MIRA
INFORM REPORT
|
Report Date : |
30.06.2012 |
IDENTIFICATION DETAILS
|
Name : |
JK PAPER LIMITED (w.e.f. 07.05.2002) |
|
|
|
|
Formerly Known
As : |
CENTRAL PULP MILLS LIMITED |
|
|
|
|
Registered
Office : |
P.O. Central Pulp Mills, |
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|
|
Country : |
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|
|
Financials (as
on) : |
31.03.2011 |
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|
|
|
Date of
Incorporation : |
04.07.1960 |
|
|
|
|
Com. Reg. No.: |
04-018099 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.782.399
Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L21010GJ1960PLC018099 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
SRTJ00098A |
|
|
|
|
Legal Form : |
Public Limited
Liability Company. The company’s shares
are listed on the Stock Exchanges. |
|
|
|
|
Line of Business
: |
Manufacturer of Paper and Paper Related Products. |
|
|
|
|
No. of Employees
: |
500 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
A (61) |
|
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 23556000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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|
Comments : |
Subject is a well established company having fine track. But there appears
dip in the profitability in the current year 2012. However, trade relations
are reported to be 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 : |
P.O. Central Pulp Mills, |
|
Tel. No.: |
91-2624-220228 / 220278-220280 |
|
Fax No.: |
91-2624-220138 |
|
E-Mail : |
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|
Website : |
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|
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|
Head / Administration Office : |
Nehru House, 3rd Floor, 4 Bahadur Shah Zafar Marg, |
|
Tel. No.: |
91-11-23311112 / 41011116 |
|
Fax No.: |
91-11-23712680 |
|
E-Mail : |
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|
|
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|
Factory 2 : |
JK Paper Mills, Jaykapur, Rayagada – 765 017, |
|
Tel. No.: |
91-6856-233303 / 233770 / 233171 |
|
Fax No.: |
91-6856-222238 |
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|
|
Zonal Offices : |
Located At :
|
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. Hari Shankar Singhania |
|
Designation : |
Chairman |
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|
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|
Name : |
Mr. Harsh Pati Singhania |
|
Designation : |
Managing Director |
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|
|
|
Name : |
Mr. Om Prakash Goyal |
|
Designation : |
Whole time Director |
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|
|
|
Name : |
Mr. Arun Bharat Ram |
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Designation : |
Director |
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|
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|
Name : |
Mr. Dhirendra Kumar |
|
Designation : |
Director |
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|
Name : |
Mr. M. H. Dalmia |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. R. V. Kanoria |
|
Designation : |
Director |
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|
Name : |
Mr. Shailendra Swarup |
|
Designation : |
Director |
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|
|
|
Name : |
Mr. Shailesh Haribhakti |
|
Designation : |
Director |
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|
|
Name : |
Mr. S. K. Pathak |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Udayan Bose |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Vinita Singhania |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. S. C. Gupta |
|
Designation : |
Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2012
|
Category of
Shareholder |
Total No. of
Shares |
Total
Shareholding as a % of total No. of Shares |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
1,050,000 |
0.77 |
|
|
68,633,953 |
50.24 |
|
|
69,683,953 |
51.01 |
|
|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
69,683,953 |
51.01 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
7,660 |
0.01 |
|
|
3,464,816 |
2.54 |
|
|
6,093,317 |
4.46 |
|
|
249,305 |
0.18 |
|
|
7,690,000 |
5.63 |
|
|
7,690,000 |
5.63 |
|
|
17,505,098 |
12.81 |
|
|
|
|
|
|
11,035,307 |
8.08 |
|
|
|
|
|
|
8,854,103 |
6.48 |
|
|
9,287,826 |
6.80 |
|
|
20,254,338 |
14.83 |
|
|
2,783,820 |
2.04 |
|
|
2,500,000 |
1.83 |
|
|
14,970,518 |
10.96 |
|
|
49,431,574 |
36.18 |
|
Total Public shareholding (B) |
66,936,672 |
48.99 |
|
Total (A)+(B) |
136,620,625 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
Total (A)+(B)+(C) |
136,620,625 |
- |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of Paper and Paper Related Products. |
||||
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Products : |
|
PRODUCTION STATUS (As on 31.03.2011)
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
|
|
|
|
|
Paper and Board including Pulp for sale |
Tones |
240000 |
286019* |
|
|
|
|
|
* includes 27525 MT transferred to Packaging
Board
GENERAL INFORMATION
|
No. of Employees : |
500 (Approximately) |
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Bankers : |
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Facilities : |
Notes : (a) Term Loans of Rs.3195.364 millions (FIs
– Rs.786.155 millions, Banks Rs.2409.209 millions) are secured by means of
first pari passu mortgage/charge created/to be created on the fixed assets of
the Company save and except specific assets exclusively charged in favour of
specified lenders as mentioned in Note (c). Out of the above Term Loan,
Rs.1303.190 millions (FIs - Rs.741.190 millions, Banks Rs.562.000 millions)
are further secured / to be secured by second charge on the current assets of
the Company. (b) Term Loans of
Rs.500.000 million (FIs - Rs Nil, Banks Rs.500.000 millions) are secured by
means of first pari passu mortgage/charge to be created on the fixed assets
both present and future of Unit JKPM of the Company save and except specific
assets exclusively charged in favour of specified lenders as mentioned in
Note (c) Term Loan of
Rs.29.810 millions from banks are secured by an exclusive charge by way of
hypothecation on the specified assets of the Company. (d) Working
Capital Loans are secured by hypothecation of Stores, Raw Materials, Finished
Goods, Stock-in- Process and Book Debts. The same are further secured / to be
secured by a second charge on the movable and immovable assets of the
Company. (e) Certain
charges have been created against which loan disbursement yet to be availed. (f) Certain
charges in the process of satisfaction. (g) Installments
of Term Loans repayable within one year - Rs.1010.092 millions. (h) Term loans from
Financial Institutions and Banks include Rs.1150.452 millions foreign
currency loans.
Notes: (a) The Company
has redeemed 50 numbers of 1.25% unsecured Foreign Currency Convertible Bonds
on 29th March 2011 for an aggregate consideration of Rs.299.220
millions USD 65,22,050 (Including premium on redemption of Rs.69.829 millions
(net of tax), USD 15,22,050) as per the terms of Offering Circular dated 30th
March 2006. (b) Includes
Commercial Paper of Nil (Previous year Rs.250.000 millions), maximum
outstanding balance during the year was Rs.250.000 millions (Previous year
Rs.250.000 millions) |
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Banking
Relations : |
--- |
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Auditors : |
|
|
Name : |
Lodha and Company Chartered Accountant |
|
Address : |
|
|
|
|
|
Name : |
S. S. Kothari Mehta and Company Chartered Accountant |
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Address : |
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Subsidiaries (Wholly Owned) : |
·
Songadh Infrastructure and Housing Limited ·
Jaykaypur Infrastructure and Housing Limited |
|
|
|
|
Associates : |
JK Enviro-Tech Limited |
CAPITAL STRUCTURE
AS ON 08.08.2011
Authorised Capital : Rs.5000.000 millions
Issued, Subscribed & Paid-up Capital : Rs.1366.506
Millions
AS ON 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
200000000 |
Equity Shares |
Rs.10/- each |
Rs.2000.000 Millions |
|
30000000 |
Redeemable Preference Shares |
Rs.100/- each |
Rs.3000.000 Millions |
|
|
Total |
|
Rs.5000.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
78149939 |
Equity Shares |
Rs.10/- each |
Rs.781.499
Millions |
|
9000 |
10% Cumulative Redeemable Preference Shares |
Rs.100/-
each |
Rs.0.900
Million |
|
|
Total |
|
Rs.782.399 Millions |
Note:
(a) These shares
were allotted as fully paid-up pursuant to the Scheme sanctioned by the Hon'ble
High Courts of Orissa and
Company has
redeemed 10% Cumulative Redeemable Preference Shares (Series E) of Rs.1.100
Millions with premium of Rs. 54.600 Millions on 30th Day of June,
2010 Series E and G of Rs. 0.600 millions and Rs. 0.300 are red are redeemable
on 30th day of June, 2011 and 2012 respectively along with premium on
redemption of Rs. 54.600 Millions with each Series.
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 |
782.400 |
783.500 |
785.600 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
5106.600 |
3973.900 |
3303.000 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
5889.000 |
4757.400 |
4088.600 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
4124.000 |
3921.500 |
5634.100 |
|
|
2] Unsecured Loans |
1259.600 |
1560.600 |
1324.500 |
|
|
TOTAL BORROWING |
5383.600 |
5482.100 |
6958.600 |
|
|
DEFERRED TAX LIABILITIES |
1284.000 |
1345.600 |
1099.400 |
|
|
|
|
|
|
|
|
TOTAL |
12556.600 |
11585.100 |
12146.600 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
8444.600 |
8795.800 |
9287.100 |
|
|
Capital work-in-progress |
938.900 |
208.000 |
139.600 |
|
|
|
|
|
|
|
|
INVESTMENT |
827.700 |
419.400 |
27.500 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1275.300
|
1268.900
|
1171.100
|
|
|
Sundry Debtors |
1078.700
|
1044.900
|
1071.500
|
|
|
Cash & Bank Balances |
308.900
|
78.700
|
342.200
|
|
|
Other Current Assets |
0.000
|
0.000
|
0.000
|
|
|
Loans & Advances |
1717.800
|
1609.800
|
1622.400
|
|
Total
Current Assets |
4380.700
|
4002.300
|
4207.200
|
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
1415.800 |
1157.113 |
979.269 |
|
|
Other Current Liabilities |
561.890
|
1585.400
|
1261.467
|
|
|
Provisions |
67.010
|
257.700
|
268.033
|
|
Total
Current Liabilities |
2044.700
|
1843.100
|
1529.500
|
|
|
Net Current Assets |
2336.000
|
2159.200
|
2677.700
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
9.400 |
2.700 |
14.700 |
|
|
|
|
|
|
|
|
TOTAL |
12556.600 |
11585.100 |
12146.600 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
12307.200 |
11055.300 |
10771.800 |
|
|
|
Other Income |
51.100 |
27.700 |
49.200 |
|
|
|
TOTAL (A) |
12358.300 |
11083.000 |
10821.000 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Employees |
1300.100 |
1197.000 |
997.900 |
|
|
|
Materials and Manufacturing |
7875.300 |
6899.200 |
7641.800 |
|
|
|
Other Expenditure |
420.500 |
442.700 |
428.600 |
|
|
|
Increase / (Decrease) in Finished Goods |
104.700 |
89.500 |
(69.700) |
|
|
|
TOTAL (B) |
9700.600 |
8628.400 |
8998.600 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)
(C) |
2657.700 |
2454.600 |
1822.400 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
457.000 |
484.900 |
584.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
2200.700 |
1969.700 |
1237.700 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
716.200 |
700.400 |
696.900 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
1484.500 |
1269.300 |
540.800 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
420.300 |
359.000 |
160.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
1064.200 |
910.300 |
380.100 |
|
|
|
|
|
|
|
|
|
|
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
2029.800 |
1319.100 |
939.000 |
|
|
|
|
|
|
|
|
|
|
APPROPRIATIONS |
|
|
|
|
|
|
|
Dividend |
176.000 |
156.600 |
137.300 |
|
|
|
Debenture Redemption Reserves |
229.400 |
0.000 |
0.000 |
|
|
|
Debenture Redemption Reserves Written back
|
(229.400) |
0.000 |
0.000 |
|
|
|
Capital Redemption Reserves |
1.100 |
2.100 |
4.000 |
|
|
|
Corporate Dividend Tax |
29.200 |
1745.100 |
1119.500 |
|
|
BALANCE CARRIED
TO THE B/S |
2809.300 |
2029.800 |
1319.100 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
422.534 |
290.543 |
424.195 |
|
|
|
Interest |
0.000 |
0.000 |
1.017 |
|
|
TOTAL EARNINGS |
422.534 |
290.543 |
425.212 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
1183.971 |
1081.053 |
856.322 |
|
|
|
Stores & Spares |
148.587 |
149.419 |
126.271 |
|
|
|
Capital Goods |
126.525 |
77.671 |
114.978 |
|
|
|
Others |
244.636 |
245.200 |
466.408 |
|
|
TOTAL IMPORTS |
1703.719 |
1553.343 |
1563.979 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
- Basic |
13.62 |
11.31 |
4.86 |
|
|
|
- Diluted |
13.62 |
11.33 |
4.74 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 1st
Quarter |
30.09.2011 2nd
Quarter |
31.12.2011 3rd
Quarter |
31.03.2012 4th
Quarter |
|
Net Sales |
3239.800 |
3218.100 |
3273.600 |
3573.800 |
|
Total Expenditure |
2666.200 |
2906.200 |
2970.600 |
3225.400 |
|
PBIDT (Excl OI) |
573.600 |
311.900 |
303.000 |
348.400 |
|
Other Income |
5.000 |
8.300 |
23.900 |
67.300 |
|
Operating Profit |
578.600 |
320.200 |
326.900 |
415.700 |
|
Interest |
82.300 |
96.300 |
86.900 |
125.300 |
|
PBDT |
496.30 |
223.900 |
240.000 |
290.400 |
|
Depreciation |
180.0000 |
182.000 |
185.100 |
182.300 |
|
Profit Before Tax |
316.300 |
41.900 |
54.900 |
108.100 |
|
Tax |
73.700 |
(23.300) |
(19.300) |
(3.100) |
|
Profit After Tax |
242.600 |
65.200 |
74.200 |
111.200 |
|
Net Profit |
242.600 |
65.200 |
74.200 |
111.200 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
8.61 |
7.20
|
3.12 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
12.06 |
10.13
|
4.51 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
11.57 |
9.92
|
4.00 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.25 |
0.27
|
0.13 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.26 |
1.54
|
2.08 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.14 |
2.17
|
2.75 |
LOCAL AGENCY FURTHER INFORMATION
|
Check List by
Info Agents |
Available in Report
(Yes / No) |
|
1) Year of Establishment |
Yes |
|
2) Locality of the firm |
Yes |
|
3) Constitutions of the firm |
Yes |
|
4) Premises details |
No |
|
5) Type of Business |
Yes |
|
6) Line of Business |
Yes |
|
7) Promoter’s background |
No |
|
8) No. of employees |
Yes |
|
9) Name of person contacted |
No |
|
10) Designation of contact person |
No |
|
11) Turnover of firm for last three years |
Yes |
|
12) Profitability for last three years |
Yes |
|
13) Reasons for variation <> 20% |
-- |
|
14) Estimation for coming financial year |
No |
|
15) Capital in the business |
Yes |
|
16) Details of sister concerns |
Yes |
|
17) Major suppliers |
No |
|
18) Major customers |
No |
|
19) Payments terms |
No |
|
20) Export / Import details (if applicable) |
No |
|
21) Market information |
-- |
|
22) Litigations that the firm / promoter involved in |
-- |
|
23) Banking Details |
Yes |
|
24) Banking facility details |
Yes |
|
25) Conduct of the banking account |
-- |
|
26) Buyer visit details |
-- |
|
27) Financials, if provided |
Yes |
|
28) Incorporation details, if applicable |
Yes |
|
29) Last accounts filed at ROC |
Yes |
|
30) Major Shareholders, if available |
No |
COMPANY HISTORY:
Subject (formerly Central Pulp Mills), a member of HS Singhania group is
originally promoted by Parkhe Group of Pune to manufacture Paper and Paper
products. The company which fell sick and referred to BIFR was taken over by JK
Corp limited of the HS Singhania Group in 1992. JK Corp. holds 44.76% in the
equity of this company as on Nov 6, 2003. The company has turnaround in a short
period of time with the rehabilitation package by HS Singhania Group companies
JK Corp Limited Industries. Subject today has an combined installed capacity of
150000 tpa with two integrated Paper Mills at Mills, Orissa (Inst. Cap 100000
tpa) and Central Pulp Mills,
PERFORMANCE REVIEW
The Company's Gross Sales during the year was Rs 143.297 millions, the Operating Profit (PBIDT) was Rs. 2657.700 millions and PAT stood at Rs 1064.200 millions as against Rs. 910.300 millions during the previous year, an increase of l7%.These represent the highest Gross Sales, PBIDT and PAT achieved by the Company.
The Company's production increased to 286,019 tonnes (previous year 273,755 tonnes, up 4.5%) and sales stood at 267,081 tonnes as against 265,045 tonnes. Overall, plant capacity utilization was 19% and it is heartening to note that the Packaging Board plant operated at 125 % of its installed capacity. The Company, however, cut back its outsourced volumes due to volatility in the international markets and limited domestic supplies.
Operating Profit (PBIDT) was higher despite increase in raw material cost and price of purchased pulp. Continued spikes in crude oil prices, made several petroleum based chemicals costlier. Lower availability of linkage coal and increase in the price of coal also contributed to higher cost of production. Though the Company was able to contain some of these cost increases due to higher productivity and efficiencies, it was constrained to raise paper prices during the year. PAT was higher by 17%, despite a higher provision for taxes of Rs 420.300 millions (previous period Rs 359.000 millions).
The Indian Paper and Paper Board industry is among the 15 largest in the world by volume. Per capita consumption in the country has increased from 8 Kg to 9.6 Kg over the last 3 years. This, however, is far below the Asian per capita consumption of 35 Kg.
The Company has been following a policy of focusing on value added products, which has paid rich dividends. As a result, it has strong presence in the segments of Copier Paper, Coated Paper and Virgin Fibre based Packaging Boards. These have all shown rapid growth in demand. The Company's wide distribution network along with emphasis on meeting customer expectations has helped it establish a leadership position in the market, despite strong competitive challenges. JK Paper continues to be the highest producer of Copier and Office Paper in the Country with well established Brands like "JK Copier", "JK Easy Copier", "JK Copier Plus", "Sparkle", and "Cedar". During the year it tied up with HP to introduce high performance "Color Lok" papers which gives better printability and saves consumption of ink. The Company has also been targeting niche segments through specialty products like "JK Excel Bond", "JK Ledger", "MICR Cheque papers" etc.
The market for coated paper continues to grow well. Domestic coated paper prices hardened during the year due to rising costs of inputs. "JK Cote", the Company's coated paper continues to attract a wide variety of customers.
The Packaging Boards business achieved highest production volumes with increased sales of Virgin Fiber based Boards. Demand continues to be strong and JK Paper has established itself as a leading player in this highly demanding segment with Brands like "JK Ultima", "JKT uffcote 'V'JK Neo Purefil" etc. The Board machine was rebuilt in March 2011, which added 24,000 TPA of capacity.
Global pulp and paper industry recovered sharply during the year to reach pre-crisis levels. Prices of pulp rose significantly though they are expected to decline over the next 6-9 months. International paper prices also went up during the year.
In 2010-11 the Company took steps to overcome the setback in plantation activities due to outbreak of "gall disease" lastyear.lt increased plantation to cover 6700 Ha. during the year. As a result of plantation activities taken up by the Company, its share of wood sourced from farm forestry in total raw material use has been on the rise.
EXPANSION
During the year the Company placed orders for major plant and machinery for its expansion program at Unit JKPM. The Rs. 165.000 millions Project envisages setting up a 215,000 TPA Pulp Mill, 165,000 TPA Paper machine, 55 MW Power block with all requisite auxiliaries.
The equipment is being sourced from leading international and domestic suppliers and incorporates efficient and contemporary technologies. The plant will deliver not only high- quality end product but will also result in lower cost of operation and have a beneficial impact on the environment. A dedicated team has been put in place for implementing the Project, aided by external technical consultants. Photocopier and Office papers from the new facility will be available for sale towards the later part of FY 2012-13.
The Company is at an advanced stage of achieving financial closure through an appropriate mix of internal accruals, debt and equity.
CUSTOMER SATISFACTION
AND QUALITY
The Company's commitment and success in delivering high quality products and services to customers has been a major reason for its attaining and retaining a leadership position in the Indian Paper Industry. JK Paper's obsession towards Quality and Customer Satisfaction is reflected in understanding and fulfillment of expectations of the customers, big or small. This in turn has been a key factor in its growth and the advantage that the Company has been able to build over the years in terms of a wide and loyal distribution network.
JK Paper became the first Indian Company to produce and sell
Color Lok copier paper in
The Company continues to conduct regular audit for its quality standards and customer satisfaction through research conducted in-house and also by an independent agency. This helps it to be in constant touch with changing customer preferences and develop its products to stay well ahead of the curve.
AWARDS AND
RECOGNITION
It is a matter of great satisfaction that JK Paper has been conferred "Dun & Bradstreet- Rolta Corporate Award 2010" as the top Indian Company in the Paper Industry.
Unit CPM was awarded "Greentech Environment Gold Award
- 2010" and "Greentech Safety Gold Award - 2010" in the Paper
Sector from Greentech Foundation,
Quality Circles held at
OVERVIEW
Global Economic
Recovery
The global economy began to show signs of recovery by end
2009 overcoming the slowdown that started in late 2008. This recovery gained
momentum in 2010 though it was affected to some extent by the austerity
measures in
The calendar year 2011 started well but the rising crude oil
prices due to political turmoil in
Last 10-15 years have been witnessing a power shift in
global pulp and paper industry with emerging economies growing faster than
advanced countries. Low growth in Europe and
The global production of paper and board picked up in 2010
to reach 395 million tonnes driven by strong growth in Asian and Latin American
markets especially in
Impact on Indian Pulp
and Paper Industry
The Indian economy weathered the economic downturn well thanks
to stimulus measures aided by robust domestic consumption, particularly in
rural areas. Return to the 9% growth trajectory may take some time but
The Indian paper industry saw demand revival in recent quarters across all segments though in varying proportions. AII the segments in which the Company operates continue to experience double digit growth rates. Cost optimization measures implemented to weather the downturn have helped the industry to shed some of its flab and become more competitive.
The rising global prices of pulp and paper along with increased domestic demand have helped prices to firm up in the Indian market. Input costs of Coal, Lime and Chemicals, however, continued to rise; these have put pressure on profit margins.
Supply and demand
scenario in Indian Paper and Board Industry
The long term outlook for paper and board Industry remains strong. The demand drivers viz. increased economic activity, rising population and incomes, growing thrust on education and greater use of sophisticated packaging will ensure good growth in future.
With no major capacity additions expected in the next 3
years, some segments might also experience a demand-supply gap. The Industry
might also witness announcements of new projects to address this gap in the
market. The potential that
The sluggish demand for paper and board in Europe and
MARKET FOR COMPANY'S
PRODUCTS
The Company, over the decades, has been consciously adopting a strategy to continuously move-up the value-chain. This has paid rich dividends and currently we are well placed to take full advantage of growth opportunities that the industry has to offer in the years to come.
JK Paper has been in the forefront of changing the marketing of paper from one of commodity to that of brands. This, along with their obsession for quality has helped us to ensure Customer loyalty and also deliver superior value to the Customers.
Copier and Office
Paper
Industry estimates suggest that the overall Indian market for the Copier Paper has grown by 17% in 2010-11 with premium segment growing at 12% and economy segment growing even faster at 18%.
The future outlook for this sector is bright in view of growth in mobile phone, internet connectivity and government focus on education through "Sarva Shiksha Abhiyan" and "Right to Education" Act
Growth of Information Technology and its increasing applications has led to a significant rise in transactions being done through internet and desktop computers. This has resulted in a sharp rise in demand for office papers.
In the coming years, one can visualize fall in cost of
mobile connectivity as a result of quantum growth in mobile telephony network
in rural
Despite production capacity constraints we have made focused attempt to increase sale of high value products such as JK Copier vis-a-vis JK Easy Copier so as to enhance the market share in the premium segment of the copy paper. To supplement in-house production
the Company imports Copier Paper in its own brands to meet the rising domestic demand.
The Company is also gearing up to take advantage of the growing demand for paper from digital printing in the coming years
Coated Paper
Domestic Coated Paper prices remained relatively stable
during the first half of the year thanks to favorable global pricing situation
and low import from
The outlook for Coated Paper remains strong with prices expected to remain firm in the near future.
Outsourcing
Outsourcing is now used more as a strategy for supplementing their in-house production so as to satisfy the diverse and changing needs of their Customers, big or small.
Outsourcing helps the Company especially where the Company is unable to offer products from its own production to its Customers and distributors. This is all the more so in view of existing capacity constraints.
Copier Paper segment saw revival of outsourcing by the Company. In Coated Papers we have been able to develop additional suppliers and making an entry in lower GSM segment which is not in their production range.
Product Upgradation:
The Company in its continuous efforts to reach out to new Customers and markets has been
introducing new products or through product extensions on a regular basis.
It has established a tie-up with Hewlett Packard to manufacture and sell Color Lok Papers which give better quality prints even while enhancing printer life and significantly reducing ink consumption. We are one of the few companies around the world who have been licensed to produce this paper and the only Company from Indian industry.
Packaging Board
Packaging boards business achieved highest production volumes during the year. Demand for the Company's brands "JK Tuffcote 'V' JK Ultima" and "JK Purefil" which are well established in the market place continues to be strong. Last year was a year of consolidation where we were able to streamline their operations, achieve production efficiencies and establish best practices.
In February 2011, the Company carried out rebuilding of the board Machine. This has led to a release of an additional capacity of 24000 TPA besides improving the consistency and quality of their products.
The New Year brings new challenges and new resolves. To strengthen their selves to meet these challenges better, we have earmarked 2011 -12 as the 'Year of Service'. The plan for this year is to lock in their Customers through improved service and quality.
Branding
JK brands occupy unique position in the minds of its Customers, which has been possible only by the extensive branding activity undertaken for its targeted market.
A mix of print advertisements, road shows and outdoor media campaigns to communicate introduction of "ColorLok" Papers were used to reach out to the target segments and create better visibility for their brands. Introduction of sophisticated packaging in "JK Copier" and "JK Easy Copier" has also helped in generating better mind share.
FINANCIAL HIGHLIGHTS
Production at 2,86,019 tonnes and sales at 2,67,08 tonnes achieved by the Company during the year are the highest ever for the Company. Operating Profit (PBIDT) went up 8% and PBDT by 12% despite sharp increase in cost of Raw Materials, Pulp, Coal and Chemicals on account of continued focus on cost optimization, better product mix and better efficiency levels. The Net Profit After Tax (PAT) was Rs 1064.200 millions which is 17% more than the previous year. The Company had issued 1.25% Foreign Currency Convertible Bonds (FCCBs) and raised USD 5 million in 2006. These FCCB were repaid on due date i.e., March 29,2011 with accumulated premium.
Increased Cash Profit (PBDT) has helped the Company reduce
it total debt (net of investments and cash balances) significantly during the
year. The current position places the Company ideally to mobilize funds for the
expansion project. Due to reduced debt levels, the interest paid on outstanding
loans other than the one time premium paid on FCCBs has come down from Rs
484.900 millions to Rs 379.300 millions for the year. softened during mid-year
and declined marginally towards the end of the year. This decline was possible
due to slackening of demand from
During the year, the Reserve Bank of India (RBI) took steps for tightening liquidity to control inflation. Various measures taken by RBI have impacted the interest rates across maturity and the base rate of most banks have been revised upwards as a consequence. The Company has repaid some high cost loans and renegotiated some others but the average interest rate for the Company is poised to move upwards.
In line with the corporate policy, hedging of currency exposures is resorted to manage the overall risks and exposures. The Company uses a mix of Swaps, Forwards, and Options to manage risks. As a policy Company does not initiate any covers without a corresponding trade exposure thus ruling out any speculation.
The Company has embarked on an expansion of about Rs 16500.000 millions at Unit JKPM. To partly fund this expansion the Company is issuing Equity Shares by way of Rights besides issuing a new series of FCCBs. The balance of funds is being tied up through Foreign Currency loans and Domestic loans from banks. Together with internal accruals in the book as on date, the Company hopes to mobilize the requisite funds for enabling the expansion.
ENVIRONMENT AND
NEIGHBOURHOOD
The Company does not believe in achieving growth at the expense of the environment. In this regard, the Company has taken necessary steps for ensuring the safety of environment and surrounding communities in all the locations where it operates. The Company tries to protect the interest of all stakeholders while taking key decisions. Both the units of their Company practice high standards of Health, Safety and Environment.
FIXED ASSETS:
Tangible Assets:
v
Land
- Freehold
- Leasehold
v
Buildings
v
Plant
and Machinery
v
Furniture,
Fixtures and Equipments
v
Vehicles
and Locomotives
v
Railway
Sidings
Intangible Assets
v
Performance
Improvement and Development
v
Software
AUDITED FINANCIAL RESULTS FOR THE YEAR
ENDED 31ST MARCH, 2012
Rs. In Millions
|
PARTICULAR |
PRECEDING THREE
MONTHS ENDED |
THREE MONTHS
ENDED |
YEAR ENDED |
|
|
UNAUDITED |
UNAUDITED |
AUDITED |
|
|
31.12.2011 |
31.03.2012 |
31.03.2012 |
|
|
|
|
|
|
(a)
Net Sales / Income from operations |
3267.900 |
3567.800 |
13282.600 |
|
(b)
Other Operating Income |
6.000 |
6.000 |
18.000 |
|
Total
Income |
3273.900 |
3573.800 |
13300.600 |
|
Expenditure |
|
|
|
|
Cost
of material consumed |
1829.700 |
1835.200 |
7214.000 |
|
Purchases
of stock in trade |
161.200 |
176.100 |
722.000 |
|
Changes
in inventories of finished goods, work in progress and stock in trade |
(14.800) |
164.600 |
(161.300) |
|
Employee
benefits expenses |
307.700 |
337.200 |
1261.400 |
|
Depreciation
and amortization expenses |
185.100 |
182.300 |
729.400 |
|
Other
expenses |
|
|
|
|
Power,
fuel and water |
515.000 |
421.700 |
1866.200 |
|
Others
|
186.900 |
290.600 |
870.00 |
|
Total |
3170.800 |
3407.700 |
12501.900 |
|
Profit
from operations before other income, interest and exceptional Items |
103.100 |
166.100 |
798.700 |
|
Other
income |
85.500 |
67.300 |
235.000 |
|
Profit
before interest and exceptional Items |
188.600 |
233.400 |
1033.700 |
|
Interest |
133.700 |
125.300 |
512.500 |
|
Profit after Interest but
before Exceptional Items |
54.900 |
108.100 |
521.200 |
|
Exceptional
Items |
0.000 |
0.000 |
0.000 |
|
Profit (+)/Loss(-) from
Oridinary Activities before tax |
54.900 |
108.100 |
521.200 |
|
Tax
expense |
|
|
|
|
Provision
for current tax |
(3.200) |
12.600 |
106.000 |
|
Mat
credit entitlement |
0.000 |
(12.200) |
(12.200) |
|
Provision
for deferred tax |
(16.100) |
(3.500) |
(65.800) |
|
Net Profit (+)/Loss(-) from
Ordinary Activities after tax |
74.200 |
111.200 |
493.200 |
|
Extraordinary items |
0.000 |
0.000 |
0.000 |
|
Net Profit
(+) / Loss (-) for the year period |
74.200 |
111.200 |
493.200 |
|
Shares
of profit of associates |
0.000 |
0.000 |
0.000 |
|
Minority
interest |
0.000 |
0.000 |
0.000 |
|
Net
profit after tax, minority interest and share of profit of associates |
74.200 |
111.200 |
493.200 |
|
Paid
up equity share capital (Face value of Rs.10/- per share) |
1336.200 |
1366.200 |
1366.200 |
|
Reserves
excluding revaluation reserves as per balance sheet of previous accounting
year |
-- |
-- |
7112.200 |
|
Earnings
per share (EPS) |
|
|
|
|
(a) Basic and diluted
EPS before Extraordinary items for the period, for the year
to date and for the previous year (not to be
annualised) |
0.54 |
0.81 |
4.41 |
|
(a) Basic and diluted EPS
before Extraordinary items for the period, for the year
to date and for the previous year (not to be
annualised) |
0.43 |
0.64 |
3.46 |
|
Public
shareholding |
|
|
|
|
Number of shares |
66936672 |
66936672 |
66936672 |
|
Percentage of shareholding |
48.99 |
48.99 |
48.99 |
|
|
|
|
|
|
Promoters
and Promoters group Shareholding- |
|
|
|
|
a)
Pledged /Encumbered |
|
|
|
|
Number
of shares |
Nil |
Nil |
Nil |
|
Percentage
of shares (as a % of total shareholding of the promoter and promoter group) |
Nil |
Nil |
Nil |
|
Percentage
of shares (as a % of total share capital of the company) |
Nil |
Nil |
Nil |
|
|
|
|
|
|
b)
Non Encumbered |
|
|
|
|
Number
of shares |
69683953 |
69683953 |
69683953 |
|
Percentage
of shares (as a % of total shareholding of the promoter and promoter group) |
100.00 |
100.00 |
100.00 |
|
Percentage
of shares (as a % of total share capital of the company) |
51.01 |
51.01 |
51.01 |
STATEMENT OF ASSETS AND
LIABILITIES
|
Particular |
As on 31.03.2012 [Rs. in
Millions] |
|
EQUITY AND LIABILITIES |
|
|
SHAREHOLDERS FUND |
|
|
Share capital |
1366.500 |
|
Reserves and surplus |
7418.100 |
|
Total |
8784.600 |
|
|
|
|
NON-CURRENT LIABILITIES |
|
|
Long-term borrowings |
8455.600 |
|
Deferred tax liabilities (Net) |
1218.200 |
|
Other long-term liabilities |
228.800 |
|
Long-term provisions |
27.900 |
|
Total |
9930.500 |
|
|
|
|
CURRENT LIABILITIES |
|
|
Short-term borrowings |
1306.300 |
|
Trade payables |
1427.000 |
|
Other current liabilities |
2389.600 |
|
Short-term provisions |
261.300 |
|
Total |
5384.200 |
|
|
|
|
TOTAL CURRENT LIABILITIES |
23829.300 |
|
|
|
|
ASSETS |
|
|
NON-CURRENT ASSETS |
|
|
Fixed assets |
13908.100 |
|
Non-current investment |
126.500 |
|
Long-term loans and advances |
2290.200 |
|
Other non-current assets |
477.500 |
|
Total |
16802.300 |
|
|
|
|
CURRENT ASSETS |
|
|
Current investment |
603.100 |
|
Inventories |
1641.00 |
|
Trade receivables |
1441.600 |
|
Cash and cash equivalents |
1476.900 |
|
Short-term loans and advances |
1776.700 |
|
Other current assets |
86.800 |
|
Total |
7026.100 |
|
|
|
|
TOTAL CURRENT ASSETS |
23829.300 |
SEGMENT WISE REVENUE,
RESULTS AND CAPITAL EMPLOYED FOR THE YEAR ENDED 31ST MARCH, 2012
Rs. in Millions
|
Segment Revenue |
Paper and Board |
Others |
Total |
|
|
|
|
|
|
Net Sales |
13300.600 |
0.000 |
13300.600 |
|
Less: Inter-Segment Revenue |
0.000 |
0.000 |
0.000 |
|
Net Sales/
Income From Operations |
13300.600 |
0.000 |
13300.600 |
|
|
|
|
|
|
Segment Results |
|
|
|
|
Segment Results (PBIT) |
844.600 |
(17.300) |
827.300 |
|
Less: Finance Costs (Net) |
512.500 |
02.200 |
514.700 |
|
Other Un-Allocable Expenditure (Net off un-allocable income) |
(196.900) |
0.000 |
(196.900) |
|
Total Profit / (Loss) Before Tax
(PBT) |
529.000 |
(19.500) |
509.500 |
|
|
|
|
|
|
Capital Employed (Segment Assets-Segment Liabilities) |
10876.100 |
62.100 |
10938.200 |
NOTE:
v
Profit for the year has been
significant impacted due to lower receipt of linkage coal and increase in raw
materials costs without commensurate increase in selling price. However, the
situation has improved during the last quarter of the year.
v
The board has recommended
dividend of Rs.1.50 per share, amounting to Rs.204.900 Millions on increased
capital and at the specified rate of preferences shares capital amounting to
Rs.1.000 Million for the year ended 31st March, 2012.
v
The company’s expansion
project of Rs.16530.000 Millions at Unit JKPM Odisha, is progressing as per
schedule.
v
The company has raised
Rs.2455.800 Millions through rights issue of equity shares and Rs.2261.400
Millions (Euro 25 Million) by issue of unsecured and unlisted foreign currency
convertible bonds (FCBs). Out of the above, Rs.2982.700 Millions (including
Right Issue Rjs.1482.700 Millions) have been deployed for the project. The balance Rs.1734.500 Millions have been
invested in mutual fund and fixed deposits with banks.
v
The figures for the previous
period have been regrouped/ rearranged, wherever necessary.
v
The company has only one
business segment namely, “paper and Board”
v
The audited accounts of
the company, after review by the audit committee, were adopted by the board of
directors at its meeting held on 14th May, 2012.
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.56.30 |
|
|
1 |
Rs.88.06 |
|
Euro |
1 |
Rs.70.90 |
INFORMATION DETAILS
|
Report Prepared
by : |
TPT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
NO |
|
--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 |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
61 |
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.