MIRA INFORM REPORT

Report Date :

06.02.2012

IDENTIFICATION DETAILS

Name :	VAMSHADARA PAPER MILLS LIMITED
Registered Office :	Madapam Village, Narasannapeta Mandal, Srikakulam District – 532 421, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	02.04.1980
Com. Reg. No.:	01-002664
Capital Investment / Paid-up Capital :	Rs.70.653 millions
CIN No.: [Company Identification No.]	U21012AP1980PLC002664
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturing of all kings of Paper such as Poster Paper, Kraft Paper, Printer Paper, Tissue Paper, etc.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (28)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 643000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. Profitability of the company appears to be low. However, trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings 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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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/ Factory :	Madapam Village, Narasannapeta Mandal, Srikakulam District – 532 421, Andhra Pradesh, India
Tel. No.:	91-8942-232132/ 232139
Fax No.:	91-8942-232151
E-Mail :	vamshadharapaper@yahoo.com rajendransennar@yahoo.com vamshandhara@sennars.com

DIRECTORS

As on 27.12.2010

Name :

Venugopala Rao Malampati

Designation :

Chairman cum Managing Director

Address :

1202, Road No.36, Jubli Hills, Hyderabad - 500 038, Andhra Pradesh, India

Date of Birth/Age :

20.12.1940

Date of Appointment :

26.03.1984

DIN No.:

00012704

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U21012AP1980PLC002664	Vamshadara Paper Mills Limited	Director	30-09-11	26-03-84	-	Active	NO
2	L27101AP1972PLC001549	Nava Bharat Ventures Limited	Director	25-09-97	25-09-97	-	Active	NO
3	U24220AP1986PLC006739	Hitech Print Systems Limited	Director	06-11-00	06-11-00	04-07-07	Active	NO
4	U15511PY2000PLC001558	Regma Ceramics Limited	Director	11-09-01	11-09-01	-	Active	NO
5	U70102AP2006PTC049314	V.V.V. Infrastructure Private Limited	Director	28-02-06	28-02-06	-	Active	NO
6	L26914AP1983PLC004249	Regency Ceramics Limited	Director	06-03-07	06-03-07	-	Active	NO
7	U45200AP2005PTC048429	Patmax Infrastructure (India) Private Limited	Managing director	20-12-08	30-10-08	-	Active	NO
8	U74999AP2008PLC058559	Nava Bharat Sugar and Bio Fuels Limited	Director	30-07-09	23-01-09	-	Active	NO
9	U40106AP2008PLC058560	Nava Bharat Energy India Limited	Director	30-07-09	23-01-09	-	Active	NO
10	U40109AP1999PTC032289	Brahmani Infratech Private Limited	Director	30-07-09	30-07-09	-	Active	NO
11	U40100AP1993PLC016204	Kinnera Power Company Limited	Director	30-07-09	30-07-09	-	Active	NO

Name :

Ramamurthy Rajendran

Designation :

Managing Director

Address :

Paper City, G.T. Road, Munasab Peta Village, Srikakulam - 532 001, Andhra Pradesh, India

Date of Birth/Age :

17.05.1950

Date of Appointment :

25.04.1984

DIN No.:

00450685

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U21012AP1980PLC002664	Vamshadara Paper Mills Limited	Managing director	01-12-10	25-04-84	Active	NO
2	U21012AP1990PLC012039	Vamshadhara Boards and Papers Limited	Director	27-11-91	27-11-91	Active	NO
3	U65910AP1994PLC017220	Vamshadhara Finance Company Limited	Director	31-03-95	31-03-95	Active	NO
4	U21012TN2002PLC048996	Sennar Paper and Boards Limited	Director	27-05-02	27-05-02	Amalgamated	NO

Name :

Sennar Ramamurthy Rabindar

Designation :

Managing Director

Address :

Paper City, G.T. Road, Munasab Peta Village, Srikakulam - 532 001, Andhra Pradesh, India

Date of Birth/Age :

23.04.1943

Date of Appointment :

02.04.1980

DIN No.:

00450841

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U21012AP1980PLC002664	Vamshadara Paper Mills Limited	Director	30-09-11	02-04-80	Active	NO
2	U21012AP1990PLC012039	Vamshadhara Boards and Papers Limited	Director	27-11-91	27-11-91	Active	NO
3	U65910AP1994PLC017220	Vamshadhara Finance Company Limited	Director	31-03-94	31-03-94	Active	NO
4	U21012TN2002PLC048996	Sennar Paper and Boards Limited	Managing director	01-04-07	27-05-02	Amalgamated	NO

Name :

Rajendran Koushik

Designation :

Director

Address :

Paper City, Munasab Peta Village, Pedda Padu, Srikakulam - 532 001, Andhra Pradesh, India

Date of Birth/Age :

20.07.1985

Date of Appointment :

31.03.2009

DIN No.:

00450931

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U21012AP1993PTC015655	Hans Paper and Pulp Private Limited	Director	31-07-03	31-07-03	Amalgamated	NO
2	U21012AP1980PLC002664	Vamshadara Paper Mills Limited	Whole-time director	01-12-10	31-03-09	Active	NO

Name :

Rabindar Vijayshekar

Designation :

Director

Address :

Paper City, Pedapadu, Srikakulam - 532 001, Andhra Pradesh, India

Date of Birth/Age :

01.07.1967

Date of Appointment :

01.07.1993

DIN No.:

00833432

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U21012AP1980PLC002664	Vamshadara Paper Mills Limited	Whole-time director	01-12-10	01-07-93	Active	NO
2	U65910AP1994PLC017220	Vamshadhara Finance Company Limited	Director	30-06-95	30-06-95	Active	NO
3	U21012AP1993PTC015655	Hans Paper and Pulp Private Limited	Managing director	19-05-00	19-05-00	Amalgamated	NO
4	U21012TN2002PLC048996	Sennar Paper and Boards Limited	Director	26-06-02	26-06-02	Amalgamated	NO
5	U74900TN2008NPL067185	South Indian Kraft Paper Mills Association	Director	30-09-10	30-09-10	Active	NO

Name :

Attaluri Durga Lakshmi Prasad

Designation :

Director

Address :

Chief Executive Jeypore Sugars Ltd., Chagallu, West Godavari - 534 342, Andhra Pradesh, India

Date of Birth/Age :

09.01.1941

Date of Appointment :

26.03.1991

DIN No.:

02519431

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 27.12.2010

Names of Shareholders	No. of Shares
A.P.I.D.C	187000
Athmuri Sarveswara Rao	100
Amaravathi Boyana	500
Chitra Rajendran	190583
G. Mohan Rao	1100
G. Sita Ramayya	300
Ganapathamma Vandana	1000
Vasantha Rabindar	244170
R. Rajendran	750
Rama Murthy Rajendran	251535
R. Vijay Shekhar	91647
R. Kousik	32800
S. Nishanti (Minor)	58450
R. Gayatri	62880
S.R. Rabindar	357710
Y.S. Chakravarthi	2000
Vamshadhara Finance Company Limited	688900
Spacengineers	105800
Srivari Associates	29080
Sri Vinayaka Associates	47450
A.S. Damodar Swamy Naidu (IND)	46575
A.S. Damodar Swamy Naidu (HUF)	45000

As on 27.12.2010

Equity Share Breakup	Percentage of Holding
Category
Public Financial Institutions	7.58
Bodies corporate	27.93
Directors or relatives of directors	55.58
Other top fifty shareholders	8.91
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of all kings of Paper such as Poster Paper, Kraft Paper, Printer Paper, Tissue Paper, etc.

Products :

Item Code No. (ITC Code)	4804
Product Description	Kraft Paper

PRODUCTION STATUS (AS ON 31.03.2010)

Class of goods manufactured: Kraft Paper

Year	Units	Installed Capacity	Actual Production
2009-2010 (Kraft)	MTS	42,750	40,337
2009-2010 (White)	MTS	19,800	16,285

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Andhra Bank, Main Branch, G.T. Road, Srikakulam – 532 001, Andhra Pradesh, India

Facilities :

Secured Loans	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
Term Loans From APSFC	169.609	168.896
Term Loan From Andhra Bank	54.513	11.346
Working Capital Funds
From APSFC	14.599	7.374
From Andhra Bank	112.734	54.406
Total	351.455	242.022

Unsecured Loans	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
Interest Free Sales Tax Loan	48.519	31.575
Trade Deposits	1.483	1.420
From Share Holders	2.888	0.000
Public Deposits
From Public	7.051	7.600
Total	59.941	40.595

Banking Relations :	--
Auditors :
Name :	Venkatasrinivas and Company Chartered Accountants
Address :	D.No.9-29-19/A(1), Flat No.101, Level-1, "Waltair Heights", Balajinagar, Visakhapatnam – 500 003, Andhra Pradesh, India
Income-tax PAN of auditor or auditor's firm :	AAHFV4986H
Associates :	Spacengineers

CAPITAL STRUCTURE

As on 27.12.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.10/- each	Rs.100.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
7065322	Equity Shares	Rs.10/- each	Rs.70.653 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		70.653	24.663	24.663
2] Share Application Money		23.612	55.751	42.141
3] Reserves & Surplus		66.560	14.064	22.061
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		160.825	94.478	88.865
LOAN FUNDS
1] Secured Loans		351.455	242.022	214.404
2] Unsecured Loans		59.941	40.595	38.846
TOTAL BORROWING		411.396	282.617	253.250
DEFERRED TAX LIABILITIES		21.367	7.435	10.684
TOTAL		593.588	384.530	352.799
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		338.880	272.688	63.428
Capital work-in-progress		43.829	20.682	184.471
INVESTMENT		0.000	0.000	0.000
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	116.397	45.512	31.534
	Sundry Debtors	161.952	82.355	63.044
	Cash & Bank Balances	20.689	9.893	34.550
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	49.151	28.669	34.246
Total Current Assets		348.189	166.429	163.374
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	127.900	62.928	48.049
	Other Current Liabilities & Provisions	9.439	12.986	11.686
Total Current Liabilities		137.339	75.914	59.735
Net Current Assets		210.850	90.515	103.639
MISCELLANEOUS EXPENSES		0.029	0.645	1.261
TOTAL		593.588	384.530	352.799

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	1026.524	396.506	299.230
		Other Income	12.593	4.123	4.594
		TOTAL (A)	1039.117	400.629	303.824
Less	EXPENSES
		Increase/ Decrease in Inventory	(0.622)	(0.825)	(0.348)
		Payments and Benefits to Employees	37.215	19.551	16.562
		Manufacturing Expenses	828.183	315.508	222.421
		Rent, Rates & Taxes	32.969	22.318	31.151
		Administrative & Other Expenses	17.904	9.129	6.349
		Selling Expenses	34.228	13.411	12.008
		Prior Period Expenses	0.000	0.133	0.029
		TOTAL (B)	949.877	379.225	288.172
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		89.240	21.404	15.652
Less	INTEREST & FINANCIALEXPENSES (D)		40.470	17.644	5.861
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		48.770	3.760	9.791
Less/ Add	DEPRECIATION/ AMORTISATION (F)		42.179	14.807	8.477
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		6.591	(11.047)	1.314
Less	TAX (H)		3.415	0.200	1.265
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		3.176	(11.247)	0.049
	IMPORTS
		Raw Materials (Waste Paper)	NA	105.805	95.596
	TOTAL IMPORTS		NA	105.805	95.596
	Earnings/ (Loss) Per Share (Rs.)		0.45	(4.56)	0.02

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	0.31	(2.81)	0.02
Net Profit Margin (PBT/Sales)	(%)	0.64	(2.79)	0.44
Return on Total Assets (PBT/Total Assets}	(%)	0.96	(2.52)	0.58
Return on Investment (ROI) (PBT/Networth)		0.04	(0.12)	0.01
Debt Equity Ratio (Total Liability/Networth)		3.41	3.79	3.52
Current Ratio (Current Asset/Current Liability)		2.54	2.19	2.73

LOCAL AGENCY FURTHER INFORMATION

FINANCIAL RESULTS:

The Company has achieved a Net Profit of Rs.3.176 millions for the year ended 31^st March, 2010 as against a Net Loss of Rs.11.247 millions during the previous year.

SCHEME OF AMALGAMATION:

i) The Hon’ble High Court of Hyderabad vide its order dated 13^th September, 2010 has approved the scheme of Amalgamation (the Scheme) under which all the assets, liabilities and debts of the Hans Paper and Pulp Private Limited (HPPPL) have been transferred to the company at book values retrospectively with effect from April 1, 2009. Similarly lease rights, tenancy rights, industrial and other licences, trade marks, patents etc have also been transferred to the Company.

ii) The Hon’ble High Court of Madras vide its order dated 30th September, 2010 has approved the scheme of Amalgamation (the Scheme) under which all the assets, liabilities and debts of the Sennar Paper and Boards Limited (SPBL) have been transferred to the company at book values retrospectively with effect from April 1, 2009.

Similarly lease rights, tenancy rights, industrial and other licences, trade marks, patents etc have also been transferred to the Company.

iii) In terms of the Scheme , all debts, liabilities including contingent liabilities relating to “HPPPL” and “SPBL” whether provided for or not in the books of Accounts of the both “HPPPL” and “SPBL” and all other liabilities relating to the “HPPPL” and “SPBL” which may accrue or arise after March 31, 2009. But which relate to the period prior to March 31, 2009 shall be debts of the Company

iv) Accordingly all the assets and liabilities pertaining to “HPPPL” and “SPBL” which has been transferred to the company and the Income and expenses arising/ incurred relating to “HPPPL” and “SPBL” During the transition period i.e., between April 1, 2009 till the effective date of the scheme i.e., 31.10.2010 have been incorporated in these accounts. During the transition period, the erstwhile “HPPPL” and “SPBL” carried on their existing business in “Trust” on behalf of the Company. Accordingly, all the Vouchers, documents etc., in respect of “HPPPL” and “SPBL” for the transition period are in the name of the erstwhile “HANS PAPER AND PULP PRIVATE LIMITED and SENNAR PAPER AND BOARDS LIMITED.

v) The scheme of Amalgamation has been accounted for under the “Pooling of Interest” method as prescribed under AS 14 issued by the ICAI. Accordingly, the assets, liabilities and Reserves of “HPPPL” and “SPBL” as at 1st April 2009 have been taken over at their book values subject to adjustment for difference in the accounting policies between the three companies and / or as specified in the scheme of Amalgamation. Accordingly, Rs.22.252 millions has been debited to the Good will.

vi) As per the Scheme, in consideration of the transfer of the existing businesses of “HPPPL” and “SPBL” in favor of the company.

a) 19 (Nineteen) Equity Shares of Rs.10/- each fully paid up credited as fully paid in the capital of transferee company for, every 1 (One) Equity Share of Rs.100/- each fully paid up held by “HANS PAPER AND PULP PRIVATE LIMITED”/ First transferor company.

Accordingly, 11,40,000 equity shares of the company are yet to be allotted to the members of “HANS PAPER AND PULP PRIVATE LIMITED”.

b) 39 (Thirty Nine) Equity Shares of Rs.10/- each fully paid up credited as fully paid in the capital of transferee company for, every 20 (Twenty) Equity Share of Rs.10/- each fully paid up to held by them in “SENNAR PAPER AND BOARDS LIMITED”/ Second transferor company.

Accordingly, 34,59,047 equity shares of the company are yet to be allotted to the members of “SENNAR PAPER AND BOARDS LIMITED”.

FIXED ASSETS:

v Land

v Buildings

v Roads, Bridges and Culverts

v Plant and Machinery

v Power Project

v Electrical Installation

v Workshop Equipments

v Weigh Scales

v Vehicles

v Furniture and Fixtures

v Office Equipments

v Lab Equipments

v Temporary Sheds

v Bore Wells

v Miscellaneous Assets

v Goodwill

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.48.96
UK Pound	1	Rs.77.47
Euro	1	Rs.64.40

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	2
--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		28

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.