MIRA
INFORM REPORT
|
Report Date : |
12.10.2007 |
IDENTIFICATION DETAILS
|
Name : |
GRASIM INDUSTRIES LIMITED |
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Formerly Known As : |
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Registered Office : |
P. O. Birlagram, Nagda – 456 331, Madhya Pradesh |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
25.08.1947 |
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Com. Reg. No.: |
10-410 |
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CIN No.: [Company
Identification No.] |
L17124MP1947PLC000410 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BPLG00117F |
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Legal Form : |
Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing and selling of complete range of plant and machinery for viscose staple fibre, viscose fibre yarn, rayon grade pulp and paper, Sulphuric acid, alum, olieum, carbon-bi-sulphide, caustic soda, chlorine, hydrochloric acid, stable bleaching powder, water treatment plant, chloro-sulphuric acid, mini cement plant on turnkey basis, sodium Sulphate, chlorine derivatives, electrostatic precipitator, baling press and evaporation system. |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 240000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company of Birla Group. Directors are reported as experienced, respectable and resourceful industrialists. Their trade relations are reported as fair. General financial position of the company is satisfactory. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
P. O. Birlagram, Nagda – 456 331, |
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Tel. No.: |
91-7366-246760/62/64/66 |
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Fax No.: |
91-7366-244114/246024 |
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E-Mail : |
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Website : |
http://www.grasim.com, http://www.adityabirla.com |
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Corporate Office : |
91, Sakhar Bhavan, 230, Nariman Point, Mumbai – 400 021, |
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Tel. No.: |
91-22-22819520 |
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Fax No.: |
91-22-22284629 |
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Office: |
Taple Fiber Division, Century Bhavan, 3rd Floor, |
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Tel. No.: |
91-22-24210182-86 |
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Fax No.: |
91-22-24220892 |
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Factory 1 : |
FIBRE,
PULP and CHEMICAL PLANTS
Staple
Fibre Division
Birlagram, Nagda – 456 331, Madhya Pradesh Tel. No. 91-7366-246760-246766 Fax No. 91-7366-244114/246024 Harihar
Polyfibres and Grasilene Division
Harihar, District Haveri, Kumarapatnam – 581 123, Karnataka Tel. No. 91-8373-232637-39 Fax No. 91-8373-232465/232875 Birla
Cellulosic
Birladham, Kharach, Kosamba 394 120, District Bharuch, Tel. No. 91-2629-270001/5 Fax No. 91-2629-270010/270310 Chemical
Division Birlagram 456 331 Nagda, Madhya Pradesh Tel No. : 91-7366 245501 - 03 Fax No. : 91-7366 246767 / 245845 Pulp
and Fibre Divisions
Birlakootam, Tel. No. 91-495-2483161-3 Fax No. 91-495-2483116 CEMENT
PLANTS
Vikram
Cement
District Neemuch, Khor – 458 470, Madhya Pradesh Tel. No. 91-7420-230514/230614 Fax No. 91-7420-235524 Aditya
Cement
Adityapuram Sawa – Shambhupura, District Chittorgarh, Rajasthan – 312 613 Tel. No. 91-1472-22201972/97 Fax No. 91-1472-2220289 Grasim
Cement
Grasim Vihar, Village P. O. Rawan, Tehsil Sigma, District Tel. No. 91-7726-288217/20 Fax No. 91-7726-288215/288209 Rajashree Cement
Aditya Nagar, Tel. No. 91-8441-2687221-24 Fax No. 91-8441-2687225 Grasim
Cement Division – South
Reddipalayam P.O. : Ariyalur, District Perambalur – 621 704, Tamilnadu Tel. No. 91-4329-249240 Fax No. 91-4329-249253 Birla
White
Rajashree Nagar, Bhopalgarh, District Tel. No. 91-2920-26040/89 Fax No. 91-2920-264225
Other
Plants
Bhiwani
Textile Mills/ Elegant Spinners
Birla Colony, Bhiwani – 125 021, Haryana Tel. No. 91-1664-242577 / 243126 Fax No. 91-1664-243717 / 242575 Sponge
Iron Division
Vikram Ispat, Salav, District Raigad – 402 202, Tel. No. 91-2141-260110 / 260119 Fax No. 91-2141-260104 / 260122 Vikram Woolens
GH I to IV, Ghironghi, Malanpur, District Bhind - 477 117, Madhya Pradesh Tel. No. 91-7539-283602 / 283606 Fax No. 91-7539-283339 |
DIRECTORS
|
Name : |
Mr. Kumar Mangalam Birla |
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Designation : |
Chairman |
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Name : |
Mrs. Rajashree Birla |
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Designation : |
Director |
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Name : |
Mr. M. L. Apte |
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Designation : |
Director |
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Name : |
Mr. B. V. Bhargava |
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Designation : |
Director |
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Name : |
Mr. R. C. Bhargava |
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Designation : |
Director |
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Name : |
Mr. Y. P. Gupta |
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Designation : |
Director |
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Name : |
Mr. S. B. Mathur |
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Designation : |
Director |
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Name : |
Mr. Cyril Shroff |
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Designation : |
Director |
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Name : |
Mr. S. G. Subrahmanyan |
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Designation : |
Director |
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Name : |
Mr. D. D. Rathi |
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Designation : |
Director |
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Name : |
Mr Shailendra K. Jain |
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Designation : |
Whole Time Director |
KEY EXECUTIVES
|
Name : |
Mr. Ashok Malu |
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Designation : |
Company Secretary
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Management
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Staple Fibre and Pulp Divisions:- |
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Mr. Shailendra K. Jain |
Business Director
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Mr. S. S. Maru |
Senior Executive
President, Pulp and Grasilene Divisions, Harihar |
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Mr. Thomas Varghese |
Executive
President (Marketing) |
|
Mr. Vijay Kaul |
Senior Executive President,
Birla Cellulosic Division, Kharach |
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Mr. S. V. Kulkarni |
Executive
President, Birla Cellulosic Division, Kharach |
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Cement Divisions:- |
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Mr. Saurabh Mishra |
Business Head |
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Mr. O. P. Puranmalka |
Group Executive President
and Chief Marketing Officer |
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Mr. S. K. Maheshwari |
Senior Executive
President and Chief Manufacturing Officer |
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Mr. L. N. Rawat |
Senior Executive
President – Rajshree Cement |
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Mr. R. M. Gupta |
Senior Executive
President, Grasim Cement |
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Mr. D. R. Dhariwal |
President, Birla
White Cement |
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Mr. H. N. Singh |
Executive
President |
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Mr. D. P. Somani |
Executive
President, Vikram Cement and Aditya Cement |
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Chemical Division:- |
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Mr. G. K. Tulsian |
Executive
President |
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Mr. Sunil Kulwal |
Executive
President |
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Textile Divisions:- |
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Mr. Vikram D. Rao |
Group Executive
President (Textiles) |
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Mr. S. Krishnamoorthy |
Chief Operating
Officer |
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Corporate
Finance Division |
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Mr. D.D. Rathi |
Whole Time Director and CFO |
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Mr. Sanjeev Bafha |
Dy. Chief Financial Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoters and Persons acting in concert |
22,898,164 |
25.00 % |
|
UTI Funds and Mutual Funds |
9,220,691 |
10.10 % |
|
Banks and FIs |
11,129,026 |
12.10 % |
|
FIIs |
19,481,318 |
21.30 % |
|
GDRs |
10,445,215 |
11.40 % |
|
Corporates |
3,011,267 |
3.30 % |
|
NRIs/OCBs |
3,522,473 |
3.80 % |
|
Indian Public |
11,965,500 |
13.00 % |
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Total |
91,673,654 |
100.00 % |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and selling of complete range of plant and machinery for viscose staple fibre, viscose fibre yarn, rayon grade pulp and paper, Sulphuric acid, alum, olieum, carbon-bi-sulphide, caustic soda, chlorine, hydrochloric acid, stable bleaching powder, water treatment plant, chloro-sulphuric acid, mini cement plant on turnkey basis, sodium Sulphate, chlorine derivatives, electrostatic precipitator, baling press and evaporation system. |
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Products: |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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1. Viscose Staple Fibre/Polynosic HWM/Hi-Performance/Speciality Fibre |
Tonnes |
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· At Nagda, Mavoor, Harihar and Kharach |
|
325750 |
270100 |
246833 |
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2. Sulphuric Acid (Captive and Intermediate Product) |
Tonnes |
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· At Nagda, Mavoor, Harihar and Kharach |
|
298070 |
191750 |
213442 |
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3. Carbon-di-Sulphide (Captive and Intermediate Products) |
Tonnes |
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· At Nagda, Mavoor, Harihar and Kharach |
|
67615 |
42915 |
45179 |
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4. Rayon Grade Pulp (At Mavoor and Harihar) |
Tonnes |
72000 |
70000 |
73231 |
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5. Rayon Grade Caustic Soda |
Tonnes |
258000 |
258000 |
136685 |
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6. Stable Beaching Powder |
Tonnes |
45000 |
15000 |
20855 |
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7. Man-Made
Fibre Fabrics (At |
Mtr. (in 000’s) |
600 Looms |
146 Looms |
15179 |
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8. Man-Made Fibre Yarn (At Bhiwani and Malapur) |
KG. (in 000’S) |
117500 Spindles |
44064 Spindles |
8211 |
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9. Cement (At Jawad, |
Tonnes |
18354356 |
13115290 |
14417941 |
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· White Cement (At Khariakhangar) |
Tonnes |
475000 |
475000 |
364649 |
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11. Industrial Machinery |
Tonnes |
25000 |
15950 |
## |
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12. Poly Aluminium Chloride |
Tonnes |
66000 |
36000 |
25621 |
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13. Chloro Sulphonic Acid |
Tonnes |
49500 |
16500 |
14756 |
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14. Sponge Iron |
Tonnes |
90000 |
90000 |
525183 |
GENERAL INFORMATION
|
Suppliers: |
v G K Electrical Services v Harihar Industries v Steive Engineering v Unity Enterprises v G K Enterprises v HY-TTUF Steels Private Limited |
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No. of Employees : |
16648 |
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Bankers : |
v
State Bank of v
EXIM v
Hongkong Bank, v IDBI v ICICI v
Mashreq Bank, v
Standard Chartered Grindlays Bank, v
British Bank of Middle East, |
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Facilities : |
Secured Loans:
Notes:
Unsecured Loans:
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
G. P. Kapadia and Company Chartered Accountants |
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Address : |
Mumbai, |
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Membership: |
v Confederation of Indian Industry |
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Associates: |
v Aditya Birla Science and Technology Company Limited, became associate w.e.f. 28th March, 2006 |
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Subsidiaries |
v Sun God Trading and Investment Limited v Samruddhi Swastik Trading and Investment Limited v Shree Digvijay Cement Company Limited v
UltraTech
Cement Limited v
Narmada
Cement Company Limited v
Dakshin
Cement Limited v UltraTech Ceylinco (Private) Limited v Harish Cement Limited |
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Joint Venture : |
v Birla Tata AT and T Limited v Idea Cellular Limited v
AV Cell Inc, v
TANFAC
Industries Limited, (ceased to be a joint venture w.e.f. 3rd February, 2006) v
A V
Nackawic Inc., v Birla Jingwei Fibres Company Limited (became a joint venture w.e.f. 25.09.2006) v Birla Lao Pulp and Plantation Company Limited (became joint venture w.e.f. 30.06.2006 |
CAPITAL STRUCTURE
Authorized Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
95,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 950.000 millions |
|
|
Redeemable
Cumulative Preference Shares |
Rs. 100/- each |
|
|
150,000 |
15% “A” Series |
|
Rs. 15.000 millions |
|
100,000 |
8.57% “B” Series |
|
Rs. 10.000 millions |
|
300,000 |
9.30% “C” Series |
|
Rs. 30.000 millions |
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TOTAL |
|
Rs. 1005.000 millions |
Issued, Subscribed & Paid-up Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
91673854 |
Equity Shares (Of the above, 29532500 Equity Shares were issued as fully paid up Bonus Shares by way of Capitalization of Share Premium and Reserves and 19359864 Equity Shares of Rs. 10.00 each issued as fully paid up for acquiring the cement business pursuant to Scheme of Arrangement without payment being received in cash |
Rs. 10/- each |
Rs. 916.700 millions |
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Share Capital Suspense: |
|
|
|
15651 |
Equity Shares to
be issued as fully paid up pursuant to acquiring of cement business of Aditya
Birla Nuvo Limited under Scheme of Arrangement without payment being received
in cash |
Rs. 10/- each |
Rs. 0.200 |
|
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Total |
|
Rs. 916.900 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
916.900 |
916.900 |
916.900 |
|
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
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3] Reserves & Surplus |
61383.500 |
48903.900 |
42366.600 |
|
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
62300.400 |
49820.800 |
43283.500 |
|
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LOAN FUNDS |
|
|
|
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|
1] Secured Loans |
22910.000 |
13310.800 |
14725.500 |
|
|
2] Unsecured Loans |
6605.600 |
5862.700 |
5357.900 |
|
|
3] Docu. Bills Disc. With Banks |
0.000 |
623.200 |
0.000 |
|
TOTAL BORROWING
|
29515.600 |
19796.700 |
20083.400 |
|
|
DEFERRED TAX LIABILITIES |
5825.500 |
5843.800 |
0.000 |
|
|
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|
|
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TOTAL
|
97641.500 |
75461.300 |
63366.900 |
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APPLICATION OF FUNDS
|
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|
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|
|
|
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FIXED ASSETS [Net Block]
|
33904.400 |
30046.300 |
30626.000 |
|
Capital work-in-progress
|
11923.500 |
2936.400 |
1459.400 |
|
|
|
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INVESTMENT
|
42747.000 |
34817.100 |
29820.200 |
|
FIXED ASSETS HELD FOR DISPOSAL
|
143.300 |
127.600 |
0.000 |
|
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|
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CURRENT ASSETS, LOANS &
ADVANCES
|
|
|
|
|
|
|
Inventories
|
8241.400
|
7507.300
|
6785.900
|
|
|
Sundry Debtors
|
5764.800
|
4134.500
|
5220.100
|
|
|
Cash & Bank Balances
|
1163.800
|
1555.800
|
867.000
|
|
|
Loans & Advances
|
8246.900
|
7055.400
|
6164.800
|
|
|
Interest accrued on Investment
|
7.000
|
14.600
|
0.000
|
Total Current Assets
|
23423.900
|
20267.600
|
19037.800
|
|
Less :
CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
12668.600
|
9691.500
|
14772.400
|
|
|
Provisions
|
1832.000
|
3042.200
|
2804.100
|
Total Current Liabilities
|
14500.600
|
12733.700
|
17576.500
|
|
Net Current Assets
|
8923.300
|
7533.900
|
1461.300
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
TOTAL
|
97641.500 |
75461.300 |
63366.900 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
||
Sales Turnover
|
86035.900 |
66526.100 |
75464.600 |
||
Other Income
|
2653.200 |
1764.600 |
0.000 |
||
Total Income
|
88689.100 |
68290.700 |
75464.600 |
||
|
|
|
|
|
||
Profit/ (Loss) Before Tax
|
22263.600 |
12060.300 |
13037.100 |
||
Provision for Taxation
|
6905.500 |
3428.200 |
4180.000 |
||
Profit/ (Loss) After Tax
|
15358.100 |
8632.100 |
8857.100 |
||
|
|
|
|
|
||
Earnings in Foreign
Currency:
|
|
|
NA |
||
|
|
Export of
Goods-On FOB basis |
2729.000 |
1941.500 |
NA |
|
|
|
Technical Know-how and Service
charges
|
4.400
|
3.600 |
NA |
|
|
|
Interest and Dividend
|
72.700
|
56.800 |
NA |
|
|
|
Others
|
0.700
|
1.100 |
NA |
|
|
Total Earnings |
2806.800 |
2003.000 |
NA |
||
|
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|
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||
Expenditures:
|
|
|
|
||
|
|
Raw Materials Consumed
|
22193.200
|
18226.900 |
|
|
|
|
Manufacturing Expenses
|
17443.300
|
15803.400 |
|
|
|
|
Purchases of Finished goods and
Other Products
|
3211.600
|
2401.500 |
|
|
|
|
Payment to and Provisions for Employees
|
4594.000
|
4076.400 |
|
|
|
|
Selling, Distribution,
Administration and Other Expenses
|
15056.900
|
11813.300 |
55142.100 |
|
|
|
Interest
|
1118.400
|
1033.800 |
|
|
|
|
Depreciation
|
3179.100
|
2916.400 |
|
|
|
|
Surplus on pre-payment of sales
tax loan
|
0.000
|
(41.300) |
|
|
|
|
Write back of provision for
diminution
|
(371.000)
|
0.000 |
|
|
|
|
66425.500 |
56230.400 |
55142.100 |
||
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2007 (1st
Quarter) |
|
Sales Turnover |
|
|
24447.900 |
|
Other Income |
|
|
677.400 |
|
Total Income |
|
|
25125.300 |
|
Total Expenditure |
|
|
16526.600 |
|
Operating Profit |
|
|
8598.700 |
|
Interest |
|
|
284.700 |
|
Gross Profit |
|
|
8314.000 |
|
Depreciation |
|
|
850.000 |
|
Tax |
|
|
2057.000 |
|
Reported PAT |
|
|
5116.600 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
0.44 |
0.43 |
0.51 |
|
Long Term Debt
Equity Ratio |
0.37 |
0.36 |
0.43 |
|
Current Ratio |
0.94 |
0.93 |
0.86 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.49 |
1.26 |
1.24 |
|
Inventory |
12.20 |
10.64 |
12.66 |
|
Debtors |
19.41 |
16.26 |
14.31 |
|
Interest Cover
Ratio |
20.91 |
13.39 |
10.40 |
|
Operating Profit
Margin (%) |
27.65 |
20.97 |
23.98 |
|
Profit Before
Interest and Tax Margin (%) |
24.34 |
17.13 |
20.03 |
|
Cash Profit
Margin (%) |
19.30 |
15.18 |
16.25 |
|
Adjusted Net
Profit Margin (%) |
15.98 |
11.35 |
12.30 |
|
Return on Capital
Employed (%) |
28.98 |
19.61 |
24.04 |
|
Return on Net
Worth (%) |
27.42 |
18.56 |
22.34 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
The company was incorporated on 25th August, 1947 at Nagda in Madhya Pradesh having Company Registration Number 410.
Grasim Industries, formerly Known as Gwalior Rayon Silk Manufacturing. (Weaving) Company, was incorporated in 1947 and commenced operations in 1950.
The company which commenced operation in 1950 by
manufacturing fabrics using imported rayon (a manmade cellulosic fibre) at
The company’s joint ventures in India are Mangalore Refinery and Petrochemicals, Bihar Caustic and Chemicals, Tanfac Industries, Bina Power Supply Company, Birla AT and T Company, Dharani Cement Company, the companies subsidiary are Kerala Spinners, Sun God Trading and Investments and Samruddhi Swastik Trading and Investment.
The company, a constituent of Aditya Birla group, is one of the most successful diversified companies. It has a presence in VSF, pulp and chemicals (39% of total gross sales in FY 2000-01), cement (39%), sponge iron (8%) and others (8%).
Its joint ventures abroad include viscose staple fibre
plants in
After consolidating its cement business by acquiring the cement operations of Indian Rayon and picking up strategic stakes in Dharani Cements and Shree Digvijay Cement, Grasim has become the third largest producer of cement in the country. The acquisitions have also helped Grasim to improve its geographical profile. The consolidation and the resultant economics of scale, improved logistics and operational synergies have strengthened its position.
In FY 2000-01, the company posted a sharp improvement in its performance. Three major factors have contributed to the sterling performance. Firstly, there was an all round growth by way of heightened production and turnover volumes along with higher realizations. Secondly, there were savings in operating costs resulting from on-going modernization efforts, up-gradation of plants and energy optimization. Thirdly, there was a reduction in financing cost through restructuring of high-cost debt coupled with effective fund management and reduction of debts.
To grow its cement business and to sustain its market share, Grasim has envisaged a capital expenditure of Rs 5300 millions.
MILESTONES
1947 – Company Incorporated
1950 – Commenced Operations
1954 – Company commenced rayon production at Nagda, Madhya Pradesh
1962 – Company incepts an Engineering Division to provide plant and machinery for VSF.
1963 – Company set up its first rayon grade pulp plant at Mavoor (Kerala) – the first of its’ kind plant with rayon grade pulp being made from bamboo and other hardwoods.
Company purchased a composite textile mill at Bhiwani (Haryana)
1968 – Rayon production commenced at Mavoor (Kerala)
1972 – Another pulp plant big production at Harihar (Karnataka) – a completely indigenous plant based on company’s own engineering and know-how.
At Nagda, Madhya Pradesh the company commenced production of rayon grade caustic soda, a major raw material for VSF production, another step towards being self-reliant.
1977 – At Harihar (Karnataka), the company’s third rayon plant was into production.
1985 – Vikram Cement – the company’s cement plant was on stream at Jawad (Madhya Pradesh).
1987 – Vikram Cement’s second production line was commissioned.
1991- A third production line was added at Vikram Cement.
1992 – The company established Birla International Marketing Corporation (BIMC), a Merchant Exporter.
1993 –
1995 – The company commissioned two
1997 – The first phase of company’s fourth VSF plant was
commissioned at Kharach (
1998 – The company acquires Shree Digvijay Cements Limited.
Through a restructuring exercise, the cement business of Group Company, Indian Rayon and Industries was transferred to company.
1999 – The company’s VSF and Rayon Grade Pulp units at Mavoor closed down due to lack of raw materials.
2000 – The Lawson Competency Centre was set up as division of Birla Consultancy and Software Services, the software arm of company, following a tie up with Lawson Competency Centre (U.S.A.), among Fortune’s top five private software companies.
Birla Consultancy and Software Services spun off, became separate entity, Birla Technology Limited.
2001 – The company has commissioned 1.0 millions TPD
grinding unit at Bhatinda,
2001-02 –
In November 2001, Grasim acquired a strategic 10% equity stake in Larsen and Toubro, the second largest player in the cement industry, for Rs 7665 millions. The stake was acquired from Reliance Industries.
On 26th February 2002, the Board of Directors of
the company approved the divesting of its loss making fabric-manufacturing
operations at
Business:
The company is also engaged in consultancy services, technical know-how, basic and detailed engineering and supervision of erection and commissioning.
Generic Names of Principal Products / Services of the Company are:-
|
Item Code No. |
Product Description |
|
550410.00 |
Staple Fibre |
|
252329.01 |
Grey Portland Cement |
|
720310.00 |
Sponge Iron |
The VSF business put up a creditable performance. Amidst intense competition from Polyester industry, they improved realizations by 6%, undeterred by the severe water scarcity arising out of poor monsoons. In fact, company’s plants at Nagda and Harihar had to be shut for 45 days and 75 days respectively. To continue to service customer needs uninterruptedly, the company operated its VSF manufacturing facilities at more than their rated capacities and shored up its inventories. These are now at a comfortable level as the buffer for the current quarter for this fiscal had been built. Expansion of VSF capacity at all its plants was yet another forward looking step taken by the company. With an increase of 31075 MT, the total VSF capacity stands raised to 251850 MT at the end of FY 2004.
The company’s cement business has been the growth driver. Its performance has been notable, recording a growth of 7%, both in production and sales, even as the industry grew by 5%. The share of blended cement in the total cement production rose from 35% to 46%. Despite realizations flat, operating margins were higher. Higher sales volumes and cost optimization measures in operations and logistics led to the improved performance of this business.
The Sponge Iron Business did remarkably well too. Production
and Sales volumes were up by 12% and 11% at 687272 MT and 676921 MT
respectively. Realization surged by 44% to Rs. 9188 per
The chemical business posted an impressive result registering an all round growth of 4% over the previous year. ECU realization was up by 13% over the corresponding year.
Resultant from the measures on operational efficiencies through de-bottlenecking, plant upgradation, energy reduction and modernization processes has resulted in bolstering productivity.
Operational excellence, cost optimization, effective financial management which are at the core of company’s processes, coupled with continuous restructuring had led in no small measure to company’s exemplary results.
The company has technical collaboration with Udhe GmbH,
The company's plants at Nagda, Harihar, Jawad,
The company exports machinery and equipment for viscose
staple fibre, Sulphuric acid, carbon-bi-sulphide and alum plants on turn-key
basis and technical consultancy services to
The company imports special instruments and special metal
sieve from
The company is in trade terms with:-
· Fine Polycolloids Private Limited
· Sankalp Chemical, Mumbai
· VRW Refractories
· Bright Star Industries
The Company has posted an excellent performance for the year under review.
Gross Turnover at Rs.96080.000 millions registered a 26% increase over the corresponding year. Net Profit rose by 78% at Rs.15360.000 millions. The Cement and VSF businesses coupled with cost optimization measures have been the growth drivers.
The performance of the VSF business has been commendable on all operating
parameters. Sales volumes grew by 3% at 250,727 tons. Realizations improved by
16% Rs.85, 729 per ton, which helped offset the steep rise in input costs. The
robust growth in the VSF business is a reflection of the shift in consumer
preference towards cellulosic products. The Cement business posted a not able
performance, propelled by the strong growth in demand and realizations.
Capacity utilization was higher at 118%.
Sales volumes appreciated by 4% at 14.52 Mn. tons. Operating profits were higher, despite the steep rise in fuel and freight costs, on the back of improved realization. The increase in blended cement ratio and better economies of scale also contributed well to the increased profitability.
The White Cement business too performed well. Production and sales volumes rose by 4% and 6% respectively. Realizations rose by 8%.
The Sponge Iron business remained under pressure, largely
due to the inadequate availability of natural gas which restricted capacity
utilization and the sharp increase in the cost of key inputs. While Sales
volumes were up by 19%, average realizations remained flat owing to pressure
from coal based sponge iron segments.
The performance of the Chemical business was subdued due to the break down of a
Captive Power Plant, which remained shutting during the 2nd and 3rd quarters.
Besides, the water shortage during the first quarter also impacted operations.
Both Production and Sales were thus affected. The abnormally low prices of
Chlorine and Hydrochloric acid resulted in lower realizations, again impairing
profitability.
Management Discussion
and Analysis
OVERVIEW:
The Indian economy has been cruising well with GDP growth at 9% plus for
two consecutive years. Strong consumption growth together with buoyancy in
exports as well as an upswing in the investment cycle has helped
Performance
Review:
VSF business has posted a good performance with all round improvement
production, sales and in profitability. A strong demand for cellulosic fibres
coupled with the Company's strategy of increased focus on specialty fibres and
concentrating on emerging textile hubs has driven the performance. Not with
standing the suspension in operations for 48 days on account of water shortage
at Nagda Plant, capacity utilization was higher at 93%, vis-a-vis 90% during
the last year. Sales volumes at 250,725 tonnes grew by 3%. As prices ruled
strong, the average realizations moved up 16% at Rs.85, 729 per tonnes from
Rs.73, 786 per tonnes during the previous year. A change in the product mix
with a higher share of specialty fibre boosted realizations. The increased
realizations helped in offsetting the steep rise in input costs, particularly
pulp. Operating margins rose from 25.9% to 31.0%.
Sector Outlook:
The long-term outlook for the VSF business remains positive. On the demand
front, global VSF consumption has been growing over the past five years, fueled
by an increasing preference for comfort fabrics due to the changing climatic
pattern coupled with rising income levels. The demand for VSF in
Business
Outlook:
The Company enjoys a leadership position in this sector. To leverage on the
growth opportunities, the Company is augmenting capacities at its various
locations. At Kharach (
The captive pulp availability is being strengthened by conversion of the AV
Nackawic facility in
The Company continues with its efforts of positioning specialty VSF like Spun
Dyed Fibre, Modal, Viscose Plus, etc., at the premium end of the fibre market by
leveraging its research facility and forming alliances with end-product
manufacturers. The Company, being the lowest cost producer of quality VSF, is
fully geared to capitalize on the increased demand for the product.
Performance
Review:
The performance of the Chemical business was constrained due to the
breakdown of one of the Captive Power Plants, which remained shutting during
the 2nd and 3rd quarters. Its operations were also affected due to the water
shortage during the first quarter of the year. Both production and sales, as a
result, were impacted. The abnormally low prices of chlorine and hydrochloric
acid resulted in ECU realizations being lower by 6%.
Along with lower volumes, this impacted the margins
adversely. Normalcy in operations was restored only in Q4FY07.
To improve efficiencies, the remaining caustic soda plant based on mercury cell
technology has been converted into the energy efficient membrane cell
technology. The Company increased its caustic soda capacity from 190,800 TPA to
258,000 TPA during the year.
Sector Outlook:
The demand for caustic soda is expected to grow at a healthy rate, buoyed by
the anticipated high growth in domestic Alumina production. However, as new
capacity additions come in, prices are expected to remain subdued due to the
supply pressures.
Business
Outlook:
The Company will continue to focus on a set sweating and improving
efficiencies. With the accrual of the full benefits of expanded capacity, the
Chemical business is expected to do better in the next year.
Performance
Review:
The Cement business posted a good performance. Its capacity utilization was at
110%, driven by healthy demand. Production grew by 4% from 13.83 million tonnes
in FY06 to 14.42 million tonnes in FY07. Sales volumes too rose by 4% at 14.52
million tonnes. Average realizations grew by 40% vis-a-vis the low level of
last year.
However, the gains from higher price levels were partially offset by the steep rise in fuel and freight costs. Road freight cost increased considerably with higher petroleum prices and restrictions on loading.
Higher prices of imported coal and petcoke together with purchase of indigenous coal from the open market led to the rise in fuel cost.
Operating margins expanded to 33.2% with higher realizations, increase blended cement production and better economies of scale.
The Company has been aggressively marketing value-added products in its White
Cement business. Revenues increased by 30% with higher contribution from
value-added products and better realizations. Sales volumes were higher by 6%
as against the industry growth of 4%.
The Ready Mix Concrete (RMC) business has been growing at a fast pace year
after year. RMC sales volumes were higher by 23% at 14.2 lac cubic meters as
compared to 11.6 lac cubic meters in the previous year.
Performance of Cement
Subsidiaries:
The Company's subsidiaries, UltraTech Cement Limited and Shree Digvijay Cement Company Limited (SDCCL), together account for 58% of the total consolidated cement capacity of 31 million TPA.
The performance of UltraTech was impressive as well. Effective capacity utilization increased from 88% to 101%, with improvement across al units.
Aggregate sales volumes grew by 14%. Cement sales were higher
by 7% at 14.6* million tonnes. With export prices ruling firm in the
Domestic cement realizations at Rs.2, 934 per tonnes increased by 39% from the
depressed level in the last year. Export realizations of cement at Rs.2, 871
per tonnes grew by 16%. Despite rising freight charges and cost of imported
coal, operating margins rose from 19.0% to 31.2% supported by improved capacity
utilizations, higher volumes, better realizations and higher share of blended
cement.
Profit after Tax grew from Rs.2251.000 millions in FY06 to Rs.7849.000 millions
in FY07.
SDCCL has registered a steady performance. Despite operations being impaired on account of break down in the first quarter and heavy rains in the second quarter, revenues increased by 19% on the back of higher realizations. The combined cement and clinker volumes were lower by 11% at 0.93 million tonnes due to the disruption in operations. Profit before exceptional items at Rs.533.000 millions was higher by 59%, vis-a-vis Rs.336.000 millions recorded in the previous year.
During the first half, SDCCL completed a Rights issue of 18 shares for every 1 share, at par, amounting to Rs.1342.000 millions. The Company has invested Rs.721.000 millions in the Rights issue.
Outlook for Grey
Cement Business:
The Cement industry has demonstrated a healthy growth of 8.6% in the last five
years. With the Indian economy continuing its growth path, cement consumption
is expected to grow at 9-10%. The increase in industrial investment and
expectations of higher spending on infrastructure portend well for the sector.
The robust demand from residential and commercial construction will continue to
be the major growth drivers.
Capacity additions have been lower than the consumption growth in the last two
years. Consequently, the cement industry increased the capacity utilization
levels to cater to the higher demand. Utilizations are expected to remain at higher
level during FY08. Enthused by the industry performance during the last 15
months, additional capacities of around 90 million tonnes have been announced
by different manufacturers. These capacities, as per such announcements, are
expected to be commissioned over three year period, creating an imbalance in
demand and supply resulting in impact on realization. However, impact be
partially mitigated by increased volumes and improved cost efficiencies.
Capex Plan: The Company's expansion plans at Shambhupura and Kotputli in
Rajasthan are progressing as scheduled. The plants are likely to be
commissioned by Q4FY08 and Q1FY09 respectively. Both the plants will also have
captive thermal power plants. The Company has envisaged a total capital outlay
of Rs.34580.000 millions on capacity expansion, modernization,
de-bottlenecking, setting up of grinding unit at Dadri, RMCs and captive power
plants.
The capex plan of UltraTech, which includes setting up of a4 Mn. TPA project at
Tadpatri (Andhra Pradesh) and captive power plants at different locations, is
also on track. The Tadpatri project is expected to be commissioned by Q4FY08.
UltraTech plans to invest over Rs.25300.000 millions on capacity expansion,
thermal power plants, modernization, RMCs etc.
Upon completion of these expansions, the Company's cement capacity, including
that of its subsidiaries, will go up by 14 million tonnes to 45 million tonnes.
The Company is focusing on timely commissioning of projects and reducing costs
through increase in share of captive power, optimizing logistics and higher
blended cement production.
Performance
Review:
The Sponge Iron business remained under pressure, largely due to the inadequate
availability of natural gas and a sharp increase in the cost of iron ore and
natural gas. Average realizations remained flat owing to pressure from coal
based sponge iron segment. Sales volumes were up by 19% aided by higher
demand.
Sector Outlook:
The sponge iron industry will continue to grow in the near future, given the
promising steel sector outlook. Prices are expected to remain firm with reduced
scrap supply from CIS and higher demand from emerging markets. However, coal
based sponge iron segment will continue to be a threat.
Business Outlook:
The profitability of sponge iron business would continue to be under pressure
due to poor gas availability. The prospects for the business may improve with
adequate gas availability by end CY 2007 as the Dahej-Dabhol pipeline and the
spur pipeline connecting the same to the existing GAIL pipeline are expected to
be commissioned by then. However, pricing of gas is still uncertain and remain
a concern. The Company's thrust would continue to be on optimum utilization of
plant capacity and enhancing volumes.
Performance Review:
The Textile business registered a volume growth of 23% with improvement in
both domestic as well as export segment due to the increased focus on supplies
to Indian and global brands. Operating margins remained subdued owing to
increase in input cost and additional advertisement expenses on brand building.
Business
Outlook:
Modernization of the Company's weaving section has been completed. To reduce
power cost, a thermal power plant of 8 MW is under construction at an outlay of
Rs.400.000 millions. These measures will help in improving profitability.
Fixed Assets
Land
Building
Workers’ Quarters under Government Subsidized
Schemes
Railway Sliding
Plant and Machinery
Ships
Furniture, Fittings and Office Equipments
Vehicles
Intangible assets – Computer Software
Website details attached:
The Emerging Cement Major
Subject is a company of the Aditya Birla Group, ranks among
India's largest private sector companies, with consolidated net revenues of
Rs.141 billion (FY2007).
Starting as a textiles manufacturer in 1948, today subject’s businesses
comprise Viscose Staple Fibre (VSF), Cement, Sponge Iron, Chemicals and
Textiles — in all of which the company holds a dominant position.
In July 2004, subject acquired a majority stake and
management control in UltraTech Cement Limited, the de-merged cement business
of Larsen & Toubro Limited (L&T). One of the largest of its kind, in
the cement sector, this acquisition catapulted the Aditya Birla Group at the
top of the league in
Between Grasim and its subsidiaries, the Group has 11
composite plants, seven split grinding units, four bulk terminals — inclusive
of one in
Viscose staple fibre
The Aditya Birla Group is the world's largest producer of
VSF, commanding a 23 per cent global market share. The company meets
Cement
The Aditya Birla Group is the 11th largest cement producer in
the world and the seventh largest in Asia
Sponge iron
It is the largest merchant producer of sponge iron in
Chemicals
Grasim has
Textiles
Its premium brands, the Grasim and Graviera range of fabrics,
have distinctively positioned themselves as 'the power of fashion'.
All of Grasim's units have earned ISO 9002 and
14001 certifications.
Product quality, innovation and eco-friendliness are a
hallmark of all the company's divisions.
Capacities
|
Division |
Capacity |
|
|
Viscose Staple Fibre (VSF) |
2,66,450 tpa |
|
|
Grey cement |
|
|
|
i |
Grasim Industries |
13.12 million tpa |
|
ii |
Shree Digvijay Cement |
1.08 million tpa |
|
White cement |
475,000 tpa |
|
|
Sponge iron |
900,000 tpa |
|
|
Chemicals |
190,800 tpa |
|
|
Textiles |
18.0 million metres a year |
|
PRESS RELEASE:
10th October 2007
Cement performance for September 2007
The Aditya Birla Group's cement production for the period April-September 2007 has moved up by 6.52 per cent at 151.86 lakh mt as against 142.57 lakh mt during April-September 2006. Dispatches grew by 6.02 per cent at 150.83 lakh mt in April-September 2007 vis-a-vis 142.27 lakh mt in the corresponding period last year.
Cement production for the month of September 2007 rose by 2.42 per cent at 23.84 lakh mt while dispatches moved up by 1.59 per cent at 23.51 lakh mt in September 2007.
Grasim, The Aditya Birla Group’s Flagship
Company - Reports Excellent Performance for FY 2005
Net Profit after Tax (Before Diminution) at
Rs. 9780 MILLIONS, Up by 26%, Proposes 160% Dividend
Mumbai,
Grasim, the flagship Company
of the Aditya Birla Group, has posted commendable performance for the financial
year ended 31st March 2005. Capacity utilization, strengthening of operational
efficiencies and marketing of higher volumes of an enriched product mix have
been key to this outstanding success.
The Company has attained an all round growth, with higher production, sales
volumes and realizations in all of its major businesses. While Turnover was up
by 19% at Rs.62470 millions, Profit before taxes and diminution was
higher by 30% at Rs.13960 millions. Notwithstanding a considerably higher
provision for tax expense, Net Profit (before considering diminution in value
of investment/loans) rose appreciably by 26% to Rs.9780 millions.
As a matter of prudence, the Company has provided for a sum of Rs.920 millions
towards permanent diminution in the value of investment/ loans to its
subsidiary, Shree Digvijay Cement Co. Limited PAT, even after this charge for
diminution, has risen by 14%.
The Company has posted impressive performance. Turnover at Rs.7,
6070 millions mirrors a 6% increase over the corresponding year. Net Profit was
lower at Rs.8630 millions, constrained by the Company's Sponge Iron business,
which was constricted by the phenomenal rise in input costs and non-availability
of natural gas. The commendable performance of the Cement business, cost
optimization measures and substantially reduced interest costs helped mitigate
the impact on profits to a great extent.
The VSF business' performance has been good. Despite the record global cotton
crop for the second consecutive year and disturbances in European markets
post-quota abolition, the business recorded its highest ever sales volumes of
242,399 tons. This was made possible due to a healthy domestic demand and higher
VSF exports to South Asian countries. The Company took a conscious decision to
scale down its production with a view to reducing inventory levels. As a
result, production was lower by 8% at 228,981 tons. Realizations were lower at
Rs.73, 786 per ton, reflecting the lower prices of cotton and VSF
globally.
The Cement business posted an excellent performance. Higher capacity
utilization increased sales volumes and better realizations translated into
improvement in operating margins and increased profitability. Production at
13.83 Mn. tons and sales volumes at 13.99 Mn. tons were higher by 11% over the
corresponding year. Realizations grew reflecting better pricing environment.
Reduced power consumption, increase in blended cement ratio and better economies
of scale contributed in no small measure.
The White Cement business too performed exceedingly well. Production and sales
volumes rose by 11% and 12% respectively. Realizations increased by 7%.
Sponge Iron business remained under severe pressure during the year. Production
was limited due to non- availability of natural gas. Consequently, sales
volumes declined. Operating margins were squeezed due to a steep increase in
the prices of inputs, viz., natural gas, iron ore and pellets. This impacted the
overall profitability of the Company.
The Chemical business recorded an improvement. Both production and sales were
up by 2%, while realizations amplified by 9% at Rs.20, 594 per ton.
An unrelenting thrust on operational efficiencies through de-bottlenecking,
plant up-gradation, energy reduction and modernization processes has enabled
the Company to sustain its performance.
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 exist on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence does 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. 39.33 |
|
|
1 |
Rs. 79.74 |
|
Euro |
1 |
Rs. 55.74 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
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 |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
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 |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|