MIRA
INFORM REPORT
|
Report Date : |
13.09.2011 |
IDENTIFICATION DETAILS
|
Name : |
MCLEOD RUSSEL INDIA LIMITED |
|
|
|
|
Registered
Office : |
4, Mangoe Lane, Surendra Mohan Ghosh Sarani, Hare Street, Kolkata –
700001, West Bengal |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2011 |
|
|
|
|
Date of
Incorporation : |
05.05.1998 |
|
|
|
|
Com. Reg. No.: |
87076 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.547.279 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L51109WB1998PLC087076 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
CALM06113C |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACE6918J |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchange. |
|
|
|
|
Line of Business
: |
Manufacturer of Tea. |
|
|
|
|
No. of Employees
: |
Around 90,000 |
RATING & COMMENTS
|
MIRA’s Rating : |
A (65) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD 61000000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is an established company having fine track. Financial
position of the company appear to sound. 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.
ECGC Country Risk Classification List – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
|
|
A1 |
A1 |
|
|
|
|
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered Office : |
4, |
|
Tel. No.: |
91-33-22101221/ 22435391/ 22489434/ 35 |
|
Fax No.: |
91-33-22488114/ 22483683 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Sales Liaison Office : |
|
|
Tel. No.: |
91-44-1635814452 |
|
Fax No.: |
91-44-1635814402 |
|
E-Mail : |
|
|
|
|
|
Factory : |
Located at :- ·
·
|
|
|
|
|
UK Branch Office
: |
Woodlands, 79 High Street, Greenhithe,
Kent DA9 9RD, United Kingdom |
|
Tel. No.: |
(+44) 1322 374878 |
|
Fax No.: |
(+44) 1322 374879 |
|
E-Mail : |
|
|
|
|
|
Branches : |
2nd Floor, Birchwood House, |
|
Tel. No.: |
91-44-8453376592 |
|
Fax No.: |
91-44-8453376593 |
|
E-Mail : |
DIRECTORS
|
Name : |
Mr. Brij Mohan Khaitan |
|
Designation : |
Chairman Director |
|
Qualification: |
B.Com |
|
Other Directorship : |
·
Williamson Magor and Company Limited ·
Everyday Industries India Limited ·
CESC Limited ·
Jay Shree Tea and Industries India Limited ( Remuneration
Committee, Chairman) ·
Philips Carbon Black Limited ·
Babcock Borsing Limited |
|
|
|
|
Name : |
Mr. Deepak Khaitan |
|
Designation : |
Vice Chairman |
|
|
|
|
Name : |
Mr. Aditya Khaitan |
|
Designation : |
Managing Director |
|
Qualification : |
B.Com |
|
Other Directorship : |
·
Willamson Magor and Company Limited ·
Everyday Industries India Limited ·
Williamson Financial Services Limited ·
Babcock Borsig Limited ·
Woodside Park Limited ·
International Development and Engineering
Association Limited ·
D1 Williamson Magor Bio Fuel Limited ·
Prana Lifestyle Private Limited |
|
|
|
|
Name : |
Mr. Raghavachari Srinivasan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Bharat Bajoria |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ranabir Sen |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Utsav Parekh |
|
Designation : |
Director |
|
Qualification: |
B.Com |
|
Other Directorship : |
·
The Sirpur Paper Mills Limited ·
MCNally Bharat Engineering Company Limited ·
Xpro India Limited ·
Moving Pictures Company ( ·
Lend Lease Company India Limited ·
SIMCO Telecommunication ( ·
Salveo Life Science Limited ·
Transceivers India Limited ·
Cable Cooperation of India Limited ·
SMIFS capital Markets Limited ·
Bengal Aerotropolis Projects Limited |
|
|
|
|
Name : |
Mr. Srikandath Narayan Menon |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Azam Monem |
|
Designation : |
Director |
|
Qualification : |
B. Com |
|
Other Directorship: |
Committee Membership |
|
|
|
|
Name : |
Mr. Rajeev Takru |
|
Designation : |
Director |
|
Qualification: |
B.A |
|
|
|
|
Name : |
Mr. Kamal Kishore Baheti |
|
Designation : |
Director |
|
Qualification : |
B.A, FCA. ACS, GRAD, CWA |
|
Other Directorship: |
·
Dufflaghur Investments Limited ·
Majerhat Estate and Developers Limited ·
Williamson Financial Services Limited ·
Woodside Parks Limited ·
Metals Centre Limited ·
ABC Tea Workers Welfare Services ·
Ichamati Investments Private Limited ·
United Machine Company Limited ·
Noble House Trading and Investments Limited ·
Bonus Trading and Investments Private Limited ·
Queens Park Property Company Limited ·
Seajuli Developers and Finance Limited |
KEY EXECUTIVES
|
Name : |
Mr. Amitabha Guha Sarkar |
|
Designation : |
Company Secretary and Compliance Officer. |
|
|
|
|
Audit Committee of the Board |
|
|
Name : |
Mr. Rahavachari Srinivasan Mr. Bharat Bajoria Mr. Ranbir SEn Mr. Srikandath Narayan Menon |
|
|
|
|
Shareholders/ Investors’ Grievance Committee of the Board: |
|
|
Name : |
Mr. Ranbir Sen Mr. Bharat Bajoria Mr. Utsav Parekh |
|
|
|
|
Remuneration Committee of the Board : |
|
|
Name : |
Mr. Bharat Bajoria Mr. Raghavchari Srinivasaan Mr. Ranbir Sen |
|
|
|
|
Name : |
Khaitan and Company |
|
Designation : |
Solicitors |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 30.06.2011)
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
|
|
|
|
(A)
Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
55,378 |
0.05 |
|
|
22,866,507 |
20.89 |
|
|
22,921,885 |
20.94 |
|
|
|
|
|
|
|
|
|
|
27,067,500 |
24.73 |
|
|
27,067,500 |
24.73 |
|
|
|
|
|
Total
shareholding of Promoter and Promoter Group (A) |
49,989,385 |
45.67 |
|
|
|
|
|
(B)
Public Shareholding |
|
|
|
|
|
|
|
|
4,164,725 |
3.80 |
|
|
58,072 |
0.05 |
|
|
112 |
- |
|
|
3,586,733 |
3.28 |
|
|
34,425,058 |
31.45 |
|
|
42,234,700 |
38.59 |
|
|
|
|
|
|
|
|
|
|
3,392,050 |
3.10 |
|
|
|
|
|
|
11,528,121 |
10.53 |
|
|
1,645,617 |
1.50 |
|
|
|
|
|
|
665,862 |
0.61 |
|
|
349,757 |
0.32 |
|
|
90,470 |
0.08 |
|
|
136,350 |
0.12 |
|
|
77,332 |
0.07 |
|
|
11,953 |
0.01 |
|
|
17,231,650 |
15.74 |
|
|
|
|
|
Total
Public shareholding (B) |
59,466,350 |
54.33 |
|
|
|
|
|
Total
(A)+(B) |
109,455,735 |
100.00 |
|
|
|
|
|
(C)
Shares held by Custodians and against which Depository Receipts have been
issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
|
|
|
Total
(A)+(B)+(C) |
109,455,735 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 MillionBUSINESS DETAILS
|
Line of Business : |
Manufacturer of Tea |
||||
|
|
|
||||
|
Products : |
|
PRODUCTION STATUS (AS ON 31.03.2011)
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
|
|
|
|
|
|
|
Tea (In Bulk) |
Tonne |
NA |
91850.00 |
74871.72 |
|
|
|
|
|
|
GENERAL INFORMATION
|
No. of Employees : |
Around 90,000 |
|||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
|
Bankers : |
·
Allahabad Bank ·
Axis Bank Limited ·
Central Bank of ·
HDFC Bank Limited ·
ICICI Bank Limited ·
Indian Bank ·
State Bank of ·
State Bank of ·
UCO Bank ·
United Bank of |
|||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
|
Facilities : |
|
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Price Waterhouse Chartered Accountant |
|
Address : |
Plot No.Y-14, Block- EP, Sector-V, |
|
|
|
|
Solicitors : |
|
|
Name : |
Khaitan and Company LLP Chartered Accountant |
|
|
|
|
Holding Company : |
· Borelli Tea Holdings Limited ( BTHL) |
|
|
|
|
Subsidiaries : |
· Borelli Tea Holdings Limited (BTHL) · Phu Ben Tea Company Limited (PBTCL) · Rwenzori Tea Investments Limited (RTI) · Mcleod Russel Uganda Limited (MRUL) Formed Known as James finally (Uganda) Limited (JFUL) · Olyana Holdings LLC (Olyana) |
|
|
|
|
Associates : |
· D1 Williamson Magor Bio Fuel Limited (D1) · Babcock Borsig Limited (BBL) |
CAPITAL STRUCTURE
(AS ON 31.03.2011)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
120000000 |
Equity Shares |
Rs.5/- each |
Rs.600.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
10033705 |
Equity Shares |
Rs.5/- each |
Rs.50.169
Millions |
|
99422030 |
Equity Shares fully paid up issued pursuant to
Scheme of Arrangement/ Schemes of Amalgamation without payment being received
in cash |
Rs.5/- each |
Rs.497.110
Millions |
|
|
|
|
|
|
|
Total |
|
Rs.547.279 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
547.279 |
547.279 |
547.279 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
14666.208 |
13023.266 |
11174.851 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
15213.487 |
13570.545 |
11722.130 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
2088.079 |
2799.085 |
3853.582 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
300.000 |
|
|
TOTAL BORROWING |
2088.079 |
2799.085 |
4153.582 |
|
|
DEFERRED TAX LIABILITIES |
635.125 |
575.125 |
525.236 |
|
|
|
|
|
|
|
|
TOTAL |
17936.691 |
16944.755 |
16400.948 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
14529.441 |
14440.167 |
14347.585 |
|
|
Capital work-in-progress |
148.128 |
119.977 |
138.260 |
|
|
|
|
|
|
|
|
INVESTMENT |
2603.600 |
2594.605 |
2051.252 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
704.032
|
529.438 |
638.599 |
|
|
Sundry Debtors |
129.840
|
162.926 |
254.624 |
|
|
Cash & Bank Balances |
128.226
|
219.203 |
306.296 |
|
|
Other Current Assets |
468.604
|
510.821 |
472.735 |
|
|
Loans & Advances |
2015.205
|
1327.800 |
841.500 |
|
Total
Current Assets |
3445.907
|
2750.188 |
2513.754 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditor |
1072.262
|
1052.448 |
1113.772 |
|
|
Other Current Liabilities |
40.557
|
74.870 |
51.283 |
|
|
Provisions |
1677.566
|
1832.864 |
1484.848 |
|
Total
Current Liabilities |
2790.385
|
2960.182 |
2649.903 |
|
|
Net Current Assets |
655.522
|
(209.994) |
(136.149) |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
17936.691 |
16944.755 |
16400.948 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
10731.342 |
10768.209 |
8288.662 |
|
|
|
Other Income |
458.878 |
346.943 |
272.837 |
|
|
|
Closing Stock |
294.261 |
178.930 |
252.287 |
|
|
|
TOTAL (A) |
11484.481 |
11294.082 |
8813.786 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Opening Stock |
178.930 |
252.287 |
206.967 |
|
|
|
Expenses |
8030.932 |
7408.663 |
6539.528 |
|
|
|
TOTAL (B) |
8209.862 |
7660.950 |
6746.495 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
3274.619 |
3633.132 |
2067.291 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
183.478 |
252.680 |
765.789 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
3091.141 |
3380.452 |
1301.502 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
275.418 |
271.172 |
260.437 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
2815.723 |
3109.280 |
1041.065 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
493.434 |
705.989 |
153.206 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
2322.289 |
2403.291 |
887.859 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
923.653 |
430.902 |
399.158 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
1600.000 |
1400.000 |
600.000 |
|
|
|
Proposed Dividend |
547.279 |
437.823 |
218.911 |
|
|
|
Tax on Dividend |
88.782 |
72.717 |
37.204 |
|
|
BALANCE CARRIED
TO THE B/S |
1009.881 |
923.653 |
430.902 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
3256.414 |
4207.515 |
NA |
|
|
|
Interests Income |
16.570 |
2.632 |
NA |
|
|
|
Other Earnings |
6.136 |
0.000 |
NA |
|
|
TOTAL EARNINGS |
3279.120 |
4210.147 |
NA |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Stores & Spares |
49.325 |
42.656 |
NA |
|
|
|
Capital Goods |
9.265 |
1.368 |
NA |
|
|
TOTAL IMPORTS |
58.590 |
44.024 |
NA |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
21.22 |
21.96 |
8.11 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2011 |
|
Type |
|
|
1st
Quarter |
|
Net Sales |
|
|
1503.000 |
|
Total Expenditure |
|
|
1039.500 |
|
PBIDT (Excl OI) |
|
|
463.500 |
|
Other Income |
|
|
26.300 |
|
Operating Profit |
|
|
489.800 |
|
Interest |
|
|
45.900 |
|
Exceptional Items |
|
|
0.000 |
|
PBDT |
|
|
443.900 |
|
Depreciation |
|
|
70.600 |
|
Profit Before Tax |
|
|
373.300 |
|
Tax |
|
|
0.000 |
|
Provisions and contingencies |
|
|
0.000 |
|
Profit After Tax |
|
|
373.300 |
|
Extraordinary Items |
|
|
0.000 |
|
Prior Period Expenses |
|
|
0.000 |
|
Other Adjustments |
|
|
0.000 |
|
Net Profit |
|
|
373.300 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
20.22
|
21.28 |
10.07 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
26.24
|
28.87 |
12.56 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
15.66
|
18.09 |
6.17 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.19
|
0.23 |
0.09 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.32
|
0.42 |
0.58 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.23
|
0.93 |
0.95 |
LOCAL AGENCY FURTHER INFORMATION
REVIEW OF
PERFORMANCE:
The Board is pleased to report that despite loss of crop in the early part of the season, the Company managed to have almost the same turnover as in the previous year which was possible for higher prices of Tea prevailing in the market during the year. The net profit for the year was marginally down at Rs.2322.300 Millions despite significant increase in input costs.
REVIEW OF
OPERATIONS
The Company produced 749 Lakh Kgs tea as compared to 772
Lakh Kgs in the previous year. Unfavorable weather and unprecedented pest
attack in the South Bank resulted in a decrease in crop over last year. During
the beginning of the year the Dooars estates had severe hail damage which also
resulted in a decline in harvest.
As a result of the ongoing Uprooting and Replanting Policy,
the age profile of the tea has improved. The Company now has about 75% of the
area under 50 years of age. A good standard of young tea was established. The
average yield of the last three years Is close to 2100 kgs per hectare which is
much higher against an Industry average of 1700 kgs per hectare. All tea
estates have good clonal nurseries with the requisite clonal blend.
The Company’s focus has always been to produce quality teas,
which continues to command a premium both in the domestic and international
market. As part of the up gradation and modernization programme of factories,
withering capacity was increased on eight estates. Ten Rotorvanes, four
Rotorvane feeders, twenty-one CTC machines, three Continuous Fermenting Machine
(CFM), three Vibro Fluid Bed dryers (VFBD), three coal stoves, one mini boiler,
eight milling machines, nine chasing lathes, nine Sinar moisture meters and
three colour sorters were purchased and installed in various factories. In some
factories extension of building was undertaken to accommodate additional
sorting machinery and create additional storage space for packed tea. To
augment the standby generating capacity one new 380 KVA gas generating set and
one 30 KVA diesel generating set were installed.
For undertaking river embankment work bordering tea estates
and deepening outlet drains one new JCB Excavator was purchased. Seven new
weigh bridges were installed to facilitate the weighment of green leaf, ration,
fertiliser, coal, etc. An additional blending drum was commissioned in the
Nilpur Blending Unit. As blending operations are expected to increase, an
additional storage space of 13,500 square feet has been constructed.
The Company has forty five Hazard Analysis and Critical
Control Points (HACCP) certified factories. The Company also has four estates
certified as "Fairtrade" and fifteen estates certified as
"Rainforest Alliance.- The Nilpur Blending Unit is a HACCP Certified unit.
The average price realization for the Company’s tea for the
year was Rs.145.11 which is higher than the North Indian auction average of
Rs.124.18.
The Company saw a total export quantum of 210 Lakh kgs with
an overall turnover of Rs.3298.100 Millions. Favourable feedback was received
from the buyers both in terms of quality and deliveries.
D1
WILLIAMSON MAGOR BIO FUEL LIMITED:
D1 Williamson Magor Bio Fuel Limited (D1WML) was
incorporated under a joint venture agreement between Williamson Magor and
Company, Limited (WML) and D1 Oils Trading
Limited, UK to facilitate
development of Jatropha Plantation
under contract farming
arrangements for production of bio diesel
from Jatropha oilseeds. Being an
associate of WML the company presently holds 33.93% of equity capital of D1WML.
The price of crude petroleum has firmed up during the year
and so also the price of bio fuel being
the supplement to fossil fuel. The demand for
bio fuel is globally quite strong
and there is acute shortage of feedstock
to meet the demand.
DIWML's effort to develop bio
diesel feedstock, once established, is likely to fetch market premium. In
addition, D1 Oils pic has
developed poultry feed from de-oiled bio mass which has been patented in UK.
The plantation developed by D1 WML under contract farming
arrangements has been going through initial gestation period at various levels
of maturity. The farmers in some areas of the North East have faced
difficulties in maintaining the
plantation because of excessive weed growth, but have been able to maintain plantation on about
25,000 hectares which is likely to be
productive. The company has also been
promoting the plantation in
more areas where farmers are
positive and undertaking due upkeep. The
company has re-engineered the plantation
management with focus
on productive plantation and
sizable cost reduction.
The quantity of oilseed harvest by the farmers during the
year had not been adequate to manufacture oil on a commercial basis and
therefore stored for use in 2011-12. The initial gestation period is longer
than the estimate and this has been
experienced across the world. The longer gestation period on contract farming
model results in shrinkage of productive area. However, D1WML has re-worked the
business plan based on present productive area.
It expects sub commercial crop
during 2011 and 2012 and final
commercial production in 2013.
SUBSIDIARY
COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:
Borelli Tea Holdings Limited ('Borelli'). the wholly
owned subsidiary of the
Company in U.K. is inter alia
engaged in the business of
investing funds in venous Companies and as al the end of the year on 31st
March 2011 had The following
Subsidiaries in different countries:-
(i) Phu Ben Tea Company Limited. Vietnam-controlling stake
of Borelli being 100%
(ii) Rwenzori Tea Investments Limited
('Rwenzori'). Uganda-controlling
stake of Borelli being 100%
(iii) McLeod Russel Uganda Limited - 100% subsidiary of
Rwenzori
(iv) Olyana Tea
Holdings LLC, ('Olyana') USA-controlling stake of Borelli being 95%
Olyana had submitted a bid with the Government of Rwanda for
acquisition of 60% stake of Gisovu Tea Company Limited ('Gisovu'). Later the
Government of Rwanda at its Cabinet
Meeting held on 11th February 2011 decided
to sell 60% shares of Gisovu instead of Olyana, to its holding Company
Borelli. In line with the said decision,
Borelli signed an MoU with Rwanda
Development Board and Rwanda Tea
Authority and provisionally entered
into management and took
over control of Gisovu on 23rd February
2011 pending other formalities which are being complied
with.
Borelli has set up a wholly owned subsidiary in Dubai by the
name of McLeod Russel Middle East DMCC which was granted the requisite license
on 9th, May 2011 for doing Tea Trading business in Dubai. With this,
the Company now has one wholly owned subsidiary and five step-down subsidiary
Companies.
As required under
the Listing Agreement
with the Stock
Exchanges, Consolidated Financial Statements of the Company, its five Subsidiaries
and two Associate Companies namely D1
WML and Babcock Borsig Limited prepared
in accordance with
the applicable Accounting
Standards issued by The
Institute of Chartered Accountants of India are attached.
In accordance with the general circular issued by the
Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit
and Loss
Account and other documents of the subsidiary companies are not being
attached with the Balance Sheet
of the Company. The Company will
make available the Annual
Accounts of the subsidiary companies and
the related detailed information to any member of the
Company who may be interested in obtaining the same. The annual accounts of the
subsidiary companies will also be kept for inspection at the Registered Office
of the Company and that of the respective subsidiary
companies. The Consolidated
Financial Statements
presented by the Company include the
financial results of its subsidiary companies. A Statement containing financial information
of the Subsidiary Companies is included
in the Annual Report in the
Chapter containing
Consolidated Financial Statements. The
performance of the major subsidiaries are summarised below for the information.
BOELLI
TEA HOLDINGS LIMITED:
During the year ended 31st March 2011 Borelli Tea Holdings
Limited earned a net profit in Indian
Rs.214.300 Millions and has recommended payment of Dividend @ 100% on its equity capital held by the
Company.
PHU
BEN TEA COMPANY LIMITED:
During the year ended 31st December 2011, Phu Ben
Tea Company Limited achieved a total production of 46.76 Lakh Kgs. Sales,
including carry forward from the previous
year amounted to 47.05 Lakh Kgs which were sold at an average price
of $1.82/kg. This was 3% higher than last year.
The plantations achieved a
yield per hectare
of 2,656 kgs.
Total production from
plantations at 30.96 Lakh kgs was another record, up from the previous year by
2%.
During this period of the Company recorded a net profit in
Indian Rs.16.100 Millions on a sales turnover of Rs.325.200 Millions. The
acquisition of the fourth factory assisted by way of capacity expansion and
also contributed for the increase in production. New withering troughs were constructed in one
factory.
The Company continues to lay stress on quality control in
both field and factory and adheres to GAP for plantation development, along
with IPM measure for the control
of pesticides. All the plantations were 'Rainforest Alliance Certified' in
2010. The Company, which employs 2,499
farmers, workers and staff had good Industrial relations and
received awards and certificates from both State Government agencies and
Provincial Authorities for environmental
protection, contribution to the development of theTea Industry in Vietnam and
was cited as a model business venture.
McLeod Russel Uganda Limited in its first year of
operation under McLeod Russel
Group and blessed with exceptionally favorable weather
conditions that prevailed from December 2009 until October 2010,
achieved an all time record production of 168.39 Lakh kgs of made tea of
this 25.37 Lakh kgs were from out grower green leaf purchase
and 143.02 Lakh kgs from own crop. The resultant yield of 4347 kg/ha was an increase
of 12% over The previous year. The
average sales price realized was $1.84
against the Ugandan average (auction) of $1.77. During the year ended
31st December 2010 the Company recorded a net profit in Indian
Rs.250.400 Millions on a sales turnover
of Rs.1185.400 Millions.
The area under tea
was increased by 7.00 ha of extension
clonal planting and 20.00
ha of eucalyptus forestry plantation were also added.
Factory expansion projects were
commenced at two of the
Company estates, to increase
processing capacity from 2 to 3 lines at
each location. The Company
increased mechanical harvesting to 53% of own crop, and undertook commercial trials of one man
harvesters.
The Company estates were Rainforest Alliance Certified
during the year, and ISO 9001 (QMS)
and ISO 14001 (EMS)
certifications were renewed.
Good Industrial relations were maintained with the over 6000 strong work-force. Efforts with regard to health and family welfare were
recognized with an award
from USAID/HIPS Project as one of the 10 best organizations in the
country, in Health in the Workplace Programme. The Company was also awarded the
Gold Award in the Presidents Export Awards, for Tea exports.
MANAGEMENT
DISCUSSION AND ANALYSIS
INDUSTRY STRUCTURE AND
DEVELOPMENT:
India, the world's largest black tea producer produced approximately
967 million kgs. during the calendar year 2010 representing 38% of
global black tea production. Black tea production by other main tea producers
during 2010 was Kenya
(399 million kgs), Sri Lanka
(329 million kgs),
other African countries (172
million kgs),Vietnam (145 million kgs).
Indonesia (72 million kgs.) and Bangladesh (59 million kgs).
Kenya and Sri Lanka
had favourable weather conditions during 2010
gaining over 100 million kgs. of crop of black tea over
2009 production. India, however, lost
13 million kgs. of crop during
2010 as
compared to the previous
year due to unfavourable weather
condition and pest attack
in North East India. Low inventory, lower production
and continuous strong consumption growth has helped in
maintaining prices during the year. Prices in
the global market were also stable to positive despite record crop
in Kenya and Sri Lanka. Cost in India has gone up by Rs.10/- per kg.
on lower crop, increase in wages and
other input costs.
OUTLOOK
Dry weather condition in Kenya and other African counthes
during the first four months of the current
year has affected the production. Tea production in these counthes is estimated to be lower by 35
million kgs. upto April. Production shortfall
in India during
2010 has further
depleted the inventory level.
However, production in 2011 in India is expected to be normal
based on the current weather conditions. Lower inventory in India,
production shortfall in
Kenya and other
African countries, strong consumption growth should have positive impact on prices
duhng 2011. Tea phces in India are currently ruling
higher by Rs.10/- to Rs.15/- per kg.
as compared to the
same period last year. With the revision
of wages, normal increase in
input costs should get offset with revival of production in North
India. Cost per kg. is expected to
increase marginally during 2011-12.
FINANCE
Financial ratios have improved substantially over
last couple of years. Gross debt
(consolidated) as on 31st March 2011 amounted to Rs.3160.000 Millions as compared
to Rs.4020.000 Millions as on 31st March, 2010. Internal generations
have been used to reduce the debt by Rs.860.000 Millions during the year.
CONTINGENT
LIABILITIES
Guarantee given on behalf of other companies to bank, financial
institution etc. Limit Rs. Nil
(31st March 2010 – Rs. Nil)
Guarantee given on behalf of a subsidiary – Rs.1174.546 Millions (31st
March 2010 – Rs.1193.594 Millions)
Year end Utilisation Rs.793.819 Millions (31st March 2010 –
Rs.1030.647 Millions)
Bank Guarantee Rs.8.328 Millions (31st March 2010 Rs.8.904
Millions)
Bills Discounted – rs.244.565 Millions (31st March 2010
Rs.645.241 Millions)
FIXED ASSETS:
·
Trade Mark
·
Goodwill
·
Estate and Development
·
Land- Freehold
·
Buildings
·
Plant and Machinery
·
Motor and Other Vehicles
·
Furniture and Fittings
AS PER WEBSITE
HISTORY:
Subject has been growing tea in India since 1869. They
are today the largest tea producing company in the world.
They manage 47 tea estates in the Assam Valley, 6 tea
estates in the Dooars region of West Bengal, 3 factories in Vietnam an 6
estates in Uganda.
Every year the estates produce approximately 100 million
kilograms of black tea, which is marketed worldwide under the registered
Elephant trade mark.
The story begins in 1869, when Captain J.H. Williamson and
Richard Boycott Magor, two Englishmen based in Calcutta, formed a partnership
firm, Williamson Magor and Company, to service the requirements of tea estates
in Assam.
The offices were originally at 7 New China Bazaar Street, in
Calcutta before they moved in 1894 to Four Mangoe Lane, where the Company is
still located today.
The Williamson Magor Partnership grew in strength over the
years and went through the usual cyclic patterns common to the tea
industry. In 1954, it was renamed Williamson Magor and Company Limited,
when it changed its status to a limited company.
Brij Mohan Khaitan, an East India merchant who used to
supply the estates with fertilizers and tea chests, was asked to join the Board
of the company in 1963 and became the Managing Director in 1964.
In 1975, Williamson Magor merged with another company,
Macneill and Barry Limited which had interests in tea and other businesses. The
new company was named Macneill and Magor Limited.
1987 saw the Guthrie family in the UK selling their
shareholding in the McLeod Russel group, which included the Makum and Namdang
Tea Companies to the Khaitan family, making the Macneill and Magor group, the
single largest producer of Assam tea, a position still held by the group.
In 1992, Macneill and Magor Limited was renamed Williamson
Magor and Company Limited.
In 1994 the Group through company bought 51% of the Equity
Share holding of Union Carbide India Limited and the Company was renamed
Eveready Industries India Limited. Subsequently, Company was merged with
Eveready Industries India Limited. After the said merger the new Company had
two Divisions, the Bulk Tea Division which managed the Tea estates of McLeod
Russel and the Battery Division which produced and marketed the popular
Eveready batteries and flashlights.
In April, 2004 Eveready Industries demerged the two
divisions into two separate companies, company and Eveready Industries India
Limited. This enabled McLeod Russel to concentrate on its core business of tea
production. Eveready, with the second largest retail distribution network in
India, enjoys more than 50% market share in their battery and flashlight
business.
In July 2005, McLeod Russel acquired Borelli Tea Holdings
Limited from the Magor family based in England and took over the 17 tea estates
of its Indian subsidiary Williamson Tea Assam Limited. In 2006 and 2007 McLeod
Russel acquired two more quality Tea Companies in Assam namely Doom Dooma Tea
Company and the Moran Tea Company India Limited. All three Companies acquired
between 2005 and 2007 have been merged with company and thereby the Company
became the largest Tea producing Company in the World.
In March 2009, the wholly owned subsidiary Borelli Tea
Holdings Limited, U.K., acquired 100% of the Charter Capital of Phu Ben Tea
Company Limited, Vietnam. Phu Ben has three tea estates and produces 4.5
million kilograms of Black CTC, Green CTC and Orthodox Green tea.
In 2010, Borelli acquired the Rwenzori Tea Investments
Limited from James Finlay International Tea Holdings Limited based in the
United Kingdom.
The history of Rwenzori Tea, was initially set up as a
para-statal and in 1994 was bought by James Finlay International and the
Commonwealth Development Council (CDC) and jointly rehabilitated the tea
estates and factories. In 2001 the CDC sold its stake to James Finlay
International. McLeod Russel intends to continue the programme of systematic
upgrades to the factories and estates.
The Republic of Uganda described as the “Pearl of Africa” is
a landlocked country North-west of Lake Victoria and bordering Sudan to the
north, Democratic Republic of Congo to the West, Rwanda and Tanzania to the
South and Kenya to the East.
A member of the newly formed East African Community (EAC),
it has emerged from a difficult period to become a peaceful and stable nation.
Uganda has a population of approximately 32.7million (UN
2009) and covers an area of nearly 94,000sq miles (approximately 241,000sq km).
It offers a unique opportunity to the group to explore and develop the
potential of the tea plantation sector.
McLeod Russel Uganda now boasts six estates, with five
factories and that produce over 15million kilos of made tea per annum. The six
estates located on the western side of the country straddle the equator and
produce tea that can be harvested around the year. They currently cover a tea
area of approximately 3,300 hectares with the potential of a further 700
hectares of virgin land. Mcleod Russel Uganda directly employs over 5,000 people
in the country.
On February 23, 2011 Borelli Tea Holdings took over
management control of Gisovu Tea Company Limited in Rwanda.
The country of Rwanda is also known as the 'Land of a
Thousand Hills' and borders Lake Kivu and the Democratic Republic of Congo to
its West, whilst to the East lies Tanzania and Lake Victoria, to the South is
Burundi and North lies Uganda.
At an altitude of 7,500ft ASL, Gisovu has the perfect
growing conditions to produce some of the finest teas in the world.
Recognized around the world as producing some the finest
quality teas, Gisovu Tea Estate has an international following and is highly
sort after for its briskness, flavour and exceptional quality. Working closely
with the Rwandan authorities McLeod Russel is very proud to be associated with
the country, its people and the finest tea garden in East Africa.
The Tea business directly employs around 90,000 people, a
large number of whom are women.
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.46.97 |
|
|
1 |
Rs.74.22 |
|
Euro |
1 |
Rs.63.66 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
65 |
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.