MIRA
INFORM REPORT
|
Report Date : |
07.10.2014 |
IDENTIFICATION DETAILS
|
Name : |
SESHASAYEE PAPER AND
BOARDS LIMITED |
|
|
|
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Registered
Office : |
Pallipalayam, Cauvery R. S. P. O., Erode – 638 007, Tamil Nadu |
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Country : |
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Financials (as
on) : |
31.03.2014 |
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Date of
Incorporation : |
22.06.1960 |
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Com. Reg. No.: |
18-000364 |
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Capital
Investment / Paid-up Capital : |
Rs.126.136 Millions |
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|
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CIN No.: [Company Identification
No.] |
L21012TZ1960PLC000364 |
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|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
CHESI7099F |
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Legal Form : |
It is a public limited
liability company. The company’s
shares are listed on the Stock Exchanges. |
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Line of Business
: |
Manufacture of Paper and
Paper Boards |
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|
No. of Employees
: |
Information declined by the management |
RATING & COMMENTS
|
MIRA’s Rating : |
A (64) |
|
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 15000000 |
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|
Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having good track record. Financial position of the company is sound. Fundamentals of the
company are healthy. Trade relations are reported as fair. Business is active. Payments
terms are reported to be regular and as per commitment. 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 1, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
N E W S
Verdict Implications
: Apex court order may alter coal import dynamics. Traders go slow on talks
over coal supply contracts, uncertainty over cancellation of blocks weigh on
stocks.
Recent arrest of the
Chennai head of the Registrar of Companies, the ministry of corporate affairs
arm that ensures that companies file all the information required by the
Companies Act is the latest manifestation of a messy fight between a father and
his adopted son for the control of Rs 40000 mn business empire. The Central
Bureau of Investigation arrested Manumeethi Cholan after he accepted Rs 10
lakhs as bribe from M A M Ramaswamy, a CBI official said.
Central Bureau of Investigation
books Electrotherm for cheating Central Bank of Rs 4360 mn.
Infosys maintains
revenue guidance. COO Rao says attrition still an area of concern and it would
take a few more quarters to bring down levels to 13-15 %.
DHL to invest
Euro 100 mn in India over next 2 years. The firm has chosen India to pilot its
e-commerce business model for the Asia-Pacific region.
Blackstone may buy
stake in BlueRidge SEZ in line with the fund’s real estate strategy in India.
Kingfisher Airlines
Ltd grounded in October 2012 under the weight of heavy debt and accumulated
losses, recently approached the Delhi high court for relief in two separate
cases. The airline challenged a notice by Punjab & National Bank alleging
that It had wilfully defaulted on Rs 7700 mn of loans and sought more time to
comply with the requirements under the listing agreements with the Stock
Exchanges.
OnMobile likely to
sack another 300 employees. The lay-offs follow a spate of senior-level exits
over the past two years, starting with of its founder. The overall lay-offs
could number around 600 and are driven by the need to cut costs, says a former
employee.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
|
Rating |
Long term bank Facilities: A+ |
|
Rating Explanation |
Adequate degree of safety and carry low credit risk. |
|
Date |
19.02.2014 |
|
Rating Agency Name |
CARE |
|
Rating |
Short term bank Facilities: A1 |
|
Rating Explanation |
Very strong degree of safety and carry lowest credit risk. |
|
Date |
19.02.2014 |
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
31-03-2014.
INFORMATION DECLINED
MANAGEMENT NON COOPERATIVE: 91-4288-240221
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 |
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E-Mail : |
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Website : |
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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 |
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|
|
|
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 31.03.2014
|
Name : |
Mr. N Gopalaratnam |
|
Designation : |
Chairman And Managing Director |
|
|
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|
Name : |
Mr. Arun G Bijur |
|
Designation : |
Director |
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|
Name : |
Mr. Bimal Kumar Poddar |
|
Designation : |
Director |
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|
Name : |
Mr. R V Gupta |
|
Designation : |
I A S (Retired) |
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Name : |
Dr S Narayan |
|
Designation : |
I A S (Retired) |
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Name : |
Mr. Mohan Verghese Chunkath |
|
Designation : |
I A S, Nominee Of Governemtn of tamilnadu |
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|
Name : |
Mrs. Philomina Thomas |
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Designation : |
Nominee Of LIC |
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Name : |
Mr. C V Sankar |
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Designation : |
I A S |
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Name : |
Mr. V Sridar |
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Designation : |
I A S |
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Name : |
Mr. K S Kasi Viswanathan, |
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Designation : |
Deputy Managing Director |
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Name : |
Mr. V Pichai, |
|
Designation : |
Deputy Managing Director and Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2014
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
18442 |
0.15 |
|
|
3904932 |
30.96 |
|
|
3923374 |
31.10 |
|
|
|
|
|
|
1547695 |
12.27 |
|
|
1547695 |
12.27 |
|
Total shareholding of Promoter and Promoter Group (A) |
5471069 |
43.37 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
1000 |
0.01 |
|
|
3568 |
0.03 |
|
|
1800000 |
14.27 |
|
|
515576 |
4.09 |
|
|
386228 |
3.06 |
|
|
2706372 |
21.46 |
|
|
|
|
|
|
695303 |
5.51 |
|
|
|
|
|
|
1563697 |
12.40 |
|
|
1597547 |
12.67 |
|
|
579640 |
4.60 |
|
|
3437 |
0.03 |
|
|
576203 |
4.57 |
|
|
4436187 |
35.17 |
|
Total Public shareholding (B) |
7142559 |
56.63 |
|
Total (A)+(B) |
12613628 |
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) |
12613628 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacture of Paper and
Paper Boards |
GENERAL INFORMATION
|
No. of Employees : |
Information declined by the management |
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Bankers : |
· Syndicate Bank · Canara Bank · Central Bank Of India · UCO Bank |
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Facilities : |
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Banking
Relations : |
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Auditors : |
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Name : |
Suri and Company Chartered Accountants |
|
Address : |
Chennai, Tamilnadu, India |
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|
Name : |
S Vishwanathan Chartered Accountants |
|
Address : |
Chennai, Tamilnadu, India |
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|
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|
Name : |
Maharaj N R Suresh and Company Chartered Accountants |
|
Address : |
Chennai, Tamilnadu, India |
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|
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Cost Auditors : |
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|
Name : |
Mahadevan and Company Chartered Accountants |
|
Address : |
Coimbatore, Tamilnadu, India |
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|
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Related Parties: |
· Esvi International (Engineers and Exporters ) Limited (ESVIN) · SPB Equity Shares Trust |
CAPITAL STRUCTURE
As on 31.03.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
40000000 |
Equity Shares |
Rs.10/- each |
Rs.400.000 Millions |
|
30000000 |
Cumulative Redeemable Preference Shares |
Rs.10/- each |
Rs.300.000
Millions |
|
|
|
|
|
|
|
Total |
|
Rs.700.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
11250000 |
Equity Shares |
Rs.10/- each |
Rs.112.500
Millions |
|
|
Alloted during the year:* |
Rs.10/- each |
Rs.13.636
Millions |
|
1363628 |
Equity Shares |
|
|
|
|
|
|
|
|
|
Total |
|
Rs.126.136 Millions |
NOTE:
Reconciliation of the
shares outstanding at the beginning and at the end of the year :
|
|
31.03.2014 |
|
|
|
No. of Shares In Millions |
Rs. In Millions |
|
Equity Shares : |
|
|
|
At the beginning of the year |
11.250 |
112.500 |
|
Add : Issued during the year |
1.364 |
13.636 |
|
At the end of the year |
12.614 |
126.136 |
Details of
shareholders holding more than 5% shares of the Company :
|
|
31.03.2014 |
|
|
|
No. of Shares in Millions |
% holding to Equity Capital |
|
Tamilnadu Industrial Investment Corporation Limited |
1.800 |
14.27 |
|
Synergy Investments Pte Limited |
1.548 |
12.27 |
|
Ponni Sugars (Erode) Limited |
1.738 |
14.02 |
|
Time Square Investments (P) Limited |
1.340 |
1.063 |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
|
|
|
|
I.
EQUITY AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
126.136 |
112.500 |
112.500 |
|
(b) Reserves & Surplus |
3715.153 |
3506.280 |
2993.607 |
|
(c) Money received against
share warrants |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
(2) Share Application money
pending allotment |
0.000 |
13.636 |
0.000 |
|
Total
Shareholders’ Funds (1) + (2) |
3841.289 |
3632.416 |
3106.107 |
|
|
|
|
|
|
(3) Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
1931.062 |
1940.832 |
890.564 |
|
(b) Deferred tax liabilities
(Net) |
926.002 |
781.513 |
821.950 |
|
(c) Other long term
liabilities |
146.400 |
134.222 |
100.691 |
|
(d) long-term provisions |
145.320 |
147.718 |
90.864 |
|
Total
Non-current Liabilities (3) |
3148.784 |
3004.285 |
1904.069 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
1636.502 |
1773.740 |
781.433 |
|
(b) Trade payables |
1766.506 |
1944.806 |
1614.057 |
|
(c) Other current liabilities |
458.636 |
730.918 |
570.032 |
|
(d) Short-term provisions |
83.802 |
80.328 |
116.530 |
|
Total
Current Liabilities (4) |
3945.446 |
4529.792 |
3082.052 |
|
|
|
|
|
|
TOTAL |
10935.519 |
11166.493 |
8092.228 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
6646.240 |
7105.912 |
4483.892 |
|
(ii) Intangible Assets |
15.185 |
17.895 |
16.406 |
|
(iii) Capital work-in-progress |
90.933 |
24.479 |
57.130 |
|
(iv) Intangible assets under
development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
319.944 |
227.620 |
232.320 |
|
(c) Deferred tax assets (net) |
0.000 |
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
231.914 |
220.042 |
68.352 |
|
(e) Other Non-current assets |
3.732 |
3.732 |
0.000 |
|
Total
Non-Current Assets |
7307.948 |
7599.680 |
4858.100 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
0.000 |
0.000 |
0.000 |
|
(b) Inventories |
1122.858 |
871.259 |
862.017 |
|
(c) Trade receivables |
1204.521 |
991.033 |
1002.016 |
|
(d) Cash and cash equivalents |
295.873 |
739.782 |
64.896 |
|
(e) Short-term loans and
advances |
935.878 |
884.367 |
1274.673 |
|
(f) Other current assets |
68.441 |
80.372 |
30.526 |
|
Total
Current Assets |
3627.571 |
3566.813 |
3234.128 |
|
|
|
|
|
|
TOTAL |
10935.519 |
11166.493 |
8092.228 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
SALES |
|
|
|
|
|
Income |
10133.769 |
8344.921 |
6114.178 |
|
|
Other Income |
27.511 |
41.666 |
46.277 |
|
|
TOTAL
(A) |
10161.280 |
8386.587 |
6160.455 |
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
Cost of Materials Consumed |
5443.615 |
4011.455 |
2790.264 |
|
|
Purchases of Stock-in-Trade |
276.642 |
282.088 |
275.928 |
|
|
Changes in inventories of finished
goods, work-in-progress and Stock-in-Trade |
13.162 |
69.403 |
(112.109) |
|
|
Employees benefits expense |
560.545 |
540.558 |
462.003 |
|
|
Other expenses |
2578.093 |
2382.319 |
1709.024 |
|
|
TOTAL
(B) |
8872.057 |
7285.823 |
5125.110 |
|
|
|
|
|
|
|
Less |
PROFIT/
(LOSS) BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTISATION (C) |
1289.223 |
1100.764 |
1035.345 |
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
387.082 |
444.616 |
243.231 |
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
902.141 |
656.148 |
792.114 |
|
|
|
|
|
|
|
Less/
Add |
DEPRECIATION/
AMORTISATION (F) |
489.749 |
491.448 |
342.560 |
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX (E-F) (G) |
412.392 |
164.700 |
449.554 |
|
|
|
|
|
|
|
Less |
TAX
(I) |
144.489 |
(40.437) |
108.600 |
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) AFTER TAX (G-I)
(J) |
267.903 |
205.137 |
340.954 |
|
|
|
|
|
|
|
|
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
348.700 |
302.600 |
219.500 |
|
|
|
|
|
|
|
|
Transfer from Investment Allowance Reserve |
0.000 |
0.000 |
7.500 |
|
|
|
|
|
|
|
|
APPROPRIATIONS |
|
|
|
|
|
Transfer to General Reserve |
250.000 |
100.000 |
200.000 |
|
|
Proposed dividend and tax
thereon |
59.000 |
59.000 |
65.400 |
|
|
Balance
Carried to the B/S |
307.600 |
348.700 |
302.600 |
|
|
|
|
|
|
|
|
Earnings
/ (Loss) Per Share (Rs.) |
21.24 |
16.26 |
30.31 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
PAT / Total Income |
(%) |
2.64 |
2.45 |
5.53 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
4.07 |
1.97 |
7.35 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
3.92 |
1.51 |
5.76 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.11 |
0.05 |
0.14 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
0.93 |
1.02 |
0.54 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.92 |
0.79 |
1.05 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Millions]
DEBT EQUITY RATIO
|
Particular |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Share Capital |
112.500 |
112.500 |
126.136 |
|
Reserves & Surplus |
2993.607 |
3506.280 |
3715.153 |
|
Share Application money
pending allotment |
0.000 |
13.636 |
0.000 |
|
Net
worth |
3106.107 |
3632.416 |
3841.289 |
|
|
|
|
|
|
long-term borrowings |
890.564 |
1940.832 |
1931.062 |
|
Short term borrowings |
781.433 |
1773.740 |
1636.502 |
|
Total
borrowings |
1671.997 |
3714.572 |
3567.564 |
|
Debt/Equity
ratio |
0.538 |
1.023 |
0.929 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
6114.178 |
8344.921 |
10133.769 |
|
|
|
36.485 |
21.436 |
NET PROFIT MARGIN
|
Net
Profit Margin |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
6114.178 |
8344.921 |
10133.769 |
|
Profit |
340.954 |
205.137 |
267.903 |
|
|
5.58% |
2.46% |
2.64% |
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 |
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 |
-- |
|
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 |
OPERATIONS PRODUCTION
During the year, the production at Unit : Erode was 1 18 197 tonnes, as compared to 1 19 366 tonnes, produced in the previous year. The production was marginally lower by 1 169 tonnes, compared to the previous year, mainly on account of severe restrictions on power availability imposed by the State Government. The Unit : Erode also produced 18 177 tonnes of Wet Lap Pulp to augment the Pulp requirements of Unit : Tirunelveli. The Unit : Tirunelveli produced 60 075 tonnes Paper during the year, as compared to 50 072 tonnes, produced in the previous year, higher by 10 003 tonnes. The overall Production for the Company was 1 78 272 tonnes of Paper and Boards for the year, as compared to 1 69 438 tonnes produced, in the previous year.
MANAGEMENT’S
DISCUSSION AND ANALYSIS
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 matched. Paper is interwoven with human life in undreds of ways. It is a bio-degradable product and has a benign footprint at the end of its life cycle. Despite the predictions that digital age would render paper obsolete, Paper Industry has been growing year after year. Paper Industry has 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 grow by about 2-3% per annum. While the mature markets 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.
The four key paper and board categories are Newsprint, Coated / Uncoated Wood-free Papers, Tissue 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 and 2012 saw a mild recovery in the fortunes of the paper industry. However, paper and paper board output fell along with overall industrial production in both Europe and the USA, as per UNICEF / FAO report. A wave of consolidations and takeovers reduced demand for pulp commodities across
Europe and North America. However, volumes to Asia, particularly China were strong in 2011 and in early 2012. During this period, prices peaked and then subsequently fell following overcapacity for most pulp, paper and paperboard commodities.
As per the Report of Environmental Paper Network, USA, consumption of paper and paper boards products have witnessed significant decline in North America, since 2007. This drop in consumption is attributable to the aftermath of financial crisis at the end of the decade, as well as to the shift in the pattern of consumption of news and other media from print to digital formats. While global paper consumption is rising, consumption in North America declined significantly by 24% between 2006 and 2009, as per reports available.
The Asian Printing and Writing Paper market experienced another disappointing year in 2013 as both demand and producer margins were weak due to gloomy global economies and overcapacity issues.
According to the latest RISI Graphic Paper forecast, Asian printing and writing paper demand edged up just 0.8% (3 70 000 tonnes gain) in 2013, slightly below the 1.2% rise seen in 2012 and well below the 3.6% growth rate achieved in 2011. China and Japan, the top two paper consuming countries in this Region, generally determine the growth trend in Asia. In China a lagging (but still healthy) economy, a de-emphasis on paper use due to environmental and energy concerns took a toll on paper demand. Consumption in Japan fell by 3% in 2013, due to competition from electronic media. For the rest of Asia, the growth rate was just 1% - same as in 2012.
The theme of sustainability dominates any discussion on the future of pulp and paper industry. Companies strive hard to sustain their Green Initiatives to reduce the carbon foot-print across their businesses.
OUTLOOK FOR 2014-15:
GLOBAL:
Moody’s Investors Service has down revised its outlook for the ‘Global Paper and Forest Products Industry’ to stable from positive. The change in outlook reflects lower operating earnings growth for North American Paper Packaging Producers over the next 12 to 18 months.
According to Moody’s the financial performance of North American companies typically drives their global outlook. Most of the North American operating earnings will come from US timberland and wood product
companies, fueled by higher demand from the growing US housing market. Recent paper machine closures will result in a modest increase in uncoated free sheet prices in 2014 which will mitigate some of the decline in demand for paper caused by electronic media. Continued decline in paper demand in Europe, with its ‘over supply’ position, will result in lower operating earnings for most European producers over the next year. Paper capacity, restarts, will also cause European Uncoated free sheets to fall, while recent coated free sheet capacity closures will lead to modest gain in prices of uncoated free sheets.
Operating income of Latin American Pulp Producers is expected to improve, given the additional pulp capacity and the local currency depreciation, offsetting lower international pulp prices. Paper demand will continue to grow in Latin America with the growing economy and literacy rates.
The popularity of the internet and smart phones has made serious inroads into the demand for print media. Stagnant or declining demand for paper in developed markets has forced all companies to take a fresh look at their operations. In the paper sector, the current trend in mature markets is to convert newsprint machines to paper board and packaging grades or to permanently idle machine or entire mills. In addition, this sector has been focusing on green technology, such as wood based biorefineries and biofuels, hoping to boost income by diversifying revenue streams, such as energy generation from bio-mass and black liquor. Thus, so much of the installed capacity in the developed world requires significant reinvestment.
RISI”s forecast for the Asian Region anticipates improvements in the global and regional economies, which will help support advertising and commercial printing. This sector is expected to grow by 1.40% or a gain of about 650000 tonnes. The projected growth rates for China and Japan are 1.7% and ‘negative’ respectively.
While South Korea is expected to see a contraction in its growth rate by 3%, mainly due to inventory correction and fierce e-media competition, rest of the countries in the Asian Region are likely to record a 3% volume gain. The latest RISI forecast for 2014 is cautiously optimistic that world paper demand growth will accelerate compared to the paltry gains posted over the last three years. Part of this optimism is based on a better performance in the general economy, with both North America and Europe showing improvements. Even graphic paper usage is predicted to stabilise in the coming year after declining by nearly 2% annually over the last three years. The performance of packaging papers is also projected to improve. Overall world paper is also projected to improve. Overall world paper demand is expected to rise by 2.4% in 2014.
DOMESTIC :
ICRA expects “ the paper industry to continue growing at the rate of 6-8% in the medium to long term, although there may be aberrant years given the cyclical nature of the industry. The low per capita consumption of paper provides tremendous potential for growth in paper demand. Further, the capacity addition programme has now come to an end and there has been a considerable slowdown in new project announcement and completion.
With the recent capacity additions coming to completion any fresh announcements is unlikely in the near term and with gestation period of 24~30 months for new capacities, supply side pressures have started easing. Assuming a moderate growth of 6% per annum, the market would expand by ~0.7 million tonnes annually which would be sufficient to absorb the new capacities that will come up in the next 2-3 years.
However, the favourable demand-supply dynamics may not immediately translate into higher profits for paper companies. The cost for most of the key inputs is currently at a very high level and domestic coal and wood prices are still increasing at a rapid pace. The ability of the companies to pass on these costs will remain the key to profitability. Companies with better cost and capital structures and a diversified portfolio of products would be better placed to endure the pressures in the medium term”.
India Ratings and Research (a Fitch Group Company) has revised the sector outlook to “negative to stable” for Financial Year 2015 from “negative” based on an expected moderation of supply side pressures with gradual absorption of the overcapacity created during the past few years. Improved ability to hike prices along with benefits from the recent capex should help sector companies in improving profitability amid moderating cost pressures.
The agency expects the overall sector demand to grow around 7-8% yoy in Financial Year 2015 with certain sub-segments witnessing higher growth rates than the overall industry. This will be on the back of changing lifestyles and strong growth in consumer-oriented sectors such as FMCG.
Inventory levels have been stabilising among industry players and reducing at distributors indicating moderating demand-supply imbalance. Ind-Ra’s analysis of major sector companies indicate that despite high capacity use by paper companies, cumulative inventory levels grew at a meagre 2% yoy in Financial Year 2013 (Financial Year 2012: 31% yoy, Financial Year 2011: 14.7% yoy). Ind-Ra also expects minimal capacity addition over the next two to three years. With no significant capacity addition in the next few years and gradual absorption of past overcapacity, demand supply dynamics is likely to become favorable for paper manufacturers. Companies are likely to register a rise in operating margins in Financial Year 2015.
However, managing input costs would be the key for domestic paper manufacturers. Their profitability has suffered in the past due to rising domestic wood prices. Also, Rupee depreciation has increased the imported cost for raw materials such as pulp and coal. Paper companies have taken several measures to increase wood availability, including focusing on farm forestry and importing wood to reduce dependence on domestic wood sources. Although Rupee depreciation has minimised benefits from the latter measure, wood import by paper companies is likely to keep domestic wood prices in check. Around 15% depreciation of the Rupee during 2013, although increased the imported cost of raw materials, benefitted certain segments such as coated paper and packaging board, where domestic prices are determined by import price parity. Sustenance of the Rupee at the current levels is likely to reduce competitive pressure from imports as witnessed in Financial Year 2013 with the overall sector imports declining 8.3% yoy (in USD terms). The issues confronting the Industry currently are poor demand growth on the back of sluggish economy and appreciating Rupee opening the doors for imported papers to flood the market and destablise the well established domestic paper distribution system.
Recent upward spurts in the strength of the Indian Rupee, if sustained will help in lowering the cost of both imported coal and imported wood chips, but will impact the operating capacity levels and the margins of domestic manufacturers substantially, with India becoming the dumping ground for overseas paper. Hence, near term concerns are serious and threatening. As mentioned in the last year’s report, the environmental footprint of the Indian Paper Industry has come under the critical scrutiny of the several (public and private) Indian and overseas environmental agencies who would like to transform the way pulp and paper industry operates.
These transformations include minimizing paper consumption, maximising use of recycled paper in the furnish, sourcing of virgin fibre, and adoption of cleaner pulping processes in the manufacture of paper. Some Indian paper manufacturers will have to turn to environmentally friendly manufacturing processes and become responsible paper manufacturers. With a view to curtail the carbon emission, Government of India, have introduced the PAT (Perform, Achieve and Trade) Scheme, calling for significant reduction in energy usage by the Pulp and Paper Units in a specified time frame. Further, REC (Renewable Energy
Certificate) Scheme requires the Indian Paper Industry to use a minimum percentage of biofuel in the fuel-mix.
These schemes, though appearing to be threats, provide great opportunities for the Paper Industry to significantly improve its carbon footprint and simultaneously augment their income through higher usage of Bio-fuels.
UNSECURED LOAN
|
PARTICULARS |
31.03.2014 (Rs.
in Millions) |
31.03.2013 (Rs.
in Millions) |
|
Long-term
Borrowings |
|
|
|
Other Loans and Advances : Interest Free Sales Tax Loan Terms of repayment : Interest Free Sales Tax Deferral Loan is repayable over a period of ten years from 01 06 2013. Period and amount of continuing default : Nil |
344.812 |
411.032 |
|
Total |
344.812 |
411.032 |
INDEX OF CHARGES
|
S.NO. |
CHARGE ID |
DATE OF CHARGE
CREATION/MODIFICATION |
CHARGE AMOUNT
SECURED |
CHARGE HOLDER |
ADDRESS |
SERVICE REQUEST
NUMBER (SRN) |
|
1 |
10467831 |
14/12/2013 |
250,000,000.00 |
SYNDICATE BANK |
1168, METTUR ROAD, MUTHAIAH COMPLEX, ERODE, TAMIL NADU - 638011, INDIA |
B92611334 |
|
2 |
10335473 |
03/08/2012 * |
2,730,000,000.00 |
CANARA BANK |
THOUSAND LIGHTS BRANCH, NO.5, GREAMS ROAD, CHENNAI, TAMIL NADU - 636006, INDIA |
B55833206 |
|
3 |
90007300 |
29/03/2013 * |
2,900,000,000.00 |
SYNDICATE BANK (AS THE LEADER OF CONSORTIUM) |
1168, METTUR ROAD, MUTHAIAH COMPLEX, ERODE, TAMILNADU - 638001, INDIA |
B73229635 |
* Date of charge modification
STATEMENT OF UNAUDITED FINANCIAL RESULT FOR THE QUARTER ENDED JUNE 30,
2014
(RS. IN MILLIONS)
|
S. No. |
Particulars |
3 months ended 30.06.2014 |
|
|
|
Unaudited |
|
1 |
Income From Operations |
|
|
|
a. Net Sales/Income from
Operations |
2112.200 |
|
|
b. Other Operating Income |
30.300 |
|
|
Total income from
Operations (Net) |
2142.500 |
|
|
|
|
|
2 |
Expenses |
|
|
|
a. Cost of Materials
Consumed |
1412.00 |
|
|
b. Purchases of
Stock-in-trade |
58.800 |
|
|
c. Changes in inventories
of finished goods, work-in-progress and stock-in-trade |
(359.000) |
|
|
d. Employee benefits
expenses |
147.200 |
|
|
e. Depreciation and
amortization expenses |
86.800 |
|
|
f. Other Expenses |
|
|
|
Cost of power and fuel |
361.000 |
|
|
Other |
263.800 |
|
|
Total Expenses |
1970.600 |
|
|
|
|
|
3 |
(Profit/(Loss) from
operations before other income, finance costs and exceptional items |
171.900 |
|
4 |
Other Income |
2.000 |
|
5 |
Profit/(Loss) from
ordinary activities before finance costs and exceptional items (3 + 4) |
173.900 |
|
6 |
Finance costs |
98.800 |
|
7 |
Profit/(Loss) from
ordinary activities after finance costs but before exceptional items (5 + 6) |
75.100 |
|
8 |
Exceptional Items |
0.000 |
|
9 |
Profit/(Loss) from
ordinary activities before tax (7 + 8) |
75.100 |
|
10 |
Tax Expenses |
24.800 |
|
11 |
Net Profit/(Loss) from
ordinary activities after tax (9 + 10) |
50.300 |
|
12 |
Extraordinary items (net
of tax expenses Rs. in Millions) |
0.000 |
|
13 |
Net Profit/(Loss) for the
period 11 + 12) |
50.300 |
|
14 |
Paid-Up equity share
capital (Face Value of Rs.10/- each) |
126.100 |
|
15 |
Reserve excluding
revaluation reserves as per balance sheet of previous accounting year |
|
|
|
|
|
|
16.i |
Earnings per share (before extraordinary items) (of Rs.1/-
each) (not annualised): |
|
|
|
(a) Basic |
3.99 |
|
|
(b) Diluted |
3.99 |
|
|
|
|
|
16.ii |
Earnings per share (after extraordinary items ) (of Rs.1/-
each) (Not annualised) |
|
|
|
(a) Basic |
3.99 |
|
|
(b) Diluted |
3.99 |
|
|
|
|
|
A |
Particulars of Share Holdings |
|
|
1 |
Public Share Holding |
|
|
|
-Number of
Shares |
7142559 |
|
|
-Percentage
of Holding |
56.63 |
|
|
|
|
|
2 |
Promoters and Promoter Group Shareholding |
|
|
|
a) Pledged/Encumbered |
|
|
|
- Number
of shares |
-- |
|
|
-Percentage
of Shares (as a % of the total shareholding of promoter and promoter group) |
-- |
|
|
-Percentage
of Shares ( as a % of the total share capital of the company) |
-- |
|
|
|
|
|
|
b) Non - Encumbered |
|
|
|
-Number of
Shares |
5471069 |
|
|
-Percentage
of Shares ( as a % of the total Shareholding of Promoter an Promoter group) |
100 |
|
|
-Percentage
of Shares (as a % of the total Share capital of the Company) |
43.37 |
|
S. No. |
Particulars |
3 Months Ended 30.06.2014 |
|
B. |
Investor Complaints |
|
|
|
Pending at
the beginning of the quarter |
Nil |
|
|
Received
during the quarter |
Nil |
|
|
Disposed
of during the quarter |
Nil |
|
|
Remaining unresolved
at the end of the quarter |
Nil |
NOTE
Paper is the only reportable segment of operation of the Company.
Figures have been re-grouped, wherever necessary, to conform to current
quarter's / year's classification.
The Depreciation for the Quarter ended June 30, 2014 has been charged as per
the revised requirement under the Companies Act, 2013 with effect from April
01, 2014. The amount of depreciation is lower by Rs.36.500 Millions, consequent
to such change.
The above results were reviewed by the Audit Committee of the Board and
approved by the Board of Directors at the respective meetings held on July 24,
2014 and July 25, 2014. The Statutory Auditors of the Company have carried out
a Limited Review of the results for the quarter ended June 30, 2014.
FIXED ASSETS
Tangible Assets
· Land and Betterment
· Buildings
· Plant and Machinery
· Furniture and Fixtures
· Vehicles
· Office Equipments
Intangible Assets
· Technical Know-How
· Computer Software
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 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.61.75 |
|
|
1 |
Rs.100.07 |
|
Euro |
1 |
Rs.77.95 |
INFORMATION DETAILS
|
Information
Gathered by : |
NYA |
|
|
|
|
Analysis Done by
: |
DIV |
|
|
|
|
Report Prepared
by : |
KVT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
64 |
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.