MIRA INFORM REPORT
|
Report No. : |
303275 |
|
Report Date : |
13.01.2015 |
IDENTIFICATION DETAILS
|
Name : |
NEPA LIMITED |
|
|
|
|
Registered
Office : |
Nepanagar, Burhanpur – 450221, Madhya Pradesh |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
31.03.2014 |
|
|
|
|
Date of
Incorporation : |
25.01.1947 |
|
|
|
|
Com. Reg. No.: |
10-000636 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.1078.612 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
U21012MP1947GOI000636 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
Not Available |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACN9961C |
|
|
|
|
Legal Form : |
A Closely Held Public Limited Liability Company |
|
|
|
|
Line of Business
: |
Producer of News Print and Writing Printing Paper |
|
|
|
|
No. of Employees
: |
798 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ca (18) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Status : |
Sick company |
|
|
|
|
Payment Behaviour : |
Slow and delayed |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a government of India Company. The company has declared as sick company under BIFR (Board for
Industrial and Financial Reconstruction). It has registered a case under
section 15(1) of the sick Industrial Companies (special provisions) Act 1985
(SICA) as case no. 502/1998. Which was approved by Government of India on
29.09.2012. Subsequently, the BIFR sanctioned the revival scheme of the
company on 04.03.2012. Management has reported huge accumulated losses. However, Business is active. Payments terms are reported to be slow
and delayed. Although subject is a government of India undertaking (having exposure
of government), it can be regarded for any business dealings on fully safe
and secured trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2014
|
Country Name |
Previous Rating (30.06.2014) |
Current Rating (30.09.2014) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
Not Available |
|
Rating |
Not Available |
|
Rating Explanation |
Not Available |
|
Date |
Not Available |
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.
LOCATIONS
|
Registered Office : |
Nepanagar, Burhanpur – 450221, Madhya Pradesh, India |
|
Tel. No. : |
91-7325-222134 |
|
Fax No. : |
91-7325-222174 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Regional Offices: |
Located at
|
DIRECTORS
As on 31.03.2014
|
Name : |
Surinder Kumar Mutreja |
|
Designation : |
Managing Director |
|
Address : |
Nepa House, Nepanagar, Burhanpur – 450221, Madhya Pradesh, India |
|
Date of Birth/Age : |
11.11.1960 |
|
Date of Appointment : |
13.10.2010 |
|
DIN No. : |
00718249 |
|
|
|
|
Name : |
Mr. Sunil kumar Singh |
|
Designation : |
Director |
|
Address : |
D-413, Pragati, Vihar Hostel, Lodhi Road, New Delhi – 110003, India |
|
Date of Birth/Age : |
13.02.1971 |
|
Date of Appointment : |
13.05.2010 |
|
DIN No. : |
02679637 |
|
|
|
|
Name : |
Mr. Anil Gupta |
|
Designation : |
Nominee director |
|
Address : |
Shanti Krishna, 5034/3, Sant Nagar, Karol Bagh, New Delhi – 110005,
India |
|
Date of Birth/Age : |
09.09.1950 |
|
Date of Appointment : |
24.10.2011 |
|
DIN No. : |
00283431 |
|
|
|
|
Name : |
Mr. Prasant Kumar |
|
Designation : |
Nominee Director |
|
Address : |
10/8 Jade
Apartment, Shalimar, Enclave, E-3 Arera Colony, Bhopal – 462016, Madhya
Pradesh, India |
|
Date of Birth/Age : |
14.08.1960 |
|
Date of Appointment : |
22.08.2012 |
|
DIN No. : |
06364793 |
|
|
|
|
Name : |
Mr. Aravind Gopal Rao Kulkarni |
|
Designation : |
Nominee Director |
|
Address : |
RMV Clusters,
2nd PHS BLK 1 FLT 404, Lottegollahalli, Devinagar, Banglore – 560094,
Karnataka, India |
|
Date of Birth/Age : |
06.02.1950 |
|
Date of Appointment : |
20.12.2012 |
|
DIN No. : |
06399161 |
|
|
|
|
Name : |
Ms. Veena Upadhyaya |
|
Designation : |
Nominee Director |
|
Address : |
B-59, Sector 14, Gautam Buddha Nagar, Noida – 201301, Uttar Pradesh,
India |
|
Date of Birth/Age : |
20.09.1951 |
|
Date of Appointment : |
20.12.2012 |
|
DIN No. : |
06499494 |
|
|
|
|
Name : |
Mr. Ravindra kumar |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Sanjay Kumar Ojha |
|
Designation : |
Company Secretary |
|
Email : |
|
|
Tel No.: |
91-7325-222167 |
|
|
|
|
Name : |
Mr. R Ramanathan |
|
Designation : |
Deputy General Manager (Legal) |
|
Email : |
|
|
Tel No.: |
91-7325-222154 |
|
|
|
|
Name : |
Mr. A N Deshmukh |
|
Designation : |
Senior Manager (Finance & Accounts) |
|
Email : |
|
|
Tel No.: |
91-7325-222262 |
|
|
|
|
Name : |
Mr. S S Kothalkar |
|
Designation : |
Senior Manager (Works ) |
|
Email : |
|
|
Tel No.: |
91-7325-222133 |
|
|
|
|
Name : |
Mr. NRA Khan |
|
Designation : |
Senior Manager (Technical, ERW & FM) |
|
Email : |
|
|
Tel No.: |
91-7325-222133 |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2014
|
Particulars |
No of shares |
|
|
|
|
Central Government |
105465944 |
|
Madhya Pradesh Government |
1697290 |
|
Public |
654930 |
BUSINESS DETAILS
|
Line of Business : |
Producer of News Print and Writing Printing Paper |
|
|
|
|
Brand Names : |
Not Divulged |
|
|
|
|
Agencies Held : |
Not Divulged |
|
|
|
|
Exports : |
Not Divulged |
|
|
|
|
Imports : |
Not Divulged |
|
|
|
|
Terms : |
Not Divulged |
PRODUCTION STATUS NOT AVAILABLE
GENERAL INFORMATION
|
Suppliers : |
|
||||||||||||||
|
|
|
||||||||||||||
|
Customers : |
|
||||||||||||||
|
|
|
||||||||||||||
|
No. of Employees : |
798 (Approximately) |
||||||||||||||
|
|
|
||||||||||||||
|
Bankers : |
|
||||||||||||||
|
|
|
||||||||||||||
|
Facilities : |
|
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Subhash Chand
Jain Anurag and Associates Chartered Accountants |
|
Address : |
4-Archana,
Apartment 8-B, Ratlam Kothi, Indore,
Madhya Pradesh, India |
|
PAN
No. : |
AAFFS7586J |
|
|
|
|
Cost Auditors: |
|
|
Name : |
Prabha Sharma and Associates Cost Accountants |
|
Address : |
Bhopal, Madhya Pradesh, India |
|
|
|
|
Memberships : |
-- |
|
|
|
|
Collaborators : |
-- |
|
|
|
|
Associates/Subsidiaries : |
NIL |
CAPITAL STRUCTURE
As on 31.03.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
52500000 |
Equity Shares |
Rs.10/- each |
Rs.5250.000 Millions |
|
600000 |
7% Non- Cumulative Preference Shares |
Rs.1000/- each |
Rs.600.000 Millions |
|
|
|
|
|
|
|
Total |
|
Rs.5850.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
107818164 |
Equity Shares |
Rs.10/- each |
Rs.1078.182 Millions |
|
97780 |
Value of shares subscribed but not fully paid |
|
Rs. 0.430 Million |
|
|
|
|
|
|
|
Total |
|
Rs.1078.612
Millions |
NOTE:
Company Has Not Filed Notice {Form No. 5 (Old)/ Form No. Sh-7 (New)} To Roc M.P. For Increase In Authorised Share Capital From Rs. 1250.000 Millions Equity Shares To Rs. 5250.Millions Equity Shares And Rs. 600.000 Millions 7% Non Cumulative Preference Shares Whose Resolution Has Been Passed In Egm On 04/03/2013
Reconciliation of
number of share outstanding at the beginning and the end of the reporting
period
|
Particulars |
31.03.2014 |
|
|
|
|
Outstanding At The Beginning Of The Year |
105465944 |
|
Central Government Equity Shares Of Rs. 10/- Each Fully Paid Up |
1697290 |
|
Madhya Pradesh Government Equity Share Of Rs. 10/- Each Fully Paid Up |
654930 |
|
Public Equity Share Of Rs.10/- Each Fully Paid Up |
97780 |
|
Forfeited Shares |
107915944 |
Add: Issued During
the year to the central govt. (Equity Shares Of Rs. 10/- Each)
|
Particulars |
31.03.2014 |
|
|
|
|
Outstanding At The Beginning Of The Year |
105465944 |
|
Central Government Equity Shares Of Rs. 10/- Each Fully Paid Up |
1697290 |
|
Madhya Pradesh Government Equity Share Of Rs. 10/- Each Fully Paid Up |
654930 |
|
Public Equity Share Of Rs.10/- Each Fully Paid Up |
97780 |
|
Forfeited Shares |
107915944 |
NOTE: company has forfeited 97780 no. of equity shares in earlier years due to non-payment thus fully paid up equity shares is 107818164 no. of shares.
SHAREHOLDING OF MORE
THAN 5%
|
PARTICULARS |
No. of Shares |
% of Shareholding |
|
|
|
|
|
CENTRAL GOVERNMENT |
105465944 |
97.78% |
AGGREGATE NUMBER OF EQUITY
SHARES ALLOTED
As fully paid up pursuant to contract without payment being received in cash:- 47184094 no. of equity share of rs. 10/- each to central govt and 1097290 no of equity share of rs. 10 each to madhya pradesh govt allotted as fully paid pursuant to contract without payment being received in cash.
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 |
1078.612 |
1078.612 |
1078.612 |
|
(b) Reserves & Surplus |
(4466.794) |
(7555.374) |
(6714.532) |
|
(c) Money received against
share warrants |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
(2) Share Application money
pending allotment |
3224.903 |
600.000 |
0.000 |
|
Total
Shareholders’ Funds (1) + (2) |
(163.279) |
(5876.762) |
(5635.920) |
|
|
|
|
|
|
(3) Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
671.328 |
6368.696 |
5574.655 |
|
(b) Deferred tax liabilities
(Net) |
0.000 |
0.000 |
0.000 |
|
(c) Other long term
liabilities |
222.903 |
28.670 |
31.927 |
|
(d) long-term provisions |
7.561 |
7.561 |
18.777 |
|
Total
Non-current Liabilities (3) |
901.792 |
6404.927 |
5625.359 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
15.240 |
0.000 |
1.088 |
|
(b) Trade payables |
91.258 |
43.633 |
54.823 |
|
(c) Other current liabilities |
542.261 |
1103.136 |
971.852 |
|
(d) Short-term provisions |
0.000 |
0.000 |
0.000 |
|
Total
Current Liabilities (4) |
648.759 |
1146.769 |
1027.763 |
|
|
|
|
|
|
TOTAL |
1387.272 |
1674.934 |
1017.202 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
177.049 |
183.673 |
179.170 |
|
(ii) Intangible Assets |
0.025 |
0.025 |
0.025 |
|
(iii) Capital work-in-progress |
5.826 |
0.000 |
0.000 |
|
(iv) Intangible assets under
development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
0.000 |
0.000 |
0.000 |
|
(c) Deferred tax assets (net) |
0.000 |
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
0.331 |
0.344 |
13.398 |
|
(e) Other Non-current assets |
102.936 |
165.924 |
40.359 |
|
Total
Non-Current Assets |
286.167 |
349.966 |
232.952 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
0.000 |
0.000 |
0.000 |
|
(b) Inventories |
249.126 |
193.953 |
200.923 |
|
(c) Trade receivables |
18.022 |
17.022 |
24.226 |
|
(d) Cash and cash equivalents |
750.242 |
1025.970 |
441.936 |
|
(e) Short-term loans and
advances |
79.383 |
85.645 |
107.679 |
|
(f) Other current assets |
4.332 |
2.378 |
9.486 |
|
Total
Current Assets |
1101.105 |
1324.968 |
784.250 |
|
|
|
|
|
|
TOTAL |
1387.272 |
1674.934 |
1017.202 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
SALES |
|
|
|
|
|
Income |
1190.117 |
1322.034 |
1516.363 |
|
|
Other Income |
888.018 |
274.106 |
135.624 |
|
|
TOTAL
(A) |
2078.135 |
1596.140 |
1651.987 |
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
Cost of Materials Consumed |
682.969 |
700.871 |
878.772 |
|
|
Purchases of Stock-in-Trade |
119.334 |
89.983 |
0.000 |
|
|
Changes in inventories of
finished goods, work-in-progress and Stock-in-Trade |
(50.138) |
(4.852) |
(18.053) |
|
|
Employees benefits expense |
1021.531 |
308.308 |
282.644 |
|
|
Other expenses |
748.725 |
730.109 |
662.218 |
|
|
Prior period items before tax |
35.116 |
6.268 |
22.512 |
|
|
Extraordinary items |
(3636.032) |
0.000 |
0.000 |
|
|
TOTAL
(B) |
(1078.495) |
1830.687 |
1828.093 |
|
|
|
|
|
|
|
Less |
PROFIT/
(LOSS) BEFORE INTEREST, TAX, DEPRECIATION
AND AMORTISATION (C) |
3156.630 |
(234.547) |
(176.106) |
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
57.354 |
596.052 |
541.626 |
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
3099.276 |
(830.599) |
(717.732) |
|
|
|
|
|
|
|
Less/
Add |
DEPRECIATION/
AMORTISATION (F) |
10.693 |
10.240 |
11.301 |
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX (E-F) (G) |
3088.583 |
(840.839) |
(729.033) |
|
|
|
|
|
|
|
Less |
TAX
(I) |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) AFTER TAX (G-I)
(J) |
3088.583 |
(840.839) |
(729.033) |
|
|
|
|
|
|
|
|
CIF Value of Imports Raw material |
0.399 |
19.910 |
NA |
|
|
|
|
|
|
|
Basic |
25.65 |
(7.80) |
(6.88) |
|
|
Diluted
|
8.31 |
(7.80) |
KEY RATIOS
|
PARTICULARS |
|
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
Net Profit Margin (PAT / Sales) |
(%) |
259.52 |
(63.60) |
(48.08) |
|
|
|
|
|
|
|
Operating Profit Margin (PBIDT/Sales) |
(%) |
265.24 |
(17.74) |
(11.61) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
223.58 |
(50.20) |
(71.67) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(18.92) |
0.14 |
0.13 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
(4.20) |
(1.08) |
(0.99) |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.70 |
1.16 |
0.76 |
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 |
1078.612 |
1078.612 |
1078.612 |
|
Reserves & Surplus |
(6714.532) |
(7555.374) |
(4466.794) |
|
Share Application money pending
allotment |
0.000 |
600.000 |
3224.903 |
|
Net
worth |
(5635.920) |
(5876.762) |
(163.279) |
|
|
|
|
|
|
long-term borrowings |
5574.655 |
6368.696 |
671.328 |
|
Short term borrowings |
1.088 |
0.000 |
15.240 |
|
Total
borrowings |
5575.743 |
6368.696 |
686.568 |
|
Debt/Equity
ratio |
(0.989) |
(1.084) |
(4.205) |
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 |
1516.363 |
1322.034 |
1190.117 |
|
|
|
(12.815) |
(9.978) |
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 |
1516.363 |
1322.034 |
1190.117 |
|
Profit |
(729.033) |
(840.839) |
3088.583 |
|
|
(48.08%) |
(63.60%) |
259.52% |
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 |
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 |
-- |
|
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 |
No |
|
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 |
CHARGES
|
ENTITY |
PERSON |
COMPETENT AUTHORITY |
REGULATORY CHARGES |
REGULATORY
ACTION(S) / DATE OF ORDER |
FURTHER
DEVELOPMENTS |
|
NEPA LTD |
|
EPFO |
EXEMPTED AND UNEXEMPTED ESTABLISHMENTS DEFAULTED WITH EPFOINCLUDING PROVIDENT FUND, PENSION & EDLI CONTRIBUTION, ADMINISTRATION CHARGES & PENAL DAMAGES OF RS.90.70 LAKHS |
AMONG OTHER ACTIONS, NAMES OF DEFAULTERS PUT ON THE EPFO
WEBSITE |
PRODUCTION AND SALES
The production of newsprint during the year was 43110 MT only as compared to 50055 MTin the previous year. Decrease in production was mainly due to poor quality of coal, frequent break-downs in outlived captive power plants. Poor performance of both the paper machines also affected the production.
Sales during the year were 41,216 MT only as compared to 50,305 MT in the previous year. Average sales realization however increased to Rs. 28981/- PMT from Rs. 26280/- per M.T. in the previous year.
OPERATIONS
All out efforts were made to manufacture good quality newsprint and achieve higher efficiency. But due to frequent break-downs in Their aging Captive Power Plants and Paper Machines, which have not been overhauled / refurbished since long due to poor financial condition of the company, desired capacity utilisation could not be achieved. Further, poor quality of coal and insufficient working capital also affected the production.
MANAGEMENT DISCUSSION
AND ANALYSIS REPORT
INTRODUCTION: With its incredible versatility and application, paper is a product with daily demand from almost all sections of society. The most well-known applications of paper and paper industry products include writing and printing (WandP) paper, industrial paper, specialty paper such as tissues, newsprint, and value added products such as packaging materials, corrugated cartons, paper cups, building materials, hospital products, fire-resistant and water roofing materials. Paper, made from natural and recyclable materials such as cellulose sourced primarily from wood products as also from rags, grass and dry waste materials, is a ecofriendly product because it is,
1. made from renewable materials;
2. sourced from forest products that are planted at a rate faster than they are utilized, with increasing forest cover;
3. bio-degradable and recycled; and, 4. a source of renewable energy at the end of its life-cycle.
GLOBAL SCENARIO and
INDIAN PAPER INDUSTRY:
Globally, paper industry has realized a linkage between production of paper and the farming community thereby infusing huge capital in agricultural economy. The USA, Latin America, Scandinavian countries, Australia, Japan and neighboring Asian countries viz. China, Indonesia etc. all have been quick to create conducive land use/forestry policies to encourage large-scale production plantations and attract mega investments in pulp and paper/paperboard manufacturing and in the process creating millions of jobs. There is a paradigm shift in the global paper and paper board industry, with Asia continuing to grow faster than the rest of the world. This trend is expected to continue in 2014-15. At present there are 750 mills operating in India consisting of small, medium and large mills. The industry produces about 2.6% of the total production of paper globally i.e. 11 million tons with a gross turnover of around Rs. 450000.000 Millions and contributes Rs. 40000.000 Millions to exchequer and provides employment to about 370000 peoples. Most of the mills have installed a mix of old and new technology.
Small and medium units mainly dominate Indian paper industry and the numbers of mills having the capacity of more than 50000 tons annually are less than 50. In fact less than half a dozen of mills in India produce almost 90% of newsprint requirement. Indian per capita consumption is less than 10 kg as compared to world average of 57kg. Many of the mills in India are waste paper based and recovery rate of the same is just 27% whereas it has crossed 60% in developing countries. India imports about 4 million tons of waste paper every year. In the total production of paper in India 47% is based on waste paper, 31% on wood and bamboo, and 22% on agro. With this kind of scenario the predictions that the growth rate of the industry will be 6-7%, hasn’t really happened instead it grew at 5%. The production was 11-11.5 million tons as compared to 100 million tons in China and 400 million tons globally. The potential of growth for the industry lies in the development of the economy, rising literacy rates, consumerism and standard of living. And with these factors, we will be able to touch around 20 million tons by 2020. The fall in the profitability of many Indian paper manufactures can be attributed to the fall in rupees value, increase cost of raw material, fuel, consumables, logistics etc.
So, the industry has to work aggressively to make up and to reduce the higher input cost to become globally competitive. India has more daily newspapers than any other nation and out of world’s 100 largest newspaper, 20 are Indian. Manufacturing newsprint through the recovered paper is preferred in India However, raw material availability is low and prices are high. This is because India does not have developed recovered paper collection system. Moreover, capacity of domestic paper mills is insufficient to meet the demand and approx. 50% of demand is met by way of import of newsprint. Thus, this market is still very much open to absorb further expansions by the Indian paper mills, provided quality newsprint as per customers’ requirements are supplied at competitive price.
In India, the Writing and Printing Paper (WPP) segment is currently (2014-15) estimated at 3.87 million tones. Greater emphasis on education and literacy by the government, coupled with growth in organized retail and demand for better quality paper are the major demand drives for WPP. The various forms that endues demand for WPP include printing of text books, notebooks and stationery for education, usage of office printing and stationery and printing of company published statutory documents such as annual report, share issue forms etc.
OUTLOOK
Subject is now well positioned to face the challenges of tomorrow. With a view to develop a strong technical team with new appointments, revitalized marketing strategy, new product developments and a focus to develop better quality products would add to traction at Nepa.
The priority is to sustain momentum, create better value for products and bring Nepa closer to its customers. The company shall add traction to its business performance and operating results by working simultaneously on all aspects. Company was referred to BIFR in 1997. However, the revival plan of the company was approved by GoI on 25.09.2012 only. BIFR has also sanctioned the revival scheme of the company on 04.03.2014. The Revival Plan envisages capital investment of Rs. 2850.000 Millions.
Following RMDP works were completed as on 31 March 2014:
— Appointment of M/s Tata Consulting Engineers, Mumbai as Project Management Consultant (PMC) through global tender.
— Plant Survey and Contour Mapping of Factory Premises of 166 Acres land.
— Geo-technical investigation and soil testing work.
— Vibration monitoring and analysis of both the Paper Machines.
— Stability testing of Buildings.
— Technical evaluation of global tender of 300 BD TPD De-Inking Plant.
— Appointment of Consultant EIA –
Environment Impact Assessment. Following RMDP works were in progress as on 31 March 2014:
— Technical evaluation of global tender for installation of new 9 MW CPP.
— Technical evaluation of global tender for refurbishment of existing 12.27 MW CPP.
— Tender preparation for refurbishment of both the Paper Machines.
— EIA and clearance from MoEF. Other remaining works are in pipeline. Vacancies at Senior Levels due to poor response to the recruitment process are affecting the progress of RMDP.
The company seeks to grow revenue and bottom line and is striving to participate in the improving demand scenario for paper in the market by ensuring economies of scale, efficient usage of resources and value chain management. The investments that proposed to be made in system, processes, products and market are expected to enhance operational performance
BACKGROUND OF THE
COMPANY :
Subject is a pioneer Newsprint manufacturing Company of India, which is centrally located at Nepa Nagar, Distt. Burhanpur in M.P. with an initial installed capacity of 30,000 TPA. Our first Prime Minister Pandit Jawaharlal Nehru dedicated the mill to the nation on 26th April 1956. Nepa Ltd. has expanded in stages to the present installed capacity of 88,000 TPA. The technology & machinery are over five decades old and there are constraints/bottlenecks in operations.
On disconnection of power supply by MPEB (Madhya Pradesh Electricity Board) in 1996 and due to acute shortage of forest based raw material, the mill switched over to recycling of recovered paper since 1997, without adding the DIP (De-inking plant) necessary for processing recovered paper having ink.
The pulping plants at Subject. were designed for processing forest raw materials. By adopting a make shift arrangement to process recovered paper, the mill is unable to achieve the desired quality in Newsprint. It is not possible to achieve desired power and water consumption norms because of aged plant and machinery. Similarly, because of aging the power generation is also not at the optimal cost. Due to the high cost of production coupled with lower sales realization due to poor brightness, the company is not able to earn profits.
UNSECURED LOAN
|
PARTICULARS |
31.03.2014 (Rs.
in Millions) |
31.03.2013 (Rs.
in Millions) |
|
Long-term
Borrowings |
|
|
|
Govt. of India (Plan and Non Plan Loan) |
634.440 |
2062.957 |
|
Govt. of India (Vrs) |
0.000 |
466.597 |
|
Interest Accrued and Due (Plan and Non Plan Loan) |
36.888 |
957.150 |
|
Penal Interest Accrued and Due (Plan and Non Plan Loan) |
0.000 |
2881.992 |
|
Total |
671.328 |
6368.696 |
INDEX
OF CHARGES
|
S.NO. |
CHARGE ID |
DATE OF CHARGE
CREATION/MODIFICATION |
CHARGE AMOUNT
SECURED |
CHARGE HOLDER |
ADDRESS |
SERVICE REQUEST
NUMBER (SRN) |
|
1 |
90207971 |
17/03/1997 |
358,000,000.00 |
S. B. I. |
NEPANAGAR, EAST NIMAR, MADHYA PRADESH, INDIA |
- |
|
2 |
90207028 |
13/07/1989 |
135,000,000.00 |
STATE BANK OF INDORE |
5; YESHWANT NIWAS ROAD, INDORE, MADHYA PRADESH, INDIA |
- |
|
3 |
90206972 |
09/01/1989 |
10,000,000.00 |
STATE BANK OF INDORE |
5; YESHWANT NIWAS ROAD, INDORE, MADHYA PRADESH, INDIA |
- |
|
4 |
90204446 |
18/09/1978 |
12,500,000.00 |
M. P. ELECTRICITY BOARD |
JABALPUR, JABALPUR, MADHYA PRADESH, INDIA |
- |
|
5 |
90206468 |
06/10/1972 |
7,500,000.00 |
STATE BANK OF INDORE |
44;HAMAM STREET ;
KARIM CHAMBERS, POST BOX NO. 93 |
- |
|
6 |
90204427 |
21/03/1964 |
96,250.00 |
THE CHAIRMAN MADHYA PRADESH |
HOUSING BOARD, BHOPAL, MADHYA PRADESH, INDIA |
- |
|
7 |
90204423 |
18/03/1961 |
165,000.00 |
THE GOVERNOR OF MADHYA PRADESH |
INDORE, INDORE, MADHYA PRADESH, INDIA |
- |
|
8 |
90204419 |
28/03/1960 |
215,800.00 |
THE GOVERNOR OF MADHYA PRADESH |
BHOPAL, BHOPAL, MADHYA PRADESH, INDIA |
- |
CONTINGENT
LIABILITIES
Based on Management’s evaluation following contingent liabilities is not probable and hence not provided by the company in respect of:-
i. Claims against the company not acknowledged as debt is Rs. 8.614 Millions (Previous year Rs 8.614 Millions).
ii. Bank Guarantee outstanding by Rs. 64.625 Millions (Previous year 62.125 Millions) iii. Custom / Excise Duty and Upkar Cess Rs. 7.746 Millions (Previous year Rs. 7.746 Millions).
iv. A demand notice Rs. 3.595 Millions raised on 30.07.1997 by the Krishi Upaj Mandi Samiti, Balaghat towards Mundi Shulk on purchase of Industrial Bamboo from the Balaghat Sector of M.P. Forest Deptt., during the period from 1988-1989 to 1995-1996. Writ petition filed before the High Court chalenging the impugned demand vide Order No. F/5/4/2002/10-3 dated 25.02.2012. Cabinet of Govt of M.P. will consider at later date.
v. Piece rated workers of Sales Godown filed 21 individual cases before labour Court, Khandwa to classify them as regular employees of the Company and Court passed an order on 05.12.1992 to declare them unskilled employees w.e.f. 01.06.1989. Company filed appeals in various forums and 21 writ appeals before High Court, Jabalpur. In addition to above, Representative Union filed a ref. case No. 22/89 before Industrial Court, Indore and court has passed an award dated 10.05.1998. Company filed writ petition No. 898/98 to challenge this award and Court has passed an order on 03.12.2009 to remand this case to Industrial Court Indore. Industrial Court again passed an order dated 19.03.2010 to modify previous order but Company still disputed in other forums. Approximate contingent liability would be Rs. 30.398 Millions.
vi. Company has total 139 Badli Workers. Workers Union has filed a case against NEPA Ltd on behalf of Badli Workers. The Company has also filed an appeal against the said case. The case is still pending with the Hon’ble High Court, Jabalpur. However contingent liability upto 31.03.2014 is 221.472 Millions. Apart from the above cases, three individuals have filed a case against the company related to service matters and the total claim amount is Rs. 9500.200 Millions only.
vii. Some parties have filed writ Petitions challenging the sale of Coal Cinder by Nepa Limited on the ground that whatever Nepa Limited sells would fall under the Government Notification restricting the disposal of fly Ash. Company has filed a reply reciting the stand of petitions saying that whatever Nepa Limited is selling will not come under Govt. Notification because the item sold by them is only Coal Cinder and not the Coal Ash. After hearing the parties, the Hon’ble High Court, Jabalpur vide order dated 19.02.2007 vacated the stay order, which was initially granted on the sale of Coal Cinder with the direction that the Company shall open a separate Account with regard to amount received from the sale of Coal Cinder. The Company filed application before the National Green
Tribunal in MA.NO.113/2013 for withdrawal of money laying in separate account generated sale proceeds of fly ash as defined in the notification. The application came up for hearing on 03.04.2014 before the Tribunal.
After hearing the counsels for both the parties, the Tribunal allowed the application of Nepa Limited permitting the company to withdraw 80% of the generated fund from sale of Dry ESP fly ash since 03.11.2009 till the date of the order that is 03.04.2014 as per para 1 of page 6. The funds have to be utilized in accordance with the stated sub paragraph of 2009 Notification and subject to final decision in the present application namely no. 10/2013, 11/2013, 12/2013, and 13/2013.
“Pending the main Original Applications-the Respondents No.1 (Nepa Ltd.) is permitted to withdraw 80% of the funds generated from the sale of dry ESP Fly Ash since 3rd November, 2009 till today.” In accordance with the said substituted sub paragraph (6) subject to the final decision in the present Application”. Accordingly, the company has deposited amount of Rs. 371.465 Millions till 31.03.2014. Some of FDR’s are kept under lien for obtaining Bank Guarantee for procurement of Coal from SECL, Kolkata.
viii. Liability on Disputed Entry Tax, M.P. Sales Tax on account of penalty/interest and additional tax imposed as per assessment orders for the accounting years 2008-09, 2009-10 and 2010-11 amounting to Rs. 9.773 Millions against which revision/appeal are pending before Commissioner Commercial Tax, Indore and Deputy Commissioner, Commercial Tax, Khandwa.
ix. Liability of Rs. 25.000 Millions towards filing fees of Form No. 5 for notice to Registrar of Companies for increase in authorized share capital of the company from Rs. 1250.000 Millions to Rs. 5850.000 Millions. The company has initiated correspondence with ROC for waiver of such fees but the matter is still pending to be executed.
x. Liability of Rs. 1.800 Millions towards Maintenance and Salaries for Level Crossing of Nepanagar at KMs 176A/523/25-27 for the F.Y. 2013-14. As per last year, Audit Para raised by the CAG, company is not liable for the said amount because the said level crossing is also being used by the local public. Hence, the amount has not been provided in the books.
xi. Estimated liability of Rs. 9.100 Millions against various service matter related cases as filed against the Company and pending before various forums.
xii. Nagar Palika Parishad, Nepanagar vide its letter No. RA/VI/5.kar/200/1083 dated 15.11.2001 has demanded / claimed Property Tax under the provisions of MP Nagar Palika Adhiniyam, 1961, amount of Rs. 21.374 Millions against Property Tax and Rs. 1.336 Millions for the delay in payment has been worked out on this account as on 31st March 2014. The same has not been acknowledged by the company, vide order no. 5/4/2002/10-3 dated 25.02.2012 cabinet of Govt. of M.P. has accorded in principal approval for providing waiver of above amount later on.
xiii. Appeals against following income-tax demands for Assessment Years 2009-10 and 2010-11 have been filed with the Commissioner of Income-Tax (Appeals), Indore on completion of assessments:
|
Sr. No. |
Assessment Year |
Rs. In Millions |
|
1 |
2009-2010 |
61.469 |
|
2 |
2010-2011 |
2.405 |
|
|
Total |
63.874 |
FIXED ASSETS
v Land
v Buildings
v Plant and Equipment
v Furniture and Fixtures
v Vehicles
v Bridges roads ports culverts
v Railway Sidings
v Books Periodicals
v Water Works
v Tools and Equipments
PRESS RELEASES
The Company is a sick unit and under Board for Industrial and Financial Reconstruction (BIFR) since May, 1998. On 23 August 2007, Cabinet approved revival of Nepa through a Joint Venture Partner in private sector by disinvestment of Government of India’s equity, preferably to the extent of 74% or 100% and introduction of Nepa Limited (Disinvestment of Ownership) Bill 2007 in the Parliament. The Bill was referred to Department related Parliamentary Standing Committee (DRPSC) for detailed examination. The Committee opined that sincere efforts should be made by the Government to revive NEPA Limited. “The Nepa Limited (Disinvestment of Ownership) Bill 2007” lapsed due to dissolution of parliament.
In a bid to revive the company, the Department prepared a revival plan, which was appraised and approved by the BRPSE. Accordingly, it is proposed to revive Nepa Limited through financial restructuring and fresh fund infusion. The estimated expenditure on Revival of Nepa Limited has been assessed at Rs. 3621.800 Millions (GoI – Rs. 2341.800 Millions and borrowing from Bank/FI –Rs. 1280.000 Millions). In addition, non-fund based assistance of Rs. 9301.400 Millions through waiver/conversion of GoI/GoMP loan/interest etc. The Cabinet Note is being finalized incorporating the comments of other concerned Ministries/Departments.
Apart from above, the Ministry is giving continuous support to the company in the form of salary/wages and statutory dues to its employees. The Ministry has provided Rs. 279.600 Millions to the company during 2011-12. Due to continuous support in the form of loan for up-gradation, the Company achieved highest ever turnover in its history during 2011-12.
REVIVAL OF M/S. NEPA
LIMITED
The Union Cabinet gave its approval for revival of NEPA Limited through infusion of funds of Rs. 2341.800 Millions, waiver/conversion of Rs. 5995.900 Millions and reduction of equity share capital to the tune of Rs. 2663.600 Millions. The Cabinet also gave its approval for 1997 pay scales to the employees, enhancement in the superannuation age of employees from existing 58 years to 60 years, recruitment of Director (Finance), implementation of VRS and continuation of the present CMD till 30.11.2015 on attaining the age of 65 years.
The revival plan consists of (i) product diversification by producing 46800
Tonnes Per Annum (TPA) of writing and printing paper and 36200 TPA of Newsprint
with increased brightness of 57-60 degree instead of existing 38-42 degree by
installing de-inking Plant and (ii) replacement of old 17 MW unit (established
in 1949) which is producing only 2MW, with new 8 MW unit and upgradation of
another 12.27 MW unit commissioned in 1989. With the implementation of the
revival package, the Company will start making profit on sustained basis from
the second year and its dependence on Government of India for financial
assistance for disbursement of salary and wages and statutory dues to employees
shall cease and it will come out of the purview of BIFR. This will ensure
security of the future of not only the employees of the company but also the
people living around the mill as the company is providing many facilities like
drinking water, street light, maintenance of road, local market etc.
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.62.16 |
|
|
1 |
Rs.94.28 |
|
Euro |
1 |
Rs.73.73 |
INFORMATION DETAILS
|
Analysis Done by
: |
SUB |
|
|
|
|
Report Prepared
by : |
KVT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
3 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
2 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
3 |
|
--PROFITABILITY |
1~10 |
-- |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
-- |
|
--CREDIT LINES |
1~10 |
-- |
|
--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 |
NO |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
18 |
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.