MIRA INFORM REPORT

 

 

Report Date :

18.09.2007

 

IDENTIFICATION DETAILS

 

Name :

RAMA NEWSPRINT AND PAPERS LIMITED

 

 

Registered Office :

Village Barbodhan, Taluka Olpad, District Surat - 395005, Gujarat

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

10.07.1991

 

 

Com. Reg. No.:

04-19432

 

 

CIN No.:

[Company Identification No.]

L21010GJ1991PLC019432

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMR05789A

 

 

PAN No.:

[Permanent Account No.]

AAACR2499H

 

 

Legal Form :

A public limited liability company.  The company’s shares are listed on the Stock Exchanges

 

 

Line of Business :

Manufacturing of Newsprint, Writing & Printing Papers.

 

 

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

 

Maximum Credit Limit :

USD 12000000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well-established and reputed company having satisfactory track. Directors are reported as experience and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments.

 

The company can be considered normal for business dealings at usual trade terms and conditions.

 

 

LOCATIONS

 

Registered Office/Factory :

Village Barbodhan, Taluka Olpad, District Surat, Gujarat – 395 005, India

Tel. No.:

91-26212-4203 / 4 / 5

Fax No.:

91-26212-4206

E-Mail :

rama@giasbm01.vsnl.net.in, ramanpl@bom6.vsnl.net.in

Website :

http://www.ramanewsprint.com

 

 

Head Office:

181-B, Maker Tower "E", Cuffe Parade, Mumbai - 400 005, Maharashtra, India

Tel. No.:

91-22-218 3791

Fax No.:

91-22-218 0136 / 218 8406

E-Mail :

ramanewsprint@vsnl.com

 

 

Corporate Office:

12th Floor, Nariman Bhavan, Nariman Point, Mumbai – 400021, Maharashtra, India

Tel. No.:

91-22-22020511

Fax No.:

91-22-22821430

E-Mail :

ramanewsprint@ramanewsprint.com

 

 

DIRECTORS

 

Name :

Mr. Shree Kumar Bangur

Designation :

Chairman

Date of Birth :

16.11.1949

Qualifications :

B.Com.

Expertise in specific functional Areas :

An industrialist of repute with extensive experience of paper industry and general management of Corporate & in Industrial affairs. He is also past president of Indian Paper Manufacturers Association. He is also a Committee Member of Federation of Indian Chamber of Commerce & Industry (FICCI), Indian Chamber of Commerce and Bharat Chamber of Commerce.

Directorship in other  Companies:

Ø       The West Coast Paper Mills Limited

Ø       The Diamond Company Limited

Ø       Jayshree Chemicals Limited

Ø       The Kil Kotagiri Tea & Coffee Estates Company Limited

Ø       Mothola Company Limited

Ø       Union Company Limited

Ø       Director in Gloster Telecom Limited,

Ø       Hindustan National Glass & Industries Limited

Ø       Laxmi Asbestos Products Limited

 

 

Name :

Mr. Virendra Bangur

Designation :

Vice Chairman

 

 

Name :

Mr. Vashu J. Ramsinghani

Designation :

Vice Chairman

Date of Birth :

08.09.1943

Qualifications :

S.S.C

Expertise in specific functional Areas :

He is a noted industrialist having extensive and varied experience & knowledge of Finance & Accounting and also expertise in the Management of the Corporate affairs.

Directorship in other  Companies:

Ø       Rama Chemicals (I) Private Limited

Ø       Rama Cylinders Private Limited

Ø       Rama Recycling Private Limited

Ø       Highrise Properties Private Limited

Ø       Vams Properties Private Limited

Ø       Rama Fininvest (I) Private Limited

Ø       R. C. Fertilisers Private Limited

 

 

Name :

Mr. K. L. Chandak

Designation :

Director

 

 

Name :

Mr. Haigreve Khaitan

Designation :

Director

 

 

Name :

Mr. Amit Ramsinghani

Designation :

Director

Date of Birth :

23.10.1981

Qualifications :

B.Sc in Business Administration with specialization in Finance & Economics (Boston-USA)

Expertise in specific functional Areas :

An entrepreneur. Currently, he is working for High Precision Seamless Cylinders for Industrial Gases, CNG & Medical Applications.

Directorship in other  Companies:

Ø       Rama Chemicals (I) Private Limited

Ø       Highrise Properties Private Limited

Ø       Rama Cylinders Private Limited

Ø       Rama Fininvest (I) Private Limited

Ø       Rama Scrap Recycling Private Limited

Ø       Vams Properties Private Limited

 

 

Name :

Mr. V. D. Bajaj

Designation :

Executive Director

Date of Birth :

02.07.1950

Qualifications :

Masters in Commerce-Gold Medalist

Expertise in specific functional Areas :

Joined Paper Industry in the year 1970 as Management Trainee in M/s. J.K. Paper Mills, Rayagada (Orissa) and rose upto the rank of Vice President (Works)- heading the entire unit operations. Joined The West Coast Paper Mills Limited In September, 1998 as President (Corporate) and thereafter Joined Rama Newsprint in the year 2004. Has around 37 years of Industrial Experience.

Directorship in other  Companies:

Speciality Coatings 81 Laminations Limited

 

 

Name :

Mr. Chandravadan Desai

Designation :

Independent Director

 

 

Name :

Mr. M V Gore

Designation :

Independent Director

 

 

Name :

Mr. Nagesh Pinge

Designation :

Director  (ICICI Bank Limited - Nominee)

 

 

Name :

Mr. Ashok Alladi

Designation :

Director (ICICI Bank Limited - Nominee)

 

 

Name :

Ms. Neeta Mukerji

Designation :

Director (ICICI Bank Limited Nominee)

 

 

Name :

Mr. M. P.Taparia

Designation :

Independent Director

Date of Birth :

22:10.1937

Qualifications :

B.A.

Expertise in specific functional Areas :

Expertise and wide experience in business management, marketing operations and actively involved in various industry forums.

Directorship in other  Companies:

Ø       Supreme Petro-chem Limited

Ø       The Supreme Industries Limited

Ø       Jeetmal Chhogmal

Ø       Supreme Capital Management Limited

Ø       Kabra Extrusion Technik Limited

 

 

KEY EXECUTIVES

 

Name :

Mr. Girish Sharma

Designation :

Asst. Vice President (F & A) & Company Secretary

 

 

SHAREHOLDING PATTERN

 

AS ON 30.06.2007

 

Names of Shareholders

No. of Shares

Percentage of Holding

Shareholding of Promoter and Promoter Group2

 

 

Indian

 

 

Individuals/ Hindu Undivided Family

512

0.00

Bodies Corporate

21125341

36.32

Foreign

 

 

Individuals (Non-Residents Individuals / Foreign Individuals)

3039838

5.23

Bodies Corporate

7785193

13.39

Public shareholding

 

 

Institutions

 

 

Mutual  Funds/ UTI

55175

0.10

Financial Institutions / Banks

64934

0.11

Foreign Institutional Investors

217805

0.38

Any Other (specify)

12300

0.02

Non-institutions

 

 

Bodies Corporate

5107773

8.78

Individuals

 

 

Individuals -i. Individual shareholders holding nominal share capital up to Rs 0.100 Millions

15148499

26.05

ii. Individual shareholders holding nominal   share capital in excess of Rs. 0.100 Millions

4922250

8.46

Any Other (specify)

 

 

NRI

507463

0.87

Overseas Corporate Bodies

650

0.00

Trust

6875

0.01

Partnership Firm

200

0.00

Hindu Undivided Family

1250

0.00

Clearing member

161974

0.28

TOTAL

58158032

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of Newsprint, Writing & Printing Papers.

 

 

Products :

Item Code No. (ITC CODE)

Product Description

Newsprint

48010009

Writing & Printing Papers

48026009

 

 

Exports :

 

Countries :

Bangladesh, Sri Lanka, Nepal in South Asia, the Middle East and West Asia as well as the continents of Africa and South Africa.

 

 

Imports :

 

Countries :

Singapore, UAE and USA

 

PRODUCTION STATUS

 

Particulars

Unit

 

Installed Capacity

Actual Production

Newsprint / Writing & Printing Paper

MT

 

132000

133144

Newsprint

MT

 

--

--

Writing & Printing Paper

MT

 

--

--

 

 

GENERAL INFORMATION

 

No. of Employees :

500

 

 

Bankers :

Ø       Bank of India

Ø       Oriental Bank of Commerce

Ø       Central Bank of India

Ø       Axis Bank Limited

 

 

Facilities :

SECURED LOANS

31.03.2007

Rs  in Millions

Rupee Term Loans from:

 

Financial Institutions/Banks:

 

ICICI Bank Limited

1008.260

Industrial Investment Bank of India Limited.

57.136

Life Insurance Corporation of India

126.172

Axis Bank Limited

7000.000

Working Capital Demand Loan and Cash Credit from Banks

321.227

 

 

 

Notes:

 

The Term Loans are secured / to be secured by first charge ranking pari passu on all immovable properties of the company, both present and future and hypothecation of all Company's movable machinery. spares. tools and accessories, present and future, subject to prior charges created on Company's stock of raw materials, stock- in -process, finished goods, consumable stores etc. in favour of the company's bankers for securing borrowings for working capital requirements, and Corporate guarantee by The West Coast Paper Mills Limited

 

Working capital demand loan and cash credit are secured by hypothecation of the Company's stocks of finished goods, stock in process, raw materials, stores and spares, book debts, etc. and by a second charge created/agreed to be created on all immovable properties of the company, both present and future.

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

Haribhakti & Company

Chartered Accountants

 

 

Memberships :

Confederation of Indian Industry

 

 

Associates/Subsidiaries :

Ø       Rama Chemicals (India) Private Limited

Ø       Rama Scrap Recycling Private Limited

Ø       Rama Alloys India Limited

Ø       Rama Fininvest India Private Limited

Ø       Highrise Properties Private Limited

Ø       Vams Properties Private Limited

Ø       Rama Paper Recycling Private Limited

Ø       The West Coast Paper Mills Limited

Ø       Sai Jyoti Paper Products Private Limited

 

 

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

58158032

Equity Shares

Rs. 10/- each

Rs. 581.580 Millions

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2007

31.03.2006

31.03.2005

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

581.580

2326.321

2326.320

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

2461.170

1176.548

1177.098

4] (Accumulated Losses)

0.000

(705.352)

(649.357)

NETWORTH

3042.750

2797.517

2854.061

LOAN FUNDS

 

 

 

1] Secured Loans

2212.795

2406.923

2405.653

2] Unsecured Loans

242.979

264.646

307.049

TOTAL BORROWING

2455.774

2671.569

2712.702

DEFERRED TAX LIABILITIES

0.000

0.000

0.000

 

 

 

 

TOTAL

5498.524

5469.086

5566.763

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

4103.600

4361.670

4302.497

Capital work-in-progress

264.815

66.061

186.494

 

 

 

 

INVESTMENT

0.168

0.168

0.168

DEFERREX TAX ASSETS

292.983

414.716

415.855

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
435.626
453.690

617.263

 

Sundry Debtors
535.029
503.562

355.090

 

Cash & Bank Balances
7.923
8.846

20.099

 

Other Current Assets
0.972
0.135

1.166

 

Loans & Advances
275.464
252.880

254.293

Total Current Assets
1255.014
1219.113

1247.911

Less : CURRENT LIABILITIES & PROVISIONS
 
 

 

 

Current Liabilities
401.930
579.532

578.651

 

Provisions
16.126
13.110

10.351

Total Current Liabilities
418.056
592.642

589.002

Net Current Assets
836.958
626.471

658.909

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

2.840

 

 

 

 

TOTAL

5498.524

5469.086

5566.763

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Sales Turnover

3519.825

3221.064

2947.658

Other Income

38.412

26.847

 

Total Income

3558.237

3247.911

2947.658

 

 

 

 

Profit/(Loss) Before Tax

368.989

(53.245)

341.921

Provision for Taxation

247.255

2.750

134.584

Profit/(Loss) After Tax

121.734

(55.995)

207.337

 

 

 

 

Earnings in Foreign Currency :

 

 

 

 

Export Earnings

32.254

48.770

136.393

Total Earnings

32.254

48.770

136.393

 

 

 

 

Imports :

 

 

 

 

Raw Materials, Chemicals, Stores & Spares

543.520

488.559

676.882

Total Imports

543.520

488.559

676.882

 

 

 

 

Expenditures :

 

 

 

 

Raw Material Consumed

1796.160

1938.938

 

 

Manufacturing and Other Expenditure

792.570

820.797

2586.238

 

Interest

270.527

224.279

 

 

Depreciation & Amortization

329.991

319.967

 

Total Expenditure

3189.248

3303.981

2586.238

 

QUARTERLY RESULTS

 

PARTICULARS

 

 

 

30.06.2007

 Type

 

 

 1st Qtr

 Sales Turnover

 

 

 948.700

 Other Income

 

 

 8.200

 Total Income

 

 

 956.900

 Total Expenditure

 

 

 757.700

 Operating Profit

 

 

 199.200

 Interest

 

 

 82.100

 Gross Profit

 

 

 117.100

 Depreciation

 

 

 85.700

 Tax

 

 

 0.400

 Reported PAT

 

 

 31.000

 

200706 Quarter 1 –

 

Expenditure Includes (Increase)/Decrease in stock in Trade Rs 4.918 million Consumption of Raw Materials Rs 417.822 million Consumption of Chemicals Rs 74.269 million Power & Fuel Rs 119.637 million Staff Cost Rs 29.342 million Other Expenditure Rs 111.739 million Tax Indicates Provision for Fringe Benefit Tax EPS is Basic and Diluted Status of Investor Complaints for the quarter ended June 30, 2007 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 124 Complaints disposed off during the quarter 124 Complaints unresolved at the end of the quarter Nil 1. Provision for Deferred tax for current year will be made in the Annual accounts. 2. The Company's products namely Newsprint and Writing & Printing paper are classified under one segment. 3. Previous period's figures have been regrouped wherever necessary, to make them comparable. 4. The above results were reviewed by the audit committee and taken on the record by the Board of Directors at its meeting held on July 26, 2007. 5. The Statutory Auditors have carried out a 'Limited Review' of the above financial results.

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2007

31.03.2006

31.03.2005

PAT / Total Income

(%)
3.42

1.72

7.03

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
10.48

1.65

11.60

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
6.89

0.95

6.16

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.12

0.02

0.12

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
0.94

1.17

1.16

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
3.00

2.06

2.12

 

 

LOCAL AGENCY FURTHER INFORMATION

 

HISTORY

 

Rama Newsprint & Papers Limited (RNPL), promoted in 1994 is the largest private sector player in the Indian Newsprint sector today, with an annual manufacturing capacity of 1.5 lakh tonnes of newsprint/writing and printing paper. West Coast Paper Mills, the flagship company of S K Bangur Group along with its associates has picked up 34.25 % stake in 2003. 

 
RNPL's manufacturing facility at Gujarat includes a paper mill and a captive power generation unit. This unit uses recycled paper as input material for producing newsprint. Rama Newsprint can alone meet almost 20 per cent of the countrys current newsprint requirements. Besides supplying newsprint to different newspapers, the company also uses part of its capacity for producing PWP depending on market conditions.  

 
The company set up the project in 1994. Since then, it has relied on equity funds for financing its expansion projects. Promoters and their associates were alloted 1500 Millions equity shares on preference basis and ICICI an 0.381 Millions shares in terms of its term loan. Hence, its equity base has now swollen to a high of close to Rs 2326 Millions.  

 
Due to not encouraging scenario for Newsprint the company is continuing with its plan of changing the product mix to Writing and Printing paper.

 

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  :

 

Ø                   Corrtech International Private Limited

Ø                   Comp-Vac Technology Private Limited

Ø                   Furnace & Foundry Equipment Company

Ø                   Hi-Tech Engineering Private Limited

Ø                   H. V. Equipments Private Limited

Ø                   NEC Containers Private Limited

Ø                   Prakash Lubriquipments Private Limited

Ø                   Ricasil Industries

Ø                   Swetha Engineering Limited

Ø                   Shree Laxmi Chemicals

Ø                   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 continuous efforts of the Company to streamline and optimize its operations, upgrading the quality of products and aggressive marketing and brand building has yielded positive results. The impressive growth of the economy over four consecutive years coupled with buoyancy in the demand for the newsprints also helped the Company to increase its production and operational margins. The Company could attain numero uno status in the newsprint paper manufacturing Industries in India by recording highest ever production and sales during the year. Further the Operating Margins also almost doubled from Rs. 488.200 Millions in the year 2005-06 to 969.500 Millions in the year under review. Thus achieving highest Operating Margins in Industry. However, increased cost of borrowing continued to affect the net margin.

 

The Company has successfully upgraded its Effluent Treatment Plant to meet all the required norms for environmental management. Also the Company has completed its first phase of conversion of Washing De-inking Plant Technology to Floatation De-inking Technology. This will help the Company to improve the quality & yield of its pulp. This is the latest technology globally and will result in putting their paper at premium in domestic and

international markets.

 

The Company has registered total production of 133162 MT during the year as compared to 123109 MT in the previous year - growth of 8.17% and the capacity utilization at more than 100%. - During the year, the Company only produced Newsprint, as the margins were higher in Newsprint segment. The Company has registered total sales volume of 130991 MT Newsprint as against 119257 MT and'8413 MT Newsprint and writing & printing paper, respectively in the previous year. The over all sales registered a growth of 2.61%. The Company has added many new customers to its fold.

 

The Company has achieved turnover of Rs. 3519.825 Millions (net of Excise Duty) as compared with turnover of Rs. 3221.064 Millions in the year 2005-06 - increase of 9.28%.

 

RAW MATERIAL

 

The Company use eco-frier\dly 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 rose steeply in the last quarter due to rise in demand.

 

EXPORTS

 

The Company exported goods worth Rs. 35.430 Millions during the year as compared with Rs.52.772 Millions of goods exported during the pervious year ended 31st March 2006. The export was less as there was higher realization in domestic market.

 

EXPANSION PROGRAMME AND FUTURE PROSPECTS

Considering healthy economy and huge demand for its products, the Company is planning an expansion programme for enhancing 'the total production capacity form 132,000 TPA to 3,00,000 TPA by adding one more paper machine and modernizing the existing .plant & machinery.

 

In India, currently, they have a demand of about 16.5 lac TPA of Newsprint Paper. Roughly half of this demand is met through Indigenous supply and the balance is met by imports. The increase in ad-spreads by Corporates, Governments, Institutions and NGOs etc. is helping to further boost up the circulation of the Newspapers and thereby increasing the demand for Newsprint. The Newsprint demand in India is growing at a CAGR of above 12% as compared to the growth rate of about 1% in developed countries.

 

 

The Company will be the biggest beneficiary of this growth by owning largest manufacturing facility at a single site at strategic location.

 

At present RNPL with 1,32,000 MT production per annum enjoys, a market share of about 17% in the domestic Newsprint segment and has well established marketing network and customer base. For the last 2 years, the Company has also strengthened its Process, Engineering, Power block and Project.& Development wing and is now well equipped to undertake the expansion programme.

 

Economy & Paper Industry Outlook

 

The robust growth of the Indian economy continued for the fourth year in succession. India emerging as 2nd fastest growing economy in the world. Consistent double-digit growth in manufacturing, services and sizeable upward revisions saw the Country record 19-year high in GDP growth at 9.4% for 2006-07. The year 2006-07 was characterized by general buoyancy in all segments of the economy with continuous inflow of foreign exchange, the healthy foreign exchange reserves, efficient utilization of capacities by the manufacturing sector and a bullish stock market. In light of various positive developments it is firmly believed that the economy will continue to expand at an impressive rate. The only concern in India is inflation, which the government and the Reserve Bank of India are successfully checking through fiscal and monetary measures.

 

Demand for paper to remain upbeat, growing at a CAGR of 6.6%. With the expected buoyancy in the Indian economy, the demand for paper, which has strong linkages with the economic growth, is expected to grow at a robust pace. The supply in the paper Industry is expected to grow at a CAGR of 6.5%. Larger paper companies are expected to rule the roost, as they will be in a position to cater to the huge demand generated by steady growth due to their capacity additions and they will also be benefited with better operating efficiency and higher operating margins.

 

Newsprint Industry - An outlook

 

Growth in the demand for Newsprint has historically moved in line with GDP growth as its demand is dependant to a large extent on population, increase in the circulation of newspapers & magazines, etc. With India's GDP expected to grow rapidly, the demand for Newsprint is also expected to grow at a fast pace. Currently, they have a demand of about 16.5 LacTPA of Newsprint paper and about half of the supply is met by Imports. The Newsprint demand in India is growing at a CAGR of above 12% as compared to the growth rate of about 1% in developed countries.

 

Increased Literacy and Advertisements has resulted in phenomenal rise in the number of 'newspapers and their

circulation. The number of pages has also increased. 'Print advertising is growing at a faster speed beating the television advertising. All the above factors are leading to higher Newsprint demand. There is a huge gap in demand & supply, which is favourable for newsprint manufacturers.

 

Company's Performance & Outlook

 

During the year, the Company only produced Newsprint, as the margins were higher in Newsprint segment. The consistent efforts of the Company in streamlining its operations, by reducing down time and increasing machine speed, improving quality, strengthening marketing & brand building yielded impressive results and the Company was able to maintain steady growth. The Company has successfully upgraded its Effluent Treatment Plant in line with the increase in production and meets all the required parameters for environmental management. Also the Company has completed its first phase of conversion of Washing De-inking Plant Technology to Floatation De-inking Technology. This will help the Company to improve the quality & yield of its pulp. This is the latest technology globally and will result in putting their paper at premium in domestic and international markets.

 

As Company complied with all the criteria prescribed by Corporate Debt Restructuring Committee (CDR), the Company was allowed to get out of CDR mechanism. The Company also successfully completed its capital restructuring exercise in line with its strategy for sustainable growth plan, I In order to exploit opportunities thrown open by the buoyant economy, increase in circulation of newspapers, magazines and periodicals, enhancement of advertisement budget by the corporate, upswing in literacy rate, the Company is planning for a major expansion programme by enhancing the total production capacity from 132000 TPA to 300000 TPA. The Company is poised for a better future, which will ultimately lead to creation of .wealth for all the stakeholders.

 

SWOT Analysis:

 

Strengths:

1. The Company has the most strategically located plant compared to other large paper mills.

2. The Company's products are well accepted by the markets.

3. The Company has an excellent Customer base and Dealer/ Distributors network.

4. The Company's machines are capable of producing both newsprint and writing & printing grades of paper. The

Company can take advantage of this swing facility on its machines when the market situtation demands.

 

Opportunities:

 

Their Country, is currently witnessing rapid industrial growth. The Government is laying emphasis on literacy growth. The corporate are allocating higher budgets for advertisement spending. Thus, the demand for both Newsprint and Writing & Printing papers is growing on a sustained basis. The Company being the largest producer of Newsprint and planning to further expand its operations at present location with swing facility on its machine, can very well exploit these opportunities.

 

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 them 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 their 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 their 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 their 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 their 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 their product mix from January 2002.

The general product range is as hereunder :

 

Cream Wove         

Super Printing

Base Paper For Coating

Maplitho

Ss Maplitho

Copier Paper

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 overseas 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 records 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.39.87

UK Pound

1

Rs.80.11

Euro

1

Rs.56.19

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

6

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

7

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

6

--LEVERAGE

1~10

6

--RESERVES

1~10

6

--CREDIT LINES

1~10

6

--MARGINS

-5~5

-

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

54

 

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.

 

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

 

 

 

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