MIRA INFORM REPORT

 

 

Report Date :

02.08.2014

 

IDENTIFICATION DETAILS

 

Name :

NESTLE LANKA PLC

 

 

Registered Office :

# 440, T B Jaya Mawatha, Colombo – 10

 

 

Country :

Sri Lanka

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

29.01.1981

 

 

Legal Form :

Public Limited Liability Company

 

 

Line of Business :

Importers, Exporters, Manufactures and Distributors of Milks, Liquid Drinks, Culinary Beverages and Confectionery  

 

 

No. of Employees :

1000

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Good

Payment Behaviour :

Regular

Litigation :

Clear

 

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 – June 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Sri Lanka

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

SRI LANKA - ECONOMIC OVERVIEW

 

Sri Lanka continues to experience strong economic growth following the end of the 26-year conflict with the Liberation Tigers of Tamil Eelam. The government has been pursuing large-scale reconstruction and development projects in its efforts to spur growth in war-torn and disadvantaged areas, develop small and medium enterprises and increase agricultural productivity. The government's high debt payments and bloated civil service have contributed to historically high budget deficits, but fiscal consolidation efforts and strong GDP growth in recent years have helped bring down the government's fiscal deficit. However, low tax revenues are a major concern. The 2008-09 global financial crisis and recession exposed Sri Lanka's economic vulnerabilities and nearly caused a balance of payments crisis. Agriculture slowed due to a drought and weak global demand affected exports and trade. In early 2012, Sri Lanka floated the rupee, resulting in a sharp depreciation, and took steps to curb imports. A large trade deficit remains a concern, but strong remittances from Sri Lankan workers abroad help offset the trade deficit. Government debt of about 80% of GDP remains among the highest in emerging markets.

 

Source : CIA

GENERAL - Basic information at a glance

       

a.

Name of Subject of Inquiry

:

NESTLE LANKA PLC

b.

Legal Form  & Status

:

Public Limited Liability Company listed at the Colombo Stock Exchange (In Operation)

c.

Chairman

 :

Etienne Benet

d.

Primary Line of Business

:

Importers, Exporters, Manufactures and Distributors of Milks, liquid drinks, Culinary Beverages and Confectionery  

e.

Head Office & Place of Business

:

 

# 440, T B Jaya Mawatha,

Colombo – 10,

Sri Lanka.

 

Tel. No: (00 94 11) 269 6304 / 269 7821 / 269 9991

Fax No: (00 94 11) 269 9437 

 

Email: info.srilanka@lk.nestle.com

    

f.

Factory

:

 

Kurunegala Factory:

 

P.O.Box No.01,

Makadura,

Gonawila.(NWP)

 

Tel No: (00 94 31) 229 9682

Fax No: (00 94 31) 229 9630

 

g.

No. of  Employees

:

Approximately 1000

           


COMPANY DETAILS  - Registration and Shareholder Details

 

a.

Registration No

:

PVS/PBS 7225

Date of Registration

:

29th January 1981

b.

Re-registration No

:

PQ 20

Date of Re-Registration

:

25th June, 2007

c.

Registered Office

:

# 440, T.B.Jayah Mawatha, Colombo- 10, Sri Lanka.

d.

Board of Directors

As At

08th January 2014

:

Antonio Helio Waszyk

Chairmen

Ganesan Ampalavanar

Managing Director

Syed Saiful Islam

Director

Shobinder Duggal

Director

Ranjan Seevaratnam

Director

Mahendra Dayananda

Director

e.

Issued Share Capital

:

Rs.     537,254,630.00              

Number of Shares

:

53,725,463

f.

Nominal Value of Share

:

Not applicable vide Companies Act #7 of 2007

 

 

 

 

 

 

 

COMPANY DETAILS  - Registration and Shareholder Details (Cont/d…)

 

h.

Major Share Holders

As At

31st December 2013 (Total Number of Share Holders 5,515)

:

 

 

                       Major Share Holders

No. of Shares

Nestle S.A                 

  48,793,746

HSBC International Nominees Ltd - MSIP - Coupland Cardiff Funds PLC

854,367

Miss Harnam Neesha

200,000

HSBC Intl Nom Ltd - SSBT - Wasatch Frontier Emerging Small Countries Fund

311,631

HSBC International Nominees Ltd - SSBT - Deutsche Bank AG Singapore

155,600

PICTET and CIE (Europe)

142,930

Estate of Late Mr. Mariapillai Radhakrishnan

110,000

Employees Provident Fund

100,000

HSBC Intl Nominees Ltd - UBS AG Singapore Branch

85,000

AIA Insuarance Lanka PLC A/C 07

81,335

i.

Auditors

:

KPMG Ford,Rhodes,Thornton & Company

j.

Company Secretaries

:

Lioshon Rajapakshe

k.

Bankers

:

 

Hong Kong & Shanghai Banking Corporation,

Standard Chartered Bank PLC

Hatton National Bank PLC

Bank Of Ceylon

 

 

 

FINANCIAL DETAILS - Most recent available Financial Information

 

 

                 

 

FINANCIAL DETAILS - Most recent available Financial Information (Cont/d…)

 

 

CURRENT INVESTIGATION                      

 

 

·         History.

The Subject Company NESTLE LANKA PLC was originally incorporated as a Private limited liability company on 29th January 1981 under registration number PVS/PBS 7225 and subsequently converted to Public Limited Liability Company listed at the Colombo Stock Exchange on 1983. The Subject Company NESTLE LANKA PLC was re-registered in terms of Companies Act #7 of 2007 on 25th June, 2007 under registration number PQ 20.

 

The Subject Company NESTLE LANKA PLC was initially registered as “NESTLE LANKA LTD”.

 

The subject company is having the following associate companies:

 

Associated Companies

 

              Ceylon Nutritional Foods Ltd, Sri Lanka

              Eastern Foods Specialities (Pvt) Ltd, Sri Lanka

              Osem UK

              Nestle India

              Nestle Japan Holding Ltd

              Nestle Singapore (Pte) Ltd

              Nestle Australia Ltd

              Nestle Canada Inc

              Nestle Jamaica Ltd

              Nestle Trinidad & Tobago Ltd

              Nestle Panama S.A.

              Nestle Middle East FTZ

              Nestle Tianjin Ltd

              Nestle Nederland B.V

              Nestle Foods (Thailand) Ltd

 

 

·         Location.

The Subject Company is located at the client # 440, T B Jaya Mawatha, Colombo 10, Sri Lanka, an area where large business conglomerates are operating.

 

·         Operational Details.

 

General

The primary line of business of the subject company, NESTLE LANKA PLC, is import, export, manufacture and distribution of   “Nestle” branded products nationally and internationally.

 

The Nestle Lanka PLC is one of the largest producer of many a mild food items such as “Milkmaid”, “Nespray”, “Everyday”, “Nest café” etc. and variety of  milk foods were added to the company’s products range from time to time such as  “Nestea” the latest..

 

Nestle Lanka PLC operates a factory in Kurunegala, an agricultural and diary farming area in Sri Lanka, approx. 100 kilo meters North West of Colombo. Nestle is one of the largest foods and beverages manufacturer in Sri Lanka, as well as the largest Private sector buyer of fresh milk and coconuts from local producers.

 

                  “Nestle” is a house hold name in Sri Lanka for over a century as their products were initially

                   Imported and distributed in Sri Lanka before being incorporated.

                  

Products

There are several varieties of food items:

Nespray, Everyday, Milkmaid (sweetened condensed milk), Nestomalt, Nespray Cereal milk Foods drink, Maggi branded noodles (with “Kurakkan”, “Karapincha” Red Rice and with different flavours) and Coconut Milk Powder, “Nestea” (Milk + Tea- introduced lately), MILO (Ready to drink), Net café (treated as the flagship of the company globally)

 

                  “Milo-Ready to Drink” has become the Islands preferred beverage amongst the youth in Sri

                  Lanka.

 

                  Nestlé Lanka Certifications:

                  FSSC 22000: 2010 (Food Safety System Certification)

                  ISO 14001: 2007 (Environmental Management Systems)

                 OHSAS 18001: 2007 (Occupational Health & Safety Management Systems)

                  NQMS (Nestlé Quality Management Systems certified by SGS)

                  SLSI Certification for Nespray Full Cream Milk Powder, Cerelac, Nestum and Milkmaid

Environmental Protection Licence No:345/2013 R11

                 

                 Country-  

                 Sri Lanka and world wide

                 Products such as“Maggi Coconut Milk Power” are sold in over 50 countries.

 

No of Employees

Approximately 1000

 

·         Financial Data:

 

                  Received from subject company annual report

                 

·         Credit Recommendations

                 

No computerised data bases exist to make checks whether the partners or the company has any  legal action or lawsuit initiated against any of them but informal (but not in-depth) checks do not indicate any such cases in the public knowledge.

 

 

 

 

 

INFORMATION DECLINED BY

 

Name :

Mr. Sunil Gamage

Designation :

Accounts Head

Contact No.:

(00 94 11) 269 6304

Date :

29.07.2014

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.60.85

UK Pound

1

Rs.102.69

Euro

1

Rs.81.46

 

INFORMATION DETAILS

 

Analysis Done by :

SUM

 

 

Report Prepared by :

TPT

 

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 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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.