MIRA INFORM REPORT

Report Date :

23.01.2013

IDENTIFICATION DETAILS

Name :	EMAMI PAPER MILLS LIMITED
Registered Office :	687 Anandapur, Kasba Golpark, E M Bye Pass, Kolkata – 700107, West Bengal
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	26.09.1981
Com. Reg. No.:	21-034161
Paid-up Capital :	Rs.120.998 Millions
CIN No.: [Company Identification No.]	L21019WB1981PLC034161
Legal Form :	A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.
Line of Business :	Manufacturing of Paper
No. of Employees :	600 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (65)

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 6900000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track record. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – 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	SHORT TERM BANK FACILITIES : CARE A1
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	21.11.2012

Rating Agency Name	CARE
Rating	LONG TERM BANK FACILITIES : CARE A
Rating Explanation	Adequate degree of safety and low credit risk.
Date	21.11.2012

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ 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.

LOCATIONS

Registered Office/ Investor Relations/ Marketing Division :	687 Anandapur, Kasba Golpark, E M Bye Pass, Kolkata – 700107, West Bengal, India
Tel. No.:	91-33-66136264/ 66136471
Fax No.:	91-33-66136400
E-Mail :	gulmohar@emamipaper.in emamipaper@emamipaper.in sjha@emamipaper.in gsaraf@emamipaper.in
Website :	http://www.emamipaper.in
Head Office :	8 Bentinck Street, 10^th Floor, Kolkata – 700001, West Bengal, India
Tel. No.:	91-33-2489330 / 6035 / 4076 / 6029/ 25488654
Fax No.:	91-33-2489288
Telex :	021-2337 MONO IN
Factory 1 / Warehouse :	Balgopalpur, Post Rasulpur – 756 020, Balasore, Orissa, India
Tel. No.:	91-6782-75723/755/756
Fax No.:	91-6782-75778
Factory 2 :	R.N. Tagore Road, Alambazar, Dakhneswar, Kolkata – 700035, West Bengal, India

DIRECTORS

As on 31.03.2012

Name :	Mr. Radhe Shyam Goenka
Designation :	Executive Chairman
Address :	110 A, Southern Avenue, Kolkata – 700029, West Bengal, India
Date of Birth/Age :	05.01.1947
Qualification :	M.Com., LL.B
Previous Employment :	Kemco Chemicals – Advisor
Date of Appointment :	23.10.2000
Name :	Mr. Radhe Shyam Agarwal
Designation :	Director
Address :	118, Southern Avenue, Kolkata – 700029, West Bengal, India
Date of Birth/Age :	06.01.1946
Date of Appointment :	26.03.1994
Name :	Mr. Manish Goenka
Designation :	Whole Time Director
Address :	110 A, Southern Avenue, Kolkata – 700029, West Bengal, India
Date of Birth/Age :	07.02.1974
Date of Appointment :	01.02.2000
Name :	Mr. Aditya Vardhan Agarwal
Designation :	Director
Address :	118, Southern Avenue, Kolkata – 700029, West Bengal, India
Date of Birth/Age :	06.01.1975
Date of Appointment :	23.10.2000
Name :	Mr. Shrawan Kumar Todi
Designation :	Director
Address :	2 Queens Park, Kolkata – 700019, West Bengal, India
Date of Birth/Age :	15.08.1943
Date of Appointment :	05.04.2003
Name :	Mr. U. Gururaja Bhat
Designation :	Director
Address :	A3, Amaravatee Appartments, 2^nd Main Road, Gandhi Nagar, Adyar, Chennai – 600020, India
Date of Birth/Age :	15.04.1938
Date of Appointment :	26.09.2003
Name :	Mr. Nandananadan Mishra
Designation :	Director
Address :	Flat No.D053, Belvendere Park, DLF Phase – III, Gurgaon – 122002, Haryana, India
Date of Birth/Age :	20.10.1942
Date of Appointment :	22.03.2006
Name :	Mr. P. S. Patwari
Designation :	Executive Director
Address :	58 B Block, D New Alipore, Kolkata – 700053, West Bengal, India
Date of Birth/Age :	126.03.1955
Date of Appointment :	28.11.1994
Name :	Mr. H. M. Marda
Designation :	Director
Name :	Mr. S. Balasubramanian
Designation :	Director
Name :	Mr. J. N. Godbole
Designation :	Director
Name :	Mr. J. K. Khetawat
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Ghanshyam Saraf
Designation :	Vice President (Finance)and Company Secretary
Address :	AE 397, Salt Lake City, Sector I, Kolkata – 700064, West Bengal, India
Date of Birth/Age :	01.01.1957
Date of Appointment :	28.05.1994

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2012

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	5301050	8.76
Bodies Corporate	39912087	65.97
Sub Total	45213137	74.73
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	125000	0.21
Sub Total	125000	0.21
Total shareholding of Promoter and Promoter Group (A)	45338137	74.94
(B) Public Shareholding
(1) Institutions
(2) Non-Institutions
Bodies Corporate	11512757	19.03
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 millions	2071792	3.42
Individual shareholders holding nominal share capital in excess of Rs.0.100 millions	1560000	2.58
Any Others (Specify)	16364	0.03
NRIs/OCBs	464	0.00
Clearing Members	15900	0.03
Sub Total	15160913	25.06
Total Public shareholding (B)	15160913	25.06
Total (A)+(B)	60499050	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	60499050	0.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Paper

Products :

· Newsprint Paper

· Writing and Printing Paper

Products Description	Item Code No
Newsprint	28030000
Paper and Paper Board	28000000
Generation of Steam and Power	40020000

Brand Name :

“EMAMI”.

PRODUCTION STATUS (As on 31.03.2011)

Particulars	Unit	Installed Capacity	Actual Production
Paper	Tones	145000	1,44,712
Generation of Electricity	MW	20	1,284.52 Kwh Lacs

i) Licensed capacity not applicable in terms of Government of India’s Notification

ii) Installed capacities are certified by the management

iii) Generation of electricity is for internal consumption

GENERAL INFORMATION

No. of Employees :

600 (Approximately)

Bankers :

• State Bank of Bikaner and Jaipur; Kolkata, West Bengal, India
• State Bank of India, Kolkata, West Bengal, India
• IDBI Bank Limited, Kolkata
• India Overseas Bank
• ICICI Bank Limited
• DBS Bank
• State Bank of Hyderabad
• Axis Bank
• Indusind Bank

Facilities :

Secured Loans	31.03.2012 Rs. in Millions	31.03.2011 Rs. in Millions
TERM LOAN
From Banks	2212.810	2082.526
WORKING CAPITAL LOAN
From Banks	1147.549	1088.974
Total	3360.359	3171.500

Notes:

(i) Term loans of Rs.2052.415 Millions (Rs.2082.526 Millions) are secured by deposit of title deeds in respect of present and future immovable properties and hypothecation of present and future movable fixed assets on a pari pasu basis. Term loans from banks are also secured by second charge on current assets on pari pasu basis.

(ii) Term Loans of Rs.160.395 Millions (Nil) are supported by personal guarantee of some of directors and second / subservient charge on all movable assets on a pari pasu basis.

Terms of Repayment of Term Loans :

(i) ECB $ 23 Million from ICICI Bank Ltd (Rs.438.840 Millions) is repayable in 9 quarterly instalments

(ii) ECB $ 16.50 Million from ICICI Bank Ltd (Rs.384.780 Millions) is repayable in 11 quarterly instalments

(iii) ECB $ 10 Million ( Rs.190.800 Millions) from State Bank of India is repayable in 6 quarterly instalments

(iv) ECB $ 4.50 Million (Rs.228.960 Millions) from DBS Bank repayable in 2 annual instalments

(v) FCNR (B) $ 21 million from State Bank of India (Rs.1004.628 Millions) is repayable in 13 quarterly instalments

(vi) FCNR (B) $ 7.878 Million from State Bank of India (Rs.146.047 Millions) is repayable in 5 quarterly instalments

(vii) Rupee Term Loan from SBH (Rs.500.000 Millions) Repayable in 12 quarterly instalments with 2 years moratorium.

(viii) Loan from Indusind Bank (Rs.163.857 Millions) is repayable in 9 quarterly instalments.

(ix) Loan from Axis Bank (Rs.188.928 Millions) is repayable in 19 monthly instalments.

Working Capital facilities from banks are secured by hypothecation of present and future stock of materials, stock-in- process, finished goods, stores and spares, book debts, outstanding money, claims receivable and further secured by way of second charge on all immovable and movable properties / fixed assets both present and future on a pari passu basis.

Banking Relations :	-
Auditors :
Name :	S. K. Agrawal and Company Chartered Accountants
Address :	4-A, Council House Street, Kolkata – 700 001, West Bengal, India
Unit Auditors :
Name :	Salarpuria Jajodia and Company Chartered Accountants
Address :	7 V R Avenue, Kolkata – 700072, West Bengal, India
Group Companies :	Pan Emami Cosmed Limited Suraj Viniyog (Private) Limited Suntrack Commerce(Private) Limited Emami Frank Ross Limited TMT Viniyogan Limited Emami Capital Markets Limited Emami International Private Limited Premier Ferro Alloys and Securities Limited Emami Cement Limited Aviro Vyapaar (Private) Limited South City Projects(Kolkata) Limited Emami Bangladesh Limited AMRI Hospitals Limited Auto Hitech Private Limited Emami Vridhi Commercial Private Limited New Age Realty Private Limited Emami Skyhigh Private Limited Emami Properties Private Limited Emami Construction Private Limited Orbit Projects Private Limited Swastik Promoters Private Limited Zandu Realty Limited Bansilal Janki Devi Agarwal Trust CRI International Limited Emami Home Private Limited Karan Business Private Limited Sneha Abasan Private Limited Sneha Gardens Private Limited Ajanta Suppliers Private Limited Emami High Rise Private Limited Emami Enclave Makers Private Limited Bhanu Vyapaar (Private) Limited Diwakar Viniyog (Private) Limited Emami Limited EPL Securities Limited Emami Realty Limited Emami Group of Companies Private Limited Emami Biotech Limited Newway Constructions Limited Prestige Vyapaar Limited Emami Infrastructure Limited CRI Limited. Emami UK Limited Emami International FZE EFL Foods Limited Emami Rainbow Niketan Private Limited Nathvar Tracon Private Limited Octagon BPO Private Limited Emami Ashiana Private Limited Delta PV Limited A Rajabasan Private Limited Basera Enclave Makers Private Limited Orbit Realty Infrastructure Limited Emami Foundation Kesar Deo Ratni Devi Goenka Trust CRI (Sanghai) Company Limited Medal Chemical and Research Works Limited Zen Business Private Limited Sneha Enclave Private Limited Sneha Niketan Private Limited Aviro Vanijya Private Limited

CAPITAL STRUCTURE

As on 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
62500000	Equity Shares	Rs.2/- each	Rs.125.000 Millions
10000	6% Redeemable Non Cumulative Preference Shares	Rs.100/- each	Rs.1.000 Million
	Total		Rs.126.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
60499050	Equity Shares	Rs.2/- each	Rs.120.998 Millions

Note:

a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting year

Particulars	Equity Shares
	As at 31.03.2012
	No. of Shares	Rs. In Millions
At the beginning of the period	6,04,99,050	120.998
At the end of the period	6,04,99,050	120.998

b) Terms / rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.2/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pay dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c) Shareholders holding more than 5% shares in the company

Name of Shareholder	As at 31.03.2012
	No. of Shares	% of Holding
a) Diwakar Viniyog Private Limited	98,05,737	16.21%
b) Emami Private Limited	79,46,000	13.13%
c) Suntrack Commerce Private Limited	76,33,900	12.62%
d) Bhanu Vyapaar Private Limited	60,05,250	9.93%

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		120.998	120.998	120.998
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1608.958	1573.830	1483.969
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1729.956	1694.828	1604.967
LOAN FUNDS
1] Secured Loans		3360.359	3171.500	3945.210
2] Unsecured Loans		704.000	0.000	271.740
TOTAL BORROWING		4064.359	3171.500	4216.950
DEFERRED TAX LIABILITIES		368.907	345.728	303.655
TOTAL		6163.222	5212.056	6125.572
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		4417.264	3861.012	4059.125
Capital work-in-progress		696.746	102.654	52.534
INVESTMENT		5.765	5.765	30.040
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	781.425	764.604	698.726
	Sundry Debtors	504.572	712.560	754.128
	Cash & Bank Balances	228.507	40.988	62.913
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	791.240	603.439	671.073
Total Current Assets		2305.744	2121.591	2186.840
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	90.822	79.731	22.707
	Other Current Liabilities	1123.012	751.967	137.791
	Provisions	48.463	47.268	42.469
Total Current Liabilities		1262.297	878.966	202.967
Net Current Assets		1043.447	1242.625	1983.873
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		6163.222	5212.056	6125.572

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	4896.900	4298.401	3978.942
		Other Income	58.949	69.639	20.088
		TOTAL (A)	4955.849	4368.040	3999.030
Less	EXPENSES
		Cost of materials consumed	2800.387	2628.283	3347.810
		(Increase) / Decrease in inventories of Finished Goods and Work-in-Progress	62.430	(96.622)
		Employee benefits expense	297.411	279.217
		Other expenses	1101.314	836.394
		TOTAL (B)	4261.542	3647.272	3347.810
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		694.307	720.768	651.220
Less	FINANCIAL EXPENSES (D)		306.585	274.035	239.345
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		387.722	446.733	411.875
Less/ Add	DEPRECIATION/ AMORTISATION (F)		271.622	265.759	294.090
	PROFIT BEFORE TAX (E-F) (G)		116.100	180.974	117.785
Less	TAX (H)		33.030	42.322	48.891
	PROFIT AFTER TAX (G-H) (I)		83.070	138.652	68.894
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		103.276	56.813	79.388
Less	APPROPRIATIONS
		Proposed Dividend	36.300	36.300	36.300
		Tax on Dividend	5.888	5.889	6.169
		Transfer to General Reserve	50.000	50.000	50.000
	BALANCE CARRIED TO THE B/S		94.158	103.276	56.813
	EARNINGS IN FOREIGN CURRENCY		21.387	55.897	14.921
	IMPORTS
		Raw Materials	488.703	628.547	555.399
		Stores & Spares	49.441	33.001	39.228
		Capital Goods	324.903	12.449	2.844
	TOTAL IMPORTS		863.047	673.997	597.471
	Earnings Per Share (Rs.)		1.37	2.29	1.16

QUARTERLY RESULTS

PARTICULARS	30.06.2012 1^st Quarter	30.09.2012 2^nd Quarter
Net Sales	1133.600	1218.400
Total Expenditure	971.500	1037.100
PBIDT (Excl OI)	162.100	181.300
Other Income	28.800	27.700
Operating Profit	190.900	209.000
Interest	108.400	100.800
PBDT	82.500	108.200
Depreciation	72.700	73.800
Profit Before Tax	9.800	34.400
Tax	2.900	6.500
Profit After Tax	6.900	27.900
Net Profit	6.900	27.900

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	1.68	3.17	1.72
Net Profit Margin (PBT/Sales)	(%)	2.37	4.21	2.96
Return on Total Assets (PBT/Total Assets}	(%)	1.73	3.03	1.89
Return on Investment (ROI) (PBT/Networth)		0.07	0.11	0.07
Debt Equity Ratio (Total Liability/Networth)		3.08	2.39	2.75
Current Ratio (Current Asset/Current Liability)		1.83	2.41	10.77

LOCAL AGENCY FURTHER INFORMATION

UNSECURED LOANS DETAILS:

(Rs. In Millions)

Unsecured Loans	31.03.2012	31.03.2011
Loans from Bodies Corporate	704.000	0.000
Total	704.000	0.000
NOTE: Terms of Repayment of Unsecured Loans: Repayable on demand after 31st March 2014.

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	Yes
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	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
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

FINANCIAL PERFORMANCE

The Company strengthened its leadership in the newsprint segment and continued to be the lowest cost manufacturer in the country. The Company's commitment in delivering high quality products to customers has been a major reason for maintaining prestigious position in the industry and allowed the Company to achieve better sales realization against the stiff competition with imported newsprint.

The Company registered a considerable growth of 13.92% in the turnover from Rs.4298.400 Millions in 2010 - 11 to Rs.4896.900 Millions during the year. The Company achieved another landmark by registering a record production of 144920 MT for the year. Operating profit (PBDIT) was marginally lower at Rs.694.300 Millions as against Rs.720.800 Millions last year despite sharp increase in the cost of raw material, coal and financing charges. Directors are pleased to inform that in spite of turbulent business environment, the company, based on its intrinsic strength, has maintained its performance and outperformed the industry.

With the increased focus on the literacy by the Government and allocation of large funds for education and print media sector, demand of the company's products is expected to be very promising. Therefore, overall performance of the Company is expected to be improved substantially in the coming years.

GLOBAL ECONOMY

The global economy rebounds in 2010, improves marginally in 2011 led by demand revival in key global economies. In Asia and Middle East, Europe and Latin America, demand grew by over 7 per cent during the year on the back of a revival in the macroeconomic environment. Growing domestic demand has encouraged large capacity additions in Asia where around 41 million tonnes of paper and board capacity are likely to be added over the next 5 years. Of this, China alone is expected to add around 30 million tonnes of capacity while India would add 4 to 5 million tonnes.

INDIAN ECONOMIC OVERVIEW

The Indian Economy is estimated to grow over 7 per cent during 2012 and it is further expected that the growth momentum is likely to continue over the next few years.

With the increasing per capita income, growing emphasis on inclusive growth and faster development of infrastructure, education and health sector, India is well poised for major leap forward. Twelfth Five Year Plan in India is expected to further boost up the aforesaid sectors resulting in the great demand for cultural grade and industrial grade paper required for education, media and industrial sectors. But rising costs and inflation is a matter of concern. They do hope that effective steps will be taken to curb this trend without sacrificing the current growth momentum.

INDIAN PAPER INDUSTRY

Consumption of paper and paper board is closely linked to the economic development of a country. In India, though the per capita consumption of paper is low, it is gradually improving with buoyant economic growth. Industrial production, expenditure incurred on the print media, government spending on education, population growth and literacy levels are other contributing factors. With stable economic growth in the country, domestic demand for paper (including newsprint) has been steadily increasing over the years. It has grown at a 4-year CAGR of around 7 per cent to reach around 11.6 million tonnes in 2011-12 and expected to reach around 17 - 17.5 million tonnes in 2016-17.

The paper industry's market size (including newsprint) in 2010-11 has been estimated at Rs.445000.000 Millions. It has grown at a CAGR of 8.7 per cent over the last 4 years from around Rs.320000.000 Millions in 2006-07. Of all the segments, paperboard has been the highest value segment in 2010-11 accounting for a share of around 42 per cent of the total market size. This was followed by W and P paper at about 37 per cent and newsprint at about 13 per cent. Specialty paper segment accounted for about 8 percent in 2010-11.

Around 215,000 new educational institutions are expected to be established in the country between 201011 and 2015-16, as an outcome of the Indian government's Right to Education Act (RTE) initiative. In 2009, the government had passed the RTE to stimulate the spread of education in the country. Correspondingly, the Gross Enrolment Ratio is expected to increase to 90 per cent by 2015 from 71 per cent in 2008. Additionally, initiatives like Rashtriya Madhyamik Shiksha Abhiyan and Sarva Shiksha Abhiyan have boosted demand for W and P paper.

The paperboard segment caters to the packaging of manufactured goods. It can be further classified into tertiary packaging, which includes kraft paper and consumer packaging, which includes greyback paperboard, white-back board, folding box board (FBB) and solid bleached board (SBB). Demand for paperboard is closely linked to the level of industrial activity in the country.

Out of total industrial demand in 2010-11, kraft paper accounted for nearly 60 per cent, recycled boards like greyback / whiteback accounted for 31 per cent and virgin boards like FBB / SBB accounted for 9 per cent. Demand for paperboard has increased at a CAGR of 6.9 per cent to an estimated 5.0 million tonnes in 2010-11 from around 3.9 million tonnes in 2006-07.

The business environment in the sector is quite challenging and the companies producing high quality product and pricing at competitive rates alone can sustain and flourish in the domestic and international markets.

Paper industry has been granted a status of a priority sector for foreign collaboration and foreign equity participation upto 100% and is entitled to receive automatic approval from the Reserve Bank of India. More foreign players are expected to join the industry in the coming years.

Demand for paper and paperboard closely follow the economic growth of a country and have a positive correlation to the prevailing economic trends. In India, the demand drivers and growth triggers have come from a combination of factors:

· the rising level of national income;

· the growing per capita disposable income;

· rising aspiration levels of the people;

· increasing size of the population;

· spread of education and literacy throughout the country;

· government's several initiatives that focus on education; and

· higher level of industrial activity and corporate spending.

Consistent economic growth in India is expected to result in the robust demand for paper, which has grown on an average 8% for past few years. During the past 5 years, newsprint has registered a growth of 13% while writing and printing paper registered growth of 7 V2%. The Company operates in these sectors.

Emami Paper mill is the largest newsprint manufacturer in India and producing world class product and selling the same against stiff competition with the imported newsprint. With the constant high demand of its product, EPM expects strong financial performance in the coming years.

INDIAN NEWSPRINT INDUSTRY

The newsprint market in India is characterized with voluminous demand and high growth rate. However capacity of Indian paper mills is insufficient to meet the demand and almost 62% of the demand is met by way of import of newsprint. Thus this market is still very much open to absorb further expansions by the Indian Players, provided quality newsprint as per customer requirements are supplied at a competitive price.

CRISIL Research estimates demand for newsprint to grow by 9-10 per cent CAGR from 2.1 million tonnes in 2011-12 to 3.4 million tonnes in 2016-17, faster than the growth in circulation of print media. The sharper rise is also attributed to the expected rise in the number of pages per newspaper, mainly driven by rise in advertising spends of corporate. Rising literacy levels in the country have been driving the growth of print media in the country.

The National Youth Readership study in 2009 discloses following interesting facts those have major bearing over the Indian newsprint market.

· Nearly 24% of the household have newspaper subscription.

· Four out of every seven households of graduates and three of every eight urban households with literates buy a newspaper.

· Despite television being the most popular source of information (78%), followed by newspapers (53%), the later cored over television for news and current affairs information source.

· Literacy increased from 64.83% in 2001 to 74.04% in 2011, as per census 2011.

India has more daily newspaper than any other nation and out of world's 100 largest newspapers 20 are Indian.

Manufacturing newsprint through the waste paper is prevalent in India. Since India does not have a developed waste paper collection system, raw material availability is low and prices are high. Consequently, imports of waste paper accounts for 55-60% of the total waste paper consumed (mostly from the US, the world's largest waste paper market).

AWARDS

The Company received the following awards during the year:

ENERGY AWARD:

2011- 'National Award for Excellence in Energy Management- 2011' by CII - GBC Hyderabad. This prestigious award was received from Dr. Ajay Mathur, Director General, and Bureau of Energy Efficiency in 10th Energy Efficiency Summit 2011.

For Energy Management, Emami has also received the First Prize for "NATIONAL ENERGY CONSERVATION AWARD" for the Pulp and Paper Sector from the Ministry of Power, Government of India for the year 2009-10

EXCELLENCE AWARD:

2011- Silver Certificate of Merit of The Economic Times India Manufacturing Excellence Award 2011 for the efforts taken by the Plant and its personnel in enhancing manufacturing and supply chain excellence. This award is jointly hosted by The Economic Times in collaboration with Frost and Sullivan.

CONTINGENT LIABILITY (AS ON 31.03.2012):

(i) Outstanding guarantees and letters of credit furnished by the bankers on behalf of the Company secured by hypothecation of current assets, as specified in note 2.7 – Rs.56.374 Millions (Rs.251.260 Millions).

(ii) Sales tax / VAT / Entry Tax / Central Excise duties / Service tax / ESI Contribution and other taxes under appeal / review (net of advances) – Rs.67.577 Millions (Rs.4.687 Millions).

(iii) Bonds / Undertakings given under EPCG scheme to Custom Authority – Rs.84.166 Millions (Rs.57.874 Millions)

(iv) Withdrawal of incentive tariff of electricity by NESCO (net of advance) – Rs.4.626 Millions (Rs.4.626 Millions)

AUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30.09.2012

(Rs. In Millions)

Particulars	3 Months Ended	Preceding 3 Months Ended	6 Months Ended
	30.09.2012	30.06.2012	30.09.2012
	(Unaudited)	(Unaudited)	(Unaudited)
Income from operations	1218.400	1133.600	2352.000
Total	1218.400	1133.600	2352.000
Expenses
a. Cost of Material Consumed	785.000	724.200	1509.200
b. Changes in inventories of finished goods and work-in-progress	(53.700)	(39.000)	(92.700)
c. Employee benefits expense	79.000	81.200	160.200
d. Power & fuel	160.700	138.600	299.300
e. Depreciation	73.800	72.700	146.500
f. Other Expenses	66.100	66.500	132.600
Total Expenses	1110.900	1044.200	2155.100
Profit / (Loss) from Operations before other Income and finance costs(1-2)	107.500	89.400	196.900
Other Income	27.700	28.800	56.500
Profit/(Loss) before finance costs (3+4)	135.200	118.200	253.400
Finance Costs	100.800	108.400	209.200
Profit Before Tax (5-6)	34.400	9.800	44.200
Tax Expense	6.500	2.900	9.400
Net Profit After tax for the period	27.900	6.900	34.800
Paid - up Equity Share Capital (Face Value Rs. 2/-each)	121.000	121.000	121.000
Reserves Excluding Revaluation Reserve	-	-	-
Earning Per Share (not annualised)
(a) Basic	0.46	0.11	0.58
(b) Diluted	0.46	0.11	0.58
PARTICULARS OF SHAREHOLDING
Public Share Holding
- Number of Shares	15160913	15160913	15160913
- Percentage of Shareholding	25.06%	25.06%	25.06%
Promoter and Promoter Group Shareholding
a) Pledged / Encumbered
-Number of Shares	NIL	NIL	NIL
- Percentage of Shareholding (as a % of the total shareholding	NIL	NIL	NIL
- Percentage of Snares (as a % of total share capital of the Company)	NIL	NIL	NIL
b) Non - Pledged / Encumbered
- Number of Shares	45338137	45338137	45338137
- Percentage of Shares (as a % of the total shareholding of promoter and promoters group)	100.00%	100.00%	100.00%
- Percentage of Snares (as a % of total share capital of the Company)	74.94%	74.94%	74.94%

Investor Complaints	3 Months Ended
	30.09.2012
	(Unaudited)
Pending at the beginning of the quarter	Nil
Received during the quarter	Nil
Disposed off during the quarter	Nil
Remaining unresolved at the end of the quarter	Nil

Notes:

1. The above financial results have been reviewed by the Audit Committee, and taken on record by the Board of Directors at its meeting held on 8th day of November, 2012. The limited review has also been
carried out by the Auditors.

2. Considering present volatility in foreign exchange rates, effects of foreign exchange fluctuation on outstanding loans including rollover will be recognised at the year end.

3. The Company operates in a single business segment i.e. paper. Hence segment reporting as per AS 17 is not applicable.

4. Comparative figures of the previous period have been regroup/rearranged wherever necessary.

STATEMENT OF ASSETS AND LIABILITIES

(Rs. In Millions)

	Particulars	6 Months ended
		30.09.2012
		(Unaudited)
A.	EQUITY AND LIABILITIES
1	Shareholders' funds
	a) Share Capital	121.000
	b) Reserves and Surplus	1641.300
	Sub total - Shareholders' funds	1762.300
2.	Share application money pending allotment	-
3	Minority Interest
4.	Non-current liabilities
	(a) Long-term borrowings	2618.300
	(b) Deferred tax liabilities (net)	378.300
	(c) Other current liabilities	4.100
	(d) Long-term provisions	6.300
	Sub total - Non-current liabilities	3007.000
5.	Current liabilities
	(a) Short-term borrowings	1224.900
	(b) Trade payables	227.300
	(c) Other current liabilities	1249.500
	(d) Short-term provisions	-
	Sub total - current liabilities	2701.700
	TOTAL - EQUITY AND LIABILITIES	7471.000
B	ASSETS
1	Non-current assets
	(a) Fixed assets	5108.300
	(b) Non-current investments	5.800
	(c) Long -term loans and advances	308.300
	Sub total - Non-current assets	5422.400
2	Current assets
	(a) Current investments
	(b) Inventories	904.500
	(c) Trade receivables	517.100
	(d) Cash and cash equivalents	31.500
	(e) Short-term loans and advances	595.500
	Sub total - Current assets	2048.600
	TOTAL - ASSETS	7471.000

FIXED ASSETS:

• Free Hold Land
• Lease Hold Land
• Building
• Plant and Machinery
• Office Equipments
• Furniture and Fittings
• Vehicles
• Software

WEBSITE DETAILS:

CORPORATE PROFILE:

Subject is the largest newsprint manufacturer in India and has embarked on an expansion to emerge as one of the largest in its industry in India.

Subject (established in 1982) is a paper mill based on recycled - fiber located in Balasore (Orissa) and Kolkata (West Bengal).

The Company is a constituent of the Emami Group, which possesses diverse business interests comprising FMCG, writing instruments, healthcare, retail departmental stores and real estate.

What they produce:

The Company possesses an installed capacity to manufacture 1,45,000 tonnes per annum of newsprint, printing and writing paper.

Who are their customers:

Newsprint: Hindustan Times, The Times of India, Dainik Jagran, Dainik Bhaskar, ABP (The Telegraph, Ananda Bazar Patrika), The Samaja, Prabhat Khabar, Sanmarg, Bartaman, Malayam Manorama and Deccan Herald amongst others. 

Writing and printing paper: Government presses, Orissa Bureau of Text Books (Bhubaneswar), Yugbodh Prakashan- Raipur, Govt. Press-Cuttack, State Bank of India, UCO Bank, Swapna Printing Press-Kolkata, among others.

What they are proud of:

Subject has been making profits since inception across various industry cycles.

The company's revenues and cash profits registered a growth of 97% and 95% respectively for the year ended 31st March 2009.

Certification
ISO 9001:2000

Quality Management System

ISO 14001:2000

Environmental Management System

OHSAS 18001:1999 to OHSAS 18001:2007

Occupational Health and safety Management System

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 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 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.53.51
UK Pound	1	Rs.84.85
Euro	1	Rs.71.43

INFORMATION DETAILS

Report Prepared by :

BSN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	7
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		65

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.