MIRA INFORM REPORT

Report Date :

03.03.2011

IDENTIFICATION DETAILS

Name :	AMARAVATHI SRI VENKATESA PAPER MILLS LIMITED

Registered Office :	1^st Floor No.132, Palani Road, Venkatesa Mills Post Udumalpet, Coimbatore – 642128, Tamilnadu

Country :	India

Financials (as on) :	31.03.2010

Date of Incorporation :	04.01.1960

Com. Reg. No.:	18-000341

CIN No.: [Company Identification No.]	U21012TZ1960PLC000341

TAN No.: [Tax Deduction & Collection Account No.]	CMBA03050F

Legal Form :	A Closely Held Public Limited Liability Company

Line of Business :	Manufacturer and Dealer of All Kinds of Printing and Writing Paper

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

Maximum Credit Limit :	USD 707500

Status :	Satisfactory

Payment Behaviour :	Regular

Litigation :	Clear

Comments :	Subject is a well – established and reputed company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for 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)

India

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	1^st Floor No.132, Palani Road, Venkatesa Mills Post Udumalpet, Coimbatore – 642128, Tamilnadu, India
Tel. No.:	91-4252-252286 / 252287/252386
Fax No.:	91-4252-252288
E-Mail :	cbt_asvpm@sancharnet.in m_accs@asvpm.com
Website :	http://www.asvpm.com

Mills & Administrative Office	Palani Road, Madathukulam – 642 113, Coimbatore

Branches :	Located at : D. No. 2-3-64/8, Tirumala Nagar Colony, Amberpet, Hyderabad – 500 013, Andhra Pradesh 7-3-10, Raghava Reddy Road, Behind K. B. H. College, Mahantipuram, Vijayawada – 520 001, Andhra Pradesh 82/3, Seniamman, Koil Street, Tondayarpet, Chennai – 600 081, Tamilnadu

DIRECTORS

As on 29.09.2010

Name :	Mr. Subburaman Rambabu
Designation :	Director
Address :	36, Mahal Vadambokki Street, Madurai, Tamilnadu
Date of Birth/Age :	27.07.1962
Date of Appointment :	23.12.1989
Din :	02428627

Name :	Mr. Raveendran Vishnuvardhan
Designation :	Director
Address :	Venkatesa Nilayam, Venkatesa Mills Post, Udumalpet, Tirupur – 642 128, Tamilnadu
Date of Birth/Age :	16.11.1983
Date of Appointment :	06.03.2009
Din :	00505212

Name :	Mr. Venkatasubba Naidu Genguswamy
Designation :	Managing Director
Address :	Venkatesa Nilayam, Venkatesa Mills Post, Udumalpet, Tirupur – 642 128, Tamilnadu
Date of Birth/Age :	04.10.1931
Date of Appointment :	04.01.1960
Din :	00132504

Name :	Mr. Govindswamynaidu Rajalakshmi
Designation :	Director
Address :	Venkatesa Nilayam, Venkatesa Mills Post, Udumalpet, Tirupur – 642 128, Tamilnadu
Date of Birth/Age :	05.11.1934
Date of Appointment :	04.01.1960
Din :	00104964

Name :	Mr. Genguswamy Raveendran
Designation :	Director
Address :	Venkatesa Nilayam, Venkatesa Mills Post, Udumalpet, Tirupur – 642 128, Tamilnadu
Date of Birth/Age :	17.01.1959
Date of Appointment :	31.03.1984
Din :	00132478

Name :	Mr. T.H. Venkatesh
Designation :	Director
Address :	H-47, Anna Nagar (East), Chennai, Tamilnadu
Date of Birth/Age :	12.07.1982
Date of Appointment :	07.07.2010
Din :	03177189

Name :	Mr. Genguswamy Raveendran Harshvardhan
Designation :	Director
Address :	Venkatesa Nilayam, Venkatesa Mills Post, Udumalpet, Tirupur – 642 128, Tamilnadu
Date of Birth/Age :	14.07.1987
Date of Appointment :	07.07.2010
Din :	02904809

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 29.09.2010

Names of Shareholders		No. of Shares
Mrs. Govindswamynaidu Rajalakshmi		524576
Mr. Genguswamy Raveendran		245901
Mr. Venkatasubba Naidu Genguswamy		848493
Mr. Subburaman Rambabu		2045
Mr. Raveendran Vishnuvardhan		2173

As on 29.09.2010

Category	Percentage
Bodies corporate	39.22
Directors or relatives of Directors	55.98
Other top fifty shareholders	4.80
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Dealer of All Kinds of Printing and Writing Paper

Products :

Item code no.	Product description
48026009	Printing and writing paper
48010009	Newsprint
48052200	Other uncoated paper & paper boards

GENERAL INFORMATION

No. of Employees :

400

Bankers :

Indian Bank,

245, Pollachi Road, Udumalpet – 642 126, Coimbatore, Tamilnadu

Canara Bank

Vakkil Nagarajan Street, Udumalpet – 642126 , Tamil Nadu,India

Facilities :

Secured Loan	31.03.2010 (Rs. in million)	31.03.2009 (Rs. in million)
From banks
Open Loan	45.091	42.763
Term Loan	30.553	100.000
Hire Purchase Loan	0.092	0.276
From Financial Institution – Term Loan	113.100	54.000
From others - Hire Purchase Loan	1.061	0.000
Total	189.897	197.039
Unsecured Loan
Fixed Deposit From Public	6.042	6.047
Trade Deposits	15.727	6.057
Loan from Directors	0.000	0.500
Total	21.769	12.604

Banking Relations :	Satisfactory

Financial Institution :	The Tamilnadu Industrial Investment Corporation Limited, 94, Dr.Nanjappa Road, Coimbatore - 641018, Tamil Nadu, India

Auditors :
Name :	M. S. Jagannathan and Visvanathan Chartered Accountants
Address :	M S S Memorial Buildings, D B Road, R S Puram, Coimbatore – 641002, Tamilnadu, India
PAN No. :	AAJPV2562K

Associates/Subsidiaries :	Rajalakshmi Paper Mills Limited Vishnuvardhan Paper Mills Private Limited V G Paper and Boards Limited The Sri Venkatesa Mills Limited V G Textiles Private Limited Amaravathi Investment Limited Nithya Finance Limited

CAPITAL STRUCTURE

As on 29.09.2010

Authorised Capital :

No. of Shares	Type	Value	Amount

5,000,000	Equity Shares	Rs.10/- each	Rs. 50.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

3,007,493	Equity Shares	Rs.10/- each	Rs. 30.075 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		30.075	30.075	30.075
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		146.800	143.367	132.441
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		176.875	173.442	162.516
LOAN FUNDS
1] Secured Loans		189.897	197.039	133.031
2] Unsecured Loans		21.770	12.604	14.424
TOTAL BORROWING		211.667	209.643	147.455
DEFERRED TAX LIABILITIES		40.675	39.226	32.095

TOTAL		429.217	422.311	342.066

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		354.074	356.184	281.754
Capital work-in-progress		0.000	0.000	0.000

INVESTMENT		6.992	6.992	6.992
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	128.580	92.608	115.819
	Sundry Debtors	83.048	103.835	81.606
	Cash & Bank Balances	19.856	20.096	18.152
	Other Current Assets	2.688	2.707	3.358
	Loans & Advances	44.979	62.350	69.791
Total Current Assets		279.151	281.596	288.726
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	182.416	164.612	181.409
	Other Current Liabilities	25.017	34.902	30.909
	Provisions	3.567	22.947	23.088
Total Current Liabilities		211.000	222.461	235.406
Net Current Assets		68.151	59.135	53.320

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		429.217	422.311	342.066

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	799.296	1004.083	867.536
		Other Income	23.925	21.755	13.926
		TOTAL (A)	823.221	1025.838	881.462

Less	EXPENSES
		Cost of Material	439.005	593.926	531.492
		Stores Consumed	87.913	74.925	71.329
		Power and Fuel	92.141	97.710	94.809
		Personnel Expenses	31.382	33.619	33.850
		Other Expenditure	128.833	145.528	122.923
		Increase/Decrease in stock	(-10.337)	10.118	(21.463)
		TOTAL (B)	768.937	955.826	832.940

Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		54.284	70.012	48.522

Less	FINANCIAL EXPENSES (D)		21.884	24.733	11.711

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		32.400	45.279	36.811

Less/ Add	DEPRECIATION/ AMORTISATION (F)		22.078	24.239	14.575

	PROFIT BEFORE TAX (E-F) (G)		10.322	21.040	22.236

Less	TAX (I)		5.130	7.661	1.955

	PROFIT AFTER TAX (G-I) (J)		5.192	13.379	20.281

	EARNINGS IN FOREIGN CURRENCY
		Direct Export	83.986	135.619	100.676
		Merchant Export	3.553	1.173	1.516
	TOTAL EARNINGS		87.539	137.992	102.192

	Earnings Per Share (Rs.)		1.73	4.45	6.74

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	0.63	1.30	2.30

Net Profit Margin (PBT/Sales)	(%)	1.29	2.10	2.56

Return on Total Assets (PBT/Total Assets}	(%)	1.63	3.30	3.90

Return on Investment (ROI) (PBT/Networth)		0.06	0.12	0.14

Debt Equity Ratio (Total Liability/Networth)		2.39	2.49	2.36

Current Ratio (Current Asset/Current Liability)		1.32	1.27	1.23

LOCAL AGENCY FURTHER INFORMATION

Note :Registered office of the company has been shifted form NIthya Nilayam No.132 Palani Road, Venkatesa Mills Post, Udamalpet, Tamilnadu – 642128, India to the present address w.e.f. 01.06.2010.

WORKING : During the year the company encountered various adverse factors like sluggish market trend persistent power cut which ranged from 10 to 40% combined with unscheduled frequent power tripping which was even more disastrous spiraling cost of major indispensable inputs lie chemicals and dyes and even other inputs water was also scarce. Internal power generation from the cogeneration plant partially met the shortfall.

All the above resulted in cost escalation this again could not be passed on to the consumers on account of sluggish market trend.

FIXED ASSETS:

Land, Buildings
Machinery
Electric Machinery
Tools & Plant
Computer
Furniture
Office Equipment
Motor Vehicles
Live Stock
Wind Mill

Bankers Charges Report as per Registry

Corporate identity number of the company	U21012TZ1960PLC000341
Name of the company	Amaravathi Sri Venkatesa Paper Mills Limited
Address of the registered office or of the principal place of business in India of the company	Nithya Nilayam No 132 Palani Road, Venkatesa Mills Post, Udamalpet, Tamil Nadu 642128, India
This form is for	Creation of charge
Type of charge	Immovable property Movable property (not being pledge)
Particular of charge holder	The Tamilnadu Industrial Investment Corporation Limited, 94, Dr.Nanjappa Road, Coimbatore - 641018, Tamil Nadu, India Email – bmcoimbatore@tiic.in
Nature of instrument creating charge	Deed of Hypothecation dated 30.03.2010 for exclusive charge. Deed of Hypothecation dated 30.03.2010 for pari passu first charge Mortgage by Deposit of Title Deeds on 30.03.2010 for exclusive charge (No instrument executed). Mortgage by Deposit of Title Deeds on 30.03.2010 for Pari Passu first charge (No instrument executed).
Date of instrument Creating the charge	30.03.2010
Amount secured by the charge	Rs.65.000 million
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest - 15.75% per annum with reset clause at the beginning of every Financial Year. In case of default additional interest of 2.50% will be charged on the defaulted amount for the defaulted period. Terms of Repayment - The loan will be repaid in 72 monthly installments as per details given below:- First 24 installments of Rs.0.800 million each; Next 36 installments of Rs.0.900 million each; Next 10 installments of Rs.1.100 million each; and last 2 installments of Rs.1.200 million each. Margin - Advance Margin - Not applicable Extent and Operation of the charge - Hypothecation over all the plant and machinery De-inking Plant (exclusive charge) and all other plant and machinery (pari passu first charge) at Palani Road, Madathukulam Post 642 113 and Wind Mill at Maivadi Village. Exclusive charge and mortgage over the land and building at various survey numbers at Kondampatti Village,New Damu agar,Sarkarkannadiputhur, Pushpathur andTondiarpet and Pari passu 1st charge over the land and building situated at Midapadi and Pushpathur & Maivadi Villages.
Short particulars of the property or asset(s) charged (including complete address and location of the property)	Hypothecation (exclusive charge) over the De-inking Plant and machinery including movables, spares, tools and accessories, stock in process, finished goods, raw materials at palani Road, Madathukulam all other plant and machinery pari passu first charge present and future lying or stored or at palani Road, Madathukulam 642113. and 350kw Suzlon make wind mill at SF.No. 236/2A, Maivadi Village, Udumalpet TK. Exclusive charge over the land and building at SF No. 86/1-B, 87/1-A, 91/2 (17.50Acres) at Kondampatti Village, S.F.No. 191,174/B,C , 107/A2, 141, 142 and 209 (part) (8.10 Acres), Sarkarkannadiputhur. SF No.519/2 (24.4 Cents) and 523/1A (35 Cents) at Pushpathur Village. Site No.5, (6248 Sq.ft) New Damu Nagar, Coimbatore, Plot No.7 (10224 Sq.Ft) Door No.101, Tondiarpet, Chennai. Pari passu first charge over land measuring 91.70 Acres and building thereon at various Survey Nos. situated at Midapadi and Puspathur Village. and wind mill land measuring 1Acre at S. F. No. 236/2A at Maivadi Village, Udumalpet Tk.

As per website details

Unit Profile

Subject is a medium sized, 100% waste paper recycled paper manufacturing unit.The unit is located in the eastern banks of Amaravathi river at Palani Road, Swaminathapurm, Dindigul district, Tamil Nadu. The plant was commissioned on 1964 with initial plant capacity of 10 tpd.

The unit has grown gradually and now it has installed capacity of 24000MT/Annum. It is manufacturing the following varieties of papers.

1) Newsprint Paper.

2) Cultural varieties like manifold,white and color varieties.

The paper is manufactured by Deinking and Non Deinking process according to the variety of wastepaper. The fresh water consumption for the unit is 3500cu.m/day and the backwater is reused wherever necessary.

The plant is utilizing a maximum demand of 3440 KVA from State Electricity Board Grid. The unit don't have the co-generation plant for power generation at present. This Unit has one no of 250kw wind mill and supplying power to grid. The generated steam from the boiler is completely utilized for the process and the boiler has the capacity of 13.5TPH.

The plant has a full fledged effluent treatment plant and the treated effluent is discharged into the own land for irrigation to raise agricultural crops.

INFRASTRUCTURE

v Lamort pulp mill

v Voith De-Inking

v Krima Cellwood Hot-dispersion system

v Roningen petter Waste water recycling plant

v Pm1- 1.8.m deckle, surface sizing coating plant, 250MPM speed.

v Pm2- 1.8 m deckle, 240MPM speed.

v Pm3- 2.5 m deckle, Dr.Hogenkampf head-box, Edward Kusters Calender, Bertrams pope reel, 335MPM speed.

v Globe Rewinders and Duplex Cutters

v ETP system with Aerators and lagoons

v Wet Scrubber for less air pollution in the boiler

v Usage of High efficiency Nash vaccum pumps, Andritz pulp pumps and fan pumps and High consistency pulpers for reducing electricity consumption and water consumption.

v An Andritz wet-lap machin to makes salable-fibre.

Amaravathi Mills to expand paper production

R. Balaji

Chennai, June 26 Amaravathi Sri Venkatesa Paper Mills Ltd (ASVPM), a family-owned company, is expanding its newsprint production capacity based on recycled paper.

According to Msr G.R. Vishnuvardhan, Chief Executive, ASVPM, the company is setting up a 180-tonnes a day paper machine to manufacture newsprint from recycled paper. The Udumalpet-based Amaravathi group, which has interests in paper and textiles, has a total paper production capacity of over 360 tonnes a day distributed across four companies within the group.

The Group sees major opportunity for growth in the domestic and export markets. The expansion would make it one of the largest recycled paper manufacturers in the country. The expanded production capacity would be in place in about a year’s time, he said.

As a part of a modernisation process the group is doing away with a 25 tonne capacity obsolete paper machine. This would leave the group with a total installed production capacity of about 515 tonnes of various grades of paper in about a year.

The company has set up a power plant and pulp mill, based on imported recycled paper. It has started the process of importing a second hand, Beloit paper machine from Italy, he said.

Mr Vishnuvardhan said nearly half its production is in newsprint – about 4,000-5,000 tones a month.

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.45.12
UK Pound	1	Rs.73.43
Euro	1	Rs.62.32

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--CREDIT LINES	1~10	5
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		50

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	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

Item code no.

Product description

0.000

0.000

0.000

0.000

128.580

83.048

19.856

2.688

44.979

279.151

182.416

25.017

3.567

211.000

68.151

0.000

0.63

1.29

1.63

0.06

2.39

1.32

Unit