Indian GAAP and
US GAAP, there is no need to attach the individual Balance Sheets and Profit and
Loss Accounts of each of the subsidiary companies. The Company therefore
applied to the Department of Company Affairs (DCA) for exempting the Company
from attaching the Balance Sheets, Profit and Loss Accounts, Directors' Report
and Auditors' Report of all its Subsidiary Companies.
DCA has vide its letter dated March 10, 2006, approved the Company's
request and exempted the Company from attaching the Profit and Loss Account,
Balance Sheet, Directors' Report and Auditors' Reports of all its subsidiaries
subject to the condition that the Company will attach the CFS of its
subsidiaries together with the Report of the Auditors' for the year ended
December 31, 2005. The Audited CFS of the Company as per Accounting Standard-21
form part of this Report.
Annual accounts of Subsidiary Companies have been kept open for
inspection by any investor at the Company's Registered and Corporate Office.
Bericap India Private Limited
This subsidiary, a Joint Venture with Bericap Holding GmbH,
New Business Opportunities
The Company is exploring different business opportunities which could be
conveniently combined with the current business, for delivering consistent
growth in Revenue and Profits.
In this regard, the Company is considering entering into a new line of
business. They are pleased to place on record that the Members through the
process of Postal Ballot have approved with overwhelming majority, the alteration
of the 'Object Clause' of the Memorandum of Association of the Company
incorporating the related Objects pertaining to the new business along with
commencement of new business, at an opportune time, as the Board of Directors
may deem fit. Details of Postal Ballot results are given in the Corporate
Governance Report.
Awards and Laurels
The efforts made by the Technology and the Manufacturing groups have
resulted in many a laurels to the Company. The Company's plant at Silvassa has
been awarded a Certificate of Merit in the Manufacturing Category of the IMC
Ramakrishna Bajaj National Quality Award - 2005.
Fixed ASSETS:-
·
·
· Buildings,
· Plant and Machinery,
· Equipments,
· Furniture and Fixtures,
· Software,
· Vehicles And
· Tubewell And
· Water Tank.
· Leasehold Improvement
Other DETAILS:-
The Company has consented to participate in the
rehabilitation and revival scheme of RAS Propack Limited (RPL) and RAS
Extrusion Limited (REL), both declared as "Sick industrial
companies"under the Sick Industrial Companies (special provisions) Act,
1985 (SICA).The Company has also agreed in principle to act as a Co-promoter in
connection with the application for approval of the scheme for revival and
rehabilitation submitted by RPL and REL. The decision on the application is
awaited before the office of the Board of Industrial and Financial
Reconstruction (BIFR),
Website DETAILS:
Corporate
Profile
Subject is the
largest speciality packaging company in the world
manufacturing laminated and seamless tubes catering to the oral care,
cosmetics, personal care, pharmaceutical, food and industrial sectors. The
clients include top multinational companies as well as local and regional
companies in the countries that it operates. In March 2006, the company forayed
into Medical Devices business by acquiring two medical devices companies – one
in
Subject
has state-of-the-art manufacturing facilities in 12 countries through 23
plants, such as
Corporate
Milestones in Brief :
Subject was the first company to introduce laminated tubes
in
In 1993, Essel ventured out to become a global player by
setting its first overseas venture in
In December 2000, the Company acquired the tubing operations
of the Propack group. Propack was the fourth largest laminated
tube manufacturer in the World with operations in
In July 2005, Subject commissioned one more plant at
This plant will be operational in March 2007. In August
2006, Subject acquired Packaging India, based in the southern part of
The Company, today, has a presence in 12 countries with 23 manufacturing locations, has employee strength of over 1,900 comprising over 20 nationalities and has a capacity of manufacturing over 4.5 billion tubes per annum. Today the Company has an estimated 32% share in total laminated tube business. Essel Propack’s global operations have achieved a turnover of USD 270 million for the year 2006.
Quality Policy :
I. Statement of
Policy
Every member of the Subject family is passionate about and committed to:
Meet and exceed all their Customers’ requirements and delight customers with respect to Total Quality, On-Time Delivery, Service Reliability and Cost Competitiveness
Comply with all laws and regulations relating to Quality, Safety and Performance requirements in all countries in which EP products are sold
Strictly adhere to EP’s Harmonised Manufacturing Policy (HMP) and Good Manufacturing Practices (GMP) to achieve continual improvements in products, processes and services
Constantly benchmark with the Best Practices of Industrial Leaders to continually improve EP performance in Business and Manufacturing excellence
This will be achieved through documented and reviewed quality objectives, Process improvement activities, commitment to performance and unyielding integrity.
II. Responsibility
and Authority
The Vice Chairman and Managing Director of Subject has the ultimate responsibility and authority for the application of this policy
Each employee of EP is empowered to be responsible for compliance to this policy
Corporate Values are
:
· Customer Driven
· Commitment to Excellence
· Integrity
· Teamwork and Involvement
· Mutual Trust and Respect
· Safety
Technology is their benchmark of progress. It not only landmarks achievement by its sheer presence but is also responsible for Essel’s rise up the corporate ladder. All of Essel’s plants are highly automated with the best technological machinery and systems available anywhere in the world. For a better idea, click and enter their world of Integrated Manufacturing Process.
What really drives their technological pursuit? Product and process
developments, which top their list of priorities. For this alone, the company
has put in place, two teams at its Technological Innovation Centre.
While one team focusses on new products, the second works on process
management.
Primarily involved in developing new and improved products for customers, the
first team works in close co-ordination with customers to enhance the product
by experimenting with the various specifications associated with it.
The second team works more with the existing product range; with the mandate to
increase the machine operational efficiencies, by increasing the uptime and
reducing material wastage. This team monitors machine efficiencies in all the
manufacturing units and provides suitable recommendations. Together, the teams
combine efforts with the marketing arm of the organisation.
Further, Essel upgrades its testing facilities consistently to maintain its
position at the frontier of technology. The result: better products for its
customers.
Because there always is scope for improvement
Media Release
Subject acquires
Catheter and Disposables Technolog Essel Technology Inc. in USA
Mumbai, March 31, 2008 – Essel Propack Limited (EPL) today
announced an acquisition of
Subsidiary - Tacpro Inc.
CDT is a total solution provider from the concept to finished packaged sterile products. CDT is a strong brand name that has been associated for over 20 years with the provision of high quality medical device manufacturing services and reliable, on-time delivery of manufactured products. CDT’s Design Engineering and Development Capabilities provide a significant differentiator in the market. CDT’s facility is ISO 13485 certified and includes a Class 7 (10,000) Clean Room. Commenting on the same, Mr. R. Chandrasekhar, President of Essel Propack said, “The acquisition of CDT is in line with our stated strategic plan for the Medical Device Business. CDT will certainly expand our current foot print into a new geography and broaden our existing product lines”.
The buyout of CDT will help EPL’s Medical Devices Business
to establish and expand operations in the State of
“The acquisition of CDT is the first of the few steps for us to broaden our Medical Device Business”, said Mr. Ashok Goel, Vice Chairman and Managing Director.
The acquisition will be funded entirely from the internal accruals of the Medical Device Business. The acquisition is expected to be effective from 1st April 2008.
EP is a specialized
packaging company promoted by Essel Group and has its head quarters in Mumbai.
EPL has 3 lines of business:
- Plastic and
Laminated tubes
- Medical device
and
- Speciality
Packaging
EPL is the world’s
largest manufacturer of laminated tubes and has stateof- art facilities in 14
countries. EPL’s medical device business is located in
Essel Propack expanding into Speciality Packaging Materials Acquiring
Packaging India,
Mumbai, August 30,
2006 :
Essel Propack, world’s largest manufacturer of laminated tubes, with
manufacturing in 13 countries through 22 plants, is acquiring 100% stake in
Packaging India Private Limited (PIPL),
Packaging
While announcing the acquisition in Mumbai, Ashok Goel, the Vice
Chairman and Managing Director of Essel Propack said, “This is a significant
step in their product diversification strategy. With the Pharma and Retail
market poised for tremendous growth, the demand for Speciality packaging
Materials is slated to rise high. This is the opportune time for them to step
in and leverage the opportunities.” Explaining the logic of the divestment, C.
K. Ranganathan, Chairman and Managing Director of CavinKare Group said, “This
was a concerted move towards unshackling growth at PIPL. Considering the
heritage of PIPL, the Company was at a point of inflection in terms of growth.
Hence, it was realized that PIPL has to align itself with another packaging
company to achieve its true growth potential. Now the company will aggressively
target growth in sectors such as Pharma, Food, Retail, Exports and others.”
Speaking of the acquisition R. Chandrasekhar, COO, Essel Propack said,
“Packaging India and Essel 2 Propack has great many synergies which make this a
perfect buy. The two organizations have many similarities, foremost being the
organizational ethics, culture, the approach to business, knowledge base,
market reputation and the burning desire to grow.”
PIPL was established in 1990 as a part of Chennai based CavinKare group.
Today, it is the third largest producer of speciality packaging
materials in
The core synergies
between PIPL and Essel Propack can be broadly termed as:
v
High-end lamination technology for speciality
materials Knowledge of requirement of Barrier Properties
v
OEM business model
v
Highest standards of quality and manufacturing
systems
v
Expanded product portfolio to enable better service
to a common customer profile
v
Leveraging medical relationship to service each
other’s customers
v
Tapping the global customer base of Essel Propack
to expand PIPL’s customer base
Creativity and Innovation is poised to take the centre stage in the
field of Packaging. The market demands are poised towards new trends,
sophistication, and user-friendliness. These needs can only be met by superior
manufacturing environment, high profile features and finer processes. Essel
Propack and PIPL are focused on creating such a discipline in the manufacture
of Speciality Packaging Materials.
They express their sincere thanks to the legal advisors ANS Law
associates, advisors to the deal Bellwether Capital and Deloitte Haskins and
Sells who did the financial due diligence.
Essel Propack, the largest speciality
packaging company in the world, is promoted by Essel Group. Essel Propack, head
quartered in
Essel Propack’s stock is listed on the Bombay
Stock Exchange and the National Stock Exchange.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.49.84 |
|
|
1 |
Rs.76.81 |
|
Euro |
1 |
Rs.64.38 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
64 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|