MIRA
INFORM REPORT
|
Report Date : |
06.02.2014 |
IDENTIFICATION DETAILS
|
Name : |
THE SOUTH INDIA PAPER MILLS LIMITED |
|
|
|
|
Registered
Office : |
Chikkayana Chatra, P. O. Nanjangud, Nanjangud – 571301, Karnataka |
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Country : |
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Financials (as
on) : |
31.03.2013 |
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|
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Date of
Incorporation : |
06.06.1959 |
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Com. Reg. No.: |
08-001352 |
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|
|
Capital Investment
/ Paid-up Capital : |
Rs. 150.000 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L85110KA1959PLC001352 |
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|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
BLRT01173E |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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|
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|
Line of Business
: |
The Company is engaged in the manufacture of Paper, Paperboards, Cartons and power generation. |
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No. of Employees
: |
347 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (50) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 3900000 |
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|
|
|
Status : |
Satisfactory |
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|
|
|
Payment Behaviour : |
Usually correct |
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Litigation : |
Exist |
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Comments : |
Subject is an established company having satisfactory track record. Profitability of the company seems to be decent. General financial
position of the company seems to be sound and healthy. Trade relations are fair. Business is active. Payment terms are
reported to be usually correct. The company can be considered for business dealings at usual trade
terms and condition. |
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 – December 1, 2013
|
Country Name |
Previous Rating (30.09.2013) |
Current Rating (01.12.2013) |
|
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
The services sector, the largest contributor to India’s GDP, contracted
for the sixth consecutive month in December, as orders dipped. However, hiring has
risen. Direct tax collections rose 12.3 % during the April – December
period of the current financial year. The government has decided to
retain 100 per cent foreign direct investment in both greenfield (new) and
brown field (existing) pharmaceutical companies, despite concerns over genetic
drugs going out of production, if multi-national companies take over domestic
ones. In M&A deals, a non compete clause would not be allowed, except in
special circumstances. The Department of Industrial Policy and Promotion plans
to release the next edition of its consolidated foreign direct investment
policy document on March 31, incorporating changes made in the past year. DIPP
compiles all policies related to India’s FDI regime into a single document to
make it easy for investors to understand. 185 million estimated number of
mobile internet users in India by June 2014, according to a report by the
Internet & Mobile Association of India and IMRB International. India
had 110 million mobile internet users with 25 million in rural areas. $3.77 tn
estimated global IT spending in 2014, according to research firm Gartner Inc.
The growth forecast for this year is cut to 3.1 %from the earlier estimate of
3.5 %. The spending growth forecast for telecom services – a segment that
accounts for more than 40 % at total IT spending – from 1.9 per cent to 1.2 per
cent is the main reason for this overall IT cut. A Reserve Bank of India
committee has recommended setting up a special category of lenders who would
cater to small businesses and households, to expand the number of customers
with access to banking services. These banks would focus onproviding payment
services and deposit products. Indian banks want the free use of
automated teller machines to be capped at five transactions in a month
including that of the bank in which the account is active. This follows state
government order to banks to install security guards at ATM booths after a
woman banker was assaulted in Bangalore. The government is likely to present a
vote on Account in mid-February. The annual Economic Survey will be tabled
later in Parliament along with the full Budget. A full Budget for 2014/15 is
likely to be present in July by the new government formed after the General
Election. The government will soon launch an internet spy system, called Netra,
to detect malafide messages. Security agency will deploy the system to capture
dubious voice traffic on applications such as Skype and Google Talk, as well as
tweeters.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
ICRA |
|
Rating |
BBB + : TERM LOAN |
|
Rating Explanation |
Moderate degree of safety and moderate
credit risk |
|
Date |
March 2012 |
|
Rating Agency Name |
ICRA |
|
Rating |
A2 + : NON FUND BASED – BANK GUARANTEE |
|
Rating Explanation |
Strong degree of safety and low credit risk |
|
Date |
March 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.
INFORMATION DECLINED
Management non-cooperative (91-8221-228264)
LOCATIONS
|
Registered Office / Factory 1 : |
Chikkayanachatra, P. O. Nanjangud, Nanjangud – 571301, Karnataka,
India |
|
Tel. No.: |
91-8221-228264/ 228265/ 266/ 267/ 228898 |
|
Fax No.: |
91-8221-228270/ 228263 |
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E-Mail : |
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|
Website : |
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Corporate and Marketing Office : |
# 1205/ 1206, Prestige Meridian II, M. G. Road, Bangalore – 560001,
Karnataka, India |
|
Tel. No.: |
91-80-41123605-06/ 41241175 |
|
Fax No.: |
91-80-41512508/ 2205531 |
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|
|
|
Factory 2 : |
Printing and Packaging Division, Sy No.18/1-2 25 and 27/1-3 4A, 4B and
28 Thandavapura, Nanjangud – 571302, India |
|
Tel. No.: |
91-8221-2283366 |
DIRECTORS
As on 31.03.2013
|
Name : |
Mr. Manish M. Patel |
|
Designation : |
Chairman and Managing Director |
|
Date of Birth/Age : |
53 Years |
|
Qualification : |
BE, MBA |
|
|
|
|
Name : |
Mr. Dineshchandra C. Patel |
|
Designation : |
Director |
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Qualification : |
Barrister-At-Law |
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|
Name : |
Mr. Jagdish M. Patel |
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Designation : |
Director |
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Qualification : |
DME |
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|
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|
Name : |
Mr. S. R. Chandrasekara Setty |
|
Designation : |
Director |
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Qualification : |
B. Com, FCA, ACS |
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|
|
|
Name : |
Mr. M. G. Mohan Kumar |
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Designation : |
Director |
|
Qualification : |
B.Sc., LLB, FCA, Licentiate ICSI |
|
|
|
|
Name : |
Mr. Ajay D. Patel |
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Designation : |
Director |
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Qualification : |
B.E., MBA |
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|
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|
Name : |
Mr. N. S. Kishore Kumar |
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Designation : |
Director |
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Qualification : |
B.Sc, MBA, CAIIB |
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|
|
|
Name : |
Mr. Jitendra A. Patel |
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Designation : |
Director |
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Qualification : |
Diploma in Paper Technology (Sweden) |
KEY EXECUTIVES
|
Name : |
Mr. N. S. Hegde |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.12.2013
|
Category of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
4450510 |
29.67 |
|
|
4450510 |
29.67 |
|
|
|
|
|
|
2206120 |
14.71 |
|
|
2206120 |
14.71 |
|
Total shareholding of Promoter and Promoter Group (A) |
6656630 |
44.38 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
1200 |
0.01 |
|
|
262000 |
1.75 |
|
|
4000 |
0.03 |
|
|
267200 |
1.78 |
|
|
|
|
|
|
220196 |
1.47 |
|
|
|
|
|
|
1983342 |
13.22 |
|
|
5617815 |
37.45 |
|
|
254817 |
1.70 |
|
|
181259 |
1.21 |
|
|
38000 |
0.25 |
|
|
35358 |
0.24 |
|
|
200 |
0.00 |
|
|
8076170 |
53.84 |
|
Total Public shareholding (B) |
8343370 |
55.62 |
|
Total (A)+(B) |
15000000 |
100.00 |
|
(C) Shares held by Custodians and against which Depository
Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
15000000 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
The Company is engaged in the manufacture of Paper, Paperboards, Cartons and power generation. |
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Products : |
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GENERAL INFORMATION
|
No. of Employees : |
347 (Approximately) |
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Bankers : |
Vijaya Bank, Nanjangud, Karnataka, India |
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Facilities : |
(Rs.
In Millions)
|
||||||||||||||||||||||||||||||
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Banking
Relations : |
--- |
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Auditors : |
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|
Name : |
B. S. Ravikumar and Associates Chartered Accountants |
|
Address : |
Mysore, Karnataka, India |
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|
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Cost Auditors : |
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|
Name : |
Mr. Madhukar P. Nayak |
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Address : |
Bangalore, Karnataka, India |
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Internal Auditors: |
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Name : |
M/s Rau and Natahn |
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Address : |
Mysore, Karnataka, India |
CAPITAL STRUCTURE
As on 31.03.2013
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
20000000 |
Equity Shares |
Rs.10/- each |
Rs.200.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
15000000 |
Equity Shares |
Rs.10/- each |
Rs.150.000
Millions |
|
|
|
|
|
|
Reconciliation of Paid up Share Capital |
As On 31.03.2013 |
|
|
|
|
|
|
Opening & Closing Paid up Equity Share Capital |
15000000 |
150.000 |
List of Share holders
having 5% or more Shares
|
Name of
Shareholders |
As On 31.03.2013 |
|
|
|
No. of Shares |
In %’age |
|
Mr. Anil Kumar Goel |
900000 |
6.00% |
As per the of the Company, including its register of members/shareholders, the above shareholding represents both legal and beneficial ownership of the shares.
Terms / Rights
attached to Equity Shares
The company has only one class of equity shares having a par value of 10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays 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.
During the year ended 31st March 2013, the amount of per share dividend recommended by the Directors for distribution to equity shareholders is Rs. 2 .20 (Previous Yr.: Rs. 2.20).
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.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
I.
EQUITY
AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
150.000 |
150.000 |
150.000 |
|
(b) Reserves & Surplus |
835.858 |
737.946 |
622.335 |
|
(c) Money
received against share warrants |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
(2) Share Application money pending allotment |
0.000 |
0.000 |
0.000 |
|
Total
Shareholders’ Funds (1) + (2) |
985.858 |
887.946 |
772.335 |
|
|
|
|
|
|
(3)
Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
46.559 |
77.249 |
86.368 |
|
(b) Deferred tax liabilities (Net) |
109.608 |
113.238 |
109.400 |
|
(c) Other long term liabilities |
0.000 |
0.000 |
23.951 |
|
(d) long-term provisions |
0.830 |
1.128 |
0.000 |
|
Total Non-current Liabilities (3) |
156.997 |
191.615 |
219.719 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
50.882 |
34.889 |
92.587 |
|
(b) Trade payables |
106.883 |
126.158 |
86.081 |
|
(c) Other current
liabilities |
48.097 |
55.372 |
48.831 |
|
(d) Short-term provisions |
65.817 |
52.552 |
53.828 |
|
Total Current Liabilities (4) |
271.679 |
268.971 |
281.327 |
|
|
|
|
|
|
TOTAL |
1414.534 |
1348.532 |
1273.381 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
772.280 |
785.555 |
651.524 |
|
(ii) Intangible Assets |
2.071 |
1.300 |
1.481 |
|
(iii) Capital
work-in-progress |
5.257 |
2.748 |
21.195 |
|
(iv)
Intangible assets under development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
0.001 |
0.001 |
5.395 |
|
(c) Deferred tax assets (net) |
0.000 |
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
77.534 |
56.134 |
61.730 |
|
(e) Other Non-current assets |
12.800 |
15.822 |
15.181 |
|
Total Non-Current Assets |
869.943 |
861.560 |
756.506 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
0.000 |
0.000 |
0.000 |
|
(b) Inventories |
255.134 |
203.699 |
215.352 |
|
(c) Trade receivables |
197.253 |
198.779 |
186.752 |
|
(d) Cash and cash equivalents |
32.970 |
14.541 |
42.466 |
|
(e) Short-term loans and
advances |
59.088 |
69.863 |
71.999 |
|
(f) Other current assets |
0.146 |
0.090 |
0.306 |
|
Total Current Assets |
544.591 |
486.972 |
516.875 |
|
|
|
|
|
|
TOTAL |
1414.534 |
1348.532 |
1273.381 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
1684.667 |
1704.052 |
1666.608 |
|
|
|
Other Income |
5.595 |
20.645 |
8.435 |
|
|
|
TOTAL (A) |
1690.262 |
1724.697 |
1675.043 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials Consumed |
771.685 |
861.514 |
877.409 |
|
|
|
(Increase)/ Decrease in Finished Goods and Work in Progress |
8.966 |
(3.001) |
0.119 |
|
|
|
Employee Benefits Expense |
132.771 |
123.760 |
422.854 |
|
|
|
Other Expenses |
500.766 |
496.300 |
117.973 |
|
|
|
Exceptional Items |
0.000 |
(38.794) |
0.000 |
|
|
|
TOTAL (B) |
1414.188 |
1439.779 |
1418.355 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
276.074 |
284.918 |
256.688 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
18.475 |
22.619 |
20.523 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
257.599 |
262.299 |
236.165 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
73.170 |
61.436 |
48.213 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
184.429 |
200.863 |
187.952 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
47.909 |
46.899 |
49.225 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
136.520 |
153.964 |
138.727 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
667.538 |
567.327 |
477.579 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
13.652 |
15.400 |
13.996 |
|
|
|
Proposed Dividend @ 22 % |
33.000 |
33.000 |
30.000 |
|
|
|
Dividend Tax Provision |
5.609 |
5.353 |
4.983 |
|
|
BALANCE CARRIED
TO THE B/S |
751.797 |
667.538 |
567.327 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
1.560 |
2.216 |
0.732 |
|
|
TOTAL EARNINGS |
1.560 |
2.216 |
0.732 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
455.934 |
483.125 |
468.784 |
|
|
|
Stores & Spares |
13.088 |
31.337 |
11.693 |
|
|
|
Capital Goods |
20.199 |
101.679 |
54.299 |
|
|
TOTAL IMPORTS |
489.221 |
616.141 |
534.776 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
9.10 |
10.26 |
9.26 |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
PAT / Total Income |
(%) |
8.08
|
8.93 |
8.28 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
10.95
|
11.79 |
11.28 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
13.09
|
14.93 |
15.07 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.19
|
0.23 |
0.24 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
0.10
|
0.13 |
0.23 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.00
|
1.81 |
1.84 |
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 |
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 |
No |
|
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 |
Yes |
|
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 |
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 |
LITIGATIONS DETAILS
|
High Court of Karnataka -Bangalore Bench |
ITA 171/2008 |
|
Petitioner/Appnt.
Name |
THE COMMISSIONER OF INCOME TAX |
Respondent/Defnt.
Name |
M/S THE SOUTH INDIA PAPER MILLS LIMITED |
|
|
Petnr./Appnt.
Advocate |
M V SESHACHALA |
Respnt./Defnt.
Advocate |
A SHANKAR AND M LAVA |
|
|
Date Filed |
25/02/2008 |
Classification |
25/02/2008 |
Classification |
|
Stage |
PENDING FOR ADMISSON |
Last Posted For |
ADMISSION |
|
|
Last Action Taken |
ADJOURNED |
Last Date of Action |
08/06/2011 |
Next Hearing Date |
|
Latest Order |
1WK TO FILE SUBSTANTIAL QUESTION OF LAW |
|
Before Hon'ble
Judge/s |
V.G.SABHAHIT |
Lower Court Details [Appeal from below case.]
|
Case No |
Court Name |
Disposal Dt |
|
IT(SS)A 17/1998 |
ITAT BANGALORE |
12/10/2007 |
Details of the Daily Order
(Click on date of order to get full order)
|
Sl No |
Honble Judge |
Date of Order |
|
1 |
HONBLE VGSJ and RVMJ |
08/06/2011 |
UNSECURED LOAN
(Rs.
In Millions)
|
Particulars |
As on 31.03.2013 |
As on 31.03.2012 |
|
Long Term
Borrowings |
|
|
|
Deposits from Agents |
14.149 |
15.644 |
|
Deposit from Others |
1.250 |
1.000 |
|
|
|
16.644 |
|
Total |
15.399 |
16.644 |
CORPORATE INFORMATION
Subject is a public limited Company, incorporated under the provisions of the Companies Act, 1956. Equity Shares of the Company are listed on the BSE (Bombay Stock Exchange) in India. The Company is engaged in the manufacture of Paper, Paperboards, Cartons and power generation.
OPERATIONS
Gross sales for the financial year 2012-13 stood at 1780.400 millions as against 1786.900 millions in the previous year.
Operating volumes for the paper plant was at 88.71% (last year 90.88%). Volumes could have been higher, but for the labour strike at the Paper plant from 11th March, 2013, which affected the production for 21 days in the financial year. Realization was slightly better and overall costs remained at the last year’s level. Increase in Fuel cost and sizing materials was offset by reduction in raw material cost and repairs and maintenance.
Printing and Packaging Division operated with higher volumes and conversion tonnage was higher by 8%. Operating profit improved from Rs. 246.100 millions to Rs. 276.100 millions. After making a higher depreciation provision of Rs. 73.170 millions (Previous year – Rs. 61.436 millions), profit before tax increased from Rs. 162.100 millions to Rs. 184.400 millions. Net profit decreased from Rs. 153.900 millions (last year included exceptional items amounting to Rs 38.800 millions, which are non-recurring) to Rs. 136.500 millions. Excluding the effect of exceptional items, net profit for the reporting year is higher.
MANAGEMENT DISCUSSION
AND ANALYSIS
INDUSTRY STRUCTURE
AND DEVELOPMENTS:
The Indian Paper Industry has been historically segmented on a three dimensional matrix identified by size, grades manufactured and raw materials utilised. Government policies on indirect taxation rates applicable to output have relied on this segmentation. Generally, tariff rates have protected smaller units utilising “unconventional” raw material. Over the years, the growth of various segments, investment levels in specific segments, technological changes, industry fragmentation and intensity of competition have been significantly influenced by the Government’s tariff policy.
Over 500 players currently populate the industry and the estimated output across all grades is about 10 million metric tonnes per annum (MTPA). Imports still do not supply any significant proportion of the total demand. The three broad segments of the market are Writing and Printing Grades (Cultural), Packaging Grades (Industrial) and Newsprint.
The “Industrial” Segment of the paper market broadly comprises of Corrugated Case Materials,(CCM) and Duplex Boards -white lined and coated or uncoated. Fragmentation is severe in this segment which constitutes about 50% of the total output of Paper and Board. This segment entirely relies upon “unconventional” raw material such as waste paper (imported and domestically sourced) and, to a limited extent, on agricultural residues. The average size of units in this segment is now about 15,000 MTPA and most units cater to local area demand from small semi-auto corrugated box factories and small printers. Although the other segments in the Indian paper industry are also fragmented by international standards, the degree of fragmentation is less severe.
Historically, the bulk of the output of “Cultural” grades - comprising of writing, printing, office stationery paper and specialty paper has been the preserve of the larger producers, who use forest based raw materials in integrated pulping facilities augmented by imported market pulp. This segment has been consistently taxed at higher rates due to its size and use of “conventional” forest based raw material. Investment in plant for these players has also been higher. With a relatively smaller number of players and high import tariff protection, prices of end products, generally perceived to be of higher quality, have been high. “Lower end cultural grades” manufactured by smaller players using unconventional raw materials in low investment, low-tech plants cater to consumers in the price sensitive sub-segment of this market. This sub segment has historically depended heavily on the tariff differential based on size and raw material for its viability. Some of the mid-sized players in the writing and printing segment are in the process of expansion and modernization and are installing wider/faster machines with full ledged de-inking plants to produce the higher quality that is increasingly preferred and for which consumers are willing to pay more. Several of the “large-integrated” forest based producers have also recently increased forest based pulping capacities The cultural paper segment contributes about 40% of the annual paper and paperboard production with a current demand growth rate of about 6 to 7% per annum. The high investment levels required and limited “conventional” fiber resources are the major deterrents to growth in this segment for both existing players as well as new entrants.
Newsprint, till about 1994, was the sole preserve of large public sector units and was well protected by high import tariff barriers. Nevertheless, imports contributed to about 40% of the domestic consumption. Since then, new domestic capacity with private investment has been “allowed” to be created. This growth has relied mainly on De-inked waste paper as a source of raw material. Currently, Newsprint is exempted from excise duty. This tariff structure for Newsprint has seen Indian Newsprint prices closely mapping international prices. Imports still constitute about 25% to 30% of consumption and newsprint constitutes about 10% of the total production of paper and paperboard. The number of players in the newsprint segment is relatively limited and manufacturing capacities are larger than in the packaging grades segment.
The Indian Paper industry which ranks 11th in production, globally, in recent times has registered faster growth rates of about 7%. The domestic demand is expected to grow at about 6 to 7% p.a. Paper industry plays an important role in the socio-economic development of the country.
Despite several infrastructural impediments there is a strong growth in demand in several sub-segments of the Indian Paper Industry. There is perceptible shift in preference for higher quality products in both the Industrial and Cultural Segments and players with the right grade-quality mix are seeing opportunities for profitable growth. As per their assessment, most of the dominant players in each industry segment are operating near to capacity and one can expect a round of capacity additions which will however be circumscribed by factors peculiar to individual units such as the ability to raise funds cost effectively, availability of raw material and low cost energy.
OUTLOOK
The Indian economy has grown by about 5% during 2012-13 (6.5% during 2011-12) with manufacturing sector growth of just 1% (last year 2.9%). Most forecasts for growth in paper industry for 2013 -14 are between 6% and 7%. The depreciating Indian Rupee, inflation and high interest rates have to some extent weakened consumer confidence and consumer purchasing power. Innovative cost containment and cost cutting will be required by paper mills to not only maintain business volumes but to capture a larger portion of a slowly growing pie.
INDEX OF CHARGES
|
S.No. |
Charge ID |
Date of Charge
Creation/Modification |
Charge amount
secured |
Charge Holder |
Address |
Service Request
Number (SRN) |
|
1 |
10109651 |
10/08/2012 * |
165,000,000.00 |
VIJAYA BANK |
BAZAR STREET, NANJANGUD, MYSORE, Karnataka - 571301, INDIA |
B57152654 |
|
2 |
10109662 |
11/06/2008 |
120,000,000.00 |
VIJAYA BANK |
BAZAR STREET, NANJANGUD, MYSORE, Karnataka - 571301, INDIA |
A41096827 |
|
3 |
10096288 |
20/03/2008 |
50,000,000.00 |
VIJAYA BANK |
BAZAR STREET, NANJANGUD, MYSORE, Karnataka - 571301, INDIA |
A35941384 |
|
4 |
10046822 |
10/08/2012 * |
5,000,000.00 |
VIJAYA BANK |
BAZAR STREET, NANJANGUD, MYSORE, Karnataka - 571301, INDIA |
B56961220 |
|
5 |
80019857 |
10/08/2012 * |
150,000,000.00 |
VIJAYA BANK |
BAZAR STREET, NANJANGUD, MYSORE, Karnataka - 571301, INDIA |
B57136020 |
|
6 |
80019854 |
10/08/2012 * |
30,000,000.00 |
VIJAYA BANK |
BAZAR STREET, NANJANGUD, MYSORE, Karnataka - 571301, INDIA |
B57005738 |
* Date of charge modification
FIXED ASSETS
· Freehold Land
· Building
· Plant and Machinery
· Furniture, Fixtures
· Office Equipments
·
Vehicles
· Computers
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 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.62.45 |
|
|
1 |
Rs.102.01 |
|
Euro |
1 |
Rs.84.35 |
INFORMATION DETAILS
|
Information
Gathered by : |
HET |
|
|
|
|
Report Prepared
by : |
NTH / DPH |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
50 |
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.