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Report Date : |
02.09.2014 |
IDENTIFICATION DETAILS
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Name : |
PACKAGES LIMITED
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Registered Office : |
4th Floor, The Forum, Suite No. 416-422, G-20, Block 9,
Khayaban-e-Jami, |
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Country : |
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Financials (as on) : |
31.12.2013 |
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Date of Incorporation : |
1956 |
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Com. Reg. No.: |
0000792 |
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Legal Form : |
Limited Liability Company |
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Line of Business : |
Subject is engaged in the manufacture
& sale of paper, paperboard, packaging materials and tissue products |
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No of Employees : |
2,096 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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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 01, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
Pakistan |
B2 |
B1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
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Low Risk |
A2 |
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Moderate Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderate High Risk |
C1 |
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High Risk |
C2 |
|
Very High Risk |
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.
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Source
: CIA |
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Registered
Address |
|
4th Floor, The Forum, Suite No. 416-422, G-20, Block 9, Khayaban-e-Jami,
Clifton, Karachi, Pakistan |
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Tel # |
92 (21) 35874047, 35874048, 35874049 |
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Fax # |
92 (21) 35860251 |
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Website |
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Address |
Shahrah-e-Roomi P.O. Amer Sidhu, Lahore, Pakistan. |
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Tel # |
92 (42) 35811541, 46, 35811191, 94 |
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Fax # |
92 (42) 35811195, 35820147 |
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Address |
Plot No. 6 & 6/1, Sector 28, Korangi Industrial Area, Karachi,
Pakistan |
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Tel # |
92 (21) 35045320, 35045310 |
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Fax # |
92 (21) 35045330 |
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a. |
Nature of Business |
Engaged in the manufacture & sale of
paper, paperboard, packaging materials and tissue products |
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b. |
Year Established |
1956 |
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c. |
Registration # |
0000792 |
|
A.F. Ferguson & Co. (Chartered
Accountants) |
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The Company is a limited liability company incorporated in Pakistan
and is listed on Karachi, Lahore & Islamabad Stock Exchanges of Pakistan |
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Names |
Designation |
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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 |
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 |
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. |
Principally
engaged in the manufacture and sale of paper, paperboard, packaging materials
and tissue products.
2,096
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.
|
Years |
In Pak Rupees |
|
2012 2013 |
13,808,154,000/- 17,245,668,000/- |
(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.
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Rating as on: June 2013 |
|
Rating Type
Rating |
|
Long-Term
AA (Double A) |
|
Short-Term
A1+ (A One Plus) |
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.
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
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.
Sound
· KCCI
· FPCCI
· LCCI
|
Currency |
Unit |
Pakistani Rupees |
|
US Dollar |
1 |
Rs. 101.25 |
|
UK Pound |
1 |
Rs. 168.00 |
|
Euro |
1 |
Rs. 133.00 |
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.60.47 |
|
|
1 |
Rs.100.43 |
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Euro |
1 |
Rs.79.40 |
INFORMATION DETAILS
|
Analysis Done by
: |
SUM |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
|
41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.