MIRA
INFORM REPORT
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Report Date : |
24.09.2008 |
IDENTIFICATION
DETAILS
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Name : |
THE WEST COAST PAPER MILLS LIMITED |
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Registered Office : |
Bangur Nagar, Dandeli – 581 325, Uttara Kannada District, Karnataka |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
18.08.1970 |
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Com. Reg. No.: |
08-1936 |
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CIN No.: [Company
Identification No.] |
U02101KA1970PLC001936 / L02101KA1970PLC001936 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRT03385E |
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PAN No.: [Permanent
Account No.] |
AAACT4179N |
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Legal Form : |
Public Limited Liability Company. The company's shares are listed on
Stock Exchange |
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Line of Business : |
Manufacturers of Writing, Printing and Packaging Paper. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 30000000 |
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Status : |
Very Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company having satisfactory
track. Directors are reported as experienced 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
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Registered Office : |
P B No. 5, Bangur Nagar, Dandeli – 581 325, Uttara Kannada District - 581 325, Karnataka, India. |
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Tel. No.: |
91-838-2331391-395 ( 5 Lines) /8284-231391-395 |
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Fax No.: |
91-838-2331225 / 8284-231225 / 230443 / 231250 / 232148 |
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E-Mail : |
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Website : |
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Corporate Office : |
Chandra Kiran 4th Floor, 10-A, Kasturba Road, Bangalore - 560 001, Karnataka, India |
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Tel. No.: |
91-80-22231828 to 1837 & 080-4112001 to2006 |
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Fax No.: |
91-80 -22241916 /
22231838 |
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E-Mail : |
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Websites: |
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Zonal Offices : |
Mumbai Shreeniwas House, Hazarimal Somani Marg, Mumbai – 400 001, Maharashtra, India Tel. No. 91-22-22070041 - 44 / 22079101 / 22070958 Fax No.: 91-22-2207 0042 / 2207 0001 Telex : 011 6421 West IN E-Mail: wcpm.west@westcoastpaper.com Chennai Flat No. 7, 12/13, Kanaksari Nagar, St. George Cathedral Lane, Off Cathedral Road, Chennai - 600 086, Tamilnadu, India Tel No.: 91-44-28111654 / 299 / 4235 9709 Fax No.: 91-44-28117013 E-Mail: wcpm.west@westcoastpaper.com wcpm.south@westcoastpaper.com Delhi Vishnu Bhawan, 1st Floor, 5, Ansari Road,
Daryaganj, New Delhi - 110 002, India Tel No.:91-11-23269806 / 2327 3679 / 23246254 Fax No.:91-11-23284913 Telex : 031 6199 WECO IN E-Mail: wcpm.north@westcoastpaper.com Bangalore Chandrakiran" 4th Floor, 10/A
Kasturba Road, Bangalore 560 001, Karnataka, India Kolkata
1. 31
Chowringhee Road, 1st Floor, Kolkata 700 016, West Bengal, India 2. 3, Pretoria Street, 2nd Floor, Kolkata - 700 071, West Bengal, Kolkata |
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Factory 1 : |
Paper & Paper Board and Duplex Board: Bangur Nagar, Dandeli – 581 325, Uttara Kannada District, Karnataka, India |
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Tel. No.: |
91-8383-2289691 / 95 |
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Fax No.: |
91-8383-289225 |
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Factory 2 : |
Telecom Cable Plant Sudarshan Telecom, Plot No. 386/387 KIADB, Electronic City Hebbal, Industrial Area, Mysore – 570 016, Karnataka, India |
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Tel. No.: |
91-821-2404060 |
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Fax No.: |
91-821-2404061 |
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E-Mail : |
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Branches : |
Located at : · Dendali North, · Kanora District, Karnataka · Mumbai · Chennai · Kolkata · New Delhi · Mysore |
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Cable Unit : |
Sudarshan
Telecom Cable Unit : Sudarshan
Telecom, Plot No.386/387 KIADB, Electronic City Hebbal, Industrial Area,
Mysore - 570 016 |
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Tel. No.: |
91-821-2404060 |
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Fax No.: |
91-821-2404061 / 2404062 |
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E-Mail : |
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Website : |
DIRECTORS
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Name : |
Mr. S. K. Bangur |
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Designation : |
Chairman and Managing Director |
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Name : |
Mrs. Shashi Devi Bangur |
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Designation : |
Director |
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Name : |
Mr. V. N. Somani |
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Designation : |
Director |
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Name : |
Mr. P. N. Kapadia |
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Designation : |
Director |
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Name : |
Lt. Gen. (Retd.) K. S. Brar |
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Designation : |
Director |
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Name : |
Mr. Bodhiswar Rai |
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Designation : |
Director |
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Name : |
Mr. C. K. Somani |
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Designation : |
Director |
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Name : |
Mr. K. L. Chandak |
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Designation : |
Executive Director |
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Age : |
57 years |
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Qualification : |
B.Com., F.C.A. |
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Experience : |
31 years |
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Date of Appointment : |
18.12.1971 |
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Name : |
Mr. R. N. Modi |
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Designation : |
Director |
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Name : |
Mr. Saurabh Bangur |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Ratan Navlakha |
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Designation : |
Company Secretary |
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Name : |
Mr. P K Mundra |
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Designation : |
Company Secretary |
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Name : |
Mr. V K Bajaj |
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Designation : |
President |
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Management Team |
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Paper and Duplex Board Division, Dandeli :- |
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Name : |
Mr. V. D. Bajaj |
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Designation : |
President (Corporate) |
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Name : |
Mr. B. S. Mundra |
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Designation : |
President (Technical) |
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Name : |
Mr. J. S. Sanwal |
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Designation : |
Joint President (Operations) |
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Name : |
Mr. B. N. Asopa |
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Designation : |
Vice President (Commercial) |
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Name : |
Mr. Ratan Navlakha |
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Designation : |
Vice President (Finance) |
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Telecom Cable Division, Mysore, Karnataka :- |
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Name : |
Mr. V. Bangur |
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Designation : |
Chief Executive Officer |
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Name : |
Mr. A. Tanwani |
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Designation : |
Vice President (Works) |
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Name : |
Mr. J.K. Mandelia |
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Designation : |
President (Corporate) |
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E-Mail: |
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Name : |
Mr. V. Subbiah, |
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Designation : |
VP (Marketing) |
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E-Mail: |
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Name : |
Mr. V.V. Bhatt, |
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Designation : |
AVP (Marketing) |
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E-Mail: |
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Name : |
Mr. M.L. Swaika, |
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Designation : |
GM Purchase |
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E-Mail: |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders (As on
30.06.2008) |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group |
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Indian |
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Individuals/Hindu Undivided Family |
3718025 |
6.48 |
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Central Government / State Government (S) |
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Bodies Corporate |
23274780 |
40.57 |
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Public shareholding |
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Institutions |
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Mutual Funds/UTI |
1600 |
--- |
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Banks |
610385 |
1.06 |
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Insurance Companies |
4025070 |
7.02 |
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Foreign Institutional Investors |
2540965 |
4.43 |
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Non-institutions |
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Bodies Corporate |
5849641 |
10.19 |
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Trusts |
3400 |
0.01 |
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Individuals – i. Individual shareholders holding nominal share capital up to Rs.
0.100 Millions |
10957697 |
19.10 |
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ii. Individual shareholders holding nominal share capital in excess of
Rs. 0.100 Millions |
2531085 |
4.41 |
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Any Other |
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Clearing Member |
65354 |
0.11 |
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Foreign Nationals |
12050 |
0.02 |
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Foreign Companies |
3599171 |
6.27 |
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NRI |
186107 |
0.32 |
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TOTAL |
57375330 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers of Writing, Printing and Packaging Paper. |
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Products : |
Generic Names of
the Principal Products / Services of the Company are:-
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PRODUCTION STATUS
(As on 31.03.2008):-
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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Paper/Paper Board and Multilayer Board |
M.T. |
180000 |
169891 |
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Optical Fibre Cables |
Km |
83500 |
22829 |
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JFTC |
Ckm. |
1542000 |
--- |
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Wind Mills |
M.W / Kwh |
1.75 |
2042633 |
GENERAL INFORMATION
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Customers : |
· Indian Aluminium Company Limited . · PG Foils Limited · Godfrey Philips India Limited . · Kores (India) Limited . · Paper Products Limited . · State Bank of India, Bank of Baroda, Central Bank of India, Syndicate Bank · Canara Bank, Punjab andSindh Bank, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Standard Chartered Bank, HSBC, etc. · Security Printing Press, Government of India, Hyderabad and Nasik · Madras Security Printers · Calcutta Security Printers · Manipal Power Press · Speciality Coatings and Laminations Private Limited, Gurgaon · Gateway Coated Papers, Haryana · Surya Coats Private Limited, Ahmedabad · Sarda Coats, Mumbai · Malhotra Book Depot, Delhi · Rohit Pulp and Paper Board Private Limited ., Mumbai · Lakhanpal Batteries, Baroda · Kiran Datta Forms, Mumbai · Vijay Flexible Containers - VFC · New Man Press, Chennai · Reliance Printers, Bangalore · Swadhya Printers and Packaging, Indore · Cartoon World, Cochin · Coromandal Cartons andContainers, Visakha Pattanam · Eagle Flask Ind. Limited, Tategaon · Polite Printers, Goregaon · Metal Box (I) Limited, Mumbai ·
21st Century, Mumbai |
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No. of Employees : |
About 1500 |
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Bankers : |
Ř Central Bank of India, Uttara Kannada District, Karnataka Ř Oriental Bank of Commerce, Uttara Kannada District, Karnataka Ř State Bank of Mysore, Uttara Kannada District, Karnataka Ř Syndicate Bank, Uttara Kannada District, Karnataka Ř Export – Import Bank of India Ř ICICI Bank Limited Ř Industrial Development Bank of India Limited |
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Facilities : |
Secured Loans
(Rs. In millions) :
Unsecured Loans
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Ř Baltliboi & Purohit Chartered Accountants cost
auditors
Ř Mr. S. Sankaranarayanan Chartered Accountants Legal Advisors Khaitan and Company |
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Associates/Subsidiaries : |
Associates v Fort Gloster Industries Limited, Kolkata, West Bengal v Rama Newsprint and Papers Limited v Shree Digvijay Cement Company Limited v Digvijay Investments Limited v Crest Cables Limited v Speciality Coatings & Laminations Limited v Digvijay Finlease Limited Subsidiaries v Speciality Coatings & Laminations Limited, Gurgaon, Haryana (SPCL) v Wescom International Fze, Sharjah, UAE (Wescom) |
CAPITAL STRUCTURE
(As on
31.03.2008):-
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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150000000 |
Equity Shares |
Rs. 2/- each |
Rs.300.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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57375330 |
Equity Shares |
Rs. 2/- each |
Rs. 114.751 millions |
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Equity Shares Warrant |
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Rs. 27.750
million |
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Total |
Rs. 142.501 millions |
NOTES:-
Out of the above
Equity Shares –
a) 7500000 Shares out of the Issued and Subscribed were allotted as Bonus shares by capitalisation of General Reserve.
b) 2325000 Shares represent Global Depository Receipts.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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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 |
142.501 |
89.407 |
89.407 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
3877.070 |
2232.375 |
1724.631 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
4019.571 |
2321.782 |
1814.038 |
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LOAN FUNDS |
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1] Secured Loans |
2009.469 |
295.939 |
669.500 |
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2] Unsecured Loans |
2041.200 |
1389.504 |
871.142 |
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TOTAL BORROWING |
4050.669 |
1685.443 |
1540.642 |
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DEFERRED TAX LIABILITIES |
415.883 |
404.852 |
410.312 |
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Present Value of Lease |
11.168 |
55.011 |
118.111 |
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TOTAL |
8497.291 |
4467.088 |
3883.103 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2201.605 |
2098.897 |
2273.830 |
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Capital work-in-progress |
3099.144 |
161.905 |
1.073 |
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ASSETS TAKEN ON LEASE [Net Block] |
11.168 |
55.011 |
118.111 |
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INVESTMENT |
550.464 |
460.464 |
460.464 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
1127.272
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1193.022 |
1121.467
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Sundry Debtors |
428.938
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435.787 |
384.056
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Cash & Bank Balances |
1863.203
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601.995 |
145.936
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Other Current Assets |
0.000
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0.000 |
0.000
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Loans & Advances |
589.197
|
528.861 |
439.683
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Total
Current Assets |
4008.610
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2759.665 |
2091.142 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
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1068.854 |
1061.517 |
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Provisions |
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Total
Current Liabilities |
1373.700
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1068.854 |
1061.517 |
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Net Current Assets |
2634.910
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1690.811 |
1029.625
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
8497.291 |
4467.088 |
3883.103 |
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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 |
5832.271 |
5545.374 |
5951.515 |
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Other Income |
156.585 |
60.608 |
158.685 |
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Total Income |
5988.856 |
5605.982 |
6110.200 |
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Profit/(Loss) Before Tax |
939.564 |
745.406 |
322.734 |
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Provision for Taxation |
120.531 |
80.760 |
2.440 |
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Profit/(Loss) After Tax |
819.033 |
664.646 |
320.294 |
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Export Value |
189.131 |
246.575 |
214.979 |
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Imports : |
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Raw Materials |
401.146 |
237.654 |
375.017 |
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Stores & Spares |
71.153 |
67.789 |
38.459 |
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Capital Goods |
958.219 |
0.289 |
33.399 |
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Total Imports |
1430.518 |
305.732 |
446.875 |
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Expenditures : |
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Manufacturing Expenses |
1688.568 |
1746.753 |
1732.283 |
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Administrative Expenses |
450.560 |
168.639 |
360.602 |
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Raw Material Consumed |
2177.723 |
1960.860 |
2009.079 |
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Salaries, Wages, Bonus, etc. |
520.378 |
459.520 |
NA |
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Payment to Auditors |
NA |
NA |
450.994 |
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Increase/(Decrease) in Finished Goods |
[25.708] |
52.845 |
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Interest |
33.500 |
47.732 |
94.728 |
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Depreciation & Amortization |
204.271 |
424.227 |
369.508 |
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Other Expenditure |
NA |
4860.576 |
770.272 |
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Total Expenditure |
5049.292 |
4860.576 |
5787.466 |
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QUARTERLY RESULTS
|
Year |
30.06.2008 |
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Type
|
1st
Quarter |
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Sales Turnover |
1534.000 |
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Other Income |
10.300 |
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Total Income |
1544.300 |
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Total Expenditure |
1263.800 |
|
Operating Profit |
280.500 |
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Interest |
-2.100 |
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Gross Profit |
282.600 |
|
Depreciation |
52.500 |
|
Tax |
26.700 |
|
Reported PAT |
203.400 |
KEY RATIOS
|
Year |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
0.92 |
0.82 |
1.14 |
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Long Term Debt-Equity Ratio |
0.81 |
0.67 |
0.90 |
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Current Ratio |
1.69 |
1.35 |
1.17 |
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TURNOVER RATIOS |
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Fixed Assets |
1.36 |
1.33 |
1.32 |
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Inventory |
5.63 |
5.35 |
4.85 |
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Debtors |
15.10 |
15.11 |
15.49 |
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Interest Cover Ratio |
18.02 |
12.76 |
3.47 |
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Operating Profit Margin(%) |
18.37 |
16.44 |
11.50 |
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Profit Before Interest And Tax Margin(%) |
15.24 |
13.06 |
5.41 |
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Cash Profit Margin(%) |
15.68 |
14.12 |
10.04 |
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Adjusted Net Profit Margin(%) |
12.55 |
10.73 |
3.95 |
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Return On Capital Employed(%) |
16.42 |
21.47 |
8.86 |
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Return On Net Worth(%) |
25.94 |
32.14 |
13.84 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was incorporated on 25th March, 1955 at Dandeli in
Karnataka State having Company Registration Number 1936.
The company, belonging to the Bangur group, is managed by Chairman S. K.
Bangur. The company came out with a Rs. 533 millions right issue at a premium
of Rs. 30/- in October, 1991 to part finance a modernisation / renovation
programme for technology upgradation, diversification and energy conservataion.
BUSINESS
The company is engaged in manufacturing and selling of uncoated paper
and paperboards used for writing and printing, paperboards sheets or rolls and
optical fibre cables.
The company’s paper mill – the product mix includes writing, printing
and packing paper was commissioned with an installed capacity of 18000 tonnes
p.a. at Dandeli in the Uttar Kannada district of Karnataka in 1959. Today it
has an installed capacity of 157750 tonnes p.a. The country is presently
engaged in rasing this installed capacity to 163750 tpa by the end of 2002-03.
It has diversified into the production of OFC in 1996 and JFTC in 2001
through Sudarshan Telecom, its Mysore based division. The OFC plant’s installed
capacity is being raised to 42000 KM p.a. at cost of Rs. 122.500 millions while
the JFTC plant possesses and annual installed capacity of 1.542 millions CKM.
The company set up six windmills with an installed capacity of 1.75 MW
in TN and the majority of this power purchased by TNEB. Expansion,
Modernisation and Diversification Programme for the Paper Division at Dandeli
has been taken up with a cost of Rs. 214.500 millions (of which 65% had been
completed by the end of 2001-02). In 2000-2001 the company has been accredited
with ISO 9001 Certification from Det Norske Veritas, The Netherlands.
During last quarter of 2001-02 the new 33000 TPA Duplex Board Machine
was commissioned by the company and the company looks forward to increase the
market share in the duplex board segment in the near future. The company is
taking necessary steps for setting up 1250 sugar mill with co-generation plant
of 7.5 MW at Kesoralli village, Haliyal Taluka. The total project cost is Rs.
480 millions and is expected to be commissioned for the sugar season 2004.
PERFORMANCE:
During the year the company, was able to fortify the peak level
performance achieved during previous years. It also successfully set new
benchmarks in corporate performance, drawing sustenance from the upswing in
sales realisations, reduced power and fuel costs, lower maintenance and finance
charges conjoining improved working results of the Cable Division. To put the
performance in a clearer perspective, this was achieved during lower volume of
production consequent to stagnation of capacities, continual increase in cost
of raw materials, furnace oil, and such, coupled with an upward revision in the
wage bill, on account of a fresh labour agreement inked during the year.
The Company posted an all-time high gross profit of Rs.
1143.8 millions as against Rs. 955.2 millions in the previous year, which is an
increase of Rs.188.6 millions or a 20% growth. The net profit increased by 23%
from Rs. 664.6 millions to Rs. 819 millions or by Rs. 154.4 millions.
DIVISIONWISE
PERFORMANCE:
a) Paper and Duplex Board
Divisions:
The production of paper, paperboard and duplex board
decreased from 1,78,871 MT in 2006-07 to 1,69,891 MT in 2007-08, i.e., by 8,980
MT.
Simultaneously, the sale of paper, paperboard and duplex
board reduced from 1,79,915 MT in 2006-07 to 1,70,193 MT in 2007-08, i.e., by
9,722 MT. This decrease was on account of lower volumes of production.
Nevertheless, there was an increase in turnover from Rs. 5939.9 millions in
2006-07 to Rs. 5965 millions in 2007-08 (both inclusive of excise duty), due to
better sales realisation. The production was lower due to shutdown of one of
the Duplex Board Machines for the grinding of the MG cylinder for a period of
30 days.
Further, the Company has taken up production of Pulp Sheet
on one of the Duplex Board machines, which is captively consumed and therefore
not accounted for in the production. Production of Pulp Sheet has therefore
reduced the dependency on costly imported Hardwood Pulp, which has also added
to the profitability of the Company.
b) CABLE DIVISION - MYSORE:
Optical Fibre Cable:
There was increase in the
production and sales during the year at 22,829 km and 22,836 km, as against
7,060 km and 7,105 km in the previous year, respectively. The turnover, in
terms of value, amounted to Rs. 556.6 millions as against Rs. 93.6 millions
(both inclusive of excise duty) during the previous year. The increase in the
production and sales was on account of a good order flow from private telecom
operators.
J.F.T.C. PLANT
The J.F.T.C. plant was not
operated through out the year for want of orders. Production last year was
1,65,407 Ckm. However, part of its facilities were utilized for production of
Optical Fibre Cable. The turnover amounted to Rs. 0.198 million on account of
the sale of opening stock of 119 Ckm as against sale of 165288 Ckm worth Rs.
154 millions (both inclusive of excise duty), in the previous year.
Exports:
The export of paper and paperboard and duplex board decreased from 6,706 MT
worth Rs. 216.6 millions (FOB) in 2006-07 to 5,396 MT worth Rs. 163.2 millions
(FOB) in 2007-08 due to unremunerative rates. 1,204 km of Optical Fibre Cable
worth Rs. 25.9 millions (FOB) was exported in 2007-08 compared to 986 km of
Optical Fibre Cable and 410 Ckm of J.F.T.C. Cable exported both worth Rs. 30
millions in 2006-07.
Raw Materials:
The Company procured 3.40 lac tonnes of wood in the year as
against 3.86 lac tonnes in the previous year, which resulted decreased stock of
wood. The cost of wood has gone up consecutively in the fifth year by 7%, due
to an increase in royalty, procurement rates, as well as freight charges. The
transportation cost of raw material by road as well as by rail has increased
due to hike in rates. Procurement rates are also likely to go up further in the
current year due to stiff competition.
The Company is concentrating on greening wastelands in the core area, within
150 km radius of the factory and has already executed 10,000 acres under its
core plantation scheme. It has plans to cover 45,000 acres of land by 2012 for
which identification has been completed. Distribution of seedlings to the
farmers is a continued process, which will allow an addition to the overall availability
of raw material. The Company distributed 16.5 millions seedlings during
2007-08.
EXPANSION
PROGRAMME - Rs. 11000 millions:
Tenaciously pursuing its long term vision of emerging as the
global player in the paper industry, the Company's expansion programme with an
investment of Rs. 11000 millions to increase its production capacity to
3,20,000 TPA, is progressing satisfactorily in accordance to the planned time
frame with stage-wise execution and implementation of projects. The Company has
placed orders for the major equipments required for the Fibreline, Chemical
Recovery Plant, Paper Machine and Utility sections with the state-of-the-art
technology considering manufacturing of quality products, to achieve energy
efficiency in an eco-friendly atmosphere. The action on ordering of balance
items is also being taken as per the requirement. Civil work is progressing for
all sections simultaneously. Metso Paper Sundsvall, AB, Sweden have already
completed the supply of all the equipments for Fibreline and four super batch
digesters along with other equipment have been duly installed. The suppliers
have also started delivering equipment for the Chemical Recovery Plant. The
erection work of mechanical equipment for black liquor evaporators, Chemical
Recovery Boiler, Rotary limekiln is in progress. Barring unforeseen
circumstances, it is expected that the Fibreline along with the new equipment
in the Chemical Recovery section will be commissioned by March 2009. The new
paper machine together with new power plant is also expected to be commissioned
by September 2009.
The Company has made a financial closure of the project by arranging for a
Foreign Currency Loan of US$ 40 million with the International Finance
Corporation (IFC), Washington, and for External Commercial Borrowings (ECBs) of
US$ 125 million with the syndicate led by ICICI Bank Limited. and State Bank of
India. IFC, Washington, has disbursed the full amount of US$ 40 million on 31st
March, 2008. The ICICI Bank-led syndicate has disbursed US$ 26 million on 9th
May, 2008 and US$ 10 million on 23rd June, 2008. They will be directly
releasing payment for imported equipments in future.
EQUITY:
The Company has planned to raise Rs. 2000 millions to part-finance the
expansion/modernisation programme. Accordingly, warrants worth Rs. 500 millions
were allotted to the entities in the promoter group, out of which 2617650
equity shares of Rs. 2 each at a price of Rs. 85 per share (including a premium
of Rs. 83 per share) amounting to Rs. 222.5 millions have been issued to them
on 25th March, 2008 on their exercising the option of conversion of warrants.
The balance 3264700 warrants are expected to be converted into equity shares by
the promoter group in the current year.
The Company also raised Rs. 354.7 millions by way of Global Depository Receipts
(GDRs) in November 2007 and Rs. 499.9 millions by way of Qualified
Institutional Placement (QIP) in December 2007, totaling to Rs. 854.6 millions
(10054280 shares of Rs. 85 each - including a premium of Rs. 83 per share). The
balance amount of Rs. 645.4 millions could not be raised due to the volatility
in the stock markets. Necessary actions are being taken to raise the balance
amount at the earliest, for which fresh approval of the members is being sought
by way of a special resolution. The proceeds from the equity issues have been
utilized for expansion-cum-modernisation programme. There is no deviation from
the purpose stated in the offer documents.
Equity Shares of the face value of Rs. 10 each were subdivided into 5 equity
shares of Rs. 2 each during the year and the 'record date' for the same was 2nd
November, 2007. The trading of the sub-divided shares commenced from 26th
October, 2007.
ISO 9001 (2000) QMS / ISO 14001 (2004 )
EMS:
The Company continues to maintain its Certification as per
International Standards ISO 9001:2000 Quality Management System and ISO
14001:2004 Environmental Management Systems from Det Norske Veritas, the
Netherlands.
The Company is fully committed to continually improve upon
the implemented QMS, EMS and simultaneously ensure full compliance with
relevant environmental enactments, which apply not only to its existing
operations but also as a commitment towards corporate responsibility on
environmental protection and fulfillment of corporate governance.
OHSAS 18001:2007:
The Company has already geared up the necessary systems and
processes to comply with OHSAS 18001 in tandem with Company's own occupational
health and safety management system for earning the international OHSAS
certification to the revised standard of OHSAS 18001:2007. The OHSAS 18001
certification process has been planned as a part of an integrated management
system with the two existing QMS and EMS certifications and will further
reinforce their commitment to comply with health and safety standards and
legislations.
RAMA
NEWSPRINT and PAPERS LIMITED.:
Rama Newsprint and Papers Limited . (RNPL) has achieved
highest ever production of 1,38,771 MT (105% capacity utilisation) as against 1,33,144
MT (101% capacity utilisation) in the previous year. The working results of
this Company were, however, affected due to unremunerative prices and increase
in the cost of waste paper cuttings and other inputs, which has resulted into
lower Gross Profit of Rs. 361.5 millions as against Rs. 699 millions in the
previous year. Net Profit of Rs.10.7 millions was achieved in the year as
against Rs. 245.2 millions in the previous year.
The Company holds 36.32% of the equity share capital of Rama Newsprint and
Papers Limited. (RNPL) with an investment of Rs. 454.100 millions (market value
Rs.629.5 millions as on 31.3.2008). The voting rights held by the Company are
54.94%, including the voting rights acquired as per the shareholders agreement
dated 6.9.2003 with Vashu Group (Shri Vashu J. Ramsinghani and persons acting
in concert).
RNPL has discharged term debt of Rs. 406.3 millions in 2007-08;
consequently, the amount of Corporate Guarantee given by the Company has
reduced to Rs.1485.3 millions against realigned debt of Rs. 2100 millions.
Further RNPL has made payment of Rs. 51.6 millions in the current year by which
the Corporate Guarantee now stands further reduced to Rs. 1433.7
millions.
Future
plan of action
Various Research
Projects are taken up keeping in view of forth coming expansion work.
· Various Research and Development works will be taken up to select the best available technology for the new project in the offing.
· Projects will be taken up to improve the pulp yield and quality.
· Improvements in bleaching sequence by introducing the oxygen dezincification, reducing the use of elemental Chlorine, leading to lowering of effluent load on the ETP.
· Better value added products in paper as well as duplex board divisions.
MANAGEMENT'S
DISCUSSION AND ANALYSIS
INDIAN
ECONOMY OVERVIEW:
Indian economy continues to expand rapidly. It is the 12th
largest economy in the world with a GDP of around US$ 1 trillion. The country
is the second fastest growing in the world with a GDP rate of 9% in 2007-08.
With rising foreign exchange reserves, a booming capital market, largest
population of a working age and a rapidly expanding FDI inflows, India is
expected to emerge as the third largest economy in the world by 2025 after USA
and China as per Goldman Sachs.
The economy has been growing at
an average growth rate of 8.8% in the last four fiscal years (2003-04 to 2006
-07) with the 2006-07 growth rate of 9.6%
being the highest in the last 18
years. Significantly the industrial and service sectors have been contributing
a major part of this growth, suggesting transformation underway in the Indian
economy.
INDUSTRY
OVERVIEW:
Paper
industry
The
paper industry can be broadly categorized into three segments:
1. Writing and printing
2. Industrial paper
3. Newsprint Writing and printing:
This segment includes varieties of paper, normally under 120
GSM (grams per square meter), that are used primarily for writing (stationery)
purposes and printing (books, notebooks, share application forms, etc). The various
varieties of writing and printing (W and P) paper starting from the lower end
of the value chain are creamwove, maplitho, copier and coated paper. While the
high quality paper segments have been gaining a greater share, the low quality
segments still account for a major share of the market.
The growth in the demand for paper in this segment depends, to a large extent,
on the growth in population, level of literacy, public and private spending on
education, level of business activity and growth in the printing
industry.
Industrial Paper:
This includes kraft paper, duplex boards, grey and white
board, and one side machine glazed paper. This paper is used for various
industrial purposes. The consumption of industrial paper is closely linked
to:
1. Growth in the packaging industry.
2. Industrial Production.
3. Development in packaging technology and substitution by
other materials.
The different varieties of paperboards include coated/ uncoated duplex, chromo
and triplex boards. Kraft paper is available in various varieties,
differentiated by properties of strength and grammage, among other
criteria.
Newsprint:
Newsprint is mainly used in the printing of newspapers and magazines.
Although used for printing purposes, newsprint is considered
a separate end-use category because of the marked difference in its production
process as compared to other W and P varieties of paper. Besides, newsprint is
consumed in very large volumes vis-a-vis other varieties of paper.
Global overview:
Paper industry is the worlds' second largest by value and
seventh largest by employment. The world consumes about 358 million tonnes of
paper. While North America and Europe jointly consist of more than 50% of the
total consumption, China, Japan and India consist of 15%, 10% and 2% of the
total consumption respectively.
Indian
Overview:
World paper demand growth is subdued and is between 2-3%,
against India's 6%. India stands 15th in terms of global paper and paperboard
manufacturing capacity. Indian market for paper is expected to grow at about 6%
p.a. from 2005-2020E. This high growth rate has been possible by a strong
emphasis on literacy, increase in per-capita income, increasing use of
photocopiers and printers, higher export growth and demand for high quality
packaging.
Indian Paper, Board and Newsprint industry is very fragmented with more than
550 mills manufacturing 7.4 million tonnes of paper, board and newsprint.
According to Hawkins Wright, the total demand will grow from 8.4 million tonnes
to 12.9 million tonnes in the period 2007-2012. Amongst all the segments
writing and printing and Containerboard are expected to grow at a much higher
rate compared to other segments. The domestic paper industry is
capitalintensive, and enjoys import duty protection (10.57% duty on paper
imports - net of credits) and 100% FDI.
India's total annual production and consumption of paper and paperboard is
around 8 million tonnes - barely 2% of global production. It is projected that
India's paper demand would reach 14 million tonnes by year 2015. Pulp and paper
industry is the second largest employment provider in India.
About 3,00,000 people are employed in the pulp and paper
industry. World's average per capita consumption of paper is 46 kg, that of
developed countries is 152 kg and developing countries is 14 kg. But the
average per capita consumption in India is only 8.5 kg, which is one of the
lowest in the region.
In developed countries, the market has reached a saturation stage but in
developing countries like India, it is still at the growth stage of the product
life cycle. The market is in a 'catch up' phase, with a growth rate more than
twice the world average.
The country is almost self-sufficient in manufacture of most varieties of paper
and paperboards. Import, however, is confined only to certain specialty papers.
To meet part of its raw material needs the industry has to rely on imported
wood pulp and waste paper.
Excise duty:
Excise duty (Cenvat) on Paper and paperboard has been
reduced from 12% to 8% advalorem w.e.f. 01.03.2008. Earlier it was reduced from
16% to 12% w.e.f.01.03.2006.
Jelly
Filled Telecom Cable (JFTC) Industry:
Almost every player in cable industry went for installation
of JFTC manufacturing plants with big capacities during mid 90's. The demand
for these cables was expected to be exceptionally high at that time. The demand
was very high until the mobile evolution. Now demand for JFTC cables has slowed
down to a great extent since last 3-4 years because of increasing use of wireless
phones. Many companies have converted their JFTC capacity in to power cables or
optical fibre cables.
Optical Fibre Cable (OFC)
Industry:
Optical Fibre Cable demand is projected to grow by 20% to
over 6 million Fkm in current year. The increase in the demand for Optical
Fibre Cable will be driven by the use of Cable TV, roll out of Broadband
Networks, interconnection of mobile networks using Optical Fibre Cable and the
use of OFC for laying/expanding national long distance networks. The cumulative
optical fibre cable demand between 2005-06 and 2009-10 is projected to be
around 13.9 Fkm. Demand during each of the years of forecast period would
depend upon the timing of network expansion and order flow from end user
segments.
Govt. of India has a target of 20 million Broadband subscribers by 2010 by
adding 0.5 million Broadband connections per month from Jan'2008 to December
2010. This will require additional fibre network with telecom operators and
would lead to higher demand for fibre cables.
Telecom players providing valueadded services (voice-to-data-to-video)
requiring high quality network and higher bandwidth. This would require
replacement of traditional copper network with fibre cables and would further
increase the demand of optical fibre cable.
There are 15 Manufacturers of Optical Fibre Cables in the country having
installed capacity of around 7,54,000 km. It is envisaged that in the current
year, the requirement of Optical Fibre Cable for BSNL/MTNL will be about 50,000
km. Besides this, other private players like Reliance, Bharti, Tata
Teleservices, VSNL, Vodafone, etc., are also expanding their infrastructure
significantly, which increases requirement of Optical Fibre cables.
Company
overview:
Subject sponsored and promoted by the S K Bangur Group, is
one of the leading integrated pulp and paper mills in India. The Company also
has interests in telecom cables and power sector.
The Company also has strategic investments in Rama Newsprint
and Papers Limited (RNPL). RNPL is listed in BSE and NSE. Subject along with
its associate Company RNPL ranks amongst the top paper manufacturing houses in
the country in terms of production capacity.
|
|
Turnover 2007-
08 |
Turnover 2006-
07 |
Y-o-Y Increase / Decreases |
|
|
(Rs. in
millions) |
||
|
Paper and Paper Board |
59.652 |
59.416 |
0.44% |
|
Optic Fibre Cables |
556.600 |
93.600 |
494.66% |
|
JFTC Plant |
0.200 |
154.000 |
99.87% |
|
Wind mills |
4.600 |
5.200 |
11.54% |
|
Total turnover |
6526.600 |
6194.400 |
5.36% |
Paper
and paperboard division operational highlights:
· Consisted of 91.39% of the total turnover of the Company in 2007-08.
· Production decreased by 5.02% from 178,871 MT in 2006-07 to 169,891 MT in 2007-08.
· Divisional turnover increased by 0.40% from Rs. 5941.6 millions in 2006-07 to Rs. 5965.2 millions In 2007-08.
Location:
The Company's
paper mill is located at Dandeli, Karnataka. The mill is situated on the bank
of river Kali (a perennial river) and is well-connected with air, rail and road
linkages. The Company's Dandeli plant is spread over 200 acres of land. The
Company's plant is a mini-township with all the major amenities including
school, college, medical and recreational facilities etc. within its
vicinity.
Subsidiaries
Speciality Coatings Laminations Limited (SPCL), Gurgaon (Haryana):
The Company has sold 6,10,000 equity shares of Speciality Coatings ft
Laminations Limited on 2nd March 2006 and from that day it is no longer subsidiary
of the Company.
Bharat Sugar Mills Limited
The Company has sold its entire shareholding of 50,000 shares of Bharat
Sugar Mills Limited., on 1 1th July 2005 and since then it is no longer the
subsidiary of the Company.
TRADE REFERENCEs:-
v R. R. Industrial
Network
v Asha Electricals
v Matal Crafts
v Microfinish Pumps
Private Limited
v Microfinish Valves
Limited
v Expert Engineering
Enterprises
v Fibreglass and
Insin. Ser. Private Limited
v Omega Engineers
v OSM Engineering
v Precifab Engineers
v Supreme Packers
v Tejas Engineers
v Universal Gasket
v Wood Designer
v Sameera Enterprise
FIXED ASSETS:-
· Land (Freehold and Leasehold),
· Factory Buildings,
· Non-Factory Buildings,
· Roads and Drainage,
· Effluent Treatment Plant,
· Construction Machinery and Equipment,
· Water Treatment Plant,
· Electric Installations,
· Fire Fighting Equipments,
· Furniture, Fittings and Air Conditioners,
· Typewriters and Addressing Machine,
· Trucks,
· Vehicles and Accessories,
· Plant and Machinery.
The company employs around 2852 persons in its’ set up comprising of
2068 persons in factory and 784 persons in office.
Contingent Liabilities:-
Contingent
liabilities not provided for in respect of :
(a) Various demands of employees pending for adjudication : amounts not ascertainable.
(b) Bank Guarantees outstanding : Rs. 119.9 millions (Rs. 131.046 millions).
(c) Letters of Credit outstanding : Rs. 2459.603 millions (Rs. 856.964 millions).
(d) Corporate Guarantees given by the Company to the Banks and Institution : Rs.1747.808 millions(Rs. 2154.0 millions).
(e) Demand raised by the Income Tax department and Sales Tax department disputed by the Company: Rs. 218.756 millions (Rs. 113.282 millions) and Rs. 3.066 millions (Rs. 3.066 millions) respectively.
(3) a) The Income tax assessments of the Company have been completed upto Assessment Year 2005-06.
b) The Total demand outstanding as on 31.03.2008 on account of income tax dues for various years is Rs. 218.756 millions (Rs. 113.282 millions). The Company is in appeal before the Appellate Authorities in respect of these years. Since most of the issues raised in these years are already covered by the decisions of Hon'ble Income Tax Appellate Tribunal in Company's favour, the Company has been legally advised that the demands are likely to be either deleted or substantially reduced in the appeals before Appellate Authorities and in view of this, the company has decided to adjust the short/excess provision, if any, after the appeals are disposed off.
c) The Company and also the Income Tax Department are in appeal before the High Court of Bombay on various grounds decided by the Income Tax Appellate Tribunal. The Company has therefore not recorded adjustment of refund of taxes. However, the interest received thereon of Rs. 62.345 millions has been accounted.
Website DETAILS:
Corporate Profile
Subject is the flagship company of SK Bangur Group, based at Kolkata. The SKB Group is a growing conglomerate with diverse interests across Paper, Power Cables, Telecommunication Cables, Chemicals, Tea, Coffee, Rubber and Wind Mills. Approximately 60% of the group’s revenue is contributed by Subject.
Established in the year 1955 at Dandeli, Karnataka, over the past five decades
the Company has exemplified all the qualities of leadership in the Industry,
with a vision to make the nation self reliant in paper production. Today Paper,
Paperboard and Coated Duplex Board from Subject address the writing, printing
and packaging demands of millions of customers across the globe. Subject is an
ISO 9001:2000 accredited by the DNV, the Netherlands.
The mill location was opted as the most suitable and advantageous, Dandeli
being situated in the heart of thick forests on the bank of river Kali. The
prospects of continued supply of forest-based raw materials on the assurance of
the then State Government of Karnataka, perennial availability of water,
assured power supply, vicinity of rail and road linkages were the major factors
that weighed in favour of Dandeli.
Not one to rest on its laurels, the Company is looking ahead and is sensitive
to meet the emerging challenges and trends. Actively engaged in Research and
Development to design and develop the products for tomorrow’s needs, the
Company has a progressive outlook that will take it through a second innings,
with goals, plans and a vision to take it forward through the next 50 years.
At the same time, the Subject is consciously engaged in giving back to nature
through forestation drives, looking after its employees through community development
initiatives and ensuring prosperity to its shareholders through sustainable
growth policies.
Sheer Longevity:
· Subject has grown from strength to strength across five decades (established 1955)
· This has established the Company as a key player in the industry.
· The wealth accumulated over the decades comprises rich goodwill, process and product knowledge, trend reading capability and distribution depth.
Its competitive strengths are based on low historical costs in what is otherwise a capital-intensive business.
Capacity:
Originally the plant
was designed to manufacture 18,000 MT per year of writing, printing and
packaging paper.
· The commercial production from May 1959.
· The company was granted a license in December 1964 for 45,000 TPA capacities and the balancing equipments program was completed in 1972 to increase the production to 45,000 TPA.
· The company also implemented the Crash program in 1974 to increase production capacity to 60,000 TPA against the license issued in July 1972 for 60,000 TPA.
· The license capacity was re-endorsed for 69,000 TPA in November 1991 on the basis of actual production.
· The paper industry has been de-licensed from July 1997.
· The production capacity has increased to 119750 TPA after successful completion of modernization / expansion program in 1999.
· After commissioning of 100 TPD duplex machines (PM-IV) and rebuilding of PM – II production capacity has further increased to 163750 TPA in 2001-02.
Productivity and
Recognition
· Recognized as an efficient paper mill with utilization of 106% of its installed Capacity in 2004-2005.
· Consumption of 1,169 units of energy per tonne of production (paper, paperboard and duplex), lower than the industry average.
· Thirteen awards conferred by the National Productivity Council (Government of India) and other organizations including Chemical and Allied Products, Export Promotion Council.
The performance of
the company during the last 5 years period was as under:
Year Ended
31st March Production
(Paper
and Board)
[in
M.T.] Net Sales Gross Profit
with
Excise Duty
[Rs. in Millions]
< 2>1. 2003 151477 454.57 622.4
< 3>2. 2004 163714 491.84 605.7
< 4>3. 2005 173070 533.35 564.8
< 5>4. 2006 176221 606.84 692.2
< 5>5. 2007 178871 619.44 955.2
The Company has an excellent track record of timely repayment of loans/ lease
rentals to financial institutions and leasing companies and has maintained such
record even in the recession period to which this industry has been subjected
many a times. This has been highly appreciated by the financial institutions
and lessors.
Products - Printing and Writing
Paper Machine No: 1 – MF Machine
|
Quality |
GSM |
Deckle |
Application Segment |
|
SS Maplitho Classic |
80 – 120 |
300 – 310 cms |
Printing and Publishing |
|
Sud. Ultra Shine Maplitho |
80 - 140 |
Printing and Publishing |
|
|
SS Pulp Board UHB |
140 – 230 |
Premium Segment, |
|
|
Azure Laid |
70 – 120 |
Ledger Book |
|
|
Azure Laid TSAD |
105 |
Bond, Certificate |
|
|
Sud MICR Cheque Paper |
95 |
Cheque Leaves |
|
|
Sud. Cheque Paper |
82 |
Bond, Certificates |
|
|
Maplitho Ptg DLX |
90 – 120 |
Publishing Segment |
|
|
Sud. Parchment |
105 |
Bond, Certificate |
|
|
Maplitho Ptg Base |
90 - 230 |
|
Coating |
Paper Machine No: 2 – MG Machine
|
Quality |
GSM |
Deckle |
Application
Segment |
|
MG Colour Poster |
80 – 140 |
300 – 315 cms |
File Board |
|
MG Colour Cover/Pulp Board |
150 – 320 |
File Board |
|
|
MG White Poster |
80 – 140 |
Picture Poster, Book Cover |
|
|
MG White Cover / Pulp Board |
150 – 320 |
Book Cover |
|
|
MF Cover Paper HL |
130 – 180 |
Soap Wrapper / |
|
|
Sud. Greetings / Natural |
100 – 230 |
Wedding Card |
Paper Machine No: 3 – MF Machine
|
Quality |
GSM |
Deckle |
Application Segment |
|
Cream Wove (SW) |
54 – 60 |
300 – 310 cms |
Notebook, Computer |
|
Maplitho Ptg Deluxe (SW) |
58 – 85 |
Publishing |
|
|
MF Cover Paper HL |
60 – 82 |
Soap Wrapper |
|
|
SS Maplitho Classic |
70 / 75 |
Four Colour Printing |
|
|
Maplitho High Bright CG |
54 – 80 |
Xerox Paper Cut Size |
|
|
Legend Copier |
75 |
Copier |
|
|
B2B Copier |
70 |
Copier |
|
|
Budget Copier |
68 |
Copier |
|
|
Maplitho Ptg Base |
58 – 85 |
Coating |
|
|
Plain Paper SS / NON SS |
|
|
Paper Machine No: 4 – Duplex Board
|
Quality |
GSM |
Deckle |
Application Segment |
|
HWC Grey Back |
220-500 |
240 – 254 cms |
Pharmaceuticals, Food Packaging, Garments,
Liquor Cartons, Agarbati etc., |
|
LWC Grey Back |
220-500 |
Match, Agarbathi, Garments, Hosiery,
Engineering Parts Etc., |
|
|
HWC White Back |
220-450 |
Pharmaceuticals, Hosiery, Personal Care
Products, Book Cover etc., |
|
|
LWC White Back |
220-450 |
Pharmaceuticals, Personal Care, Book Cover
etc., |
|
|
Match Box Board |
220-500 |
Match Box Segment |
Paper Machine No: 5 – Duplex Board
|
Quality |
GSM |
Deckle |
Application Segment |
|
LWC Grey Back |
230-600 |
240 – 254 cms |
Match, Agarbathi, Garments, Hosiery,
Engineering Parts etc., |
|
Deluxe – Uncoated Board |
230-600 |
Shoe Segment, Garment segment etc., |
|
|
LWC Kraft Back |
230-600 |
Top liner for Corrugation Segment, Garment
Inserts etc., |
|
|
Uncoated Kraft Back |
230-600 |
Top liner for Corrugation Segment, Garment
Inserts etc., |
The company
manufacturers the following products also in premium range:
· Sud. MICR Cheque Paper
· SS Maplitho Classic
· Ultrashine Maplitho
· SS Pulp Board UHB
· Legend Copier
· B2B Copier
· Budget Copier
· Parchment
Raw Material Requirements
·
PRINTING and WRITING: They require Bleached Soft
Wood/Hard Wood Pulp around 7800 ADMT p.a.
· COATED DUPLEX BOARD: For their Multi-Layer Duplex board manufacturing facility on Paper Machine IV and V they require the following raw materials:
|
Sl |
Description |
Specification |
Quantity P/A (M.T.) |
|
1. |
Box Board Cuttings |
As per PS-01, Item 4 |
20000 M.Tons |
|
2. |
Supermix waste as per specification |
As per PS-01, Item 2 |
15000 M.Tons |
|
3. |
Old News Paper |
As per PS-01, Item 8 |
15000 M.Tons |
|
4. |
Light Colour cuttings |
- |
3000 M.Tons |
|
5. |
White Cuttings |
As per PS-01, Item 31and35 |
3000 M.Tons |
Green Info
Subject although dependent heavily on trees for supply of raw materials, remains one of the foremost ecology conscious concern in the country. With the threats of ozone depletion and global warming, the company has taken a number of steps to protect ecology as well as to ensure steady supply of raw material.
The natural forests in India being under tremendous pressure, the Company has
started a programme of distributing quality seedlings of fast growing species
like Eucalyptus, Casurina, Acacia and Subabul (which are the raw materials of
the plant).
The beneficiaries are owners of low yielding local agricultural lands in the
vicinity of the plant, i.e Uttar Kannada, part of Shimoga, Belgaum and Dharwar
districts. The target is to distribute to the tune of 4 million quality
seedlings.
The Company has implemented Clonal
Technology to achieve the following:
· Supply genetically high quality planting stock.
· Improve land productivity and yields from pulpwood plantation
· Provide fuelwood etc. for local use
· Improve the economic conditions of the growers through clonal plantation
Encourage overall
tree forming practices.
The company has been playing a very active role in developing the backward district of Uttara Kannada. Stabilising fly-ash dumps by biological means, developing better drainage systems, organising education from primary to graduate, including pulp and paper technology course, facilities for needy children, organising various social awareness programmes etc. are some of the steps it has taken to manifest its commitments to social and environmental causes.
Tree Improvement
Through Clonal Forestry
The productivity of the plantation can be increased sustainably by promoting technology based plantations. Of late in India, clonal forestry is gaining acceptance among the progressive Foresters and Plantation Managers. Clonal technology is a strategy adopted in tree improvement programme to capture and exploit the best recombinations in a shortest possible time. The ultimate objective of tree improvement is to produce quality seeds. Seeds are the carriers of entire improvement made in one generation to the next generation. Keeping in view the improved superior seeds are the major source for propagation. Seeds from known sources mainly half sib seeds or full sib seeds are collected and propagated.
The principles and practices of plant breeding of trees are well established
and they apply equally to industrial plantations and small holder agroforestry
and community plantations also. The goal of tree improvement for agroforestry
is to increase the effectiveness of land for productivity, suitability and
sustainability of land use for rural communities. It consists of:
- Germination of the species
or geographic sources within a species in a given area.
- Kind and causes of
variability within a species.
- Packaging the desired
qualities into improved individuals.
- Mass production of
improved individuals for planting purposes.
- Developing and maintaining
a genetic base population for advanced generation.
Success in the establishment and productivity of forestry
plantations is determined largely by species used and the source of seed within
species. The higher gain in most of the forestry improvement programmes can be
made by assuring the use of the proper species.
OTHER DIVISIONS:
CABLE DIVISION:
The Company has set up a plant for manufacturing of Optical
Fiber Cables at Mysore. The commercial production was started in 96-97. The
installed capacity has now increased to 83500 KM. The Company is also diversified
to produce Jelly Filled Telecommunication Cables (JFTC) and has setup
production facility to manufacture 15,42,000 CKM capacity in the existing
location at Mysore. .
WIND MILLS:
The Company has set up a plant for manufacturing of Optical
Fiber Cables at Mysore. The commercial production was started in 96-97. The
installed capacity has now increased to 83500 KM. The Company is also
diversified to produce Jelly Filled Telecommunication Cables (JFTC) and has
setup production facility to manufacture 15,42,000 CKM capacity in the existing
location at Mysore. .
ACQUISITIONS:
The Company acquired a running Coating Plant, Speciality
Coatings and Laminations Limited., near Gurgaon (Haryana), in May, 1996 - with
a capacity of 500 MT per month which has been increased to 2000 MT p.m. in the
year 2004-05.
The company has acquired 33.85% equity of Rama Newsprint and
Papers Limited (RNPL) Barbodhan (Gujarat) from ICICI Bank Limited and ICICI
Equity fund for Rs.39.38 millions in Sept. 2003. The present holding is 35%.
The capacity of RNPL is 1,32,000 MT/p.a. The acquisition has been completed in
January 2004.
PRODUCTION and MARKETING:
The company manufactures writing, printing and wrapping papers and its share in
the country's total production is 4%. The company also manufactures paper as
per the specification of the end users including industrial users. The end use
of paper / paper board is for diaries, calendars, multicolour printing, ledger
books, cheque printing, share certificate and other permanent records, railway
tickets, boarding passes, corrugated and packaging and core make [for Textile
Industry], tube making, soap wrapping, coating base paper, continuous
stationary, cyclostyling, photo copying etc.
The company has experienced no problem in the marketing of its products. The
entire sale of paper is made through various paper dealers spread over the
country.
TECHNICAL PROCESS:
The mill is based on conventional kraft process using wood as the main raw material.
Wood is chipped in Chippers and fed to digesters for cooking in which cooking
chemicals are added. After cooking the pulp the washed, screened, cleaned,
bleached and stored. The company has two streams of Brown Stock Washers and of
bleach plants. 91% and above of spent chemicals are recovered in the recovery
plant and in the process of this recovery substantial steam is also generated.
The pulp is refined in the Stock preparation section and treated with sizing
chemicals, dyes and loading materials before transferring to the Paper Machine
section for manufacturing paper. The company has three machines which are of
standard design consisting of wire part, press part and dryer section. Paper
M/c. III has been re-built in 1993 and has twin wire system known as
Papriformer machine. PM II has been rebuilt in 2000 and PM I was rebuilt in 2004. The Paper M/c. No. II
is MG machine whereas PM I and III are MF machines. The company has fully
equipped finishing and converting section for rewinding, cutting and packing of
the paper in reels or sheets.
The company also has Paper
M/c Nos.IV and V for manufacture of multi-layer board (Duplex Board). The Paper M/c No.V was commissioned in 1996
and the Paper M/c No.IV, in 2002. These
machines use recycled fibre and are therefore eco-friendly. However, some quantity of mill made pulp is
also used for top layer of the duplex board to improve the quality and reduce
the cost.
The company has gone for process automation and installed Basis Weight and
Moisture Controller on PM I and III and CD Profiler / Digital Control Drive on
PM III. The FBC boiler has also been provided with computer for process
control. The Chemical Recovery Boiler, Evaporators, Rotary Limekin, Clo2 Plant
and Pulp Wash Plant are being operated through DCS/PLC Control system.
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.45.72 |
|
UK Pound |
1 |
Rs.84.81 |
|
Euro |
1 |
Rs.67.60 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
Yes |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
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 |
|