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CREDIT RATING REPORT
ON Kazi & Kazi Tea Estate Limited
Page 1 of 17
Address: CRISL Nakshi Homes (4th & 5th Floor) 6/1A, Segunbagicha, Dhaka-1000 Tel: 9515807-8 9514767-8 Fax: 88-02-9565783 Email: [email protected] Analysts: Nur Uddin Ahmed [email protected] Entity Rating Long Term: A Short Term: ST-3 Outlook: Positive
KAZI & KAZI TEA ESTATE LIMITED
ACTIVITY Cultivate, manufacture and sell tea INCORPORATED ON June 28, 2001 MANAGING DIRECTOR Lt. Col. (Rtd.) Kazi Shahid Ahmed EQUITY Tk. 47.50 million TOTAL ASSETS Tk.107.02 million
Ownership is confined within the family members
Date of Rating September 29, 2011 Long Term Short Term Entity Rating A ST-3 Outlook Positive
1.0 RATIONALE CRISL has assigned the Long Term rating “A” (pronounced as single A) and the Short Term rating “ST–3” to Kazi & Kazi Tea Estate Limited (hereinafter referred to as “KKTEL”) on the basis of its financials up to September, 2010 and other relevant quantitative and qualitative information. The above ratings have been assigned after due consideration to its fundamentals such as equity based company, qualified and experienced management, positive brand image, effective credit control, good liquidity position, good security arrangements, sound infrastructure facilities and increasing trend of profitability. The above rating is, however, constrained to some extent by low yield per hectare, limited pricing power, insufficient irrigation facilities, fund introduced other than equity etc. The Long Term rating indicates that entities rated in this category are adjudged to offer adequate safety for timely repayment of financial obligations. This level of rating indicates a corporate entity with an adequate credit profile. Risk factors are more variable and greater in periods of economic stress than those rated in the higher categories. The Short Term rating indicates good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risks factors are small. CRISL also placed the company with ‘Positive Outlook’ considering of its prospective business growth. The company is in the process of expanding its tea garden and the market as well. 2.0 COMPANY PROFILE 2.1 Background Kazi & Kazi Tea Estate Limited, a private limited company, is a business unit of Gemcon Group of Companies which has been established in order to cultivate, manufacture and sell tea. The company has more than 20 varieties of tea product with good market image under the brand name of “Tetulia Tea” and “Kazi & Kazi Tea”; moreover the products are also known by their own name and identity such as Green, Tulshi, Neem, Ginger, Lemon and Mint etc. KKTEL differentiates itself from other tea producers by its organic produces generating from a chemical free production process, which is being preferred by increasing no of consumers. KKTEL was incorporated on June 28, 2001 as a Private Limited Company under the Companies Act (Act XVIII) 1994. The company has an authorized capital of Tk 100.00 million (100,000 ordinary shares of Tk 1,000 each) and the paid-up capital of Tk. 47.50 million (47,500 ordinary shares of Tk 1,000 each). The company started commercial operation in 2006. KKTEL is currently running under the leadership of Lt. Col. (Rtd.) Kazi Shahid Ahmed, the company’s Managing Director. The company’s factory and garden are located at Rawshanpur, Tetulia, and the corporate office is located at House # 44, Raod # 27 (old) 16 (new), Dhanmondi, Dhaka. 2.2 Ownership Pattern The ownership of KKTEL is confined within the family members of Mr. Lt. Col. Kazi Shahid Ahmed (Rtd.), the main sponsor of the company. Mr. Shahid owns highest shareholding of 35% shares, allowed under individual capacity. His wife Mrs. Ameenah, the Director of the company holds 20% of the shares. The rest are equally distributed among the three sons. A summary of the ownership positions are outlined below:
REPORT: RR/981/11
This is a credit rating report as per the provisions of the Credit Rating Companies Rules 1996. CRISL’s entity rating is valid one year for long-term rating and 6 months for short term rating.After the above periods, these ratings will not carry any validity unless the entity goes for surveillance .CRISL followed Corporate Rating Methodology published in CRISL website www.crislbd.com
