MIRA
INFORM REPORT
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Report Date : |
30.12.2008 |
IDENTIFICATION DETAILS
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Name : |
NEPA LIMITED |
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Formerly Known As : |
THE NATIONAL NEWSPRINT AND PAPER MILLS LIMITED |
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Registered Office : |
Nepa Nagar, Khandwa – 450 221, Madhya Pradesh |
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Country : |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
25.01.1947 |
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Com. Reg. No.: |
636 |
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CIN No.: [Company
Identification No.] |
U21012MP1947GOI000636 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BPLN00417E |
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Legal Form : |
Public Limited Liability Company. The Company shares are listed on the
stock exchange. |
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Line of Business : |
Manufacturer and Seller of Newsprint and Caustic Soda. |
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. |
Small |
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Maximum Credit Limit : |
USD 5400000 |
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Status : |
Government Company |
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
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Comments : |
Subject is a Government of India Company. It’s financial position is moderate. Payments are reported as slow but
correct. As the subject is a Government of India company. It can be considered
normal for business dealings at usual trace terms and conditions. |
LOCATIONS
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Registered Office : |
Nepa Nagar, Khandwa – 450 221, |
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Tel. No.: |
91-7325-222134 / 222167 / 42 |
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Fax No.: |
91-7325-222174 / 222176 / 222272 / 222517 / 222165 |
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E-Mail : |
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Website : |
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Branch Offices : |
Located at ·
·
Mumbai ·
·
Hempur |
DIRECTORS
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Name : |
Mr. V.J Reddy |
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Designation : |
Chairman cum
Managing Director |
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Address : |
Nepa Limited, Nepanagar - 450
221, |
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Name : |
Brigadier S K Mutreja |
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Designation : |
Chairman cum
Managing Director |
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Name : |
Dr. Ved Prakash |
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Designation : |
Director |
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Name : |
Mr. K.S. Lather |
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Designation : |
Director |
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Address : |
Deptt. of Heavy Industry Ministry of Heavy Industries and Public Enterprises Govt. of |
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Name : |
Mr. R. Ashokan |
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Designation : |
Director (IFW) |
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Address : |
Department of Heavy Industry Ministry of Heavy Industries and Public Enterprises Govt. of |
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Name : |
Mr. D.K. Kapila |
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Designation : |
Director |
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Address : |
C-4, First Floor, Jangpura Extension, |
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Name : |
C H Murlikrishna |
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Designation : |
Director |
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Audit Committee : |
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Name : |
Mr. D.K. Kapila |
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Designation : |
Chairman |
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Name : |
Dr. Ved Prakash |
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Designation : |
Member |
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Name : |
Mr. R. Ashokan |
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Designation : |
Member |
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Name : |
C H Murlikrishna |
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Designation : |
Member |
KEY EXECUTIVES
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Name : |
Mr. Pushkar Singh |
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Designation : |
Additional Secretary |
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Address : |
Department of Forest Govt. of Madhya Pradesh, Vallabh Bhawan, |
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Name : |
Mr. Sudeep Jain |
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Designation : |
Company Secretary |
BUSINESS DETAILS
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Line of Business : |
Manufacturer and Seller of Newsprint and Caustic Soda. |
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Products : |
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PRODUCTION STATUS
(As on 31.03.2007)
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Newsprint |
MT |
88000 |
88000 |
42110 |
GENERAL INFORMATION
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Bankers : |
·
State Bank of ·
State Bank of ·
Bank of |
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Facilities : |
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Banking
Relations : |
- |
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Auditors : |
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Name : |
·
SBA and Company Statutory Auditors Address
:
·
Kanti and Company Cost Auditors Address
:
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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125000000 |
Equity Shares |
Rs.10/- each |
Rs.1250.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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105968164 |
fully paid up held by |
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Issued, Subscribed & Paid-up Capital : (Central Government)
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No. of Shares |
Type |
Value |
Amount |
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56431850 In cash |
Equity Shares |
Rs.10/- each |
Rs.564.319
millions |
|
47184094 Other than Cash |
Equity Shares |
Rs.10/- each |
Rs.471.841
millions |
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Sub Total |
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Rs.1036.160 millions |
Issued, Subscribed & Paid-up Capital : (Madhya Pradesh Government)
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No. of Shares |
Type |
Value |
Amount |
|
600000 In cash |
Equity Shares |
Rs.10/- each |
Rs.6.000
millions |
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1097290 Other than Cash |
Equity Shares |
Rs.10/- each |
Rs.10.973
millions |
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Sub Total |
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Rs.16.973 millions |
Issued, Subscribed & Paid-up Capital : (Public)
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No. of Shares |
Type |
Value |
Amount |
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654930 |
Equity Shares |
Rs.10/- each |
Rs.6.549
millions |
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105968164 |
Money received towards share capital pending allotment |
|
Rs.10.000
millions |
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Add: (i) Forfeited share amount paid up on 97780 Equity Shares |
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Rs.0.430
million |
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Sub Total |
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Rs.16.979 millions |
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Grand Total |
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Rs.1070.112 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
1070.112 |
1060.112 |
1060.112 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1.101 |
1.104 |
1.108 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1071.213 |
1061.216 |
1061.220 |
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LOAN FUNDS |
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1] Secured Loans |
86.201 |
133.698 |
156.315 |
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2] Unsecured Loans |
2973.816 |
2463.073 |
2006.097 |
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TOTAL BORROWING |
3060.017 |
2596.771 |
2162.412 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
4131.230 |
3657.987 |
3223.632 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
189.926 |
192.434 |
193.598 |
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Capital work-in-progress |
0.000 |
1.385 |
0.000 |
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INVESTMENT |
0.000 |
0.000 |
0.000 |
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DEFERREX REVENUE EXPENDITURE |
0.000 |
0.000 |
31.149 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
96.724
|
128.312 |
131.600 |
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Sundry Debtors |
57.009
|
55.622 |
41.997 |
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Cash & Bank Balances |
209.151
|
107.873 |
81.929 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
68.736
|
74.538 |
75.173 |
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Total
Current Assets |
431.620
|
366.345 |
330.699 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
758.790
|
793.947 |
778.882 |
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Provisions |
0.000
|
0.000 |
0.000 |
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Total
Current Liabilities |
758.790
|
793.947 |
778.882 |
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Net Current Assets |
(327.170)
|
(427.602) |
(448.183) |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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Profit and Loss A/c |
4268.474 |
3891.770 |
3447.068 |
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TOTAL |
4131.230 |
3657.987 |
3223.632 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
1037.560 |
835.156 |
576.754 |
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Township Income |
5.093 |
5.321 |
5.091 |
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Other Income |
87.310 |
33.113 |
7.583 |
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Total Income |
1129.963 |
873.590 |
589.428 |
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Profit/(Loss) Before Tax |
(373.408) |
(430.274) |
(453.222) |
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Provision for Taxation |
0.000 |
0.000 |
0.000 |
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Profit/(Loss) After Tax |
(373.408) |
(430.274) |
(453.222) |
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Imports : |
NA |
38.711 |
11.435 |
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Expenditures : |
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Raw Material Consumed |
496.342 |
386.232 |
259.211 |
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Manufacturing Expenses |
346.101 |
290.462 |
236.083 |
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Employees Remuneration & Benefits |
167.180 |
177.722 |
185.257 |
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Administration Expenses |
27.252 |
20.601 |
12.212 |
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Township and Social Overheads |
31.992 |
31.462 |
29.361 |
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Selling and Distribution Expenses |
23.664 |
18.872 |
13.369 |
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Write offs/Provisions |
1.063 |
9.044 |
1.821 |
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Finance charges |
391.596 |
356.728 |
305.731 |
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Increase / Decrease in Stock |
7.979 |
2.606 |
(10.530) |
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Depreciation & Amortization |
10.202 |
10.135 |
10.135 |
|
Total Expenditure |
1503.371 |
1303.864 |
1042.650 |
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KEY RATIOS
|
PARTICULARS |
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
PAT / Total Income |
(%) |
(33.05)
|
(49.25) |
(76.89) |
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Net Profit Margin (PBT/Sales) |
(%) |
(35.99)
|
(51.52) |
(78.58) |
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Return on Total Assets (PBT/Total Assets} |
(%) |
(60.08)
|
(77.00) |
(86.44) |
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Return on Investment (ROI) (PBT/Networth) |
|
(0.35)
|
(0.41) |
(0.43) |
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Debt Equity Ratio (Total Liability/Networth) |
|
3.56
|
3.20 |
2.77 |
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Current Ratio (Current Asset/Current Liability) |
|
0.57
|
0.46 |
0.42 |
LOCAL AGENCY FURTHER INFORMATION
OPERATION.
In current year, financial condition of the Company was better than previous year
but availability of raw material in the market was a major constraint. Further,
due to collapse of
During the year Economy grade newsprint was made with ONP only, without use of
White material/Exercise Note Book. Manufacture of Standard grade newsprint with
ONP and Chemical recipe/mix furnish of ONP and OINP gave much better machine
runnability and strength. This not only enhanced marginal contribution per ton
but also the confidence of the customers in Nepa Newsprint tremendously.
The Company is focusing on further improvement in productivity and quality of
product to minimise wastages and cost by adopting various methods.
The Company signed Memorandum of Understanding with Department of Heavy
Industry on 26.3.2007 for the financial year 2007-08 after a gap of fifteen
years. It is heartening to note that performance of the Company has achieved
grading 'EXCELLENT'. MOU for 2008-09 has also been signed with DH I on
31.3.2008.
MARKETING
SCENARIO
The financial year 2007-08 was relatively better compared to previous 6-7
years. Efforts made for product quality improvement coupled with aggressive marketing,
sales promotion communication and personalised and prompt customer service etc
have been instrumental in bringing a sea change. Market acceptance of products
of company now is much better. The sales made in March 2008 are highest sales
achieved in one month in last 14 years. Only 8 times in past 51 years of
subject's existence, the sales quantity in a month has been higher than March
2008 sales. The sale for the year was 52005 MT which has been highest in past
six years. Recoveries of old dues from customers have also been made to a great
extent. The closing stock was 853 MT. There has been increase in sales quantity
by 23% and 27% in sales value over the last year.
LEASE DEED OF
LAND
Land at Hempur
The subject of proposed transfer of 803 acres of land at Hempur to State
Government has been referred to a Joint Committee comprising of representatives
front Ministry of Heavy Industries, Government of India, Government of
Uttarakhand and Nepa Limited, for detailed examination and recommending modalities
for handing over process.
Lease Deed of Land at Nepanagar
Draft Lease Deed for retaining 849.90 acres of land for 30 years by the Company
at Nepanagar and Draft Agreement for transfer of 667.18 acres of land (including
124.18 acres of blank area for afforestation) to Forest Department, Government
of Madhya Pradesh has been cleared by the State Government. The subject
relating to execution of lease deed and transfer of surplus land has been
cleared by Department of Heavy Industries and BIFR. The Company has sent its
consent to Forest Department, Government of Madhya Pradesh for signing of
documents. The request of the Company is under consideration of the State
Government.
CONTINGENT
LIABILITIES
·
Estimated amount of Contracts remaining to be
executed on Capital account Rs.0.326
million (Previous Year 1.541)
·
Claims against the company not acknowledged as
debts Rs.124.345 millions (Previous year Rs.142.058 millions).
·
Bank Guarantee outstanding Rs.12.000 millions
(Previous Year 12.000 millions.).
·
Custom/Excise Duty and Upkar Cess Rs.10.613
millions (Previous Year Rs.9.582 millions).
·
A demand dated 30.07.97 (received on 4.8.97) of
Mandi Shulk Rs.3.595 millions raised by the Krishi Upaj Mandi Samiti, Balaghat
towards purchase of Industrial Bamboo from the Balaghat Sector of M.P. Forest
Deptt., during the period from 1988-89 to 1995-96. Writ petition filed before
the High Court challenging the impugned demand.
·
Demand of Rs.2.150 millions raised by MPRVVN,
·
The pay revision effective from 01/01/1992 was
implemented with effect from 19.01.2001 as per Order of Govt. of India dated
19.01.2001. The pay revision of employees effective from 01.01.97 could not be
implemented in view of non-fulfillment of certain conditions prescribed under
DPE’s OM.No.- 1(3)/86.DPE (WC) dt.12th April, 1993 and 17th Jan. 1994. The
estimated liability is not ascertainable.
·
The Company has gone in appeal in the Hon’ble
Supreme Court of India through Special Leave Petition dated 23/06/2005 against
Govt. of Madhya Pradesh Orders for regularisation of Piece Rated Workers
w.e.f. 1.06.1989 and Job Rated Workers
and Badli Workers with effect from 01.05.1998. The impact of implementation of
these orders would be approximately Rs.4.490 millions as on 31.03.2008.
·
Disputed Sales Tax and Entry Tax liabilities on
account of penalty/interest and additional tax imposed as per assessment orders
for the accounting years 89-90, 90-91, 92-93, 94-95 to 97-98, 2003-04 amount to
Rs.17.262 millions against which revision/appeal are pending.
·
Nagar Palika Parishad, Nepanagar vide its letter
No. RA/VI/5.kar/200/1083 dated 15.11.2001 has demanded/claimed Property Tax
under the Provisions of MP Nagar Palika Adhiniyam, 1961. Amount of Rs. 12.564
millions against Property Tax and Rs.0.785 million for the delay in payment has
been worked out on this account as on 31st March 2008. The same has not been
acknowledged by the company.
·
In case of Appeals fixed before Income Tax
Appellate Tribunal /Commissioner of Income Tax (Appeals), the liability is not
ascertainable.
FIXED ASSETS
·
Land (Free Hold)
·
Building
·
Railway Siding
·
Plant and Machinery
·
Water Works
·
Roads and Bridges
·
Tools and Implements
·
Furniture, Fixtures and
Equipments
·
Library Books
·
Vehicles
WEB DETAILS
Major Activities
Subject pioneered manufacturing of
newsprint in the country. It commenced production from April, 1956 with an
installed capacity of 30,000 TPA. The main raw materials were Salai wood and
Bamboo which were available in abundance in the forests around Nepanagar. The
mill embarked upon major expansion programmes in 1967 and subsquently in 1978
and 1989 to increase its installed capacity to 88,000 TPA. Presently, the
Company has switched to Waste paper as basic raw material from original forest
based and has thus been able to reduce cost of production. The in-house
modifications/alterations to the pulping plants have also helped in processing
various quality of waste paper to manufacture Newsprint. Mills is meeting its 100%
requirement from Captive Power generation.
Originally subject was a single product
Company producing standard Newsprint. The Company has produced for the first
time in
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.47.89 |
|
|
1 |
Rs.70.84 |
|
Euro |
1 |
Rs.67.37 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
2 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
4 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
37 |
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 |
|