MIRA
INFORM REPORT
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Report Date : |
25.11.2006 |
IDENTIFICATION
DETAILS
|
Name : |
RAMA
NEWSPRINT & PAPERS LIMITED |
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Registered Office : |
Village Barbodhan, Taluka Olpad, District
Surat - 395005, Gujarat |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
10.07.1991 |
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Com. Reg. No.: |
04-19432 |
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CIN No.: [Company
Identification No.] |
L21010GJ1991PLC019432 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMR05789A |
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PAN No.: [Permanent
Account No.] |
AAACR2499H |
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Legal Form : |
A
public limited liability company. The
company’s shares are listed on the Stock Exchanges |
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Line of Business : |
Manufacturing
of Newsprint, Writing & Printing Papers. |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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Maximum Credit Limit : |
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Status : |
Moderate |
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Payment Behaviour : |
Slow by +30/60 days |
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Litigation : |
Exit |
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Comments : |
Subject
is a part of Rama Group of Companies, whose most of the member companies are
not performing well. The company
continue to incur losses. Its'
payments are reported as slow and delayed. The
company can be considered for business dealings on safe and secured trade
terms and conditions. |
LOCATIONS
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Registered Office/Factory : |
Village Barbodhan, Taluka Olpad, District
Surat, Gujarat – 395 005, INDIA |
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Tel. No.: |
91-26212-4203 / 4 / 5 |
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Fax No.: |
91-26212-4206 |
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E-Mail : |
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Website : |
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Head
Office : |
12th Floor, Nariman Bhavan, Nariman Point, Mumbai -
400021 |
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Tel.
No.: |
91-22-22020511 |
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Fax
No.: |
91-22-22821430 |
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E-Mail
: |
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Corporate
Office : |
181-B,
Maker Tower "E", Cuffe Parade, Mumbai - 400 005 |
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Tel.
No.: |
91-22-218 3791 |
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Fax
No.: |
91-22-218 0136 / 218 8406 |
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E-Mail
: |
DIRECTORS
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Name : |
Mr. Virendra Bangur |
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Designation : |
Vice Chairman |
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Name : |
Mr. Vashu J. Ramsinghani |
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Designation : |
Vice Chairman |
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Name : |
Mr. K. L. Chandak |
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Designation : |
Director |
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Name : |
Mr. Haigreve Khaitan |
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Designation : |
Director |
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Name : |
Mr. Amit Ramsinghani |
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Designation : |
Director |
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Name : |
Mr. Chandravadan Desai |
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Designation : |
Independent Director |
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Name : |
Mr. M V Gore |
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Designation : |
Independent Director |
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Name : |
Mr. Nagesh Pinge |
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Designation : |
(ICICI Bank Limited - Nominee) |
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Name : |
Mr. Ashok Alladi |
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Designation : |
(ICICI Bank Limited - Nominee) |
KEY EXECUTIVES
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Name
: |
Mr. V. D. Bajaj |
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Designation
: |
EXECUTIVE DIRECTOR |
MAJOR SHAREHOLDERS
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Names
of Shareholders |
No. of Shares |
Percentage of Holding |
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Promoters |
127803852 |
54.94 |
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Mutual Funds & UTI Banks, Financial Institutions & Govt./non Govt. Institutions/ |
272800 |
0.12 |
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Insurance Companies |
1622463 |
0.70 |
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Foreign Institutional Investors |
469110 |
0.20 |
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Others |
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Private Corporate Bodies |
17683684 |
7.60 |
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Indian Public |
80124369 |
34.44 |
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NRIs/OCBs |
2224908 |
0.96 |
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Any Others |
2430943 |
1.04 |
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Total |
232632129 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing
of Newsprint, Writing & Printing Papers. |
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Products : |
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Exports to : |
Bangladesh,
Sri Lanka, Nepal in South Asia, the Middle East and West Asia as well as the
continents of Africa and South Africa. |
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Imports from : |
Singapore,
UAE and USA |
PRODUCTION
STATUS
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Particulars |
Unit |
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Installed Capacity |
Actual Production |
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Newsprint / Writing & Printing Paper |
MT |
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132000 |
-- |
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Newsprint |
MT |
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-- |
114867 |
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Writing
& Printing Paper |
MT |
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-- |
8242 |
GENERAL
INFORMATION
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No. of Employees : |
500 |
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Bankers : |
v Bank of India v Oriental Bank of Commerce v
Central Bank of India v UTI Bank Limited |
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Facilities : |
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Banking Relations : |
Unknown |
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Auditors : |
Haribhakti
& Company Chartered
Accountants |
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Associates/Subsidiaries : |
v
Rama
Chemicals (India) Private Limited v
Rama
Scrap Recycling Private Limited v
Rama
Alloys India Limited v
Rama
Fininvest India Private Limited v
Highrise
Properties Private Limited v
Vams
Properties Private Limited v
Rama
Paper Recycling Private Limited |
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MEMBERSHIPS |
v
Confederation
of Indian Industry |
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
233000000 |
Equity Shares |
Rs. 10/- each |
Rs. 2330.000 Millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
232632129 |
Equity Shares |
Rs. 10/- each |
Rs. 2326.321 Millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
2326.321 |
2326.320 |
2326.300 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1176.548 |
1177.098 |
255.400 |
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4] (Accumulated Losses) |
(705.352) |
(649.357) |
0.000 |
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NETWORTH |
2797.517 |
2854.061 |
2581.700 |
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LOAN FUNDS |
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1] Secured Loans |
2406.923 |
2405.653 |
2638.500 |
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2] Unsecured Loans |
264.646 |
307.049 |
260.000 |
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TOTAL BORROWING |
2671.569 |
2712.702 |
2898.500 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
5469.086 |
5566.763 |
5480.200 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
4361.670 |
4302.497 |
4570.700 |
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Capital work-in-progress |
66.061 |
186.494 |
49.800 |
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INVESTMENT |
0.168 |
0.168 |
0.200 |
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DEFERREX TAX ASSETS |
414.716 |
415.855 |
556.400 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
453.690
|
617.263 |
292.500 |
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Sundry Debtors |
503.562
|
355.090 |
26.700 |
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Cash & Bank Balances |
8.846
|
20.099 |
2056.000 |
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Other Current Assets |
0.135
|
1.166 |
0.000 |
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Loans & Advances |
252.880
|
254.293 |
2068.300 |
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Total Current Assets |
1219.113
|
1247.911 |
4443.500 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
579.532
|
578.651 |
2068.300 |
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Provisions |
13.110
|
10.351 |
9.500 |
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Total Current Liabilities |
592.642
|
589.002 |
2077.800 |
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Net Current Assets |
626.471
|
658.909 |
853.800 |
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MISCELLANEOUS EXPENSES |
0.000 |
2.840 |
5.700 |
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TOTAL |
5469.086 |
5566.763 |
5480.200 |
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PROFIT
& LOSS ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Sales Turnover [including other income] |
3247.911 |
2947.658 |
1681.000 |
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Profit/(Loss)
Before Tax |
(53.245) |
341.921 |
227.500 |
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Provision
for Taxation |
2.750 |
134.584 |
61.700 |
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Profit/(Loss)
After Tax |
(55.995) |
207.337 |
165.800 |
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Export
Value |
48.770 |
136.393 |
NA |
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Import
Value |
488.559 |
676.882 |
NA |
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Total
Expenditure |
2759.735 |
2586.238 |
1679.800 |
QUARTERLY
|
PARTICULARS |
|
30.06.2006 (1ST Quarter) |
30.09.2006 (2ND Quarter) |
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Sales Turnover |
|
890.500 |
878.300 |
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Other Income |
|
7.700 |
7.800 |
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Total Income |
|
898.200 |
886.100 |
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Total Expenditure |
|
650.500 |
636.900 |
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Operating Profit |
|
247.700 |
249.200 |
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Interest |
|
63.400 |
60.100 |
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Gross Profit |
|
184.300 |
189.100 |
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Depreciation |
|
81.700 |
82.500 |
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Tax |
|
0.400 |
0.400 |
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Reported PAT |
|
102.200 |
106.200 |
200606 Quarter 1 - Expenditure Includes (Increase)/Decrease in stock in Trade Rs. (2.967) million Consumption of Raw Materials Rs. 344.808 million Consumption of Chemicals Rs. 73.311 million Power & Fuel Rs. 100.717 million Staff Cost Rs. 27.323 million Other Expenditure Rs. 107.327 million Tax Indicates Provision for Fringe Benefit Tax EPS is Basic and Diluted Status of Investor Complaints for the quarter ended 30.06.2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 32 Complaints disposed off during the quarter 32 Complaints unresolved at the end of the quarter Nil 1. The special resolution for reduction of equity share capital from Rs. 2326.321 million to Rs. 581.580 million was confirmed by the Hon'ble High Court of Gujarat at Ahmedabad by its Order dated 05.05.2006. The reduction is effective from 07.06.2006 i.e. from the date of registration of the Order with the Registrar of Companies. Accordingly paid-up equity share capital and no. of shares have been reduced for quarter ended 30.06.2006. The EPS has been worked out on the reduced equity share capital for all the reported periods, 2. Provision for Deferred tax for current year will be made in the audited accounts. 3. The Company's products namely Newsprint and Writing & Printing paper are classified under one segment. 4. Previous period's figures have been regrouped / recast wherever necessary, to make them comparable. 5. The above results were reviewed by the audit committee and taken on the record by the Board of Directors at its meeting held on 27.07.2006. 6. The Statutory Auditors have carried out a 'Limited Review' of the above financial results.
200609 Quarter 2 - EPS basic and diluted 1.There was loss production for six days on account of disruption in water supply to mills from the intake well at river Tapti in Surat due to flood. 2.The special resolution for reduction of equity shares capital from Rs.2326.321 Millions to Rs.581.580 Millions was confirmed by the Hon'ble High Court of Gujarat at Ahmedabad by its order dated 05.05.2006.The reduction is effective from 07.06.2006 i.e from the date of registration of the order with the registar of companies. Accordingly paid-up equity sharescapital and no. of shares have been reduced for quarter and half year ended 30.09.2006.The EPS has been worked out on the reduced equity share capital for all the reported periods. 3.Provision for deferred tax for current year will be made in the audited accounts. 4.The company'sproducts namely Newsprint and Writing and Printing paper are classified under one segment. 5.The details of number of investor complaints for the quarter ended 30.09.2006 are: beginning Nil Received 8 Resolved 8 Pending Nil 6.Previous period's figures have been regrouped/recast wherever necessary,to make them comparable. 7.The above results were reviewed by the audit committee and taken on the record by the board of directors at its meeting held on 14.10.2006. 8.The statutory auditors have carried out a limited review of the above financial results.
KEY
RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt
Equity Ratio |
0.95 |
1.03 |
1.79 |
|
Long
Term Debt Equity Ratio |
0.83 |
0.92 |
1.66 |
|
Current
Ratio |
1.35 |
1.29 |
1.24 |
|
TURNOVER
RATIOS |
|
|
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Fixed
Assets |
0.50 |
0.47 |
0.41 |
|
Inventory
|
6.06 |
4.99 |
5.51 |
|
Debtors |
7.55 |
9.05 |
9.46 |
|
Interest
Cover Ratio |
0.76 |
1.50 |
2.96 |
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Operating
Profit Margin (%) |
15.16 |
19.71 |
38.70 |
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Profit
Before Interest and Tax Margin (%) |
5.29 |
9.23 |
26.76 |
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Cash
Profit Margin (%) |
8.14 |
12.35 |
24.86 |
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Adjusted
Net Profit Margin (%) |
(1.73) |
1.87 |
12.92 |
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Return
on Capital Employed (%) |
0.00 |
4.31 |
11.56 |
|
Return
on Net Worth (%) |
0.00 |
1.58 |
13.80 |
STOCK PRICES
|
Face
Value |
Rs.10/- |
|
High |
Rs.42.55/- |
|
Low |
Rs.41.10/- |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The
company was incorporated on 10th July, 1991 at Surat in Gujarat
having Company Registration Number 19432.
The
company was promoted in 1994.
Its'
unit is located in Gujarat. This unit
uses recycled paper as input material for producing newsprint. Subject can alone meet almost 20% of India's
current newsprint requirements.
Besides
supplying newsprint to different newspapers, the company also uses part of its
capacity for producing PWP depending on market conditions. It has a captive power generation unit from
which it meets its power requirements.
The
company set up the project in 1994.
Since then, it has relied on equity funds for financing its expansion
projects.
The
company allotted 15000000 equity shares of Rs. 10 each at par to the promoters
and associates on a preferential basis in January, 2000 and 38132129 equity
shares of Rs. 10 each at par to ICICI Limited in March, 2000, in terms of their
Loan Agreements.
BUSINESS
The
company is engaged in manufacturing of Newsprint, Writing & Printing
Papers.
The
company offers a wide variety of width sizes, colour codes and special
coatings. In newsprint, the range
offered is 40-60 gsm and in writing /printing paper the range is of 40-100
gsm. Colour coded paper is also
available for special publications such as the distinctive pink for financial
publications, yellow for yellow pages.
Subject
is the India's largest private sector player in the newsprint sector today,
with an annual manufacturing capacity of 0.150 million tonnes of newsprint /
writing and printing paper.
The
company has an excellent paper conversion facility and can supply all products
in sheet form as per customer specifications.
The
company is in trade terms with :
Ř
Corrtech
International Private Limited
Ř
Comp-Vac
Technology Private Limited
Ř
Furnace
& Foundry Equipment Company
Ř
Hi-Tech
Engineering Private Limited
Ř
H.
V. Equipments Private Limited
Ř
NEC
Containers Private Limited
Ř
Prakash
Lubriquipments Private Limited
Ř
Ricasil
Industries
Ř
Swetha
Engineering Limited
Ř
Shree
Laxmi Chemicals
Ř
Turbomachinery
Works Private Limited
The
company’s fixed assets of important value include Freehold Land, Buildings,
Plant and Machinery, Furniture & Fittings, Office Equipment and Vehicles
PERFORMANCE:
During the year under review the Company has undertaken various strategic
measures to streamline and optimize its operations, which have yielded desired
results. The healthy growth of Indian economy helped in continuing buoyancy in
the demand for the newsprint as a result of which the Company was able to
increase its sales and operational margins. However increased cost of borrowing
affected the net margin. The Company has successfully commissioned 23MW TG
Power Unit during the year, which has helped the Company in becoming
self-sustainable in its power needs and considerably reducing its energy
cost.
Due to buoyant demand and improved economic indicators, the Company is
planning for expansion of its operations by adding one more paper machine and
modernizing the existing Plant & Machinery, so as to achieve better
efficiency and quality.
The Company has taken various forward-looking measures like increasing
plant efficiency, improving product quality, bettering procurement practices,
strengthening sales & marketing chain, streamlining internal control
systems coupled with building cordial human relations and is looking for
substantial growth in its capacity by way of expansion.
The Company has registered total production of 123109 MT during the year
as compared to 118092 MT in the previous year showing growth of 4.25%
The production of Newsprint and Writing & Printing varieties was
114867 MT and 8242 MT during the year under review, as compared to 100049 MT
and 18043 MT, respectively in the preceding year.
The Company has registered sales volume of 119257 MT Newsprint and 8413
MT Writing & Printing paper as against 99744 MT and 19084 MT, respectively
in the previous year. The over all sales was 127670 MT as compared to 118828 MT
in the year ended 31st March 2005, showing a growth of 7.44%.
The Company has achieved turnover of Rs. 3221.034 Millions (net of Excise
Duty) as compared with turnover of Rs. 2880.628 Millions in the year 2004-2005
- increase of 11.82%.
The company was able to achieve the zero stock of finished goods as on
31.03.2006, first time in its history.
CURRENT YEAR'S PROSPECTS:
The improvement in production was extended into the first quarter of
2006-2007. Production of Newsprint and Writing & Printing paper increased
from 30453 MT in 2005-2006 first quarter (April-June) to 33084 MT in 2006-2007
first quarter. Profit before Interest & Lease Rent, Depreciation and Tax
during first quarter of 2006-2007 was 247.678 Millions as against Rs. 74.507
Millions in corresponding quarter of the previous year. Profit before Taxation
was Rs.102.585 Millions in first quarter of 2006-2007 as against los of Rs.
47.857 Millions in first quarter of 2005-2006.
The overall outlook for the year 2006-07 looks to be positive considering
the fact that various strategic measures undertaken by the Company having
already stated giving results. Accordingly operational efficiencies shall
improve further as market scenario also continues to be good.
RAW MATERIAL:
The Company use eco-friendly raw material of recycled fibre viz., Old
Newspaper (ONP), other waste paper and pulp, for manufacturing Newsprint and
high quality waste paper & virgin pulp for Writing & Printing Paper
through totally chlorine free process. The Company imports as well as procures
raw materials domestically. During the year under review though the
availability of raw materials was normal, the prices saw rise due to rise in
demand.
EXPORTS:
The Company exported goods worth Rs. 52.772 Millions during the year as
compared with Rs.139.480 Millions of goods exported during the pervious year
ended 31.03.2005.
CAPITAL REDUCTION
After implementation of the Corporate Debt Restructuring (CDR) scheme,
the Company, with a view to streamline capital structure for optimum benefit to
its stakeholders, has undertaken the proposal of reduction of its paid up
equity share capital. The shareholders of the Company, at their meeting held on
23.12.2005, have passed special resolution subject to approval of the High
Court, approving the reduction of present equity paid up capital by way of (i)
cancellation of Rs.7.50 for every equity share of Rs.10/- each fully paid up;
and (ii) simultaneously consolidation of four(4) numbers of fully paid up
equity shares of Rs. 2.50 each into one equity share of the face value of
Rs.10/- each fully paid [after cancellation of one fractional equity share],
resulting in reduction in the issued, subscribed and paid up equity share
capital of the Company from Rs.2326.321 Millions consisting of 232.632 Millions
equity shares of Rs. 10 each to Rs.581.580 Millions consisting of 58.158
Millions equity shares of Rs. 10 each fully paid up by adjusting (a) the debit
balance in the profit & loss account amounting to Rs. 649.355 Millions as
on 31.03. 2005 and (b) Creating Capital Reserve of Rs.1095.385 Millions on the Record/Book Closure date as may be
fixed by the Board.
The Hon'ble High Court of Gujarat, Ahmedabad, vide Order dated
05.05.2006, has approved the above special resolution passed by the
shareholders for reduction in the paid up equity share capital of the Company.
A copy of the said Order was registered with the Registrar of Companies on
07.06.2006 consequent to which (i) Rs 7.50 of every equity share of Rs. 10 each
fully paid up stands cancelled and simultaneously four fully paid-up equity
shares of Rs. 2.50 each have been consolidated into one equity share of Rs.10
each fully paid [after cancellation of 1(one) fractional equity share],
resulting in reduction in the issued, subscribed and paid up equity share
capital of the Company from Rs.2326.321 Millions consisting
The debit balance in the profit & loss account amounting to Rs.64.935
Millions as on 31.03.2005 stands adjusted against the part of the paid up share
capital of Rs.1744.740 Millions so cancelled in above manner and for the
balance of the cancelled capital a Capital Reserve of Rs.1095.385 Millions is
created. The effect of reduction of paid up share capital, adjustment of the
debit balance in the profit & loss account as on 31.03.2005 and creation of
the Capital Reserve will be taken into consideration in the books of accounts
for the accounting year 2006-2007.
MANAGEMENT DISCUSSION AND ANALYSIS
Economy & Paper Industry Outlook:
Indian economy is on the axis of an ever-increasing growth curve and is
growing annually at a stable 8 percent growth rate. Because of the healthy GDP
growth rate, rising foreign exchange reserves, booming capital market, healthy
exports growth and large consumer base coupled with rising per capita income
and young and talented pool of workforce makes India one of the leading
emerging market and attractive destination for foreign investment.
On the backdrop of good growth in economy and favourable government
policies in education and literacy sector, the paper consumption in India is
growing at an impressive rate of around 7% way ahead of the global average of
2.2% and Asian average of 4.5%. The domestic per capita consumption is the
lowest at 6.5 kg compared to the South Asian and the world average of 11 kgs
and 53 kgs respectively. India's paper demand is expected to touch 8mn tpa by
2010. The demand for paper is influenced by various macro-economic factors like
national economic growth, industrial production, promotional expenditure,
population growth and the Government's allocation for the educational sector
and since all these factors showing positive indications, the Indian Paper
industry is expected to grow at a healthy rate. However the healthy demand
growth has to counter the odds of imports due to low custom duty, increasing
prices of raw material and fuel, restrictions of environmental regulations and
upcoming capacity additions in the Indian paper industry. Though, the positive
factors outbids the challenges faced by the Paper Industry, only those larger
paper companies, which demonstrates the ability to integrate its operations,
improve its product quality and strengthen its sales and distribution network
apart from emphasis on brand value will able to survive and thrive in the
future.
The International and domestic Newsprint scenario continues to be
promising. It is expected that the newsprint prices in the international market
will remain firm following higher offtake by the print media in China and other
Asian countries whose economies appear buoyant. The domestic newsprint market
is also likely to stay bullish in near future in anticipation of strong buying
support from the newsprint consuming sectors and greater thrust on education
and literacy by the Government.
Newsprint Industry - An outlook:
The domestic Newsprint industry is in the limelight due to its strong
linkages with India's GDP growth and a firm trend in Newsprint demand. It is
expected that the domestic newsprint market will stay bullish throughout
2006-07. It is also expected that newsprint prices in the international market
might surge further following higher offtake by the print media in China and
other Asian countries.
Considering. the healthy growth rate of Newsprint Industry, it is
expected that the demand for Newsprint, in India, will go up to the level of
about 1.650 Millions tonnes against last year's consumption of about 1.500
Millions tones, thereby further increasing the demand-supply gap by about 0.150
Millions tones. The demand and supply gap is expected to continue since no
major capacity expansion is going to take place in 2006-2007, though some of
the major newsprint manufacturers have drawn up ambitious capacity expansion
plans. In view of strong demand and better realization for Newsprint and
Writing & Printing paper, some of the manufacturers, who were earlier
focusing on other paper segments, have sifted to Newsprint and Writing &
Printing production. But the factors like, rising raw material and lower custom
duty on Newsprint as well as increase in transportation cost are offsetting the
advantage of better realization. To combat this manufacturers are setting their
own captive power generation units as an integral part of paper manufacturing
facility to save power cost and bring down the cost of production. Further they
are also improving the quality of their products through continuous Research
and Development. Newsprint sector is expected to grow at healthy rate of around
7% in near future as capacity utilization has peaked and proposed expansions
will not keep pace with demand growth in the short term.
Company's Performance & Outlook:
During the year under review, the Company has undertaken various
strategic measures and initiatives for streamlining its operations such as,
increasing its capacity utilization, minimizing wastages, installation of new
captive power plant, applying right product mix, improving the quality of its
products, strengthening marketing & sales network, and maintaining healthy
human relations. All these initiatives have yielded impressive results and the
Company was able to show a steady growth in production, sales and earnings.
Through continuous Research and Development efforts the Company was able
to achieve higher fibre yield, reduced the chemical consumption, conserved
energy and maintained the consistency in product quality. The improved
performance of the Company is reflected in higher operating margins.
Considering the strong growth in the economy and firm demand for the
Newsprint, the Company is focusing mainly on production of Newsprint, which
provides better contribution. The Company has also drawn up capacity expansion
plan for adding one more paper machine and continuing the Mill Development Plan
for the existing manufacturing facilities at the Mills, so as to exploit the
demand growth in the Industry. The Company also has undertaken the major
capital restructuring exercise, as detailed in the Directors Report in order to
write off capital not represent by its assets to the extent of accumulated
losses, also to streamline the capital structure to bring it on par with
industry norms, to enhance the earning per share and to enable to service the
capital structure properly in near future.
Opportunities & Threats:
The Company is in the business of manufacturing Newsprint and Writing
& Paper. The growth of Paper industry is in tandem with the growth of the
economy. With Indian economy growing at around 8%, the paper industry is
expected to grow at around same rate. The growing economy and thrust of
government on education and literacy program has created opportunities for the
company to enhance its capacity, improve quality of product and increase profit
margins. With the swing facility of production of Newsprint and/or Writing
& Printing paper, the Company is well insulated from the cyclicity of
demand in different varieties of Paper. With globalization of the economy, the
company finds various opportunities to explore international market by
improving is product quality and strengthening marketing chain.
However the Company does face challenges of increasing competition from
international players, mainly China. Rising cost of quality raw material &
fuel and its cascading effect on the economy and rising cost of borrowings are
also matter of concern. The Management is taking various strategic measures to
reduce manufacturing costs and improve quality of its products to beat the
competition.
Profile
They are India’s largest private sector Newsprint and Printing & Writing Paper manufacturing Company at a single location in India, meeting 22% of India's newsprint production capacity. Set up with an equity of Rs. 2330.000 Millions (US $50 million) and Spread over 450 acres of land in Village Barbhodhan, Gujarat, the Company is managed by a professional Board of Directors having vast experience in related fields.
The mill is equipped to manufacture Newsprint and Printing & Writing Paper from Virgin Pulp as well as Non-Conventional raw materials. The company has also demonstrated deep commitment to the cause of preserving the environment, by setting up a state of the art facility for manufacture of Environ friendly Chlorine free paper.
The fact that the Company has its captive power plant and captive water works, means uninterrupted power and water supply leading to non-stop production.
A contributing feature is the in-house engineering workshop for preventive
maintenance and repairs leading to continuous improvisation of process, quality
and productivity.
Technical collaboration with world leaders in the newsprint industry and aided by a highly qualified and committed workforce of about 500 personnel has now seen us diversify into synergetic industries as well as establish an export presence in Asia and Africa
Products
The demand for Newsprint and Printing & Writing paper in India and many developing countries far exceeds the supply.They have tapped this ready market by focussing our exports to Bangladesh, Sri Lanka, Nepal, etc., in South Asia, the Middle East and West Asia as well as the continents of Africa.
The fact that our plant is located close to the Magdalla Port is of strategic importance when it comes to the import of raw material as well as the distribution of finished products thus obtaining freight advantage to our customers.
Being India's largest private sector Newsprint and Printing & Writing Paper manufacturing company in a single location brings its own responsibilities for maintaining high standards of quality, range and timely delivery schedules.
For instance all our products conform to ISO standards. In terms of range, they offer a wide variety of width sizes, colour codes and special coatings. In newsprint, the range offered is 40-52gsm and in writing/printing paper the range is of 40-120gsm. Colour coded paper is also available for special publications such as the distinctive pink for financial publications; yellow for yellow pages and so on.
The Printing & Writing Papers was included in our product mix from January
2002.
The general product range is as hereunder :
PRODUCT RANGE:
v CREAM WOVE
v SUPER PRINTING
v BASE PAPER FOR COATING
v MAPLITHO
v SS MAPLITHO
v COPIER PAPER
v NEWSPRINT
Emulating the success in the Newsprint
Export business, they have developed the export markets for Printing &
Writing Papers. In a short period of time they have bagged and executed orders
of overseeas customers from countries including Eqypt, Mauratius, Indonesia,
Sri Lanka etc.
CMT REPORT [Corruption, Money
laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the subject of any
formal or informal allegations, prosecutions or other official proceeding for
making any prohibited payments or other improper payments to government
officials for engaging in prohibited transactions or with designated parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation
with Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation
Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.65 |
|
UK
Pound |
1 |
Rs.87.23 |
|
Euro |
1 |
Rs.58.96 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
3 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
NO |
|
TOTAL |
|
38 |
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%)
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 |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
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 |
|
NR |
In view of the lack of information, we
have no basis upon which to recommend credit dealings |
No Rating |
|