Dhunseri Tea and Industries Ltd.

• Non Convertible debenture - Rs. 110 million Rating : A+ (Reaffirmed)

The A+ (pronounced single A plus) rating assigned to the Rs. 110 Million Non Convertible Debenture programme of Dhunseri Tea & Industries Limited (Dhunseri) has been reaffirmed.

The rating continues to reflect the companys comfortable market position in the domestic tea industry, its favourable performance on operating parameters, comfortable capital structure and its moderate financial risk profile. These factors are, however, tempered by the volatile nature of the tea industry and increasing competitive pressures in the packet tea segment. While the rating also factors Dhunseris proposed investments in the green field petrochemical project to be implemented by an affiliate company, higher than anticipated investments in the project could have a negative impact on the companys risk profile.

 Dhunseri Tea and Industries Ltd (Dhunseri) is the flagship company of the Calcutta based S. L. Dhanuka group of companies and is engaged in the manufacture and marketing of tea. The promoters of Dhunseri are proposing to implement a green field petrochemical project at Haldia, West Bengal at an estimated cost of Rs 4500.0 million (Mn), in collaboration with Zimmer AG of Germany. Dhunseri is also expected to make some equity investments in the proposed joint venture, on account of being the flagship company of the group. During the 15 month period ending March 1999, the company reported a net profit of Rs. 87.1 Mn on an operating income of Rs. 880.5 Mn.