MIRA
INFORM REPORT
|
Report Date : |
18.05.2011 |
IDENTIFICATION DETAILS
|
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) : |
31.12.2010 |
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Date of Incorporation : |
22.12.1982 |
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Com. Reg. No.: |
11-28947 |
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Capital
Investment / Paid-up Capital : |
Rs.313.130 millions |
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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. |
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No. of Employees : |
About 1200 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
A (61) |
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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 24400000 |
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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 part of Essel Group. It is a well established and reputed
company having fine track. Financial position of the company appears to be
sound. Director are reported to be experienced and respectable businessman.
Trade relations are reported as fair. Business is active. Payments are
reported to be regular and as per commitments. The company can be considered good for normal business dealings at
usual trade terms and conditions. |
NOTES :
Any query related to this report can be made on
e-mail : infodept@mirainform.com
while quoting report number, name and date.
INFORMATION DECLINED BY
|
Name : |
Mr. Vinay Mokashi |
|
Designation : |
Financial Controller |
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Contact No.: |
91-22-24819000 |
|
Date : |
16.05.2011 |
LOCATIONS
|
Registered Office : |
P.O. Vasind, Taluka -
Shahapur, Dist. Thane- 421 604, |
|
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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Unit 1 : |
Cuddalore, Goa, Murbad, Nalagarh, Puducherry,
Silvassa, Sitarganj (Uttarakhand), Vasind and Wada |
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Unit 2 : |
China, Colombia, Egypt, Germany, Indonesia,
Mexico, Philippines, Poland, Russia,
UK and USA |
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Overseas Offices : |
v
v
v
v
v
v
v
v
v
v
v
v
v
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DIRECTORS
As on : 24.09.2010
|
Name : |
Mr. Subhash Chandra |
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Designation : |
Chairman |
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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. 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. Mukund M. Chitle |
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Designation : |
Director |
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Name : |
Mr. Davendra Ahuja |
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Designation : |
Director |
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KEY EXECUTIVES
|
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. 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. Vinay |
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Designation : |
Financial Controller (Global) |
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Name : |
Mr. Akshay Khandwala |
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Designation : |
Vice President – Legal And Company Secretary |
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Name : |
Mr. Shyam Kumar |
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Designation : |
Head, Purchase and Logistic |
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Name : |
Mr. Parag C |
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Designation : |
Head, Manufacturing Excellence and Quality Functions. |
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Name : |
Mr. Cherian Kenneth Thomas |
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Designation : |
CEO, Packaging India Private Limited |
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Name : |
Ted Sojourner |
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Designation : |
Regional Vice President – Americas |
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Name : |
Mrs. Evelyn Strwart Tweedllie |
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Designation : |
Regional Vice President |
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Name : |
Mr. Luozhiyong Edward |
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Designation : |
Regional Vice President – East Asia Pacific |
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MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on : 31.03.2011
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Shareholding of Promoter and Promoter Group |
|
|
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Indian |
|
|
|
Individuals/Hindu Undivided Family |
334,750 |
0.21 |
|
Bodies Corporate |
70,437,030 |
44.98 |
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|
70,771,780 |
45.19 |
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Foreign |
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|
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Individual (Non-Resident Individuals/Foreign Individuals) |
89,305 |
0.06 |
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Bodies Corporate controlled by
promoters |
21,728,305 |
13.87 |
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|
21,817,610 |
13.93 |
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Public shareholding |
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Institutions |
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Mutual Funds/UTI |
10,444,384 |
6.67 |
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Financial Institutions/Banks |
2,498,063 |
1.60 |
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Insurance Companies |
2,283,715 |
1.46 |
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Foreign Institutional Investors |
5,112,192 |
3.27 |
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Non-institutions |
|
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Bodies Corporate |
15,710,069 |
10.03 |
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Individuals – i. Individual shareholders holding nominal share capital up to Rs.
0.100 Million |
19,494,018 |
12.45 |
|
ii. Individual shareholders holding nominal share capital in excess of
Rs. 0.100 Million |
6,512,041 |
4.16 |
|
Non resident Individuals |
1,931,008 |
1.23 |
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OCB |
800 |
-- |
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Trusts |
15,450 |
0.01 |
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|
|
|
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TOTAL |
156,601,130 |
100.00 |
BUSINESS DETAILS
|
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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GENERAL INFORMATION
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No. of Employees : |
About 1200 (Approximately) |
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Bankers : |
v Axis Bank Limited v BNP Paribas v DBS Bank Limited v IDBI Bank Limited v Punjab National Bank v State Bank of India v Standard Chartered Bank v Yes Bank Limited |
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Facilities : |
Secured Loans :
Unsecured Loans
:
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
MGB and Company Chartered Accountants |
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Joint Ventures : |
·
P.T. · Essel Deutschland GmbH and Company, KG Germany ·
Essel Deutschland Management ·
Bericap India Private Limited, |
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Subsidiary Company : |
· Essel Packaging (Nepal) Private Limited, Nepal ^ · Essel Propack America, LLC, USA · Lamitube Technologies Limited, Mauritius · Lamitube Technologies (Cyprus) Limited, Cyprus · Packaging India Private Limited, India · The Egyptian Indian Company for Modern Packaging S.A.E., Egypt · Essel Propack MISR for Advanced Packaging S.A.E., Egypt · Essel Packaging (Guangzhou) Limited, China · Essel Propack Philippines, Inc, Philippines · MTL de Panama S.A., Panama · Packtech Limited, Mauritius · Arista Tubes Limited, UK · Essel Propack UK Limited, UK · Essel Propack de Venezuela, C.A., Venezuela ^ · Essel de Mexico, S.A. de C.V., Mexico · Tubo pack de Colombia S.A., Colombia · Essel Propack LLC, Russia · Avalon Medical Services Pte. Limited, Singapore* · Essel Propack Polska Sp. Z.O.O., Poland · Tacpro Inc., USA* · Tactx Medical Inc., USA* · Produxx Inc., USA* · Arista Tubes Inc., USA · Catheter and Disposable Technology INC.* · Medical Engineering and Design INC.* Note : ^These subsidiaries
have discontinued their operations and are in the process of liquidation. * These Companies ceased to be Subsidiaries w.e.f. December 23, 2009
following sale by Company’s overseas Subsidiaries of their shareholding in
these Companies. |
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Associate : |
· P.T. Lamipak Primula, Indonesia · Ras Propack Lamipack Limited @ |
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Joint Ventures : |
· Essel Deutschland GmbH and Company,KG Germany · Essel Deutschland Management GmbH, Germany Note : @ Associate w.e.f. March 29, 2010 |
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Related Parties : |
·
Ayepee Lamitubes Limited ·
Briggs Trading Company Private
Limited ·
Churu Trading Company Private Limited
·
Continental Drug Company Private
Limited ·
Pan India Network Infravest Private
Limited ·
Essel Corporate Resources Private
Limited ·
Ganjam Trading Company Private
Limited ·
Pan India Paryatan Private Limited ·
Premier Finance and Trading Company
Limited ·
Prajatma Trading Company Private
Limited |
CAPITAL STRUCTURE
As on 31.12.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
200000000 |
Equity Shares |
Rs. 2/- each |
Rs.400.000
millions |
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|
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
156601130 |
Equity Shares |
Rs. 2/- each |
Rs.313.202
millions |
|
|
Less: Calls in
Arrears |
|
Rs. 0.071
million |
|
|
|
|
|
|
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Total |
|
Rs.313.130 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 |
31.03.2010 (15 Months) |
31.12.2008 (12 Months) |
31.12.2007 (12 Months) |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
313.130 |
313.130 |
313.131 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
5797.179 |
5530.386 |
5313.559 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
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NETWORTH |
6110.309 |
5843.516 |
5626.690 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
2691.975 |
1659.999 |
1850.371 |
|
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2] Unsecured Loans |
2068.748 |
3862.280 |
2082.178 |
|
|
TOTAL BORROWING |
4760.723 |
5522.279 |
3932.549 |
|
|
DEFERRED TAX LIABILITIES |
171.121 |
124.319 |
129.810 |
|
|
|
|
|
|
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TOTAL |
11042.153 |
11490.114 |
9689.049 |
|
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APPLICATION OF FUNDS |
|
|
|
|
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|
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FIXED ASSETS [Net Block] |
1543.440 |
1624.371 |
1523.462 |
|
|
Capital work-in-progress |
209.390 |
188.834 |
155.662 |
|
|
Translation Difference Accounts |
80.041 |
0.000 |
|
|
|
|
|
|
|
|
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INVESTMENT |
5733.987 |
5744.315 |
5744.316 |
|
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
438.316
|
534.018 |
451.135
|
|
|
Sundry Debtors |
730.236
|
846.289 |
593.330
|
|
|
Cash & Bank Balances |
84.755
|
72.697 |
55.836
|
|
|
Other Current Assets |
150.622
|
311.427 |
256.899
|
|
|
Loans & Advances |
2684.619
|
2865.081 |
1581.288
|
|
Total
Current Assets |
4088.548
|
4629.512 |
2938.488
|
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
319.714
|
443.070
|
275.055
|
|
|
Sundry Creditors |
190.025 |
135.743 |
129.222 |
|
|
Provisions |
140.594
|
118.105
|
268.602
|
|
Total
Current Liabilities |
650.333
|
696.918 |
672.879
|
|
|
Net Current Assets |
3438.216
|
3932.594 |
2265.609
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
37.079 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
11042.153 |
11490.114 |
9689.049 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 (15 Months) |
31.12.2008 (12 Months) |
31.12.2007 (12 Months) |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
4290.874 |
3359.094 |
3116.142 |
|
|
|
Other Income |
250.468 |
189.032 |
162.243 |
|
|
|
TOTAL (A) |
4541.342 |
3548.126 |
3278.385 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Goods Sold |
1869.386 |
1486.808 |
1328.381 |
|
|
|
Manufacturing Expenses |
665.657 |
517.697 |
424.755 |
|
|
|
Personnel Cost |
461.020 |
359.768 |
365.602 |
|
|
|
Administrative Expenses |
206.850 |
178.342 |
176.937 |
|
|
|
(Gain)/Loss on Foreign Exchange Fluctuation |
125.279 |
89.514 |
(34.264) |
|
|
|
Selling and Distribution Expenses |
129.360 |
75.742 |
56.288 |
|
|
|
Exceptional Item |
1.042 |
(11.848) |
4.582 |
|
|
|
TOTAL (B) |
3458.594 |
2696.025 |
2322.281 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1082.748 |
852.101 |
956.104 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
352.361 |
260.904 |
199.915 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
730.387 |
591.197 |
756.189 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
288.858 |
206.557 |
200.827 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
441.529 |
384.640 |
555.362 |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
96.042 |
112.856 |
182.437 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-I) (J) |
345.487 |
271.784 |
372.925 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
525.185 |
321.954 |
206.188 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
25.912 |
13.589 |
37.300 |
|
|
|
Dividend |
73.044 |
54.964 |
219.858 |
|
|
BALANCE CARRIED TO
THE B/S |
771.717 |
525.185 |
321.954 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
380.948 |
357.176 |
266.355 |
|
|
TOTAL EARNINGS |
380.948 |
357.176 |
266.355 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
950.357 |
976.308 |
642.082 |
|
|
|
Stores & Spares |
79.888 |
80.353 |
57.476 |
|
|
|
Capital Goods |
74.497 |
253.635 |
107.512 |
|
|
TOTAL IMPORTS |
1104.742 |
1310.296 |
807.070 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
2.21 |
1.66 |
2.41 |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
30.06.2011 1st
Quarter |
30.09.2010 2ndQuarter |
31.12.2010 3rd
Quarter |
31.03.2011 4th
Quarter |
|
Type |
|
|
|
|
|
Sales Turnover |
964.100 |
1015.300 |
1143.200 |
1073.700 |
|
Total Expenditure |
736.700 |
797.300 |
884.200 |
895.700 |
|
PBIDT (Excl
OI) |
227.400 |
218.000 |
259.000 |
178.000 |
|
Other Income |
53.200 |
173.000 |
98.700 |
134.400 |
|
Operating
Profit |
280.600 |
391.000 |
357.700 |
312.400 |
|
Interest |
48.200 |
142.700 |
141.900 |
138.700 |
|
Exceptional
Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
PBDT |
232.400 |
248.300 |
215.800 |
173.700 |
|
Depreciation |
58.800 |
59.200 |
61.500 |
63.600 |
|
Profit
Before Tax |
173.600 |
189.100 |
154.300 |
110.100 |
|
Tax |
51.200 |
56.900 |
46.600 |
24.900 |
|
Reported PAT |
122.400 |
132.200 |
107.700 |
85.200 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
122.400 |
132.200 |
107.700 |
85.200 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 (15 Months) |
31.12.2008 (12 Months) |
31.12.2007 (12 Months) |
|
PAT / Total Income |
(%) |
7.60
|
7.65 |
11.37 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
10.28
|
11.45 |
17.82 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
7.83
|
6.15 |
12.44 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.07
|
0.06 |
0.09 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.88
|
1.06 |
0.81 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
6.28
|
6.64 |
4.36 |
LOCAL AGENCY FURTHER INFORMATION
SUNDRY CREDITORS
DETAILS :
(Rs.
In Millions)
|
PARTICULARS |
31.03.2010 (15 Months) |
31.12.2008 (12 Months) |
31.12.2007 (12 Months) |
|
|
|
|
|
|
For Goods |
130.215 |
77.170 |
106.100 |
|
For Capital Goods |
50.814 |
58.215 |
22.183 |
|
For Micro, Small and Medium Enterprises |
8.996 |
0.358 |
0.939 |
|
|
|
|
|
|
Total |
190.025 |
135.743 |
129.222 |
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.
INDIA STANDALONE
RESULTS :
The Company’s Standalone
total revenue for 15 months period grew 28% over the previous year (12 months),
while the PBDIT grew 29% reflecting improved cost management. Sharp increase in
the financial expenses was on account of higher short term interest rates and
high level of debt. Through reduction achieved in working capital and advances,
the Company’s debt reduced significantly helping lower interest cost in the
last quarter of the year. The Company’s plant in Nalagarh (Himachal Pradesh)
ran to capacity during the period, helping optimize the tax holiday benefit and
the tax cost. The net profit for the period thus grew 27% to Rs 345 million.
REVIEW OF BUSINESS AND
OPERATIONS :
The packaging industry continues to play an important role
in delivering fast moving consumer goods in an efficient and attractive manner
to the ultimate consumer. Given this strong linkage to the FMCG sector, the
plastic collapsible tubes and laminate industry has weathered the economic
downturn caused by the financial crisis of 2008. The off-take for plastic
extruded tubes in the developed markets of US and Europe has turned sluggish,
however given the relatively minor presence of the Company in this product
category, this is not expected to impede the Company in achieving its sales
plans. The demand for plastic laminated tubes on the contrary holds strong in
the developed markets and in fact is growing in the emerging markets.
India:
The Company continues
to lead the market for tubes in India. With rapidly increasing penetration of
oral care and personal
Care products helped by strong
economic growth and increasing disposable income, the Company is faced with a
growing demand for tubes from several FMCG customers in the country. In seizing
the opportunity, the Company continues to pro-actively identify the changing
needs of customers, develop tube solutions for varied applications and actively
encourage conversion from conventional packaging solutions into tubes. Key
initiatives include, new customer development in the pharmaceuticals and
cosmetics categories. Besides continuing to grow its traditional product
offering of laminated tubes for the oral care segment, the Company is now
rapidly increasing its sale of plastic tubes targeted at the cosmetics segment.
Subsidiary
operations
The Company is a global
player in tubing business with an active presence in eleven other countries
through direct and step down subsidiaries. These subsidiaries are involved in
the manufacture and marketing of tubes in the various countries. The Company
also has a wholly owned subsidiary in India focusing on manufacture and
marketing of flexible packaging used in the packing of home care, personal
care, food and pharmaceutical products. All these subsidiaries continue to work
closely with customers and grow the business with product offerings relevant to
their markets.
During the year, the
subsidiaries in China, Egypt, Philippines and Latin America continued to
perform well. Packaging India Private Limited, the Indian subsidiary engaged in
flexible packaging business, increased its sales and profitability following
the ramping up of its operations in its new unit at Uttarakhand and improvement
in the gross margin.
The subsidiaries in the
UK, Poland and Russia have significantly cut their losses (almost by 60%)
compared to the previous year through several focused initiatives. The Polish
subsidiary has added laminated tubes to its product offerings, targeting the
local East European customers. All these units are actively developing new
customers to ramp up their volumes and turn profitable. The plastic tubes
subsidiary in the US posted loss as the off-take of a key customer fell short
of the plan in the recessionary climate. The Company is working to develop new
customers to be able to step up capacity utilization and achieve an early break
even.
The subsidiaries in
Venezuela and Nepal having ceased operations are in the process of winding up.
During the year, the Nepal subsidiary carried out capital reduction and
remitted Rs 20 million to the holding company.
Two of the Company’s
subsidiaries divested all of their shareholding in one of the Company’s step
down subsidiaries viz. Avalon Medical Services Pte. Limited, Singapore, engaged
in Medical Devices Business. Consequently, this step down subsidiary along with
its various subsidiaries viz. Tacpro Inc, USA, Tactx Medical Inc, USA, Produxx
Inc, USA, Catheter and Disposables Technology Inc, USA, Medical Engineering and
Design Inc, USA have ceased to be Company’s subsidiaries with effect from
December 23, 2009. The consolidated financial results for the year therefore
reflect the performance of these entities only until this date, and these
entities are not included in the Consolidated Balance Sheet of the Company as
on March 31, 2010. With this divestment, Essel Propack has exited its non-core
medical devices business.
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
and obtained exemption from such
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 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 between 11.00 am to 1.00 pm at
the Company’s Registered office / Corporate office till the date of the 27th
Annual General Meeting.
Management Discussion and Analysis
Finance and Accounts
In response to the
economic downturn and as part of the turnaround strategy, the Company
implemented a number of measures to reduce costs, improve asset productivity
and conserve cash across its global operations. The debt profile was
rationalized minimizing the short-term debt. Further helped by exit from the
non-core Medical Devices Business, the debt in the Consolidated Balance Sheet
of the Company has reduced by Rs 1.9 billion by end of the year.
During the year, the
Company implemented SAP as its new ERP platform worldwide, replacing its
existing financial accounting software. This has entailed the Company to cost
the raw and packaging material inventories using “moving weighted average of
prices” method instead of “FIFO” method followed earlier.
Effective January 1,
2009, the Company has adopted the amended provisions of ‘AS-11’ as per the
Companies (Accounting Standards) Amendment Rules 2009 related to “ Effects of
the changes in foreign exchange rate.” The impact on the reported results for
the year has been disclosed in the Accounts.
Mergers, Acquisitions,
Disposals
Divesture of shareholding in Bericap India Private Limited
In December 2008, the Company had exercised the put option
for transfer of 31,41,971 equity shares of Rs. 10 each in associate company,
‘Bericap India Private Limited’ to its joint venture partner, Bericap Holding
GmbH, Germany (“Purchaser”). Accordingly, the share transfer was completed and
consideration amount of Euro 442,700 was received by the Company during August, 2009 with all
necessary approvals. With this your Company has fully exited from the joint
venture company, Bericap India Private Limited.
Acquisition of shareholding in Ras Propack Lamipack Ltd (RPLL) and Ras
Extrusion Limited (REL)
These companies (RPLL
and REL) having Units near Pune to manufacture 15 million sq m of laminate and
156 million laminated tubes were declared as sick companies during the year
2001 and 2008 respectively. the Company had agreed in principle to act as
Co-Promoter in connection with an application for approval of the Scheme for
Revival and Rehabilitation submitted by RPLL and REL before the Board of
Industrial and Financial Reconstruction (BIFR), New Delhi.
As per the Scheme approved by BIFR and as part of
Co-Promoters contribution, the Company has infused funds in RPLL and REL, by
way of equity and unsecured loans. RPLL has allotted 41,09,100 equity shares of
Rs 10 each at par and REL allotted 7,50,000 equity shares of Rs 10 each at par
to the Company on March 29, 2010 and April 30, 2010 respectively. These shares
are subject to lock in for a period of three years from the date of allotment
as per the BIFR Order. The Company’s shareholding in RPLL and REL stands at
39.57% and 36.67% respectively. The unsecured loan amounts to Rs 30 million and
Rs 15 million respectively in the two companies.
FINANCIAL AND
OPERATIONAL PERFORMANCE
Overview:
The Directors note with
satisfaction that the Company achieved a
speedy turnaround during the period (15 months), posting a Net profit of Rs 599
million against the Net loss of Rs 883 million suffered in the previous year.
In a period haunted by the spectre of global economic depression and cut-back
in new investments and innovations by the customers, the management team went
on to implement with great zeal the various corrective measures highlighted in
our last Annual Report. The outcome was evident as early as quarter ending June
2009 when your Company turned profitable and achieved break-even. The
subsequent quarters have been building on the performance. Amongst the high
points of this period, are the following :
1. PBDIT recovering to a
healthy Rs 3.0 billion helped by 360 basis points improvement in the margin.
2. Winning large long
term contracts in China, India and US
3. Exiting the non-core
Medical Devices Business.
4. De-risking the capital structure through sharp reduction
in debt equity ratio from 1.4 to 1.1
Segment Performance Review:
The Company’s key
business is in Plastic packaging materials. The business is managed by four
geographical segments viz.
1. Americas (
with operations in the USA, Mexico and Colombia)
2. Europe (with
operations in the UK, Germany, Poland and Russia)
3. AMESA - Africa,
Middle East and South Asia (with operations in Egypt and India)
4. EAP - East
Asia Pacific (with operations in China, Philippines and Indonesia)
The segment financial highlights set out below shows positive
revenue growth in all regions, except in Europe which is on a consolidation
phase. The growth in Profit before Interest and Tax has been robust in AMESA
and EAP. Europe losses have been reduced by 50% following major restructuring
in Poland and the UK units
Americas:
The US laminated tubes
unit focused on reducing operating cost and sustaining high service level, in
the wake of a volatile market environment wherein customers were constantly fine
tuning their inventory holding in response to recessionary expectations. The
unit is also actively developing new customers to improve its capacity
utilization.
Capacity utilization in
the US plastic tubes unit improved with sales doubling over the previous year.
Together with better material usage efficiencies and operating cost reduction,
the said unit cut its EBITDA losses. However the planned break even could not
be achieved on account of shortfall in the key customer off-take attributed to
recessionary conditions.
The Mexican unit
continued to seize the growth opportunity in the local market reporting
significantly higher sales and improved profitability.
The Colombian unit
successfully diversified into value added cosmetic / pharma tubes by focusing
on the local market. Consequently the unit ‘s profitability which had suffered
last year on account of loss of its huge export business, bounced back.
Europe:
The UK laminated tubes
unit reduced its operating cost significantly by downsizing the establishment
and improved its product mix. This has helped the unit to post operating
profits in recent months; however on account of delays in the materialization
of new customer contracts earlier in the year, the unit reported loss for the
period as a whole.
Improved product mix and
strong cost management measures helped the unit at Germany to grow profitably
in a sluggish market.
The operating loss in
the Polish unit was reduced by 40% through improved material efficiencies and
operating cost reduction. Theunit would have posted operating profits but for
the volume shortfall suffered in the recession ridden Europe. The unit has now
developed capability to make laminated tubes using spare equipment available in
the system and expect to achieve break even by end of fiscal 2010-2011.
Meantime, the plastic tubes volumes are being steadily ramped up by developing
new customers.
The customer development
efforts have been paying off handsomely in the Russian unit . The unit has
turned profitable since the end of the year helped by strong volume growth.
AMESA (Africa, Middle East
and South Asia)
The units in Egypt
delivered another year of strong sales and profit.
The Indian tubing
operations were re-vitalised and financial performance improved with a number of
initiatives in customer development, capacity de-bottlenecking, productivity
improvement and cost management. A key long term customer contract was renewed.
Sales to pharmaceuticals and cosmetic customers grew strongly.
Plastic tubes holds lot
of promise in the context of proliferation of beauty care brands in India. The
Indian unit is committed to grow and gain share in this product category by
investing in new capacity and new capabilities such as high end printing, oval
profiles, differentiated dispensers etc. This category has been growing
strongly over the last three years and contributing to the units’s bottom line.
The flexible laminate
operations of Packaging India Private Limited grew profitably helped by ramping
up of the new unit set up in Uttarakhand and improved margins. Consequently,
the subsidiary company has turned around and reported significant net profit
for the period. The said Company is actively diversifying its customer base to
homecare and foods categories besides putting on test certain new products for
pharma application.
EAP (East Asia Pacific):
The China operations
continued to be robust helped by high levels of customer engagement and
pro-active cost management. The unit has won new long term customer contracts
paving way for growth in the coming years. New capacities have been
successfully commissioned, in Tian Jing in North China, and in Guang Zhou in
South China. The unit is also actively developing products for the cosmetic
segment using Essel’s “inviseam” technology. The new facility in the North
China is being geared to support export opportunities to Japan and South Korea.
The unit continues to pursue necessary approvals for launching products for the
pharmaceuticals market.
The Philippines
operations recovered strongly after sluggish sales in the early part of the
year with renewed focus on the local market and strategic partnering with a key
customer.
FINANCE
Conservation of cash was the dominant theme across the business
during the period. New capital spend was contained at around Rs 300 million.
Capacity utilization was improved by re-locating surplus equipments to growth
markets. Working capital turnaround was improved by reducing inventory and
debtor days. The sale by Company’s subsidiaries of their shares in the non-core
Medical Devices Business further helped release significant cash. Consequently,
the Company has reduced the level of debt by Rs 1.9 billion over the period
thus sharply reducing the debt equity ratio from 1.4 at the end of December
2008 to around 1.1 by end of this period. The debt profile has been further
de-risked by replacing volatile short term debt with secured long term loans.
Having stabilized the finances, the Company is now focusing on reduction of
interest cost.
OUTLOOK
The Company has
successfully overcome the set back suffered in the year 2008. The developed
markets are still beset with recessionary concerns, while this may hold back an
ambitious ramping up of plastic tubes units in Poland and US, the laminated
tubes sales should be largely unaffected. The ongoing new customer additions
both in the US and Europe for laminated tubes should then provide modest growth
opportunity.
Fixed ASSETS:-
·
·
· Buildings,
· Plant and Machinery,
· Equipments,
· Furniture and Fixtures,
· Software,
· Vehicles And
· Tubewell And
· Water Tank.
· Leasehold Improvement
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 records 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. 45.07 |
|
|
1 |
Rs. 72.97 |
|
Euro |
1 |
Rs. 63.57 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
|
61 |
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 |
Capability to overcome financial difficulties seems comparatively
below average. |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.