MIRA INFORM REPORT

 

 

Report Date :

08.12.2014

 

IDENTIFICATION DETAILS

 

Name :
PACKAGES LIMITED

 

 

Registered Office :

4th Floor, The Forum, Suite No. 416-422, G-20, Block 9, Khayaban-e-Jami, Clifton, Karachi

 

 

Country :

Pakistan

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

1956

 

 

Com. Reg. No.:

0000792

 

 

Legal Form :

Limited Liability Company

 

 

Line of Business :

Subject is engaged in the manufacture & sale of paper, paperboard, packaging materials and tissue products

 

 

No of Employees :

2,096

 

 

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 :

Satisfactory

Payment Behaviour :

No Complaints

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 – September 30, 2014

 

Country Name

Previous Rating

(30.06.2014)

Current Rating

(30.09.2014)

Pakistan

B1

B1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

PAKISTAN - ECONOMIC OVERVIEW

 

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment was 6.6% in 2013, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in the following two years, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3.5% per year from 2008 to 2013. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.

 

Source : CIA

Company name

 
PACKAGES LIMITED

 

 

Full Address       

 

Registered Address

4th Floor, The Forum, Suite No. 416-422, G-20, Block 9, Khayaban-e-Jami, Clifton, Karachi, Pakistan

                       

Tel #

92 (21) 35874047, 35874048, 35874049

Fax #

92 (21) 35860251

Website

www.packages.com.pk

 

 

Head Office

 

Address

Shahrah-e-Roomi P.O. Amer Sidhu, Lahore, Pakistan.

Tel #

92 (42) 35811541, 46, 35811191, 94

Fax #

92 (42) 35811195, 35820147

 

 

Factory Location

 

Address

Plot No. 6 & 6/1, Sector 28, Korangi Industrial Area, Karachi, Pakistan

Tel #

92 (21) 35045320, 35045310

Fax #

92 (21) 35045330

 

 

Short Description Of Business

 

a.

Nature of Business       

Engaged in the manufacture & sale of paper, paperboard, packaging materials and tissue products

b.

Year Established

1956

c.

Registration #

0000792

 

 

Auditors

 

A.F. Ferguson & Co.

(Chartered Accountants)

Legal Status

 

The Company is a limited liability company incorporated in Pakistan and is listed on Karachi, Lahore & Islamabad Stock Exchanges of Pakistan

 

 

Details of Management

 

Names

Designation

Mr. Towfiq Habib Chinoy

 

Mr. Syed Hyder Ali

 

Mr. Alamuddin Bullo

 

Mr. Khalid Yacob

 

Mr. Mats Nordlander

 

Mr. Muhammad Aurangzeb

 

Mr. Shamim Ahmad Khan

 

Mr. Syed Aslam Mehdi

 

Mr. Syed Shahid Ali

 

Mr. Tariq Iqbal Khan

 

 

Chairman

 

Chief Executive & Managing Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

 

Categories of Share Holders                

 

Categories

    Percentage (%)

Directors, Chief Executive Officer, and their spouse & minor children

 

Associated Companies, undertakings and related parties

 

NIT & ICP

 

Banks, Development Financial Institutions, Non Banking Financial Institutions

 

Insurance Companies

 

Modarabas and Mutual Funds

 

General Public

 

Local

 

Foreign

 

Other

 

3.09

 

 

33.53

 

5.43

 

 

 

3.74

 

7.22

 

7.26

 

 

 

22.88

 

0.73

 

16.12

 

 

Associates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

 

a. Subsidiary

 

(1) Coates Lorilleux Pakistan Limited, Pakistan.

(2) Packages Lanka (Private) Limited, Pakistan.

                                                         

B. Associated Companies

 

(1) International General Insurance Co. of Pakistan Limited, Pakistan.

(2) Treet Corporation Limited, Pakistan.

(3) Loads limited, Pakistan.

(4) Treet Packages Limited, Pakistan.

(5) Orient Match Company Limited, Pakistan.

 

Business Activities

 

Principally engaged in the manufacture and sale of paper, paperboard, packaging materials and tissue products.

 

 

Number of Employees

 

2,096

 

 

Capacity & Production - Tons

 

 

Capacity                                   Actual Production

                                                                        ------------------------                                    ----------------------------       

                                                                        2013                 2012                             2013                     2012            

 

Paper and paperboard produced - tons              98,900              271,400                         38,314            148,055

Paper and paperboard converted – tons                         75,235              158,069                         52,610            106,322

Plastics all sorts converted - tons                                  20,000              20,000                          16,041            14,494

             

Note:

 

The variance of actual production from capacity is primarily on account of the product mix.

 

 

Annual Sales Volume

 

Years

In Pak Rupees

2012

2013

13,808,154,000/-

17,245,668,000/-

 

Bankers

 

(1) Allied Bank Limited, Pakistan.

(2) Askari Bank Limited, Pakistan.

(3) Bank Al-Habib Limited, Pakistan.

(4) Bank Alfalah Limited, Pakistan.

(5) Bank Islami Pakistan Limited, Pakistan.

(6) Faysal Bank Limited, Pakistan.

(7) Habib Bank Limited, Pakistan.

(8) Habib Metropolitan Bank Limited, Pakistan.

(9) MCB Bank Limited, Pakistan.

(10) NIB Bank Limited, Pakistan.

(11) Standard Chartered Bank, Pakistan.

(12) United Bank Limited, Pakistan.

(13) JS Bank Limited, Pakistan.

(14) Samba Bank Limited, Pakistan.

(15) Silk Bank Limited, Pakistan.

(16) HSBC Bank Middle East Limited, Pakistan.

(17) National Bank of Pakistan.

(18) Citibank N.A., Pakistan.

 

Performance Outlook

 

Company has performed well during the current year. As you were informed last year, subsequent to the consummation of the joint venture with Stora Enso OYJ Group of Finland, the Company’s operations have been divided into Continuing and Discontinued Operations for financial reporting purposes. Paper and Paperboard and Corrugated businesses have been recognised as Discontinued Operations with respect to Packages Limited. The results of Continuing Operations include Folding Cartons, Flexible Packaging and Consumer Products Divisions that will operate as part of Packages Limited on a stand-alone basis. Continuing operations have achieved net sales of Rs. 13,558 million in 2013 against net sales of Rs. 11,745 million of last year representing sales growth of 15%. This sale excludes Rs. 1,330 million of materials imported on behalf of Bulleh Shah Packaging (Private) Limited (BSPL) and transferred to it at cost as part of the transitional arrangement. The operations have generated Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) of Rs. 1,268 million during 2013 against Rs. 1,103 million of 2012 resulting in an increase of Rs. 165 million mainly due to revenue growth, better product mix and production efficiencies.

 

 

Contribution to National Exchequer

 

Your Company is a noteworthy contributor to the national economy and has contributed Rs. 1,405.7 million during the year 2013 to the national exchequer on account of sales tax, income tax, import duties and statutory levies

 

 

Future Outlook

 

The management remains confident that the economy would improve in the future and the Company shall be able to maintain its market position. It is expected that the trend of shift from unpacked to packed products would gain accelerated momentum with growing middle class, urbanization and a changing life style. Consumer Products Division is striving to not only regain its market share but also to enhance the market size through advertisement, extensive trade and distribution program. The Division is also actively focusing on its Away From Home (AFH) category. With the start-up of new offset printing line during first quarter of 2014, the Company is confident of getting deeper penetration into this segment of packaging business. The Company is also evaluating various options for reduction of its energy costs and has already embarked on installation of a solar solution for its offices. Despite the rising raw material prices and electricity and gas shortages, your Company is improving shareholder’s value through tight cost control, product and process optimisation, price rationalisation and efficient working capital management. In respect of Paper & Paperboard and Corrugated Boxes businesses, the management believes that the new joint venture shall bring considerable value to its shareholders.

 

 

Financial Position   

 

Sound

Memberships

 

·         KCCI

·         FPCCI

·         LCCI

 

 

Foreign Exchange Rates

 

Currency         

 

Unit

Pakistani Rupees

US Dollar

1

           Rs. 101.25

UK Pound

1

           Rs. 168.00

Euro

1

           Rs. 133.00

 

 

Comments

 

Subject Company is well known and directors are resourceful and experienced businessmen. Trade relations are reported as fair.  Payments to creditors etc are reported as normal. Subject can be considered for normal business dealings at usual trade terms and conditions.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.85

UK Pound

1

Rs.96.73

Euro

1

Rs.76.53                                 

 

INFORMATION DETAILS

 

Report Prepared by :

SMN

 

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.