|
Report Date : |
01.10.2012 |
IDENTIFICATION DETAILS
|
Name : |
SESHASAYEE PAPER AND
BOARDS LIMITED |
|
|
|
|
Registered
Office : |
Pallipalayam, Cauvery R. S. P. O., Erode – 638 007, Tamil Nadu |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2012 |
|
|
|
|
Date of
Incorporation : |
22.06.1960 |
|
|
|
|
Com. Reg. No.: |
18-364 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.112.500 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L21012TZ1960PLC000364 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
CHESI7099F |
|
|
|
|
Legal Form : |
It is a public limited
liability company. The company’s
shares are listed on the Stock Exchanges. |
|
|
|
|
Line of Business
: |
Manufacture of Paper and
Paper Boards |
|
|
|
|
No. of Employees
: |
No Divulged |
RATING & COMMENTS
|
MIRA’s Rating : |
A (67) |
|
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 12424428 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well
established and a reputed company having fine track. Financial position of
the company appears to be experienced and respectable businessmen. Trade
relations are reported as fair. 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 – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
India is developing into an open-market economy, yet traces
of its past autarkic policies remain. Economic liberalization, including industrial
deregulation, privatization of state-owned enterprises, and reduced controls on
foreign trade and investment, began in the early 1990s and has served to
accelerate the country's growth, which has averaged more than 7% per year since
1997. India's diverse economy encompasses traditional village farming, modern
agriculture, handicrafts, a wide range of modern industries, and a multitude of
services. Slightly more than half of the work force is in agriculture, but
services are the major source of economic growth, accounting for more than half
of India's output, with only one-third of its labor force. India has
capitalized on its large educated English-speaking population to become a major
exporter of information technology services and software workers. In 2010, the
Indian economy rebounded robustly from the global financial crisis - in large
part because of strong domestic demand - and growth exceeded 8% year-on-year in
real terms. However, India's economic growth in 2011 slowed because of persistently
high inflation and interest rates and little progress on economic reforms. High
international crude prices have exacerbated the government's fuel subsidy
expenditures contributing to a higher fiscal deficit, and a worsening current
account deficit. Little economic reform took place in 2011 largely due to
corruption scandals that have slowed legislative work. India's medium-term
growth outlook is positive due to a young population and corresponding low
dependency ratio, healthy savings and investment rates, and increasing
integration into the global economy. India has many long-term challenges that
it has not yet fully addressed, including widespread poverty, inadequate
physical and social infrastructure, limited non-agricultural employment
opportunities, scarce access to quality basic and higher education, and
accommodating rural-to-urban migration.
|
Source
: CIA |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
|
Rating |
A+ (Long Term) |
|
Rating Explanation |
Adequate degree of safety and low credit risk |
|
|
|
|
Rating |
A1 (Short Term) |
|
Rating Explanation |
Very Strong degree of safety and lowest credit risk |
|
Date |
07.03.2012 |
RBI DEFAILTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAILTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
INFORMATION DECLINED BY
Management Non Co-operative (Name not disclosed)
LOCATIONS
|
Registered Office : |
Pallipalayam, Cauvery R. S. P. O., Erode – 638 007, Tamil Nadu, India |
|
Tel. No.: |
91-4288-240221 / 8 |
|
Fax No.: |
91-4288-240229 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Chennai Office : |
109 Nungambakkam High Road,
1st Floor, Chennai - 600 034, Tamilnadu, India |
|
Tel. No.: |
91-44-28278000 /
28233967 / 28283428 / 28283446 |
|
Fax No.: |
91-44-28275086 |
|
|
|
|
Corporate Office : |
ASMA Building, No-84, T.T.K Road, (1st Floor) Alwarpet, Chennai - 600 018, Tamilnadu, India |
|
Tel. No.: |
91-44- 24982230 /
24982202/ 24982195 / 24661071 / 24661047 / 24983163 |
|
Fax No.: |
91-44-24661086 |
DIRECTORS
AS ON 31.03.2012
|
Name : |
Mr. N Gopalaratnam |
|
Designation : |
Chairman And Managing Director |
|
|
|
|
Name : |
Mr. Arun G Bijur |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Bimal Kumar Poddar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. R V Gupta |
|
Designation : |
I A S (Retired) |
|
|
|
|
Name : |
Dr S Narayan |
|
Designation : |
I A S (Retired) |
|
|
|
|
Name : |
Mr. Md Nasimuddin |
|
Designation : |
I A S, Nominee Of Tiic |
|
|
|
|
Name : |
Mrs. Philomina Thomas |
|
Designation : |
Nominee Of LIC |
|
|
|
|
Name : |
Mr. C V Sankar |
|
Designation : |
I A S |
|
|
|
|
Name : |
Mr. V Sridar |
|
Designation : |
I A S |
|
|
|
|
Name : |
Mr. K S Kasi Viswanathan, |
|
Designation : |
Deputy Managing Director |
|
|
|
|
Name : |
Mr. V Pichai, Director |
|
Designation : |
(Finance) and Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 30.06.2012
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of promoter
and Promoter Group |
|
|
|
1) Indian |
|
|
|
a) Individuals / Hindu Undivided Family |
102740 |
0.91 |
|
b) Bodies corporate |
3086941 |
27.44 |
|
|
|
|
|
2) Foreign |
|
|
|
a) Bodies corporate |
1547695 |
13.76 |
|
|
|
|
|
(B) Public Shareholdings |
|
|
|
1) Institutions |
|
|
|
a) Mutual Funds |
1000 |
0.01 |
|
b) Financial Institutions/Banks |
3851 |
0.03 |
|
c) Central Government / State Government |
1800000 |
16.00 |
|
d) Insurance Companies |
521918 |
4.64 |
|
e) Foreign Institutional Investors |
386228 |
3.43 |
|
|
|
|
|
2) Non – Institution |
|
|
|
a) Bodies corporate |
716617 |
6.37 |
|
|
|
|
|
b) Individuals |
|
|
|
i. Individual Shareholders holding nominal share capital upto Rs.0.100
Million |
1657207 |
14.73 |
|
ii. Individual Shareholders holding nominal share capital in excess
Rs.0.100 Million |
1402493 |
12.47 |
|
|
|
|
|
c) Any other |
|
|
|
i) Clearing Member |
20738 |
0.18 |
|
ii) Trust |
2572 |
0.02 |
|
|
|
|
|
Total |
11250000 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacture of Paper and
Paper Boards |
GENERAL INFORMATION
|
No. of Employees : |
No Divulged |
|||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
Bankers : |
· Syndicate Bank · Canara Bank · Central Bank Of India · UCO Bank ·
State Bank Of India |
|||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
Facilities : |
|
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Messrs Suri and Company Chartered Accountant |
|
Address : |
Chennai |
|
|
|
|
Related Parties : |
·
Ponni Sugars (Erode) Limited ·
High Energy Batteries India Limited ·
SPB Project and consultancy Private Limited ·
Time square investment Private Limited ·
SPB Papers Limited |
CAPITAL STRUCTURE
AS ON 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
25000000 |
Equity Shares |
Rs.10/- each |
Rs.250.000 Millions |
|
30000000 |
Cumulative Redeemable Preference Shares |
Rs.10/- each |
Rs.300.000
Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
11250000 |
Equity Shares |
Rs.10/- each |
Rs.112.500
Millions |
|
|
|
|
|
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
112.500 |
112.500 |
112.500 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
2993.607 |
2718.028 |
2133.380 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
3106.107 |
2830.528 |
2245.880 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
1231.441 |
974.998 |
2888.275 |
|
|
2] Unsecured Loans |
440.556 |
2500.497 |
365.714 |
|
|
TOTAL BORROWING |
1671.997 |
3475.495 |
3253.989 |
|
|
DEFERRED TAX LIABILITIES |
821.950 |
830.150 |
872.450 |
|
|
|
|
|
|
|
|
TOTAL |
5600.054 |
7136.173 |
6372.319 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
4500.298 |
4747.428 |
4980.546 |
|
|
Capital work-in-progress |
57.130 |
84.863 |
77.294 |
|
|
|
|
|
|
|
|
NON CURRENT INVESTMENT |
232.320 |
232.320 |
0.000 |
|
|
INVESTMENT |
0.000 |
0.000 |
101.905 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
862.017
|
448.803 |
478.097 |
|
|
Sundry Debtors |
1002.016
|
522.757 |
449.724 |
|
|
Cash & Bank Balances |
64.896
|
288.445 |
916.822 |
|
|
Other Current Assets |
30.526
|
51.088 |
0.000 |
|
|
Loans & Advances |
1343.025
|
2362.608 |
426.296 |
|
Total
Current Assets |
3302.480
|
3673.701 |
2270.939 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
1614.057
|
742.172 |
707.187 |
|
|
Other Current Liabilities |
670.723
|
647.316 |
272.467 |
|
|
Provisions |
207.394
|
212.651 |
78.711 |
|
Total
Current Liabilities |
2492.174
|
1602.139 |
1058.365 |
|
|
Net Current Assets |
810.306
|
2071.562 |
1212.574 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
5600.054 |
7136.173 |
6372.319 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
6114.178 |
5734.787 |
5092.576 |
|
|
|
Other Income |
46.277 |
63.847 |
87.299 |
|
|
|
TOTAL (A) |
6160.455 |
5798.634 |
5179.875 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Material Consumed |
2790.264 |
2395.166 |
2174.318 |
|
|
|
Purchase of Stock in trade |
275.928 |
176.278 |
173.666 |
|
|
|
Increased / (Decreased) In Stock |
(112.109) |
(18.244) |
1.055 |
|
|
|
Employees benefit expenses |
462.003 |
522.784 |
339.876 |
|
|
|
Other Expenses |
1709.024 |
1554.687 |
1273.780 |
|
|
|
TOTAL (B) |
5125.110 |
4630.671 |
3962.695 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1035.345 |
1167.963 |
1217.180 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
243.231 |
220.298 |
283.959 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
792.114 |
947.665 |
933.221 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
342.560 |
339.942 |
336.125 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
449.554 |
607.723 |
597.096 |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
108.600 |
(42.300) |
197.800 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-I) (J) |
340.954 |
650.023 |
399.296 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
443.425 |
357.085 |
NA |
|
|
TOTAL EARNINGS |
443.425 |
357.085 |
NA |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
30.31 |
57.78 |
-- |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2012 |
|
Type |
|
|
1st
Quarter |
|
Sales Turnover |
|
|
1576.500 |
|
Total Expenditure |
|
|
1300.100 |
|
PBIDT (Excl
OI) |
|
|
276.400 |
|
Other Income |
|
|
4.500 |
|
Operating
Profit |
|
|
280.900 |
|
Interest |
|
|
55.900 |
|
Exceptional
Items |
|
|
0.000 |
|
PBDT |
|
|
225.000 |
|
Depreciation |
|
|
87.000 |
|
Profit
Before Tax |
|
|
138.000 |
|
Tax |
|
|
26.200 |
|
Reported PAT |
|
|
111.800 |
|
Extraordinary Items |
|
|
0.000 |
|
Prior Period Expenses |
|
|
0.000 |
|
Other Adjustments |
|
|
0.000 |
|
Net Profit |
|
|
111.800 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
5.53
|
11.33 |
7.71 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
7.35
|
10.60 |
11.72 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
5.76
|
10.59 |
82.30 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.14
|
0.21 |
0.27 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.34
|
0.21 |
0.26 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.32
|
2.11 |
2.15 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
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 |
No |
|
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 |
No |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
Yes |
|
30] |
Major Shareholders, if
available |
No |
|
31] |
Date of Birth of
Proprietor/Partner/Director, if available |
No |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
Yes |
OPERATIONS
During
the year, the Company’s production was 1 18 282 tonnes, as compared to 1 20 558
tonnes, produced in the previous year. The production could have been higher
but for the severe restrictions on power availability imposed by the State
Government, which affected production whenever their Captive Power Plants were
shut for annual inspection and during maintenance related outages.
The
revenue was Rs.61 60.500 Millions for the year under review, as compared to
Rs.57 98.600 Millions in the previous year. Total revenue was higher by 6.2%,
on account of higher production and sale of Pulp.
The Profit
before interest, depreciation and tax was Rs.10 35.400 Millions, as compared to
Rs.11 68.000 Millions, in the previous year. Major factors that impacted the
profitability for the year under review were increases in prices of Wood,
Bagasse, Coal and Chemicals. After absorbing interest and financing charges and
depreciation of Rs. 2 43.200 Millions and Rs. 3 42.600 Millions, respectively,
the profit before tax was Rs. 4 49.600 Millions, as compared to Rs.6 07.700
Millions, in the previous year.
There was no carried forward loss or depreciation
available for set off against current year’s profit. Consequently, the Company
was liable for regular tax at normal rate. The said current tax liability
worked out to Rs.116.800 Millions. The unutilised MAT Credit Entitlement could
be utilised to the extent Rs. 28.700 Millions to reduce the cash outgo.
As per the Accounting Standard (AS) 22 of The Companies
(Accounting Standards) Rules, 2006, a sum of Rs.8.200 Millions has been
transferred from Deferred Tax and credited to the Statement of Profit and Loss,
as against Rs. 42.300 Millions, in the previous year.
In the result, profit after tax for the year was Rs.3
41.000 Millions, as compared to Rs. 6 50.000 Millions, in the previous year.
FINANCE
The Company paid the instalments of the Term Loans and the
interest dues on Term Loans and Working Capital borrowings, on or before the
respective due dates.
MANAGEMENT’S
DISCUSSION AND ANALYSIS
(i)
Industry
structure and developments Global :
Paper is of significant importance to the society. Its
contribution in the areas of education, dissemination of information and
knowledge, hygiene and packaging cannot be easily matched.
Paper is interwoven with human life in hundreds of ways. It
is also a bio-degradable product and has a benign footprint at the end of its
life cycle. Despite the projections that digital age would render paper
obsolete, Paper Industry has been growing year after year.
Paper Industry has also a very prominent role in the World
Economy. Annual revenue from this Sector exceeds US $ 500 billions. World
consumption of paper and boards grew from 169 million tonnes in 1981, to 253
million tonnes in 1993 and to 352 million tonnes in 2005. Current consumption
is of the order of 400 million tonnes.
Demand is projected to exceed 500 million tonnes by 2020.
While the mature market may record a flat growth rate, the emerging markets are
expected to grow at a CAGR of 4 - 5%. India is forecast to have the highest
growth rate of 6 - 7% per annum. China and Russia are expected to register
impressive growth rates, in excess of
5% per annum.
Global Pulp and Paper Industry is dominated by North
American countries (USA and Canada), Northern Europe (Finland, Sweden,
North-west Russia), and East Asian Countries (China, Japan and South Korea).
Australasia Countries and Brazil have also significant pulp and paper
enterprises.
The four key paper and board categories are Newsprint,
Coated / Uncoated Wood-free Papers, Tissue and Papers and Boards for the
packaging applications. The growth rate will vary by grade. Tissue, Container
Boards and Carton Boards are expected to witness higher growth rates.
The year 2011 saw a mild recovery in the fortunes of the
Paper Industry. The production / consumption of the year 2011 were of the order
of 394 million tonnes. In 2010, China had maintained the top spot with 93
million tonnes of production. USA accounted for 76 million tones of paper,
Japan 27 million tonnes, Germany 23 million tonnes and Canada 13 million
tonnes.
India's production in the year 2010 registered 9.223 million
tonnes and helped to move up to become the 11th largest pulp and paper
producing country in the world, from 15th place it occupied some years ago.
As per the American Forest and Paper Association, (AFandPA),
the US paper and board capacity decline slowed down to 1.4% in 2011. This was
smaller than the 3.1% reduction registered in 2010. Paper and paper
boardcapacity in US is expected to decline by 1% in 2012 and then register
increases by 0.6% and 0.5% in 2013 and 2014, respectively.
The Pulp and Paper Industry is capital intensive and
cyclical in nature. North American block of nations consumed over 100 million
tonnes of paper and paper boards while Asia, including China and Japan, account
for 140 million tonnes of paper. Europe's share is of the order of 102 million
tonnes. China, which registered the fastest growth (9.3% per annum) in recent
times, is expected to slow down. India, whose consumption is a low 10 - 11
million tonnes per annum, has the distinction of being the fastest growing
nation in the Paper Sector at 7.4% per annum.
Unlike consumption trends in the other mature commodity
sectors, paper consumption follows closely economic growth. Per capita
consumption has grown to about 190 kg per annum in Western Europe and more than
300 kg per annum in North America. In the developing economies, paper
consumption is growing rapidly, but the per capita consumption is still a low
17.5 kg per annum. However, paper and board consumption in Asia already exceeds
that of Europe. This growth rate would eventually make the region the largest
paper consumer in the world.
DOMESTIC:
The Indian Paper Industry has recently moved up to the 11th position in production.
It is however highly fragmented. As per estimates, there are more than 1000
paper mills in the Country. There are three segments in the entire Industry,
other than newsprint segment, viz., (i) large integrated mills, using bamboo
and hardwood and large mills using waste paper / recycled fibre, (ii) medium
mills using agricultural residues and (iii) small / medium mills using waste
paper / recycled fibres. All the three sectors contribute equally to the total
production of paper and paper board in the country. The installed capacities of
these mills range from 1000 tonnes per annum to 5 00 000 tonnes per annum.
The Paper Industry is an important industrial sector having a bearing on
the socio-economic development of the Country. The Industry mirrors the
Country’s economic growth. It creates economic wealth in the hands of the poor,
by generating rural employment. Indian Paper Industry is an important vehicle
to drive the Government's National Literacy Mission. It is also an important
contributor to greening India through Social Forestry Programmes. The Indian
Paper Industry is a rural based industry with linkages to Agriculture and Agro
Forestry.
The Industry’s current installed capacity is around 11.0 million tonnes.
The annual output is of the order of 10.0 million tonnes. The consumption is
currently estimated at 11.0 million tonnes and is set to grow to 20.0 million
tones by 2020. The Industry provides direct employment to more than 5 lakhs
people, besides indirect employment to over 11 lakhs rural poor. The Industry
has grown at a CAGR of 6% in the last few years and is projected to grow at a
CAGR of 7.6% in the next 2 - 3 years.
The global demand for paper and paper board is projected to grow to over
500 million tonnes by the year 2020. This growth is being driven by emerging
markets, including India, while in the matured market, the demand is expected
to be flat or decline.
According to Poyry, India will witness highest annual growth of about
6.5% per annum while China's growth is projected to be in the order of 5.25%.
Japan and North America may witness marginal or negative growth. Amongst the
various grades, Container Boards, Tissue Paper, followed by Carton Boards will
witness higher rates of growth, while growth rate of Coated / Uncoated Wood-free
Paper is expected to be under 2%.
OPPORTUNITIES AND
THREATS
The competitive strengths and the opportunities that are available to
the Indian Paper Industry are:
_ its large and growing domestic paper market and potential export
market
_ qualified technical manpower with capability to manage world scale
pulp and paper mills
_ relatively low employee cost _ well established Research and
Development (R and D) facilities / activities encouraging innovation
_ fast growing contemporary printing sector
_ Government's thrust for improving literacy in the Country
_ potential for growth of forest plantation. While so, the competitive
weaknesses and threats that face the Industry are :
_ inadequate availability of virgin fibre, resulting in high cost of raw
materials, including wood, non-wood and waste paper.
_ delay in creation of sustainable raw material base through industrial
plantations
_ small and fragmented industry structure _ many non-competitive mills
_ inconsistent multi-tiered quality of products.
_ environmental problems of most of the small pulp mills and also some
large mills
_ high energy consumption and costs
_ poor infrastructure
_ likely closures, owing to increasingly stringent environmental
regulations
_ numerous Regional Trade Agreements (RTAs) / Free Trade Agreements
(FTAs) without adequate safeguards
_ with the bunched-up creation of about 10.0 lakh tonnes of additional
capacity (between 2008 and 2010), demand / supply mismatch will confront the
domestic manufacturers, impacting capacity utilisation and margins.
International Competitiveness is the key issue that is confronting the
Indian Paper Industry, today, especially in the context of Government’s resolve
to bring down import tariff every year and RTAs / FTAs proposed to be
entered into with ASEAN / SAARC countries, including China.
Paper Industry is capital intensive and yields poor returns on
investments. The issues that require the attention of the Government are,
creation of robust raw material base, fiscal incentive for assimilation of
eco-friendly technologies, etc.
The major players, alive to the emerging international threats, have
been aggressively pursuing quality improvement programmes, coupled with cost
rationalisations and capacity additions. Increasingly, more up-to-date
technologies are sought to be implemented, with added focus on environmental
regulations.
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.52.70 |
|
|
1 |
Rs.85.71 |
|
Euro |
1 |
Rs.68.15 |
INFORMATION DETAILS
|
Information Gathered
by : |
SVA |
|
|
|
|
Report Prepared
by : |
SDA |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
|
67 |
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.