MIRA
INFORM REPORT
|
Report Date : |
04.01.2012 |
IDENTIFICATION DETAILS
|
Name : |
THE ANDHRA PRADESH PAPER MILLS LIMITED |
|
|
|
|
Registered
Office : |
Rajamundry, East Godavari District Andhra Pradesh – 533105, Hyderabad |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2011 |
|
|
|
|
Date of
Incorporation : |
29.06.1964 |
|
|
|
|
Com. Reg. No.: |
01-001008 |
|
|
|
|
Capital Investment
/ Paid-up Capital : |
Rs.397.700 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L21010AP1964PLC001008 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
VPNT00325D |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACT8849B |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchange. |
|
|
|
|
Line of Business
: |
Manufacturer, Importer and Exporter of Creamwove – Maplitho, Karft Paper,
Uncoated Paper Boards, News Print etc. |
|
|
|
|
No. of Employees
: |
2492 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
A (70) |
|
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 |
|
Maximum Credit Limit : |
USD 23100000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
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. Business is active. Payments are reported to be regular 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 – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
|
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/ Factory 1 : |
Rajamundry, East Godavari District Andhra Pradesh – 533105, Hyderabad,
India |
|
Tel. No.: |
91-883-2471831 to 2471838 |
|
Fax No.: |
91-883-2461764 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate Office : |
501-509, Swapnalok Complex, 5th Floor, 92/93, Sarojini Devi
Road, Secunderabad-500003, Andhra Pradesh, India |
|
Tel. No.: |
91-40-30482614 / 27813715 |
|
Fax No.: |
91-40-27813717 |
|
E-Mail : |
|
|
|
|
|
Factory 2 : |
Industrial
Area, MR Palem – 533126, Kadiyam Mandalam, East, Godavari District, Andhra
Pradesh, India |
|
Tel. No.: |
91-883-2454651 |
|
Fax No.: |
91-883-2453538 |
|
E-Mail : |
|
|
|
|
|
Branches : |
DELHI Tel No.:-91-11-23275731/23276817/23367578 KOLKATA 7th Floor, Krishna Apartments, 224/A, AJC
Bose Road, Kolkata
700 017, West Bengal, India CHENNAI C/o Hindustan Import Export Corporation,
Post Box No.1205, 122, Broadway, 2nd Floor, Chennai 600 108, Tamil Nadu, India MUMBAI Shrinivas House, Hazarimal Somani Marg, Mumbai 400 001, Maharashtra, India BANGLORE # 36, Ground Floor, 2nd Main Road, Satyanarayana Temple Street,
Srinivas Nagar, Kathireguppa Main Road, BSK 111 Stage, Bangalore 560 085, India |
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. L. N. Bangur |
|
Designation : |
Executive Chairman |
|
|
|
|
Name : |
Mr. N. Srinivasan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. R. C. Sarin |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. P.J.V. Sarma |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. P. R. Ramakrishnan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. P. K. Paul |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Rajiv Kapasi |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Paul Brown |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. M.K. Tara |
|
Designation : |
Managing Director and Chief Executive Officer |
|
|
|
|
Name : |
Ms. Sheetal Bangur |
|
Designation : |
Director (Commercial) |
|
|
|
|
Name : |
Mr. Shreeyash Bangur |
|
Designation : |
Director (Corporate) |
|
|
|
|
Name : |
Mr. P.K. Suri |
|
Designation : |
Director (Operations) |
KEY EXECUTIVES
|
Name : |
Mr. E. Sairam |
|
Designation : |
Senior Vice President (Finance and Accounts) and Chief
Finance Officer |
|
|
|
|
Name : |
Mr. C. Prabhakar |
|
Designation : |
Senior Vice President (Corporate Affairs) and Company
Secretary |
|
|
|
|
Name : |
Mr. Jaspal Singh |
|
Designation : |
Senior Vice President (Marketing) |
|
|
|
|
Name : |
Mr. Hemant Kumar Singh |
|
Designation : |
Chief Information Officer |
|
|
|
|
Name : |
Mr. Yogesh Jain |
|
Designation : |
Associate Vice President (Commercial) |
|
|
|
|
Name : |
Mr. Y. Uday Shankar |
|
Designation : |
General Manager (Product Development and Technical
Services) |
|
|
|
|
Name : |
Mr. Shalab Agarwal |
|
Designation : |
General Manager (Marketing) |
|
|
|
|
Name : |
Mr. S. Vasudevan |
|
Designation : |
General Manager (Marketing Support) |
|
|
|
|
Name : |
Dr. Alok Prakash |
|
Designation : |
Associate Vice President (Customer Relationships and Institutional Sales) |
|
|
|
|
Name : |
Mr. Raghu Reganti |
|
Designation : |
Senior Vice President (Projects) |
|
|
|
|
Name : |
Mr. K.M. Kasetty |
|
Designation : |
General Manager (Paper) |
|
|
|
|
Name : |
Mr. T.S. Sundaram |
|
Designation : |
General Manager (Works) (Unit: CP) |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.09.2011
|
Category of Shareholder |
Total No. of
Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
|
|
|
|
29827529 |
75.00 |
|
|
29827529 |
75.00 |
|
Total shareholding of Promoter and Promoter Group (A) |
29827529 |
75.00 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
200 |
-- |
|
Financial Institutions/
Banks |
30280 |
0.08 |
|
Insurance Companies |
1243350 |
3.13 |
|
|
457546 |
1.15 |
|
|
288000 |
0.72 |
|
Foreign Bank |
200 |
-- |
|
Foreign Financial Investors |
287800 |
0.72 |
|
Sub Total |
2019376 |
5.08 |
|
|
|
|
|
|
4029281 |
10.13 |
|
|
|
|
|
Individual shareholders holding nominal share capital up to Rs.0.100
Million |
2229086 |
5.60 |
|
Individual shareholders holding nominal share capital in excess of
Rs.0.100 Million |
1494203 |
3.76 |
|
|
170564 |
0.43 |
|
Trusts |
6382 |
0.02 |
|
|
139639 |
0.35 |
|
|
24543 |
0.06 |
|
|
7923134 |
19.92 |
|
Total Public shareholding (B) |
9942510 |
25.00 |
|
Total (A)+(B) |
39770039 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
Total (A)+(B)+(C) |
39770039 |
- |
(1) Indian
Bodies Corporate
BUSINESS DETAILS
|
Line of Business : |
Manufacturer, Importer and Exporter of Creamwove – Maplitho, Karft
Paper, Uncoated Paper Boards, News Print etc. |
||||||||||
|
|
|
||||||||||
|
Products : |
|
PRODUCTION STATUS AS ON 31.03.2011
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
Pulp, Paper and Board* |
MT |
232189 |
187233 |
|
Generation of electricity** |
MW |
62.94 |
3192.44 Kwh Lakhs |
|
Generation of steam |
TPH |
573 |
2402712 MT |
* represents
finished production of Paper and Paper Board. Production of pulp is not
separately ascertained as pulp plant is an integral part of paper and paper
board plant. Includes pulp production of 4,733 MT (Previous year:
24,705 MT) meant
for external sales.
** Total
generation of steam is for internal consumption. Generation of electricity is
for internal consumption with surplus units sold to APTRANSCO.
Notes:
i. Licensed
capacity not applicable in terms of Government of India's notification.
ii. Installed
capacities are as certified by the Managing Director and CEO and have not been
verified by the auditors as this is a technical matter.
GENERAL INFORMATION
|
No. of Employees : |
2492 (Approximately) |
||||||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||||||
|
Bankers : |
·
State Bank of India ·
Canara Bank ·
Axis Bank Limited ·
ICICI Bank Limited |
||||||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||||||
|
Facilities : |
Notes: 1. Term loans
from the financial institutions viz. International Finance Corporation,
Deutsche Investitions-und Entwicklungsgesellschaft mbH, State Bank of India, Canara
Bank, IDBI Bank Limited and Axis Bank Limited except ICICI Bank Limited are
secured by a pari passu first
charge on all movable and immovable properties of the Company situated at
Rajahmundry, Serinarasannapalem and Kadiyam, in accordance with respective
loan agreements and subject to charge under Note No.2. Further, term loans
from Axis Bank Limted have a second charge on current assets of the Company.
The Company is in
the process of creating charge on the term loan of Rs.300.000 Millions taken
from ICICI Bank Limited on 31st March, 2011. 2. Working
capital facilities from State Bank of India and Canara Bank are secured by
hypothecation of raw materials, finished stock, stock in process, stores and
spare parts etc. along with a second charge on the fixed assets of the
Company situated at Rajahmundry, Serinarasannapalem and Kadiyam. 3. 14,99,330
(Previous year: 9,71,115) equity shares of Rs.10 each of the Company held by
Digvijay Investments Limited have been pledged in favour of IDBI Trusteeship
Services Limited for the benefit of International Finance Corporation and
Deutsche Investitions-und Entwicklungsgesellschaft mbH.
|
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
B S R and Company Chartered Accountants |
|
Address : |
Hyderabad, Andhra Pradesh, India |
|
|
|
|
Cost Auditors : |
|
|
Name : |
Narasimha Murthy and Company Chartered Accountants |
|
Address : |
Hyderabad, Andhra Pradesh, India |
|
|
|
|
Enterprises where principal shareholders have control : |
Samay Books Limited |
|
|
|
|
Enterprises where principal shareholders have significant influence : |
·
Digvijay Investments Limited ·
Amalgamated Development Limited ·
Apurva Export Private Limited ·
MB Commercial Company Limited ·
Maharaja Shree Umaid Mills Limited ·
Mugneeram Ramcoowar Bangur ·
Charitable and Religious Company ·
Placid Limited
·
Shree Krishna Agency Limited ·
The General Investment Company Limited ·
The Kishore Trading Company Limited ·
The Peria Karamalai Tea and Produce Company
Limited ·
The Swadeshi Commercial Company Limited |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
40000000 |
Equity Shares |
Rs.10/- each |
Rs.400.000 Millions |
|
500000 |
Redeemable cumulative preference shares |
Rs.100/- each |
Rs.50.000 Millions |
|
|
Total |
|
Rs.450.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
39770039 |
Equity Shares |
Rs.10/- each |
Rs.397.700 Millions
|
|
|
|
|
|
Notes:
1. Subscribed and
paid-up share capital includes:
a. 70,18,242
equity shares of Rs.10 each at a premium of Rs.40 per share were allotted
during the current year as fully paid up by converting an equivalent number of detachable
warrants.
b. 9,98,500
(previous year: 9,98,500) equity shares of Rs.10 each were allotted as fully
paid up pursuant to a contract without payment being received in cash.
c. 11,25,000
(previous year: 11,25,000) equity shares of Rs.10 each fully paid up were
allotted for consideration other than cash as bonus shares by capitalisation of
reserves.
d. 5,80,000
(previous year: 5,80,000) equity shares of Rs.10 each were allotted to the
shareholders of amalgamating company, Coastal Papers Limited pursuant to the
scheme of amalgamation without payment being received in cash.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
397.700 |
327.518 |
257.336 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
5385.573 |
4701.935 |
3922.440 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
5783.273 |
5029.453 |
4179.776 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
3977.826 |
4569.541 |
4747.779 |
|
|
2] Unsecured Loans |
381.846 |
364.118 |
862.538 |
|
|
TOTAL BORROWING |
4359.672 |
4933.659 |
5610.317 |
|
|
DEFERRED TAX LIABILITIES |
427.125 |
307.525 |
216.555 |
|
|
|
|
|
|
|
|
TOTAL |
10570.070 |
10270.637 |
10006.648 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
8582.768 |
6779.926 |
7508.689 |
|
|
Capital work-in-progress |
367.800 |
2259.575 |
1524.621 |
|
|
|
|
|
|
|
|
INVESTMENT |
166.434 |
166.434 |
166.434 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1210.685
|
1158.720
|
1352.485 |
|
|
Sundry Debtors |
562.936
|
464.246
|
387.491 |
|
|
Cash & Bank Balances |
206.809
|
137.664
|
80.700 |
|
|
Other Current Assets |
0.000
|
0.000
|
11.666 |
|
|
Loans & Advances |
918.198
|
722.911
|
557.793 |
|
Total
Current Assets |
2898.628
|
2483.541
|
2390.135 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
1140.696
|
1048.068
|
1349.001 |
|
|
Other Current Liabilities |
258.642
|
307.385
|
198.025 |
|
|
Provisions |
46.222
|
63.386
|
50.476 |
|
Total
Current Liabilities |
1445.560
|
1418.839
|
1597.502 |
|
|
Net Current Assets |
1453.068
|
1064.702
|
792.633 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
14.271 |
|
|
|
|
|
|
|
|
TOTAL |
10570.070 |
10270.637 |
10006.648 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
7818.127 |
6492.861 |
6279.485 |
|
|
|
Other Income |
168.081 |
87.360 |
102.329 |
|
|
|
TOTAL (A) |
7986.208 |
6580.221 |
6381.814 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Material Costs |
2149.029 |
1746.272 |
|
|
|
|
Manufacturing expenses |
2833.028 |
2208.361 |
|
|
|
|
Personal Costs |
797.624 |
564.892 |
|
|
|
|
Operating and Other Expenses |
567.152 |
530.426 |
|
|
|
|
TOTAL (B) |
6346.833 |
5049.951 |
5128.113 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1639.375 |
1530.270 |
1253.701 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
398.843 |
321.545 |
493.709 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1240.532 |
1208.725 |
759.992 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
669.672 |
558.172 |
541.119 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
570.860 |
650.553 |
218.873 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
121.438 |
108.619 |
29.334 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H)
(I) |
449.422 |
541.934 |
189.539 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
699.854 |
1196.101 |
1040.628 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
500.000 |
1000.000 |
19.000 |
|
|
|
Proposed Dividend |
39.770 |
32.742 |
12.877 |
|
|
|
Tax on Proposed Dividend |
6.452 |
5.439 |
2.189 |
|
|
BALANCE CARRIED
TO THE B/S |
603.054 |
699.854 |
1196.101 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN FOREIGN
CURRENCY |
|
|
|
|
|
|
|
Export on FOB basis |
447.479 |
441.798 |
540.508 |
|
|
TOTAL EARNINGS |
447.479 |
441.798 |
540.508 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
281.272 |
260.247 |
306.801 |
|
|
|
Stores & Spares |
216.925 |
157.538 |
201.018 |
|
|
|
Capital Goods |
64.721 |
101.339 |
1.599 |
|
|
TOTAL IMPORTS |
562.918 |
519.124 |
509.418 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
12.82 |
21.03 |
7.37 |
|
QUARTERLY RESULTS
(Rs.
In Millions)
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
|
|
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
|
UnAudited |
UnAudited |
UnAudited |
|
Net Sales |
1993.320 |
204.320 |
1940.060 |
|
Total Expenditure |
1534.560 |
1830.460 |
1828.700 |
|
PBIDT (Excl OI) |
458.760 |
212.740 |
111.360 |
|
Other Income |
7.880 |
6.820 |
17.070 |
|
Operating Profit |
466.640 |
219.560 |
128.430 |
|
Interest |
94.730 |
150.010 |
195.310 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
371.910 |
69.550 |
(66.800) |
|
Depreciation |
167.320 |
173.470 |
165.420 |
|
Profit Before Tax |
240.590 |
(103.920) |
(232.300) |
|
Tax |
41.510 |
822.980 |
(17.990) |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
163.090 |
(926.900) |
(214.310) |
|
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 |
163.090 |
(926.900) |
(214.310) |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
5.63
|
8.24
|
2.97 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
7.30
|
10.02
|
3.48 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
4.97
|
7.02
|
2.21 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.10
|
0.13
|
0.05 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.00
|
1.26
|
1.78 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.00
|
1.75
|
1.50 |
LOCAL AGENCY FURTHER INFORMATION
FINANCIAL RESULTS
During the year, the Company recorded
production of 1,87,233 MT as against 1,76,452 MT in the previous year and sales
of 1,93,302 MT as compared to 1,77,351 MT in the previous year. The increase in
volumes and net sales realization contributed to higher sales value. EBIDTA was
Rs.1639.400 Millions as against Rs.1530.300 Millions in the corresponding year.
However, profitability was affected due to higher input cost, retrospective
settlement of wage revision following an agreement with the union of Unit:APPM,
higher depreciation cost and interest and finance charges.
Change in the share capital
On 2nd December, 2010, the Company allotted
70,18,242 equity shares of Rs.10 each for cash at a premium of Rs.40 per share
aggregating to Rs.350.912 Millions by converting equivalent number of
Detachable Warrants.
Consequently, the equity share capital has
gone up from `32,75,17,970 divided into 3,27,51,797 equity shares of Rs.10 each
to Rs.397.700 Millions divided into 3,97,70,039 equity shares of Rs.10 each.
The newly issued equity shares have since been listed on Bombay Stock Exchange
Limited and National Stock Exchange of India Limited.
Sale of Promoter Shareholding
On 1st April, 2011, a public announcement was
issued by Lazard India Private Limited on behalf of IP Holding Asia Singapore
PTE. Limited (Acquirer) along with International Paper Company ('Person Acting
in Concert' or PAC) to the equity shareholders of the Company pursuant to
Regulations 10, 12 and other applicable provisions of Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,
1997 offering to acquire 85,67,521 equity shares of `10 each representing
21.54% of the paid-up capital of the Company at Rs.544.20 per share payable in
cash. The public announcement was made consequent upon share purchase agreement
dated 29th March, 2011 entered into with the promoter group of APPM whereby the
acquirer would purchase the entire shareholding of the promoter group in APPM.
The acquirer is a private unlisted company
incorporated on 15th September, 2010 under the laws of Singapore and is a
subsidiary of IP International Holdings Inc., a subsidiary of International
Paper Company. The PAC is a global paper and packaging company with
manufacturing operations in North America, Europe, Latin America, Russia, Asia
and North Africa. Its businesses include uncoated papers and industrial and
consumer packaging, complemented by xpedx, the company's North American
distribution company. Net sales for the financial year ended 31st December,
2010 were more than USD 25 billion.
After acquisition of shares from the promoter
group and the equity shareholders from the public category, the acquirer would
be holding 75% of the equity share capital of the Company. Consequently, the
Company would become a subsidiary of IP Holding Asia Singapore PTE. Limited.
Marketing and exports
Sales for the year were 1,93,302 MT as
compared to 1,77,351 MT in the previous year. In 2010-11, paper sales comprised
1,88,569 MT and sale of surplus pulp was 4,733 MT in comparison, paper sales in
2009-10 was 1,52,646 MT and that of pulp was 24,705 MT. Additional quantity
resulted from the commissioning of PM 6. However, the complete benefit of the
expanded capacity will be derived in the financial year 2011-12.
The Company managed to get a better Net Sales
Realization per MT over the previous year partly due to better market
conditions and revisions in the price list across all grades and partly due to
change in product mix at Unit:CP.
Export volumes were 21,669 MT as against
13,646 MT in the previous year. The Company was not only able to significantly
increase quantity, but also able to substantially increase the sales
realization per MT over the previous year as well.
Raw material procurement
In the field of social/farm forestry, efforts
were made to increase the area under plantation activities in order to meet the
demand of pulpwood in tune with the mill development plan. Concerted efforts by
APPM have enabled to meet and over come the stiff competition in the catchment
for pulpwood procurement.
Raw material resource development
103.70 million quality saplings were developed
and distributed during the year 2010-11 covering an area of 15,000 Ha under
plantation against development and distribution of 97 million saplings covering
an extent of 14,000 Ha during previous 2009- 10 planting year. Research on
clonal development has resulted into introduction of high yielding, disease
resistant clones and versatile to a wide variety of agro-climatic conditions in
inland and coastal areas.
Research and Development initiatives with low
cost planting techniques, quality seed material and high yielding, short
rotation planting stock have enhanced raw material availability spread over
more than 1,15,000 Ha. These benefits are extended to around 41,000 families
creating employment resource pool of 57 million man-days especially in rural
areas so far.
Forestry targeting marginal and wastelands
The ongoing farm forestry activities focused
on agrarian community of small and marginal land holdings which could be better
utilised for plantations with minimal investment by adopting low cost planting
technology. Wasteland development also geared up by introducing site specific
superior clones. Introduction of casuarina hybrid has come out with higher yield
ensuring quality raw material to mills and higher returns to farmers.
The mills farm forestry activities have helped
in generating the pulpwood requirement to mills and also in sustaining the
local needs of farmers by means of generating employment and upliftment of
socio-economic conditions of the villagers and tribal communities.
The industries presence in greening waste
lands for raw material resources have created a strong network comprising
tribal beneficiaries, self help groups, village organizations etc. to fight
against poverty and natural disasters.
Projects
Unit:APPM
Paper Machine # 6
Erection of the second hand paper machine of
capacity of 67,000 TPA, imported from Germany was completed and commissioned in
May 2010. The machine has stabilized.
Two numbers of sheet cutters were received
along with the paper machine and installed in conversion unit near mill and
were commissioned in August 2010.
In addition, one number synchro duplex sheeter
and A4 cutting line were commissioned at SN Palem facility in March 2011.
Export of power
Retrofit of electro static precipitators (ESP)
for reduction of emissions and environment in improvement is completed for coal
fired boilers No.1 to 5. Electrical front arrangements are also completed to
export power up to 8 MW per day.
Construction of D1 tower for DnD sequence
Tower construction and equipment erection was
completed. Tower testing, equipment pre-commissioning trials were completed and
commissioned in July 2011.
Installation of a new ESP and retrofit of Recovery Boiler # 4
All equipments for ESP are received at site.
Erection completed and commissioned in April 2011. Boiler retrofit shall be
carried out during November 2011.
Modifications in Paper Machine # 5
New closed hood and PV system, new state of
art design steam and condensate system equipment, new ceramic top de-watering
elements and new micro travel variable speed high pressure oscillating showers
are ordered on reputed suppliers and partly received at site. The modifications
of new closed hood and ventilation will be completed during November 2011. All
other modifications were completed during April 2011.
Re-winders for PM # 3 and PM # 6
New re-winders are being installed in PM # 6
and PM # 3 to meet the production requirements. The existing Jagenberg rewinder
of PM # 6 is being retrofitted and operates at its rated speed. The existing
re-winder of PM # 3 will be retrofitted and installed for PM # 2 to meet
converting capacity of the machine.
On-line monitoring systems for stacks, ambient air quality and waste
water
New on-line monitoring systems are installed
for stacks for CF Boiler # 1 to CF Boiler # 6 (for SPM) in July 2011.
Installation of on-line monitoring system is in progress for both the lime
kilns (for SPM and H2S) and Recovery Boiler # 4 (for SPM and H2S). Ambient air
quality monitoring systems (RSPM, SO2, NOx, and Methyl Mercaptans) are being
installed. On-line monitoring systems for waste water (for total organic
carbon, dissolved oxygen, temperature and pH) are also being installed.
Unit:CP
Retrofit of De-Inking Plant
All the imported and indigenous equipment were
received at site. Erection is completed and commissioned in July 2011.
On-line monitoring systems for stack
New on-line monitoring systems are being
installed for stack of CF Boiler # 4 (for SPM). On-line monitoring systems for
waste water (for total organic carbon) are being installed.
Awards
The Company received the following awards
during the year:
i. The Financial Express - Emergent Venture
India (FE-EVI) Green Business Leadership Award in pulp and paper Sector for the
year 2009-10 for its commitments and continuous improvements towards
environment protection, minimizing greenhouse gas emissions through selection
of state-of-the-art technologies and bringing awareness about climate change.
ii. IPMA Environment Award 2009-10.
iii. The CII Environmental Best Practices
Award 2011 for its commitment and continuous improvements towards environment
protection by installing high efficiency and low odour chemical recovery
boiler.
MANAGEMENT DISCUSSION AND ANALYSIS
GLOBAL SCENARIO
The global paper and paperboard industry is
equally distributed between North America, Europe and Asia. Global paper and
paperboard production stands at around 380 million tons, with US accounting
with over 100 million tons and accounting for nearly a third of the world's
consumption. With a large number of paper production capacities shutting down
in North America and Europe and growing capacity creation in Asia, the global
manufacturing industry is fairly distributed. Asia accounts for over a third of
global paper production, while Europe and North America account for about 30%
and 26% respectively.
Paper demand however, is unevenly distributed
as 72% of the world's paper is consumed by 22% of the world's population - in
the US, Europe and Japan. The world demand for the material is expected to grow
by around 3% annually, reaching an estimated 490 million tons by 2020, with
significant growth coming out of Asia and Eastern Europe.
INDIAN PAPER INDUSTRY - A BRIEF OVERVIEW
The Indian paper industry is more than 140
years old with the first mill having been commissioned in 1867. Over the years,
in line with the improvement in the well-being of people and rising literacy
and aspiration levels, paper usage has increased. Today almost every person
uses paper in one form or the other. The industry has responded to the growth
in demand and the installed capacity in India has risen from 0.137 million MT
per annum in 1951 to 10 million MT. This includes capacity expansion of
approximately 0.7 million MT in recent past.
Domestic production of paper and paperboards
is estimated to be around 10 million MT as per industry estimates. Overall paper
consumption (including newsprint) has also touched 10 million MT and per capita
consumption stands at approximately 9.18 kgs. However, the momentum in paper
usage has neither kept pace with the growth in population, nor does it match
the global per capita consumption of 56 kgs. Indian per capita consumption can
be appreciated by examining the Asian record - Japan 250 kgs; Korea 170 kgs;
China 45 kgs; and Asian average is 46kgs.
While India has 15% of the world population,
it consumes only 1.6% of the world paper production. The low consumption
pattern remains both a challenge in the short term as well as an opportunity in
the long term to tap the future aspiration requirements of the Indian society.
At present, there are about 515 units engaged
in the manufacture of paper, paperboards and newsprint across the country.
India is almost self-sufficient in the manufacture of most varieties of paper
and paperboards. Import is confined only to certain specialty papers and
newsprint.
Raw materials and power constitutes the major
cost, accounting for around 55 to 60%of the total costs. The paper industry
faces a demand-supply mismatch in raw materials, resulting in price rise. The
cost of pulp has been rising after the global slump, reaching an all time high of
USD 974 per tonne. The earthquake in Chile disrupted pulp supplies by about
three million tonnes, resulting in price increase of pulp across the world.
Paper manufacturers use a variety of raw
materials like hardwood, bamboo, recycled fibre, bagasse, wheat and rice straw.
Approximately 30% of the paper manufacturing units in India are based on
chemical pulp, 39% on recycled fibre and 31% on agro-residues. A substantial
part of the raw material needs of the country is met through wood procured
indigenously and imported pulp and waste paper accounts for 6 to 7% of the
domestic production.
The geographical spread of the industry as
well as the paper markets is mainly responsible for the regional balance of
production and consumption. Most paper mills in India have been in existence
for several years and therefore, they use a wide spectrum of technologies
ranging from the oldest to the most modern.
Performance of the industry has been
constrained due to high cost of production characterized by rising raw material
and power cost. The industry needs large quantity of pulpwood and water and
often faces supply limitations for them. Furthermore, they are subject to very
strict environmental regulations.
Paper industry in India is highly fragmented. The
sector is dominated by small and medium sized units and the number of mills
with capacity of more than 50,000 MTPA is not more than 30. In products such as
newsprint, less than half a dozen mills account for almost 90% production in
the country. In recent times, the industry is striving to modernize its
manufacturing locations, improve productivity and build new production
capacities with the induction of pulp and paper machines with capabilities of
producing more than 50,000 MTPA.
Industry pressures have been managed better by
forward looking entrepreneurs. Large modern mills which are environment
conscious and are reasonably assured of raw material supplies are presently
able to expand capacities, derive advantages of size, enhance production efficiencies,
improve productivity and quality and respond to the challenges of the market.
These units place premium on latest technology and environmental standards and
have derived productivity gains which in turn have helped them climb up the
value chain both in terms of product and process efficiencies.
The Union Government has completely delicensed
the paper industry with effect from 17th July, 1997. Entrepreneurs are required
to file an Industrial Entrepreneur Memorandum with the Secretariat for
Industrial Assistance for setting up a new paper mill or substantial expansion
of the existing mill in permissible locations.
Paper industry has been granted the status of
a priority sector for foreign collaboration and foreign equity participation up
to 100% and is entitled to receive automatic approval from Reserve Bank of
India. Several fiscal incentives have also been provided particularly to those
mills which are based on nonconventional raw materials.
Estimated turnover of the industry is
approximately Rs.296000.000 Millions and its contribution to the exchequer is
around Rs.29000.000 Millions. The industry provides employment to more than
1,20,000 people directly and another 3,40,000 indirectly.
CRISIL in its latest report has categorized
industrial papers as the highest market segment which accounts for
approximately 41% of the paper market; the writing and printing (W and P)
segment constitutes about 39%; newsprint and specialty segments make up the
balance 15% and 5%, respectively.
Demand for paper and paperboard closely follow
the economic growth of a country and have a positive correlation to the
prevailing economic trends. In India, the demand drivers and growth triggers
have come from a combination of factors:
·
the rising level of
national income;
·
the growing per capita
disposable income;
·
rising aspiration levels
of the people;
·
increasing size of the
population;
·
increasing size of the
service industry;
·
spread of education and
literacy throughout the country;
·
government's several
initiatives that focus on education; and
·
higher level of
industrial activity and corporate spending.
Historically, strong economic growth has been
accompanied by equally robust demand for paper. So far, the growth in Indian
paper industry has mirrored the growth in GDP which, has grown on an average
8%+ over the past few years. During the past five years, while newsprint
registered a growth of 13%, W and P, containerboard, carton board and others
registered growth of 7.5%, 11% and 9%, respectively.
GLOBAL IMPACT IN 2010
The global paper market saw severe disruption
in 2010. The massively devastating earthquake in Chile together with the
Finnish dock strikes proved disastrous for the already unsustainable paper
market. The Chilean earthquake on 27th February killed 500 people
and caused an estimated USD 30 billion worth of damage. Chile supplies 8% of
all paper pulp, so as production in Chile ceased, paper production companies
all over the world lost out on valuable supplies. This led to an increase in
demand for paper pulp from other sources and this in turn led to increased
prices at a time when paper pulp was already at a 15 year high.
The Finnish dock strikes in March aggravated
the situation further. Finland is a major paper manufacturer, accountable for
4% of the global export of paper. With all exports ceased, even for just 16
days, a huge backlog of paper was created. Finnish paper mills ran out of
storage and production had to be halted all together. When the dock strikes
ended it took weeks for production to begin again and for the stored stock to
be exported, creating a wave of disruption through the industry. Lack of supply
meant higher demand and once again paper prices were forced higher. Industrial
action in European mills in mid 2010 exacerbated the paper prices. Almost until
end 2010, the prices remained elevated.
PERSPECTIVE AT APPM MILLS
The paper industry's challenges would offer
opportunities for the best integrated mills with the ability to produce high
quality products at the most competitive prices. Vertically integrated
producers with the latest technology would be able to offer the best quality
products while containing their costs. Improved processes and cost controls
would facilitate margins and manage competitive pressures.
Andhra Pradesh Paper Mills (APPM) has been one
of the first to recognize the potential in actively promoting agro forestry
with private land holders/farmers to meet its raw material needs in a
sustainable manner. This has helped the Company to access pulp of the highest
quality, modernise the processes by incorporating the latest state-of-the-art
production technology, enhance production capacity, conserve fossil fuel,
recover and recycle chemicals and water, improve productivity and quality of
products, upgrade environmental technologies and be cost competitive in
manufacturing economics. APPM has hugely improved its competitive strength and
presently has the ability to overcome the pressure points that confront the
industry.
APPM is one of the largest integrated pulp and
paper manufacturers in India and has done pioneering work in several areas in
the pulp and paper industry in India. The Company holds ISO 14001, ISO 9001 and
OHSAS 18001 certifications as well as the Forest Stewardship Council (FSC)
Chain of Custody (COC) certification.
The Company owns and operates two units, one
at Rajahmundry and another at Kadiam. The Rajahmundry based Unit:APPM is an
integrated wood based paper mill with a rated capacity to produce 1,74,000 MTPA
of finished paper production and 1,82,500 MTPA of bleached pulp production. The
unit manufactures uncoated writing and printing paper mainly copiers,
industrial papers and posters using Casuarina and Subabul as main source of
pulpwoods.
Unit:CP the second manufacturing unit at
Kadiam, has a rated capacity to produce 67,000 MTPA of finished paper such as
creamwove, azurelaid, coloured copiers, kraft liner and newsprint using
agri-residue, recycled fiber and purchased pulp as base raw materials.
APPM has done path finding work to develop its
unique model of farm forestry that has helped the Company not only to create
adequate supplies of wood in the catchment area but also develop a sustainable
source of pulpwood for the future. The Company sells saplings from its
nurseries and counsels farmers on the best methods to grow them thereby
conserving natural resources and creating a healthier environment.
The farm forestry program is based on
developing massive plantations on marginal and degraded farm lands. As of
today, the Company ensures that it gets 100% of its requirement of hardwood
from its farm forestry efforts. While doing so, APPM supports farmer welfare
programs and champions the cause of an eco-friendly environment.
The Company has always been conscious of its
corporate responsibilities and for decades followed a strict environmental
policy. Investments continue to be made in achieving ambitious benchmarks to
remain ahead of all compliance standards. Such efforts have helped protect and
regenerate the natural resources, conserve energy and water, improve
productivity and set environment track record at the mills.
Paper industry is capital intensive and has a
large gestation period. Payback is partly earned through better product
characteristics and value realisation and partly by improving productivity. In
its endeavor to match global standards, APPM has invested heavily in
environment friendly technologies that facilitate increasing the overall
quality of products and demonstrating productivity gains.
As part of the Mill Development Plan, the Company has installed:
a. A chipper line which enables more
homogenous chips which in turn help produce good quality pulp;
b. A continuous digester that works on low
solid and low temperature cooking of chips;
c. A two stage oxygen delignification plant followed
by an elemental chlorine free bleaching plant;
d. A non-condensable gas burning system
suitable for high volume and low concentration gases;
e. A chemical recovery system based on high steam
economy evaporation and crystallization technology for higher solids
concentration;
f. A recausticizing plant;
g. A rotary lime kiln;
h. A 34 MW turbine with a power boiler to
supplement captive power, and,
i. A diffused aeration system with cooling tower
to improve the efficiency of the effluent treatment plant.
These plants and processes ensure consistent
pulp quality with high strength properties, low consumption of utilities and
chemicals and offer economies of scale. The Company has improved the economics
of production in the mill and exceeded current environmental norms applicable
in the country.
At Unit:APPM the paper production capacity has
being enhanced with commissioning of the Paper Machine No. 6 which further
augments the marketable quantities of paper by 67,000 MTPA and add to both top
and bottom lines of the Company.
The Company has been striving to produce
higher grade varieties of paper that are in demand in the addressable markets.
During the past two years, several newer and high-end writing and printing
varieties were introduced. In the copier and graphic papers, 90+ brightness
paper was launched.
The Company introduced a new 90+ brightness
range of papers in a bid to re-establish and grow volumes in both copier and
graphic papers including India's first copier with Colour Freeze technology -
Copyrite. APPM with its in house RandD efforts developed the new technology
(ColourFreeze) for improved inkjet performance of copier papers by enhancing
the print densities of both black and color prints. Its technical superiority
is evidenced by faster drying of inkjet inks compared to ordinary copier
papers. ColourFreeze is a unique technology developed by APPM and is the
intellectual property of APPM.
Apart from this, the other introductions are
Reflection a premium grade 70 GSM copier, a high bright paper Andhra Starwhite,
high-end writing and printing paper Andhra Primavera, a premium grade Maplitho
paper Andhra Royal Silk and a superior special grade paper Andhra Hi Brite SG
Maplitho in the surface size segment. Andhra Skytone and Andhra Starliner in
the premium non-surface sized category were introduced to primarily cater to
the notebook conversion segment. All these products are positioned and
benchmarked to the best in competition and have not only been very well
received but are also being increasingly demanded by the end customer.
As part of the long term strategy, newsprint
production has been suspended.
For all grades, marketing and distribution is
done primarily through a network of 75 dealers. Some large consumers are also
being catered directly and the Company participates in government tenders.
Exports are undertaken through a network of indenting agents across 20
countries.
Domestic prices of paper have tended to align
with the global trends. They firmed up in the first half of the financial year,
while in the latter half they remained subdued.
PERFORMANCE REVIEW
The domestic pulp and paper market was firm in
the early part of the year. Both pulp and paper prices were aligned with the
global trends, which witnessed resurgence.
Production for the year was 1,87,233 MT as
against 1,76,452 MT in the previous year and sales was 1,93,302 MT as compared
to 1,77,351 MT in the previous year. The increase in volumes and net sales
realization contributed to higher sales value. The Company managed to get a
better Net Sales Realization per MT over the previous year partly due to better
market conditions and revisions in the price list across all grades and partly
due to change in product mix at Unit:CP.
Paper sales comprised 1,88,569 MT and sales of
surplus pulp was 4,733 MT. In 2009-10, in comparison, paper sales was 1,52,646
MT and pulp sales was 24,705 MT. Additional quantity resulted from the
commissioning of PM 6.
Export volumes were 21,669 MT as against
13,646 MT in the previous year. The Company was not only able to significantly
increase quantity, but also able to substantially increase the sales
realization per MT over the previous year as well.
Earnings before interest, depreciation and
taxation (EBIDTA) was higher at Rs.1639.400 Millions, up from Rs.1530.300
Millions.
Finance charges and depreciation and
amortisation for 2010-11 totaled Rs.1068.500 Millions, as against Rs.879.800
Millions in the previous year. Although PM 6 was commissioned in May 2010, the
production was stabilized only in November 2010. The earnings from PM 6 hence,
were not adequate to cover the costs. The full benefit of the expanded capacity
is expected to be derived in the financial year 2011-12.
Profitability was also affected due to higher
input cost (substantially on account of the inflationary conditions in the
economy) and retrospective settlement of wage revision following an agreement
with the union of Unit:APPM. As a result, profit before tax was lower at
Rs.570.900 Millions from Rs.650.500 Millions reported in the earlier year.
Profit after tax was also lower for the year at Rs.449.500 Millions as compared
to Rs.541.900 Millions.
IT SUPPORTS BUSINESS
Enterprise Wide IT and ERP infrastructure is
monitored and supported by a dedicated in-house IT team in areas of ERP (SAP)
support, data centre management, hardware capacity planning, networking,
software development and systems administration. A centralized data center has
been installed at Unit:APPM having clusters of IBM P-series servers with AIX
operating system to comply with the SAP landscape. MySAP ECC 5.0 and ORACLE
database provides 24X7 services to all users within the Company. Connectivity
across different locations in APPM is provided through contemporary
communication links like MPLS backbone, Wi-Fi/SSL VPN/ Internet services/video
conferencing through trusted service providers. Similarly, people across plants
and corporate office are well connected through unified telephony system (One
Office solution) and CUG network to facilitate mobile connectivity across
locations. Firewalls and other security solutions like Unified Threat
Management (UTM) and end-point security measures have been taken to enforce
strict security practices in all nodes to mitigate risks and protect IT assets
from any threats and vulnerabilities.
The ERP system supports the complex and
heterogeneous business footprint with ease. Based on priorities related to the
business, the implementation of SAP has been phased in three stages.
Implementation has been completed in key function areas such as materials
management, sales and distribution, production planning, quality management,
finance and costing. APPM further envisages the strengthening of ERP Value
chain by deploying suitable functional modules like Plant maintenance and BI
suite to improve business dynamics and decision making capabilities across all
layers of management.
APPM has implemented Web enabled 'Dealer
Portal' and 'Export Order Management Portal', which are integrated with My SAP
ERP. This enables dealers to process orders, track dispatches online etc.,
resulting in reduced cycle time. Similarly, in HR front, APPM has implemented
all essential components like Human resources information system, Time and
leave management, Employee self-service, Training management and performance
management to churn out value from each members of APPM team.
Highlights of the implemented ERP System are
briefly listed below:
·
Streamlined business
processes with inbuilt control
·
Informed and accelerated
decision making
·
Online interaction across
the value chain
·
Automated work-flow in
all functional areas
·
Reduced manufacturing
cycle time of orders and improved logistics operations
·
Standard platform for all
users to share and view data
·
proliferation of
Automation process using barcode and real-time data capturing
·
Improved working capital
and cash-flow management
·
Empowered and nurtured
manpower having cross functional exposure
OUTLOOK
Indian economy showed 7.9% GDP growth in
2010-11 and has been one of the better managed countries protecting itself from
sharp decline. It is also estimated that India will demonstrate sustained
growth higher than global average, with GDP growth of over 8.2% in 2010-11 and
rising to double digit in subsequent years.
Paper industry in general and APPM in
particular, needs to be ready to grab the emerging opportunities by developing
an infrastructure that enables higher production, improves productivity and lowers
manufacturing costs.
Looked at a wider perspective, they live in a
knowledge oriented world where majority of people have increasing aspiration
levels and feel a need to improve their quality of life. There is anecdotal
evidence that confirms increasing use of paper with rising human development.
Demand for paper is expected to keep increasing in times to come especially in
developing countries such as India and China. In view of the paper industry's
strategic role for the society and for the overall industrial growth, it is
imminent that the paper industry performs well.
India is one of the fastest growing markets
for paper globally and this presents an exciting scenario. Paper consumption is
poised for a big leap forward in sync with the economic growth and is estimated
to touch 14.95 million MT by 2015-16.
It is estimated by industry experts that
growth in paper consumption would be in multiples of GDP and hence an increase
in consumption by one kg per capita would lead to an increase in demand of more
than a million tons of paper. According to estimates made by the Indian Paper
Manufacturers Association, paper production is likely to grow at a CAGR of 8.4%
while paper consumption will grow at a CAGR of 9% till 2012-13 (as against CAGR
of 7% estimated by CRISIL). Imports are expected to supplement indigenous
supplies in products wherein Indian players are not actively present.
Presently, there is a balance between the
domestic supply and demand for paper products, which both stand at around 10
million MTPA. However, with additional capacity coming in shortly, the supply
is set to exceed the demand this year. The existing total paper production
capacity of 10 million MTPA in the country and the additional capacity of
around 350,000 MTPA are expected to be absorbed by the market in a year's time
wiping out the demand-supply gap as the demand for paper is expected to grow by
9% in 2011-12.
APPM seeks to grow faster than the industry
average both in volume and bottom line and is striving to participate in the
improving demand scenario for paper by ensuring economies of scale, efficient
usage of resources and value chain management. The investments that continue to
be made in the systems, processes, product and market are expected to add
traction to the Company's operational performance and meet stakeholder
expectations. A strong marketing team, revitalized marketing strategy, new
product developments and high-end quality products launched over the past year
would add to traction at APPM to ride the future with confidence.
Every business carries inherent risks and
uncertainties that can affect financial conditions, results of operations and
prospects. APPM has been conscious of its risk factors and has been taking
proactive steps to mitigate/minimise them. The risk management goal is to
identify and evaluate risks as early as possible and limit business losses by
taking suitable measures. Overall, the Company aims to avoid risks that pose a
threat to its sustainable growth.
The management of APPM understands that risks
can negatively impact the attainment of both short term operational or long
term strategic goals. Risk management is a part of the business planning and
controlling process and is vital to ensure effectiveness in business success.
Some of the industry specific risks need a review:
The following factors are considered for determining the materiality:
a. Some events may not be material
individually but may be found material collectively.
b. Some events may have material impact
qualitatively instead of quantitatively.
c. Some events may not be material at present
but may have material impact in future.
AUDITED FINANCIAL
RESULTS FOR THE YEAR ENDED 31ST DECEMBER, 2011
(Rs.
In millions)
|
Particulars |
QUARTER ENDED |
NINE MONTHS
ENDED |
|
|
31.12.2011 (Refer Note 12) |
30.09.2011 (Unaudited) |
31.12.2011 (Audited) |
|
|
(a) Net Sales/ Income from
operations |
1917.802 |
2039.233 |
5939.101 |
|
(b) Other Operating Income |
39.326 |
10.790 |
69.250 |
|
Total Income |
1957.128 |
2050.023 |
6008.351 |
|
2. Expenditure |
|
|
|
|
a. Increase(-) /Decrease(+) in Stock |
(301.772) |
(349.227) |
(799.161) |
|
b. Consumption of Raw-Materials |
705.395 |
698.105 |
1929.214 |
|
c. Stores |
645.282 |
542.503 |
1679.769 |
|
d. Power and Fuel |
242.441 |
257.368 |
778.364 |
|
e. Employees Cost |
229.953 |
210.948 |
656.608 |
|
f. Other Expenditure |
261.255 |
205.704 |
637.718 |
|
g. Total |
1782.554 |
1565.401 |
4882.512 |
|
3. EBIDTA |
174.574 |
484.622 |
1125.839 |
|
4. Interest |
195.310 |
150.013 |
440.049 |
|
5. a) Deprecation |
165.424 |
173.469 |
506.213 |
|
b) Impairment of assets |
46.139 |
265.062 |
311.202 |
|
6. Profit/
(Loss) before Tax |
(232.299) |
(103.922) |
(131.605) |
|
7. Tax Expenses |
|
|
|
|
a) for the current period |
(821.838) |
18.379 |
21.700 |
|
b) Deferred taxes relating
to previous years |
803.851 |
804.600 |
0.000 |
|
8. Net Profit/
(Loss) for the period/ year |
(214.312) |
(926.901) |
81.952 |
|
9. Paid - up equity share capital (face value Rs.10/- each) |
397.700 |
397.700 |
397.700 |
|
10. Reserves (Excluding revaluation reserve) |
4407.451 |
|
4407.451 |
|
11. Earnings per Share - Basic (Rs.) (not annualised) |
(5.39) |
(23.31) |
(24.59) |
|
12. Earnings per share - Diluted (Rs.) (not annualised) |
(5.39) |
(23.31) |
(24.59) |
|
13. Public Shareholding |
|
|
|
|
- Number of Shares |
9942510 |
18510031 |
9942510 |
|
- Percentage of Share holding |
25.00 |
46.54 |
25 |
|
14. Promoters and promoter group Shareholding |
|
|
|
|
a) Pledged/Encumbered |
|
|
|
|
- Number of shares |
-- |
1499330 |
-- |
|
- Percentage of shares (as a % of the total shareholding of promoter and promoter group) |
-- |
7.05 |
-- |
|
- Percentage of shares (as a
% of the total share capital of the
company) |
-- |
3.77 |
-- |
|
b) Non-encumbered |
|
|
|
|
- Number of shares |
29827529# |
19760678 |
29827529# |
|
- Percentage of shares (as a % of the total
shareholding of promoter and
promoter group) |
100.00# |
92.95 |
100.00# |
|
- Percentage of shares (as a
% of the total share capital of the
company) |
75.00# |
49.69 |
75.00# |
# The number of shares and the percentages represent the shareholding of
present promoter viz., IP Holding Asia Singapore Pte Limited consequent to
acquisition of shares from the erstwhile promoter group and public
shareholders.
Notes:
1 Statement of Assets and Liabilities
|
PARTICULARS |
31.12.2011 (Audited) |
|
SHAREHOLDERS FUNDS |
|
|
1] Share Capital |
397.700 |
|
2] Reserves and Surplus |
4782.519 |
|
3] Share Application Money |
0.000 |
|
LOAN FUNDS |
4768.235 |
|
DEFERRED TAX LIABILITIES |
1216.670 |
|
TOTAL |
11165.124 |
|
|
|
|
FIXED ASSETS [Net Block] |
8692.030 |
|
INVESTMENT |
160.534 |
|
|
|
|
CURRENT ASSETS, LOANS and ADVANCES |
|
|
Inventory |
2119.177 |
|
Sundry Debtors |
352.595 |
|
Cash and Bank Balances |
241.541 |
|
Loans & Advances |
992.236 |
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
Current Liabilities |
1750.397 |
|
Provisions |
17.660 |
|
Net Current
Assets |
1937.492 |
|
Debit balance in Profit & Loss account
|
375.068 |
|
TOTAL |
11165.124 |
2. As per the
notification issued by the Ministry of Corporate Affairs vide notification
dated 31 March 2009, the Company has adjusted foreign exchange differences arising
on long term foreign currency loans to the cost of the fixed asset, where the
long term foreign currency monetary items relates to acquisition of a
depreciable capital asset (whether purchased within or outside India), and has
depreciated such foreign exchange gain / losses over the asset’s balance useful
life. The Government vide notification dated G.S.R. 378(e) dated 11th May 2011
has extended the period up to 31 March 2012. As a result , the Company has
capitalised foreign exchange loss of the current period amounting to
Rs.1,68.321 Millions. The depreciation arising out of capitalisation during the
period amounts to Rs.13.478 Millions. If the option is not exercised, the
profit for the period would have been reduced by Rs.1,54.843 Millions.
3. The Company is
in the business of manufacture and sale of pulp, paper and paper board.
Management views manufacture and sale of Pulp, paper and Paper boards as a
single reportable business segment.
4. The Promoters of
the Company, LN Bangur Group informed the Company on 29 March 2011 that they
had entered into an agreement to sell their entire shareholding of 2,12,60,008
equity shares of Rs. 10 each held by them in the Company to IP Holding Asia
Singapore PTE Limited. (Acquirer), a subsidiary of International Paper Company,
USA. The Acquirer is an unlisted company incorporated under the Laws of
Singapore. International Paper Company, USA is a global paper and packaging
company and is listed on the New York Stock Exchange.
5. Lazard India
Private Limited, Manager to the Open Offer appointed by the Acquirer had given
a certificate dated 11 October 2011 to the Company confirming that IP Holding
Asia Singapore PTE Limited. (Acquirer) along with International Paper Company complied
with all applicable provisions of Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations and completed
their obligations in relation to the Open Offer made in accordance with the
Interim Order dated 11 August 2011 to Securities Appellate Tribunal. They have
also confirmed that despatch of payment consideration to the shareholders whose
equity shares have been accepted in the Open Offer was completed by 8 October
2011. The Board approved transfer of 35,762 equity shares of Rs.10 each in
physical form to the Acquirer and noted the acquisition of 85,31,759 equity
shares in electronic form from public shareholders by the Acquirer.
Pursuant to such
Open Offer and above mentioned share sale agreement, 29,827,529 shares of the
Company was acquired by IP Holding Asia Singapore PTE Limited. on 14 October
2011, being the effective date of the change in the ownership. Pursuant to such
acquisition, IP Holding Asia Singapore PTE Limited became the holding company of
the company with International Paper Company being the ultimate holding
company. Further, the Company's Board of Directors have been reconstituted and
MR. Paul Brown was appointed as the Chairman and CEO of the Company.
6. The Company has
since the inception of Accounting Standard 22 on Accounting for Taxes on
Income, recognized the deferred tax expense, which arises primarily from
depreciation on tangible fixed assets on the basis of the currently applicable
enacted Minimum Alternate Tax rate rather than the regular tax rates as
specified by paragraph 21 of Accounting Standard 22. The Company has challenged
the provisions of Accounting Standard 22, in so far as it relates to the above
matter and has accordingly filed a writ petition in June 2003 before the
Hon’ble High Court of Andhra Pradesh. The case has been subsequently
transferred to the Hon’ble Calcutta High Court. The writ petition has been
admitted and is currently pending resolution.
The Company's
current management is of the view that notwithstanding the writ petition and
its ultimate outcome, the differential liability needs to be provided for in
accordance with the provisions of AS 22 – Accounting for Taxes on Income and
has accordingly quantified and recorded the deferred tax liability relating to
earlier years up to 31 March 2011 of Rs. 804.600 Millions. The cumulative
amount of Rs. 8,04.600 Millions pertaining to the period up to 31 March 2011
has been debited to the profit and loss account for the period ended 31
December 2011.
The statutory
auditors have included an Emphasis of Matter Paragraph in their auditors report
highlighting such adjustment. Their audit report is not qualified with respect
to this matter.
7. The Company
during the period carried out an internal technical review based on which
assets with a net book value of Rs. 3,11.202 Millions was identified as being
asset held for sale and accordingly debited to the profit and loss account.
The statutory
auditors have included an Emphasis of Matter Paragraph in their auditors report
highlighting such adjustment. Their audit report is not qualified with respect
to this matter.
8. During the
period ended 31 December 2011, the Company has accrued and paid for managerial
remuneration, which is in excess of the maximum limits specified in Schedule
XIII to the Companies Act, 1956 to the extent of Rs. 19.464 Millions. The
Company is yet to apply to Central Government for obtaining approval for the
same. The statutory auditors have drawn attention to this matter in their
report.
9. During the
quarter ended on 31st December 2011, the Company received 5 investor complaints
which have been resolved. There were no complaints pending at the beginning of
the quarter and no complaint was pending at the end of the quarter.
10. The Company in
its Board meeting held on 6 December 2011, approved the change of financial
year from 31 March to 31 December every year. Pursuant to such change, the
Company has closed its accounts for the nine months period ended 31 December
2011.
11. The above Financial Results have been reviewed by the Audit
Committee and approved by the Board of Directors at its meeting held on 25
January 2012.
12. The figures of last quarter are the balancing figures between
audited figures in respect of the full financial year and the published year to
date figures upto the second quarter of the current financial year.
13. The figures for the previous periods/ year have been
re-grouped/re-classified, wherever necessary, to conform to the current period
presentation.
Contingent Liabilities not provided for (As on 31.03.2011):
i. Commitments/contingent liabilities
a. Guarantees issued by banks - Rs.68.436 Millions
b. Letters of credit outstanding – Rs.101.483 Millions
c. Corporate guarantee given to forest department of Government of
Andhra Pradesh – Rs.147.209 Millions
ii. Claims against the Company not acknowledged as debts in respect of:
a. Income tax matters, pending decisions on various appeals made by the
Company and by the Department – Rs.13.882 Millions
b. Excise matters, under dispute – Rs.164.702 Millions
c. Sales tax matters, under dispute – Rs.36.533 Millions
d. Other matters, under dispute – Rs.29.725 Millions
e. Vacant land tax – Rs.22.831 Millions
f. Demand raised
by Eastern Power Distribution Corporation of Andhra Pradesh Limited for surplus
power supplied by APGPCL disputed by the company. An amount of Rs.7.698
Millions paid under protest (Previous year Rs.7.698 Millions) has been grouped
under loans and advances. The appeal filed by APTRANSCO is pending before the
Hon’ble A.P. High Court in which other companies similarly placed are made
respondents – Rs.8.766 Millions
iii. Estimated amount
of contracts remaining to be executed on capital account and not provided for
(net of advances) – Rs.213.694 Millions
iv. Commitment under Export Promotion Capital Goods (EPCG) scheme –
Rs.5761.338 Millions
FIXED ASSETS
·
Land
·
Road and Drainages
·
Buildings
·
Plant and Machinery
·
Electrical Installations
·
Furniture and Fixtures
·
Vehicles
·
Goodwill
Subject is an integrated pulp and paper manufacturers in India. The Company is engaged in the business of manufacture and sale of pulp, paper and paper board. The Company owns and operates two units, one at Rajahmundry and another at Kadiam. The Rajahmundry unit manufactures industrial grades, posters, uncoated and office papers using casuarina and subabul hardwoods as raw materials. The Rajahmundry based unit is an integrated wood based paper mill, which has production capacity of 1,74,000 metric tons per annum finished paper production and 1,82,500 bone dry metric tons per annum of bleached pulp production. The Kadiam unit manufactures finished paper, such as creamwove, azurelaid, colored printing, kraft liner and newsprint. Its products include white posters, colour poster, stiffner, coating base, blade wrapper, deluxe cover and deluxe ribbed kraft. In October 2011, International Paper Company acquired 75% interest in the Company. For the nine months ended 31 December 2010, The Andhra Pradesh Paper Mills Limited's revenues increased 19% to RS5.39B. Net income increased 4% to RS365.2M. Revenue reflects increased income from operations and higher sale of surplus power. Net income was partially offset by an increase in consumption of raw materials, higher power and fuel expenses, an increase in depreciation expenses, rise in employee cost and higher other expenditure.
More Business Descriptions
Subject is an India based company engaged in developing, manufacturing and distributing, paper, paper board, pulp and other paper related products. The company is also involved in power generation. AP Paper Mills has established a power generation plant with 34 MW Double Extraction Condensing type turbine. The company supplies 18 MW to 20 MW of power from the Recovery boiler to the turbine. AP Paper Mills caters its products to the needs of industrial giants like INDO NATIONAL, MODI XEROX, to leading publication houses like MacMillan and Navaneet Publications; and to the coated segment like Master Coat, and Speciality Coatings. The company is headquartered in Hyderabad, Andhra Pradesh, India.The company reported revenues of (Rupee) INR 7,986.21 million during the fiscal year ended March 2011, an increase of 21.37% over 2010. The operating profit of the company was INR 570.86 million during the fiscal year 2011, a decrease of 12.25% from 2010. The net profit of the company was INR 449.42 million during the fiscal year 2011, a decrease of 17.07% from 2010.
Paul Brown (Chairman
of the Board, Chief Executive Officer, Managing Director)
Mr. Paul Brown has been appointed as Chairman of the Board, Chief Executive Officer, Managing Director of subject, with effect from October 15, 2011 He is President, International Paper India, was appointed as an Additional Director of the Company by the Board with effect from 18th May, 2011. He was nominated by IP Holding Asia Singapore PTE Limited. Mr. Brown joined International Paper in 1984. During his career with the company, he has held various technical, manufacturing, sales and general management positions in paper and packaging in USA and Europe before being appointed as President of International Paper Asia in November 2009. In this position, he had leadership responsibility for the company`s business across Asia including coated board, consumer packaging, industrial packaging, food service packaging , uncoated free sheet and paper, board and pulp distribution. Prior to this position in Asia, Mr. Brown was Vice President and General Manager responsible for International Paper's industrial packaging business in Europe, Middle East and Africa. He is also a Director/Chairman/Vice Chairman of 30 foreign companies/bodies corporate under IP group besides a Director of IP Paper (India) Private Limited. Mr. Brown holds a B.S. in Industrial Engineering from the University of Florida, Gainesville, Florida, USA and an MBA from Drexel University, Philadelphia, Pennsylvania, USA.
Shreeyash Kumar
Bangur (Additional Director)
Mr. Shreeyash Kumar Bangur is Additional Director of subject. He has resigned as Director - Corporate, Executive Director of Andhra Pradesh Paper Mills Limited, with effect from October 14, 2011. He has MSc in Engineering Business Management from University of Warwick, UK and BSc in Accounting and Management from University of Wales Cardiff, U.K. He worked for two years in Ernst and Young before joining the Company as Vice President (Corporate Planning and Business Development) in April, 2005. Over the years, he has also developed a understanding of business processes and excellent communication and people management skills. He assumed charge as Director (Corporate) on 19th February, 2007. His prime areas of focus are marketing, human resource development, corporate planning and business development related functions. In this role, he started working with the top management team in establishing practices, formulating growth strategies and managing organizational structure with an aim to deliver an enduring Company advantage. He is a director of Digvijay Investments Limited.
P. K. Suri (Director
- Operations, Executive Directors)
Mr. P. K. Suri is Director - Operations, Executive Directors of subject. He is a graduate in Chemical Engineering, started his career as an Executive Trainee in J.K. Paper Mills in November 1978. His knowledge, skills and contributions saw him serve in higher capacities and he became Deputy General Manager (Technical Services) by 1990. Later, he joined Star Paper Mills as General Manager (Manufacturing) in 1996. He has been associated with APPM since May, 1997 and had grown from General Manager to President (Operations). He is responsible for all plant operations of both Unit:APPM and Unit:CP. In his 33 years of experience, he has acquired skills to manage plant operations. Mr. Sun played a vital role in implementing the Mill Development Plan and was elevated as Director (Operations) from 12th May, 2008.
Press
Release
India, February 01 -- The Andhra Pradesh Paper Mills Limited
has informed the Exchange regarding a press release dated February 01, 2012,
titled "International Paper Makers Leadership s for Andhra Pradesh Paper
Mills Limited."
Post
Open Offer Status
India, October 19 -- Lazard India Private Ltd ("Manager to the Offer"), on behalf of IP Holding Asia Singapore Pte. Limited. ("Acquirer") along with International Paper Company ("Person Acting in Concert" or "PAC") has informed this Post Offer Public Announcement to the equity shareholders of The Andhra Pradesh Paper Mills Limited ("Target Company"), which is in continuation of and should be read in conjunction with the Public Announcement ("PA") dated April 01, 2011, Corrigendum to the PA dated May 23, 2011, Second Corrigendum to the PA dated August 10,2011, Third Corrigendum to the PA dated August 18, 2011 and Letter of Offer dated August 24, 2011, under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 ("Regulations"), to acquire 8,567,521 shares of the Target Company at a price of Rs.544.20 per share, payable in cash.
Disclosure
under Insider Trading Regulation
India, October 17 -- The Andhra Pradesh Paper Mills Limited has submitted to the Exchanged a copy of Disclosure of shareholding SEBI (Prohibition of Insider Trading) Regulation, 1992.
Peria
Karamalai transfers entire shareholding in AP Paper
India, October 15 -- Peria Karamalai Tea and Produce Company has transferred its entire shareholding of 12,23,093 equity shares in the Andhra Pradesh Paper Mills (AP Paper) to IP Holding Asia Singapore, a subsidiary of International Paper Company, USA. Further, the company has received a total consideration of about Rs 799.600 Millions (inclusive of non-compete fee). Earlier on March 29, 2011, the company executed share purchase agreement with IP Holding Asia Singapore (Purchaser) and International Paper Company, USA (Purchaser Guarantor).
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.48.96 |
|
|
1 |
Rs.77.46 |
|
Euro |
1 |
Rs.64.40 |
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 |
8 |
|
--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 |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
70 |
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.