MIRA INFORM REPORT

Report Date :

03.08.2011

IDENTIFICATION DETAILS

Name :	HINDUSTAN NEWSPRINT LIMITED
Registered Office :	News Print Nagar, Mavelloorvaikom Taluk, Kottayam - 686616, Kerala
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	07.06.1983
Com. Reg. No.:	09-003735
Capital Investment / Paid-up Capital :	Rs.999.999 Millions
CIN No.: [Company Identification No.]	U21013KL1983GOI003735
TAN No.: [Tax Deduction & Collection Account No.]	TVDH00192D
PAN No.: [Permanent Account No.]	AAACH5288E
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Taking over and acquiring the business of the Kerala Newsprint Project
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba [45]

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 7670000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a subsidiary of Hindustan Paper Corporation Limited. It is an established company having satisfactory track. The company has incurred some losses in the current year. However, 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 / with some cautions.

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 – June 30, 2010

Country Name	Previous Rating (01.04.2010)	Current Rating (30.06.2010)
India	A1	A1

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

LOCATIONS

Registered Office :	News Print Nagar, Mavelloorvaikom Taluk, Kottayam – 686616, Kerala, India
Tel. No.:	91-4829-256211 to 256221
Fax No.:	91-4829-256777 / 251911
E-Mail :	secretarial@hnlonline.com hnl@hnlonline.com
Website :	http://www.hnlonline.com

DIRECTORS

As on 27.08.2010

Name :	Mrs. Subhendra Nath Bhattacharyya
Designation :	Director
DIN :	03147076
Date of Appointment :	19.07.2010
Name :	Mr. Madduri Venkata Narasimha Rao
Designation :	Managing Director
Address :	HPC Housing Complex, HC Block, Sector III, Saltlake City, Kolkata – 700091, West Bengal, India
Date of Birth/Age :	26.07.1955
DIN :	00470654
Date of Appointment :	29.09.2003
Name :	Mrs. Jyoti Prokash Bhattacharya
Designation :	Whole-time director
Address :	D 10, KC Avenue, Garia, Kolkata – 700084, West Bengal, India
Date of Birth/Age :	10.03.1952
DIN :	02534648
Date of Appointment :	26.09.2008
Date Of Cessation :	13.09.2010
Name :	Mr. Thotanchath Balakrishnan
Designation :	Nominee Director
Address :	Ram Niwas, BHakti Vilasom Road, Vazhuthacaud, Thiruvananthapuram, Kerala – 695001, India
Date of Birth/Age :	03.10.1951
DIN :	00052922
Date of Appointment :	13.01.2007
Name :	Mr. Sunil kumar Singh
Designation :	Nominee Director
Address :	D 413, Pragathi Vihar, Lodhi Road, Delhi – 110003, India
Date of Birth/Age :	13.02.1971
DIN :	02679637
Date of Appointment :	30.06.2010
Name :	Mr. Raji Philip
Designation :	Director
Address :	VIP Guest House, HPC Housing Complex, HC Block, Sector III, Saltlake City, Kolkata – 700091, West Bengal, India
Date of Birth/Age :	30.05.1957
DIN :	00188747
Date of Appointment :	20.03.2001

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 27.08.2010

Names of Shareholders	No. of Shares
Hindustan Paper Corporation Limited, India	99999900
Raji Philip	100
Madduri Venkata Narasimha Rao	100

As on 27.08.2010

Category	Percentage
Government Companies	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Taking over and acquiring the business of the Kerala Newsprint Project

Products :

Products Description	ITC Code No.
News Print	48.01

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

• State Bank Of India, Velloor, Mevelloor (Po), Kottayam - 686609, Kerala, India
• HDFC Bank
• State Bank of Travancore
• Indian Bank
• Canara Bank

Facilities :

Secured Loan [Rs. in million]	31.03.2010	31.03.2009
a) Cash Credit/Loan from Scheduled Commercial Banks taken on Short Term Basis (Secured by hypothecation of current assets such as Sundry Debtors, stocks of raw materials, stock in process, finished goods and stores S spares)
HDFC Bank	0.000	16.244
State Bank of Travancore	0.000	216.808
b) Term Loan for EDP; (Secured by first charge on the proposed HOP and second charge on the existing fixed assets of the Company)
State Bank of Travancore	0.000	20.000
Indian Bank	0.000	20.000
Canara Bank	0.000	53.500
Total	0.000	326.552

Banking Relations :	--
Auditors :
Name :	Kuryan And Suseelan Chartered Accountant
Address :	Pukadiyil Buildings, Sastri Road, Kottayam, Kerala - 686001, India
Tel. No.:	91-481-2563109 / 2580735
Fax No.:	91-481-2583152
E-Mail :	Kscaktm@gmail.com
HGolding Company :	Hindustan Paper Corporation Limited CIN : U74899DL1970PLC005301

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
100,000,000	Equity Shares	Rs.10/-each	Rs.1000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
19,420,300	Equity Shares issued for cash	Rs.10/-each	Rs.194.203 millions
80,579,600	Equity Shares issued for consideration other than cash	Rs.10/-each	Rs.805.796 millions
			Rs.999.999 millions

Held by Hindustan Paper Corporation Limited the holding company, and its nominee

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

Particulars		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		999.999	999.999	999.999
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		917.504	1397.744	1388.382
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1917.503	2397.743	2388.381
LOAN FUNDS
1] Secured Loans		0.000	326.552	78.771
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	326.552	78.771
DEFERRED TAX LIABILITIES		302.487	324.456	346.219
TOTAL		2219.990	3048.751	2813.371
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1453.012	1548.010	1592.330
Capital work-in-progress		186.085	171.241	127.674
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	610.619	1441.530	702.397
	Sundry Debtors	169.831	429.776	90.131
	Cash & Bank Balances	356.887	37.470	561.037
	Other Current Assets	2.586	2.250	5.063
	Loans & Advances	282.913	280.256	260.994
Total Current Assets		1422.836	2191.282	1619.622
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	391.266	536.033	213.639
	Other Current Liabilities	265.809	191.496	136.576
	Provisions	184.868	134.253	176.040
Total Current Liabilities		841.943	861.782	526.255
Net Current Assets		580.893	1329.500	1093.367
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		2219.990	3048.751	2813.371

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	2843.859	2976.737	2986.084
		Other Income	45.940	69.412	54.612
		TOTAL (A)	2889.799	3046.149	3040.696
Less	EXPENSES
		Raw Materials	839.169	964.402	910.185
		Chemicals and other Materials	388.850	410.438	385.092
		Power and Fuel	743.119	816.516	719.003
		Repairs and Maintenance	129.163	144.803	168.863
		Employees Remuneration and Benefits	609.866	570.534	419.238
		Other Expenses	159.903	221.653	130.848
		Change in finished goods and WIP	424.139	[428.383]	1.106
		TOTAL (B)	3294.209	2699.963	2734.335
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		[404.410]	346.186	306.361
Less	FINANCIAL EXPENSES (D)		6.668	13.414	5.938
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		[411.078]	332.772	300.423
Less/ Add	DEPRECIATION/ AMORTISATION (F)		122.929	120.185	118.037
	Prior period Adjustments		4.055	[1.634]	[1.393]
	PROFIT BEFORE TAX (E-F) (G)		[529.952]	210.953	180.993
Less	TAX (I)		49.712	84.597	65.624
	PROFIT AFTER TAX (G-I) (J)		[480.240]	126.356	115.369
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1277.900	1268.538	1211.667
Less	APPROPRIATIONS
		Interim Dividend	--	100.000	50.000
		Tax on Dividend	--	16.994	8.498
	BALANCE CARRIED TO THE B/S		797.660	1277.900	1268.538
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Export	1.861	1.338	0.000
	TOTAL EARNINGS		1.861	1.338	0.000
	IMPORTS
		Raw Materials and Consumables	75.820	460.214	190.233
		Components & Spare Parts	27.659	45.142	27.668
		Capital Goods	6.058	13.298	9.278
	TOTAL IMPORTS		109.537	518.654	227.179
	Earnings Per Share (Rs.)		[5.12]	1.28	1.39

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	[16.62]	4.15	3.79
Net Profit Margin (PBT/Sales)	(%)	[18.63]	7.09	6.06
Return on Total Assets (PBT/Total Assets}	(%)	[18.43]	5.64	5.63
Return on Investment (ROI) (PBT/Networth)		[0.28]	0.09	0.07
Debt Equity Ratio (Total Liability/Networth)		0.44	0.49	0.25
Current Ratio (Current Asset/Current Liability)		1.69	2.54	3.08

LOCAL AGENCY FURTHER INFORMATION

ORIGIN AND BRIEF HISTORY

The Company was incorporated as a Private Limited Company on 7^Ih June, 1983, as a wholly owned subsidiary of Hindustan Paper Corporation Limited, with the main objective of taking over and acquiring the business of the Kerala Newsprint Project, a unit of Hindustan Paper Corporation Limited, on a going concern basis in accordance with the directive of the Government of India.

Operational Performance

The company achieved a production of 100546 MT which is 101 % of the installed capacity for the FY ending 31^s1 March 2010. During the year the company sold 120986 MT of newsprint thereby disposing of the entire production and the accumulated stock of 20529 MT held at the end of the previous year.

Financial Performance

The financial performance of the company was not encouraging with a sales turnover of Rs.2843.900 millions for the year ending 31^s' March, 2010 compared to Rs.2976.700 millions during the previous year. The company was forced to sell newsprint at lower prices as a result of availability of imported newsprint at cheaper prices. Therefore the Net Sales Ratio of your company has drastically came down to Rs.23506 per MT for the year ending 31^st March 2010 from Rs.34029 per MT during the previous year which is 31% less over the previous year.

Contingent Liabilities

Rs. in millions

Particulars	31.03.2010	31.03.2009
a) Suits for enhancement of compensation filed by ex-land owners whose lands were acquired for Kerala Newsprint Mill.	2.000	2.000
b) Disputed liability in respect of Sales Tax	*246.965	13.809
c) Value of Bills Discounted and Letters of Credit issued by Bankers	3.775	103.066
d) Contingent Liability in respect of House Loan advanced to employees by HDFC Limited	0.024	0.112
e) Claims against the Company not acknowledged as debts
1 Claim for Service Tax by Service Providers	37.334	31.570
2 Claims made under Kerala Grants and Leases (Modification of Rights) Ac 1980	0.000	14.168
3 Claims made by Forest Department, GoK towards Lease rent	9.977	0.000
4 Others	16.324	16.678
f) Contingent Liability for Income fax	26.828	29.559
g) Contingent Liability in respect of estimated Customs Duty on stock of imported pulp and Waste paper	0.000	1.568
h) Disputed liability to KFDC	1.823	1.823
Contingent Liability in respect of Bank Guarantees issued favouring KSEB, Mahanadi Coalfields Limited and T.T. Devasslhanams Press.	20.873	21.799

*Includes Rs.81.258 millions considered on the basis of pre-assessment notice for the year 2006-07

Form 8

Corporate identity number of the company	U21013KL1983GOI003735
Name of the company	HINDUSTAN NEWS PRINT LIMITED
Address of the registered office or of the principal place of business in India of the company	News Print Nagar Mavelloorvaikom Taluk, Kottayam, Kerala - 686616, India
This form is for	Creation of Charge
Type of charge	Book Debts Movable Property others
Particular of charge holder	State Bank Of India, Velloor, Mevelloor (Po), Kottayam - 686609, Kerala, India
Nature of instrument creating charge	Agreement for loan and hypothecation of goods and assets.
Date of instrument Creating the charge	18.01.2011
Amount secured by the charge	Rs.50.000 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest – 11.6% Terms of Repayment – On Demand Margin – 25% Extent and Operation of the charge – Pari Passu Charge on current Assets
Short particulars of the property or asset(s) charged (including complete address and location of the property)	Pari Passu Charge on current Assets

FIXED ASSETS :

· Land

· Building

· Roads

· Railway Siding

· Plant and Machinery

· Construction Equipment

· Office Equipment

· Furniture and Fixtures

· Other Equipments

· Durable Tools

· Fans and Electricals

· Cooling Apartment

· Vehicles

· Water Supply

· Drainage and Sewage System

· Air Conditioner

· Air Cooler

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.44.22
UK Pound	1	Rs.72.09
Euro	1	Rs.62.98

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	4
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

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.