MIRA
INFORM REPORT
|
Report Date : |
06.04.2011 |
IDENTIFICATION DETAILS
|
Name : |
ORIENT PAPER AND
INDUSTRIES LIMITED |
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Registered Office : |
Unit VIII, Plot
No. 7, Bhoinagar, |
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Country : |
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Financials (as on) : |
31.03.2010 |
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Date of Incorporation : |
25.07.1936 |
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Com. Reg. No.: |
15-000117 |
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CIN No.: [Company Identification No.] |
L21011OR1936PLC000117 |
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TAN No.: [Tax Deduction & Collection Account
No.] |
HYDO00346D |
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Legal Form : |
A Public Limited
Liability Company. The company shares are listed on the Stock Exchange. |
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Line of Business : |
Manufacturer of
Paper and Paperboards. |
RATING & COMMENTS
|
MIRA’s Rating : |
A (65) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
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Maximum Credit Limit : |
USD 31000000 |
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Status : |
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 fine track. Financial
position of the company appears to be sound. Trade relations are reported as
fair. Payments are reported to be regular and as per commitments. The company can be considered good for normal business dealings at
usual trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
Unit VIII, Plot
No. 7, Bhoinagar, |
|
Tel. No.: |
91-674-2396930,
2392947 |
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Fax No.: |
91-674-2396364 |
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E-mail : |
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Website: |
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Plant : |
ORIENT CEMENT P.O.:- Devapur Cement Works, Dist.:- Adilabad, Andhra Pradesh PIN -
504 218 Vill:- Nashirabad, National Highway No. 6, Dist.:- Jalgaon ,
Maharastra PIN - 425 309 ORIENT FANS 6, 11, Industrial Estate, Sector – 6, |
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Corporate
Office : |
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Tel. No.: |
91-33-2248
0135/2213 1680 |
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Fax No.: |
91-33-2243 0490 |
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E-mail : |
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Mills: |
v
Brajrajnagar,
Orissa v
Amlai,
Madhya Pradesh v
Devapur,
Andhra Pradesh v
Kolkata,
v
v
Jalgaon,
|
DIRECTORS
As On : 31.03.2010
|
Name : |
Mr. C.K. Birla |
|
Designation : |
Chairman |
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Name : |
Mr. B.K. Jhawar |
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Designation : |
Director |
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Name : |
Mr. P.K. Sen |
|
Designation : |
Director |
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|
Name : |
Mr. A. Ghosh |
|
Designation : |
Director |
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|
Name : |
Mr. Michael
Bastian |
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Designation : |
Nominee – IDBI |
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Name : |
Mr. M. L.
Pachisia |
|
Designation : |
Managing Director |
KEY EXECUTIVES
|
Name : |
Mr. S L Saraf |
|
Designation : |
Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.12.2010
|
Names of
Shareholders |
No. of Shares |
Percentage of Holding |
|
Shareholding
of Promoter and Promoter Group2 |
|
|
|
Indian |
|
|
|
Individuals/ Hindu Undivided Family |
7371250 |
3.82 |
|
Bodies Corporate |
57458672 |
29.79 |
|
Sub-Total (A) |
64829922 |
33.61 |
|
Foreign |
|
|
|
Total
Shareholding of Promoter and Promoter |
64829922 |
33.61 |
|
Public shareholding |
|
|
|
Institutions |
|
|
|
Mutual Funds/ UTI |
45172542 |
23.42 |
|
Financial Institutions/ Banks |
207430 |
0.11 |
|
Central Government/ State Government(s) |
4000 |
-- |
|
Foreign Institution Investors |
2796955 |
1.45 |
|
Insurance Companies |
20471771 |
10.61 |
|
Sub-Total (B) |
68652698 |
35.60 |
|
Non-Institutions |
|
|
|
Bodies Corporate |
28228952 |
14.64 |
|
Individuals - i. Individual shareholders
holding nominal share capital up to Rs. 1 lakh. |
22597363 |
11.72 |
|
ii. Individual shareholders holding nominal share capital in excess in
excess of Rs. 1 lakh. |
3879462 |
2.01 |
|
Any Others (Specify) |
4673103 |
2.42 |
|
Foreign Corporate Bodies |
1000 |
-- |
|
Overseas Corporate Bodies |
3682240 |
1.91 |
|
Non Resident Indians |
989153 |
0.51 |
|
Trust and Foundation |
710 |
-- |
|
Sub-Total (B) |
59378880 |
30.79 |
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Total public shareholding (B) |
128031578 |
66.39 |
|
TOTAL (A)+(B) |
192861500 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of
Paper and Paperboards. |
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Products : |
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PRODUCTION STATUS (As On 31.03.2010)
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
Pulp, Paper & Board – Amlai |
MT |
100000 |
110000 |
53589 |
|
Brajrajnagar * |
MT |
76000 |
76000 |
-- |
|
Caustic Soda (Brajrajnagar) * |
MT |
3292 |
3292 |
-- |
|
Chlorine (Brajrajnagar) * |
MT |
2926 |
2926 |
-- |
|
C.S.Lye (excluding Flake conversion) |
MT |
77930 |
52340 |
21272 |
|
C.S.Flakes |
MT |
-- |
-- |
8564 |
|
Portand Cement |
MT |
5000000 |
5000000 |
3056028 |
|
Electric fans |
Nos. |
1674000 |
5000000 |
4195913 |
|
Lights & Luminaries |
Nos. |
6000000 |
8060000 |
3700932 |
|
Air Pollution Control Equipment |
Nos. |
300 |
300 |
132 |
|
Industrial Blower |
Nos. |
540 |
540 |
348 |
|
Room Air conditioner* |
Nos. |
2200 |
2200 |
-- |
|
Water Cooler Package Type* |
Nos. |
300 |
300 |
-- |
|
Air conditioner* |
Nos. |
480 |
480 |
-- |
|
Cooling Towers* |
Nos. |
360 |
360 |
-- |
Notes:
1. Installed capacities have been certified by the management and
accepted as correct by the Auditors.
2. Pulp plant is an integrated part of the Paper and Board plants and
therefore, capacity and actual production of pulp is not separately ascertained.
3. Sale of Pulp, Paper and Board includes own consumption 7 MT (10 MT)
4. Sale of C S Lye and Hydrochloric Acid includes own consumption 271 MT
(142 MT) and 2787 MT (1511 MT) respectively.
5. Sale of Portland Cement includes own consumption, samples etc. 8698
MT (18278 MT) and sale of clinker 178874 MT (Nil) valuing Rs. 323.806 millions
(Rs. Nil).
GENERAL INFORMATION
|
Bankers : |
Not Available |
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Facilities : |
Notes : 1.
a) Non-Convertible debentures of Rs.1000.000
millions (Rs.1000.000 millions), redeemable at par on 14th November,2013, are
secured by first mortgage/ charge ranking pari-passu with each other on the
movable and immovable properties pertaining to the Paper plants at Amlai and
Brajrajnagar and Cement plants at Devapur and Jalgoan and a first charge on
the Company’s freehold land at Mehsana, Gujarat. b)
Non-Convertible debentures of Rs. 500.000 millions and Rs. 250.000 millions,
redeemable at par on 22nd November, 2010 and 17th February, 2011
respectively, are secured by a charge on the Company’s freehold land at
Mehsana, Gujarat. 2.
a) Term Loan of Rs.343.301 millions (Rs.381.448
millions) from a Scheduled Bank is secured by first charge ranking pari-passu
with each other on the immovable properties ( both present and future )
pertaining to the Paper plants at Amlai and Brajrajnagar and Cement plant at
Devapur and by way of hypothecation of moveable fixed assets (both present
and future) ranking pari passu with each other, pertaining to the Paper
plants at Amlai and Brajrajnagar and Cement plant at Devapur. b) Term Loans of
Rs.1447.000 millions (Rs.Nil ) from Scheduled Banks are secured / to be
secured by first charge ranking pari-passu with each other on the fixed
assets ( both present and future ) pertaining to the Paper plants at Amlai
and Brajrajnagar and Cement plants at Devapur and Jalgaon. c) Term Loan of
Rs.30.951 millions (Rs.72.196 millions) from a Scheduled Bank is secured by a
mortgage/charge ranking pari-passu with each other on the immovable
properties pertaining to the Paper plants at Amlai and Brajrajnagar and
Cement plant at Devapur, both present and future, save and except such assets
as are excluded by the financial institutions/banks and the agents/trustees
for the debenture holders and a charge on the movable assets of the Company’s
said units, subject to prior charges created/to be created in favour of the
Company’s bankers for working capital requirements. d) Cash Credit
facilities of Rs 599.770 millions (Rs.672.850 millions) are secured / to be
secured against hypothecation of stock in trade, stock in process, raw
materials, stores and chemicals, book debts and other current assets of the
Company and 2nd charge on fixed assets of the Company. 3 The above
loans include Rs 1062.200 millions (Rs.1067.900 millions) falling due for
payment within one year.
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Banking
Relations : |
-- |
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Auditors : |
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|
Name : |
S. R. Batliboi and Company Chartered Accountant |
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Address : |
22, Camac Street, Block C, 3rd Floor, Kolkata-700016, India |
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Joint Venture
Company : |
Pan African Paper Mills (E.A) Limited |
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Subsidiaries : |
·
Air Conditioning Corporation Limited.(Upto 31st
March,2009) ·
OPI Export Limited |
CAPITAL STRUCTURE
As On : 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
750000000 |
Equity Shares |
Rs. 1/- each |
Rs. 750.000 millions |
|
2500000 |
Preference Shares |
Rs. 100/- each |
Rs. 250.000 millions |
|
|
Total |
|
Rs. 1000.000
millions |
Issued :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
192887970 |
Equity Shares |
Rs. 1/- each |
Rs. 192.888
millions |
|
100000 |
6% Redeemable Non-Cumulative Preference
Shares |
Rs. 100/-
each |
Rs. 10.000
millions |
|
|
Total |
|
Rs. 202.888 millions |
Subscribed & Paid-up Capital
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
192884770 |
Equity Shares |
Rs. 1/- each |
Rs. 192.885
millions |
|
|
Less : Calls in Arrear |
|
Rs. 0.020
million |
|
|
Add : Forfeited Shares |
|
Rs. 0.020 million |
|
100000 |
6% Redeemable Non-Cumulative Preference
Shares |
Rs. 100/-
each |
Rs. 10.000
millions |
|
|
Total |
|
Rs. 202.867 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
202.867 |
202.767 |
262.715 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
7564.020 |
6326.454 |
4678.190 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
7766.887 |
6529.221 |
4940.905 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
4171.022 |
3126.494 |
438.032 |
|
|
2] Unsecured Loans |
964.151 |
1496.802 |
1215.028 |
|
|
TOTAL BORROWING |
5135.173 |
4623.296 |
1653.060 |
|
|
DEFERRED TAX LIABILITIES |
1102.781 |
501.756 |
454.586 |
|
|
DEFERRED PAYMENT LIABILITIES |
27.304 |
36.497 |
62.933 |
|
|
|
|
|
|
|
|
TOTAL |
14032.145 |
11690.770 |
7111.484 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
11159.127 |
3845.381 |
3339.702 |
|
|
Capital work-in-progress |
534.616 |
6348.555 |
1972.015 |
|
|
|
|
|
|
|
|
INVESTMENT |
471.190 |
92.165 |
91.936 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
EXPENDITURE ON EXPANSION / NEW PROJECTS |
33.148 |
238.101 |
24.794 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1503.093
|
1097.112 |
989.009 |
|
|
Sundry Debtors |
1844.000
|
1407.014 |
1358.460 |
|
|
Cash & Bank Balances |
466.974
|
332.898 |
260.098 |
|
|
Other Current Assets |
96.463
|
96.013 |
24.542 |
|
|
Loans & Advances |
1076.804
|
931.861 |
788.686 |
|
Total
Current Assets |
4987.334
|
3864.898 |
3420.795 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
1873.013
|
1571.884 |
|
|
|
Other Current Liabilities |
473.310
|
421.361 |
1382.878 |
|
|
Provisions |
806.947
|
728.291 |
408.945 |
|
Total
Current Liabilities |
3153.270
|
2721.536 |
1791.823 |
|
|
Net Current Assets |
1834.064
|
1143.362 |
1628.972 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
23.206 |
54.065 |
|
|
|
|
|
|
|
|
TOTAL |
14032.145 |
11690.770 |
7111.484 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
16197.546 |
15031.776 |
12928.609 |
|
|
|
Other Income |
162.886 |
228.119 |
197.043 |
|
|
|
Know How and Service Fees |
0.000 |
0.000 |
33.208 |
|
|
|
TOTAL (A) |
16360.432 |
15259.895 |
13158.860 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials |
4811.270 |
3649.830 |
3405.726 |
|
|
|
Manufacturing, Administrative, Selling
Expenses |
7729.147 |
6815.443 |
5887.995 |
|
|
|
Director Remuneration |
30.751 |
28.928 |
18.400 |
|
|
|
Increase/(Decrease) in Finished Goods |
(293.953) |
29.479 |
8.399 |
|
|
|
Excise Duty on Stocks |
17.142 |
(9.313) |
(2.042) |
|
|
|
Purchase of Trading Goods |
829.558 |
603.722 |
237.505 |
|
|
|
Exceptional Items |
0.000 |
486.588 |
0.000 |
|
|
|
TOTAL (B) |
13123.915 |
11604.677 |
9555.983 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
3236.517 |
3655.218 |
3602.877 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL EXPENSES (D) |
345.327 |
206.792 |
197.102 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
2891.190 |
3448.426 |
3405.775 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
550.136 |
347.139 |
270.736 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
2341.054 |
3101.287 |
3135.039 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
7479.660 |
1100.347 |
1090.225 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
1593.088 |
2000.940 |
2044.814 |
|
|
Add |
Debenture
Redemption Reserve Written back |
250.000 |
125.000 |
146.600 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
2144.085 |
1430.204 |
279.625 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
1766.957 |
500.000 |
500.000 |
|
|
|
Dividend on Preference Shares |
0.600 |
3.044 |
23.981 |
|
|
|
Interim Dividend |
0.000 |
0.000 |
85.314 |
|
|
|
Proposed Final Dividend on Equity Shares |
289.327 |
289.327 |
135.019 |
|
|
|
Capital Redemption Reserve |
0.000 |
70.000 |
130.000 |
|
|
|
Debenture Redemption Reserve |
187.500 |
500.000 |
125.000 |
|
|
|
Tax on Dividend |
48.154 |
49.688 |
41.521 |
|
|
BALANCE CARRIED
TO THE B/S |
1694.635 |
2144.085 |
1430.204 |
|
|
|
|
|
|
|
|
|
|
EXPORT VALUE |
536.420 |
461.865 |
NA |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
113.272 |
51.634 |
NA |
|
|
|
Stores & Spares |
31.762 |
51.634 |
NA |
|
|
|
Capital Goods |
150.247 |
1186.144 |
NA |
|
|
|
Trading Goods |
57.722 |
37.658 |
NA |
|
|
TOTAL IMPORTS |
353.003 |
1327.070 |
NA |
|
QUARTERLY RESULTS
(Rs.
In Millions)
|
PARTICULARS |
30.06.2010 |
30.09.2010 |
31.12.2010 |
|
|
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
4492.290 |
3896.820 |
4406.300 |
|
Total Expenditure |
3698.260 |
3641.390 |
3642.890 |
|
PBIDT (Excl OI) |
794.030 |
255.430 |
763.410 |
|
Other Income |
11.430 |
29.990 |
13.550 |
|
Operating Profit |
805.460 |
285.430 |
776.960 |
|
Interest |
100.740 |
75.950 |
107.290 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
704.720 |
209.470 |
669.670 |
|
Depreciation |
191.810 |
200.210 |
207.740 |
|
Profit Before Tax |
512.910 |
9.270 |
461.930 |
|
Tax |
170.500 |
4.280 |
152.910 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
342.410 |
4.980 |
309.020 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
342.410 |
4.980 |
309.020 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
9.74
|
13.11 |
15.54 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
14.45
|
20.63 |
24.25 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
14.50
|
40.22 |
46.37 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.30
|
0.47 |
0.63 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.21
|
1.20 |
0.79 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.58
|
1.42 |
1.91 |
LOCAL AGENCY FURTHER INFORMATION
MANAGEMENT DISCUSSION AND ANALYSIS FOR BUSINESS
SEGMENTS
They achieved an
increase of 11% in their cement and clinker sales volumes. However, cement
realizations in their markets were adversely affected during the 2nd and 3rd
quarter of the year under review largely because of disturbed situation in
Andhra Pradesh. While prices started gradually improving during the last
quarter, they were still to fully recover to the previous year’s levels. It is
for this reason that their margins for the year have been lower than the
previous year. Substantially higher volumes now available from their expanded
capacity should enable them to achieve better results during the current year.
Their Electrical division
achieved an impressive growth of 38% and its best ever profitability. They
achieved full utilisation of their expanded capacity of 5 million fans during
the year and are working on expanding this capacity further to 6 million units.
Their 1st CFL production line, commissioned late last year, also achieved full
capacity. In view of good market response, 2nd line for CFL has been ordered
and should become operational during 2010-11.
However, their
paper division did not perform to its potential as we lost production for 76
days during the year, due to pulp mill up gradation project as well as water
scarcity. Regrettably, the production at the paper plant has been once again
disrupted this year because of unprecedented water scarcity in spite of their
having reduced our water consumption per ton of paper by 25%. As a long term
measure to overcome this problem, we are now constructing large water
reservoirs to store approx. 250 million gallons, which should be adequate to
sustain around 2 months’ production. The upgraded fibre line which should
result in significant cost savings and efficiency improvements will also become
fully operational as soon as the plant restarts.
A detailed
business analysis, review and operational performance of each of their business
segments is covered in the Management discussion and analysis chapter, which
forms a part of this report.
Overall review
Indian economy
demonstrated its resilience and recovered much faster than other economies,
from the setbacks suffered last year, to register an estimated growth of around
7.7% during FY 2010.
The recent finance
budget has placed a lot of emphasis on inclusive growth with development of
infrastructure, education and health services as its main pillars. This bodes
well for their Country’s economy, which we believe will return to its growth
path of over 8% soon. However, rising costs and inflation is a matter of
concern and we hope that with normal monsoons predicted for this year and other
actions being considered by the Government, at least the food inflation should
come down. In any case, the industry has to find ways of compensating inflation
led cost increases through better efficiencies and increased productivity.
Segment-wise business analysis
Business segment – cement
Industry structure and development
Additional
capacities of 33 million tons were commissioned during the year over and above
42 million tons added during the previous 2 years. Thus, the total capacity of
the Indian cement industry stood at 251 million tons as at end of March 2010.
Considering the timing of commissioning of these new capacities, it is
estimated that an effective capacity of 227 million tons was available for
2009-10.
Domestic demand
for cement also registered an impressive growth of 11% from 178 million tons in
2008-09 to 197 million tons in 2009-10. This indicates that the domestic demand
is now growing at almost 1.5 times GDP growth as against the normal ratio of
1.1 to 1.2 times. Obviously, apart from higher spending on infrastructure development,
there has been a strong revival in the realty sector also.
In spite of this
impressive growth in cement consumption, capacity utilization on all India
basis came down to 89% of the effective capacity from 94% last year because of
the large capacity additions.
One major dampener
in this demand growth scenario was the negative growth registered in Andhra
Pradesh, hich was recording double digit growth in cement demand for past
several years. At the same time, new capacities of 7 million tons were
commissioned in Andhra Pradesh, resulting in capacity utilization of cement
plants in Andhra Pradesh coming down to 73% only. As a result, cement prices in
Andhra Pradesh and its neighbouring areas dropped significantly during the 2nd
and 3rd quarter. They are however fairly convinced that this was a passing
phase, caused by a number of adverse developments in Andhra Pradesh. Markets
have already started improving gradually during the 4th quarter and
a substantial part of drop in realization has recovered by now.
On the statutory
front, recent budget increased excise duty on cement, which had been reduced
earlier as part of the stimulus package. Government of Andhra Pradesh increased
VAT on cement from 12.5% to 14.5% w.e.f January 2010.
Outlook
They expect their
cement volumes to go up significantly next year as our expanded capacity would
be available for the full year.
On the costs
front, the savings arising from self generation of power and increased
efficiencies from the new facilities should more than compensate for the
inflation led cost increases.
Sales realization
will depend upon market forces and could be affected d for some time in case
supplies exceed demand either because of slower than normal demand in our
markets or excess supplies from new capacities. In any case, we remain fairly
confident and optimistic that going forward they shall be able to achieve
continuously improving results from our existing cement plants.
Business segment – paper
Industry structure and development
As indicated in
their analysis and report last year, paper markets were fairly depressed for
most part of the year .
In addition to
616000 tons of capacities added during the previous year, a further capacity of
155000 tons was commissioned this year by large integrated paper mills alone.
Other mills, based upon waste paper or agro residues, also commissioned around
300000 tons of new capacities in the same time frame.
As a result
domestic production of paper increased sharply in a short period of time. At
the same time paper mills from South Asia started offering pulp and paper at
very low prices as a means of evacuating their production during the global
meltdown period.
While the domestic
demand for Paper and paper board grew at a healthy rate of around 8% and tissue
paper at around 15%, supplies exceeded demand for most part of the year.
Consequently,
paper prices came under pressure and dropped by almost 7.5% from the previous
year’s levels.
However, the
International scenario changed towards end of the year following closure of
some capacities in Europe, disruption in pulp and paper production due to the
devastating earth quake in Chile and curb on illegal logging in Indonesia. As a
result, International pulp and paper prices have started recovering offering
opportunities to Indian mills to export at fairly remunerative prices. Domestic
prices are also expected to improve during 2010- 11.
The issue of long
term and adequate availability of pulp wood remains an area of concern for the
integrated paper mills. The Industry continues to make significant efforts to
encourage social and farm forestry. But this has limitations of scattered
plantations. The industry has been representing to the central and state
Governments to facilitate public – private partnership to gainfully utilise
huge tracts of revenue waste lands for large scale plantations, which could
create huge rural employment and potentially enable the Indian paper industry
to achieve
world class
scales.
Outlook – Amlai plant
Admittedly, the plant
has not performed to potential in the last two years mainly because of water
shortage related shut downs, which were beyond control. However there have been
several positive developments during the year:
·
They have been able to reduce their water consumption
from 8 million gallons per day to 6 million gallons per day through greater
recycling. Work is on hand to further reduce this to 5 million gallons per day.
·
They changed over to alkaline sizing from Acid
sizing for improving quality of their writing and printing papers. Their tissue
paper products have found acceptance in different parts of the World and they
were able to export substantial quantity of tissue paper during the last
quarter of the year. Future prospects appear bright.
·
Their branded note books are gradually becoming
more popular. Even in the face of tough market situation during the year, they
were able to increase turnover from this activity by 50%.
They have recently finalized the order for increasing their own power
generation capacity to 55 MW from existing 25 MW. This project is aimed at
substantially reducing cost of power and steam both for paper and caustic /
chlorine. It is expected that this plant should be ready for commissioning in
24 months starting from May 2010. While production of paper will still be low
during first quarter of 2010-11, they shall make every effort to make up the
shortfall in the remaining 3 quarters.
Brajrajnagar plant
Operations at this
plant have remained suspended. Only employees, who are mostly required for
upkeep of the facility, now remain on the rolls of this plant. This is indeed a
valuable asset which is ideally located with complete
infrastructure.
They intend to put this asset to productive use soon and are examining options
for best utilization of this facility.
Business segment – Electricals
Industry structure and development
The organized fan
industry in India is estimated to have registered one of its highest ever
growth of around 30%, most of which came from the domestic markets.
Total fan
production in India is estimated to have grown to around 35 million units from
28 million units last year. The share of organized sector continues to increase
gradually and is estimated to be around 80% of total fans sold.
At the same time,
prices of major inputs like steel and copper eased to some extent from their
peaks of previous year. However, prices of these commodities have again started
rising and are close to their earlier peak levels.
Demand for
Orient’s CFLs also increased by 30% to touch 180 million units. Demand for tube
lights however declined marginally by 4%. As per the latest regulations, all
CFLs produced from October 2009 had to meet the requirement of high power
factor. While this created some initial bottlenecks, complete change-over from
low power factor to high power factor has since taken effect.
Outlook
Orient PSPO has
been one of the market leaders in the Indian fan industry and also the highest
exporters by far.
The fact that they
have continued to grow at a much higher rate than the industry, clearly shows
that they have been consistently increasing their market share.
This has been
possible through expanding their product portfolio to include table, pedestal,
wall and exhaust fans.
Simultaneously
they have been able to increase our market reach and penetration in relatively
weaker markets. They have also taken several new initiatives in building
enhanced brand equity for Orient PSPO. Mahendra Singh
Dhoni continues to
be their brand ambassador and will start endorsing their lighting products as
well.
Their lighting
business has shown rapid growth and we expect this trend to continue.
During 2010-11,
they shall further expand their capacity for fans to 60 lac units and also add the
2nd line for production of CFLs. They shall be deriving further benefits from
economies of scale. Overall, we expect their electrical business to continue to
grow rapidly in both domestic and export markets.
UNAUDITED FINANCIAL RESULTS FOR
THE QUARTER / NINE MONTHS ENDED 31.12.2010
(Rs. in millions)
|
Sr. No. |
Particular |
Unaudited |
Unaudited |
|
|
|
Quarter
ended 31.12.2010 |
Quarter
ended 31.12.2010 |
|
1. |
Gross
Sales / Income |
|
|
|
|
a. Net Sales / Income from Operations (Net of Excise and Discounts) |
4384.138 |
12629.205 |
|
|
b. Other Operating Income |
22.162 |
166.206 |
|
|
Total
Income (a+b) |
4406.300 |
12795.411 |
|
|
|
|
|
|
2. |
Expenditure |
|
|
|
|
a) (Increase) / Decrease in Stock in Trade and Work In
Process |
(396.229) |
(509.060) |
|
|
b) Consumption of Raw Materials (Net) |
1486.866 |
4044.414 |
|
|
c) Purchase of Traded Goods |
149.642 |
536.344 |
|
|
d) Employee Cost |
302.452 |
869.126 |
|
|
e) Depreciation |
207.742 |
599.796 |
|
|
f) Other Expenditure |
503.290 |
1423.297 |
|
|
g) Consumption of
Stores, chemicals and Spares |
182.291 |
423.607 |
|
|
h) Power and Fuel |
816.281 |
2454.341 |
|
|
i)Packing, Freight and Forwarding Charges |
598.300 |
1740.530 |
|
|
|
|
|
|
3. |
Profit From Operations before Other Income, Interest and
Exceptional Items (1-2) |
555.665 |
1213.016 |
|
|
|
|
|
|
4. |
Other Income |
13.552 |
54.971 |
|
|
|
|
|
|
5. |
Profit Before Interest and Exceptional Items (3+4) |
569.217 |
1267.987 |
|
|
|
|
|
|
6. |
Interest |
107.288 |
283.975 |
|
|
|
|
|
|
7. |
Profit After Interest but before Exceptional Items (5-6) |
461.929 |
984.012 |
|
|
|
|
|
|
8. |
Exceptional Items |
-- |
-- |
|
|
|
|
|
|
9. |
Profit from Ordinary Activities before Tax (7+8) |
461.929 |
984.012 |
|
|
|
|
|
|
10. |
Tax
Expense |
|
|
|
|
a) Current tax |
92.200 |
196.611 |
|
|
b) Deferred tax |
59.807 |
171.581 |
|
|
c) MAT Credit |
0.900 |
(40.500) |
|
|
|
|
|
|
11. |
Net Profit from Ordinary Activities after Tax (9-10) |
309.022 |
656.320 |
|
|
|
|
|
|
12. |
Extraordinary Item (net of expense) |
-- |
-- |
|
|
|
|
|
|
13. |
Net Profit for the period (11-12) |
309.022 |
656.320 |
|
|
|
|
|
|
14. |
Paid-up Equity Share Capital (Face Value of Rs.10/- Each) |
192.876 |
192.876 |
|
|
|
|
|
|
15. |
Reserves Excluding Revaluation Reserve |
-- |
-- |
|
|
|
|
|
|
16. |
Basic
and Diluted Earning Per Share (EPS) (Rs.)-Not Annualised |
1.60 |
3.40 |
|
|
|
|
|
|
17. |
Public
Shareholding |
|
|
|
|
-Number of Shares |
128054848 |
128054848 |
|
|
- Percentage of Shareholding |
66.39% |
66.39% |
|
|
|
|
|
|
18. |
Promoters
and Promoter Group Shareholding |
|
|
|
|
a)
Pledged/Encumbered |
|
|
|
|
- Number of Shares |
Nil |
Nil |
|
|
- Percentage of Shares (as a % of the Total Shareholding
of promoter and promoter group) |
Nil |
Nil |
|
|
- Percentage of Shares (as a % of the Total Share Capital
of the Company) |
Nil |
Nil |
|
|
|
|
|
|
|
b)
Non Encumbered |
|
|
|
|
- Number of Shares |
64829922 |
64829922 |
|
|
- Percentage of Shares (as a % of the Total Shareholding of
Promoter and Promoter Group) |
100% |
100% |
|
|
- Percentage of Shares (as a % of the Total Share Capital
of the Company) |
33.61% |
33.61% |
NOTES:
1.
Limited Review of the above quarterly /
nine months results has been carried out by the statutory auditors of the
company.
2.
There were no investor complaints at
the begining and the close of the quarter. The company had received five
complaints during the quarter, which were resolved during the quarter.
3.
There were no extraordinary items
during the quarter / nine months ended 31st December, '2010.
4.
The Auditors in their Report on the
Accounts for the year ended 31st March,2010 and subsequent Limited Review Reports for the quarters ended 30th June,2010
and 30th September, 2010 had commented upon the basis of provision/payment
against water tax demand which had been made to the extent of liability
admitted by the Company for the period up to April, 2009 i.e. the period prior
to new agreement effective from 27th May,2009 entered into with the Water
Resource Department. No provision against the balance demand of Rs. 1033.400
millions has been made since the Company’s application for waiver thereof is pending
with the Government of Madhya Pradesh.
5.
Pursuant to the Scheme of Amalgamation
as approved by the shareholders of the Company and the Hon’ble High Court at
Calcutta by an order dated 22nd November,2010, OPI Export Limited., a wholly
owned subsidiary of the company , has been merged with the Company w.e.f. 1st
April, 2010.
6.
Figures for the Quarter / nine months
ended 31st December, 2009 have been recasted to give effect of the amalgamation
of Company's erstwhile wholly owned subsidiary, namely Air Conditioning
Corporation Limited, with the Company, which has became effective from the
appointed date 1st April, 2009.
7.
Previous period figures have been
regrouped / rearranged wherever necessary.
8.
The above results were reviewed by the
Audit Committee and taken on record by the Board of Directors of the Company at
their respective meetings held on 21st January, 2011.
Segment wise Revenue, Results and Capital
Employed under Clause 41 of the Listing Agreement
(Rs. in millions)
|
Sl. No. |
|
Particulars |
Quarter Ended |
Quarter Ended |
|
|
31.12.2010 |
31.12.2010 |
||
|
|
(Un-audited) |
(Un-audited) |
||
|
1 |
|
Segment Revenue (Net of Excise & Other Taxes) |
|
|
|
|
|
|
|
|
|
|
|
a)
Cement |
2286.138 |
6990.015 |
|
|
|
b)
Paper and Board |
890.831 |
1796.419 |
|
|
|
c)
Electrical Consumer Durables |
1189.366 |
3800.621 |
|
|
|
d)
Others |
17.803 |
42.150 |
|
|
|
|
|
|
|
|
|
Total |
4384.138 |
12629.205 |
|
|
|
|
|
|
|
|
|
Net Sales / Income from
Operation |
4384.138 |
12629.205 |
|
|
|
|
|
|
|
2 |
|
Segment Results (Net Profit(+)/Loss(-) before Tax & Interest from each Segment) |
|
|
|
|
|
|
|
|
|
|
|
a)
Cement |
466.457 |
1925.201 |
|
|
|
b)
Paper and Board – Amlai |
36.074 |
(203.680) |
|
|
|
Brajranjnagar * |
(11.660) |
(35.599) |
|
|
|
c) Electrical Consumer Durables |
100.346 |
263.862 |
|
|
|
d) Others |
2.344 |
5.089 |
|
|
|
|
|
|
|
|
|
Total |
593.561 |
1324.873 |
|
|
|
|
|
|
|
|
|
Less :Interest |
107.288 |
283.975 |
|
|
|
Less : Other Unallocable Expenses |
|
|
|
|
|
Net of Unallocable Income |
24.344 |
56.886 |
|
|
|
Profit Before Tax |
461.929 |
984.012 |
|
|
|
|
|
|
|
3 |
|
Capital Employed |
|
|
|
|
|
|
|
|
|
|
|
a)
Cement |
9492.521 |
9492.521 |
|
|
|
b)
Paper and Board |
3278.845 |
3278.845 |
|
|
|
c)
Electrical Consumer Durables |
1573.061 |
1573.061 |
|
|
|
d) Others |
10.663 |
10.663 |
|
|
|
|
|
|
|
|
|
Total |
14355.090 |
14355.090 |
WEB SIDE DETAILS
PROFILE
Incorporated in 1939 with a single paper machine and now a
multi-product, multi-location Company, that's much more than paper. That's Orient Paper and Industries Limited, a
proud member of one of the premier and most dynamic business houses of India,
the G P Birla/C K Birla Group.
The G P Birla / C K Birla Group
has promoted and established a large number of industrial undertakings
manufacturing a diverse range of products such as Automobiles, Earthmoving
Equipment, Engineering Products, Ball Bearings, Building Materials, Chemical
Plants and Software Development etc.
In keeping with the Birla philosophy, giving shape to customers' aspirations is
Orient Paper and Industries Limited's
pivotal strength. Keeping abreast of new technology, its credo. Preserving the
hues and shades of nature, its obsession.
No wonder then, that in the Paper Industry subject commands the status of a leader with a vision. In cement,
it has earned a solid reputation. In appliances, Orient, has become a household
name.
And, all combined subject in
seen as a company with a cutting edge. A hi-tech, customer friendly,
eco-responsive corporate citizen, that is Shaping a Better Tomorrow for
everyone.
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.44.45 |
|
|
1 |
Rs.71.59 |
|
Euro |
1 |
Rs.63.01 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
65 |
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 |
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 |
|
-- |
NB |
New Business |
-- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.