MIRA
INFORM REPORT
|
Report Date : |
03.12.2008 |
IDENTIFICATION
DETAILS
|
Name : |
GRASIM INDUSTRIES LIMITED |
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Formerly Known As : |
GWALIOR RAYON SILK (WEAVING) COMPANY LIMITED |
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Registered Office : |
P. O. Birlagram, Nagda – 456 331, Madhya Pradesh |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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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 : |
Manufacturer of a range of Inorganic Industrial Chemicals. |
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 400000000 |
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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, Madhya Pradesh, India |
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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 : |
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Corporate Office : |
91, Sakhar Bhavan, 230, Nariman Point, Mumbai – 400 021, Maharashtra |
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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, Dr. A B
Road, Worli, Mumbai – 400030 |
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Tel. No.: |
91-22-24210182-86 |
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Fax No.: |
91-22-24220892 |
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Factory : |
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, Gujarat 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, Kozhikode, Mavoor – 673 661, Kerala 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 Raipur, Madhya Pradesh Tel. No. 91-7726-288217/20 Fax No. 91-7726-288215/288209
Rajashree Cement
Aditya Nagar, Malkhed Road, Gulbarga – 582 292, Karnataka 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 Jodhpur, Kharia Khangar – 342 606, Rajasthan 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, Maharashtra 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
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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) |
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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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Mr. S K Saboo |
Advisor,
Chairman’s Office |
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Cement Divisions:- |
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Mr. Saurabh Misra |
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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Mr. Anil Kumar Pillai |
Executive
President and Unit Head, Rajshree Cement |
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Mr. S Natarajan |
Joint Executive
President and Unit Head Grasim Cement (South) |
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Mr. M M Tiwari |
Joint Executive
President and Unit Head Grasim Cement (Rawan) |
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Mr. Sanjay Agrawal |
Joint Executive
President and Unit Head Grasim Cement (Kotputli and Panipat) |
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Mr. Jagat Singh Rathee |
Joint Executive
President and Unit Head 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 |
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Vikram Ispat |
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Mr. S N Jajoo |
Senior Executive President |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.03.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Individuals |
133372 |
0.16 |
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Bodies Corporate |
22955788 |
28.32 |
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Institutions |
|
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Mutual Funds /AXIS |
7992922 |
9.86 |
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Financial Institutions/Banks |
230935 |
0.28 |
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Insurance Companies |
10530026 |
12.99 |
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Foreign Institutional Investors |
20380173 |
25.14 |
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Non Institutions |
|
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Bodies Corporate |
4090507 |
5.05 |
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Individuals |
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[i] individual shareholders holding nominal share capital upto Rs. 0.100 Millions |
10033593 |
12.38 |
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[ii] Individual shareholders holding nominal share capital in excess of Rs. 0.100 Millions |
1264711 |
1.56 |
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Any other – Overseas Body Corporate |
2623063 |
3.24 |
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Any Other – Non Resident Indian [NRIs] |
820204 |
1.01 |
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Shares held by custodians and against which depository receipts have been issued |
10618934 |
0.00 |
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Total |
91674228 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of a range of Inorganic Industrial Chemicals. |
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Products: |
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PRODUCTION STATUS
As on 31.03.2008
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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 |
|
393500 |
33975 |
279901 |
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2. Sulphuric Acid (Captive and Intermediate Product) |
Tonnes |
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· · At Nagda, Mavoor, Harihar and Kharach |
|
396070 |
222295 |
231216 |
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3. Carbon-di-Sulphide (Captive and Intermediate Products) |
Tonnes |
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· · At Nagda, Mavoor, Harihar and Kharach |
|
78865 |
52610 |
50109 |
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4. Rayon Grade Pulp (At Mavoor and Harihar) |
Tonnes |
72000 |
70000 |
73648 |
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5. Rayon Grade Caustic Soda |
Tonnes |
258000 |
258000 |
188537 |
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6. Stable Beaching Powder |
Tonnes |
45000 |
15000 |
21583 |
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7. Man-Made Fibre Fabrics (At Gwalior and Bhiwani) |
Mtr. (in 000’s) |
600 Looms |
146 Looms |
8413 |
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8. Man-Made Fibre Yarn (At Bhiwani and Malapur) |
KG. (in 000’S) |
25000 Spindles |
8832 Spindles |
5382 |
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9. Cement (At Jawad, Raipur, Shambhupura, Malkhed and Reddipalayam) |
Tonnes |
19654290 |
16750000 |
15363809 |
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· · White Cement (At Khariakhangar) |
Tonnes |
475000 |
475000 |
407882 |
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11. Industrial Machinery |
Tonnes |
25000 |
15950 |
## |
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12. Poly Aluminium Chloride |
Tonnes |
66000 |
36000 |
31405 |
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13. Chloro Sulphonic Acid |
Tonnes |
49500 |
16500 |
17713 |
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14. Sponge Iron |
Tonnes |
2500000 |
900000 |
562000 |
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 India, Bahrain v EXIM Bank, USA v Hongkong Bank, London v IDBI v ICICI v Mashreq Bank, Dubai v Standard Chartered Grindlays Bank, Dubai v British Bank of Middle East, Dubai |
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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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Statutory Auditors |
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Name : |
G P Kapadia and Company Chartered Accountant |
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Address : |
Mumbai |
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Branch Auditors |
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Name: |
Deloitte Haskins and Sells Chartered Accountant |
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Address: |
Mumbai |
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Name: |
Vidyarthi and Sons Chartered Accountant |
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Address: |
Gwalior |
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Solicitors: |
· Mulla and Mulla and Craigie, Blunt and Care · Amarchan and Mangaldas and Suresh A Shroff and Company |
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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, Canada v
TANFAC Industries Limited,
(ceased to be a joint venture w.e.f. 3rd February, 2006) v A V Nackawic Inc., Canada, (became a joint venture w.e.f. 4th October, 2005) 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
As on 31.03.2008
Authorized Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
95,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 950.000 Millions |
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Redeemable
Cumulative Preference Shares |
Rs. 100/- each |
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|
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: |
|
|
|
15257 |
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 Million |
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Total |
|
Rs. 916.900 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
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 |
|
|
3] Reserves & Surplus |
80441.200 |
61383.500 |
48903.900 |
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4] Employee Stock Option Outstanding |
49.000 |
0.000 |
0.000 |
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5] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
81407.100 |
62300.400 |
49820.800 |
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LOAN FUNDS |
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|
|
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|
1] Secured Loans |
23504.000 |
22910.000 |
13310.800 |
|
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2] Unsecured Loans |
8514.700 |
6605.600 |
5862.700 |
|
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3] Docu. Bills Disc. With Banks |
0.000 |
0.000 |
623.200 |
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TOTAL BORROWING
|
32018.700 |
29515.600 |
19796.700 |
|
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DEFERRED TAX LIABILITIES |
6068.700 |
5825.500 |
5843.800 |
|
|
|
|
|
|
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TOTAL
|
119494.500 |
97641.500 |
75461.300 |
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APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
40235.100 |
33904.400 |
30046.300 |
|
Capital work-in-progress
|
30263.100 |
11923.500 |
2936.400 |
|
|
|
|
|
|
|
INVESTMENT
|
40807.900 |
42747.000 |
34817.100 |
|
FIXED ASSETS HELD FOR DISPOSAL
|
41.400 |
143.300 |
127.600 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS &
ADVANCES
|
|
|
|
|
|
|
Inventories
|
9784.400
|
8241.400
|
7507.300
|
|
|
Sundry Debtors
|
7119.800
|
5764.800
|
4134.500
|
|
|
Cash & Bank Balances
|
1274.700
|
1163.800
|
1555.800
|
|
|
Loans & Advances
|
11404.900
|
8246.900
|
7055.400
|
|
|
Interest accrued on Investment
|
7.000
|
7.000
|
14.600
|
Total Current Assets
|
29590.800
|
23423.900
|
20267.600
|
|
Less :
CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
16041.700
|
12668.600
|
9691.500
|
|
|
Provisions
|
5402.100
|
1832.000
|
3042.200
|
Total Current Liabilities
|
21443.800
|
14500.600
|
12733.700
|
|
Net Current Assets
|
8147.000
|
8923.300
|
7533.900
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
TOTAL
|
119494.500 |
97641.500 |
75461.300 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
||
Sales Turnover
|
102150.500 |
86035.900 |
66526.100 |
||
Other Income
|
3778.400 |
2653.200 |
1764.600 |
||
Total Income
|
105928.900 |
88689.100 |
68290.700 |
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|
|
|
|
|
||
Profit/ (Loss) Before Tax
|
30099.000 |
22263.600 |
12060.300 |
||
Provision for Taxation
|
7773.000 |
6905.500 |
3428.200 |
||
Profit/ (Loss) After Tax
|
22326.000 |
15358.100 |
8632.100 |
||
|
|
|
|
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Earnings in Foreign
Currency:
|
|
|
|
||
|
|
Export of
Goods-On FOB basis |
3778.100 |
2729.000 |
1941.500 |
|
|
|
Technical Know-how and Service
charges
|
3.800
|
4.400
|
3.600 |
|
|
|
Interest and Dividend
|
85.800
|
72.700
|
56.800 |
|
|
|
Others
|
0.900
|
0.700
|
1.100 |
|
|
Total Earnings |
3868.600 |
2806.800 |
2003.000 |
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Expenditures:
|
|
|
|
||
|
|
Raw Materials Consumed
|
28289.300
|
22193.200
|
18226.900 |
|
|
|
Manufacturing Expenses
|
21968.500
|
17443.300
|
15803.400 |
|
|
|
Purchases of Finished goods and Other
Products
|
974.000
|
3211.600
|
2401.500 |
|
|
|
Increase of decrease of Stock
|
[1302.200]
|
0.000
|
0.000 |
|
|
|
Payment to and Provisions for
Employees
|
5500.700
|
4594.000
|
4076.400 |
|
|
|
Selling, Distribution, Administration
and Other Expenses
|
17017.300
|
15056.900
|
11813.300 |
|
|
|
Interest
|
1070.000
|
1118.400
|
1033.800 |
|
|
|
Depreciation
|
3532.700
|
3179.100
|
2916.400 |
|
|
|
Surplus on pre-payment of sales
tax loan
|
0.000
|
0.000
|
(41.300) |
|
|
|
Write back of provision for
diminution
|
[456.800]
|
(371.000)
|
0.000 |
|
|
|
Self Consumption
|
[763.600]
|
0.000
|
0.000 |
|
|
|
75829.900 |
66425.500 |
56230.400 |
||
|
|
|
|
|
|
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 1st
Quarter |
30.09.2008 2nd
Quarter |
|
Sales Turnover |
|
25923.300 |
27005.300 |
|
Other Income |
|
822.400 |
843.800 |
|
Total Income |
|
26745.700 |
27849.100 |
|
Total Expenditure |
|
18403.100 |
21061.100 |
|
Operating Profit |
|
8342.600 |
6788.000 |
|
Interest |
|
304.600 |
288.200 |
|
Gross Profit |
|
8038.000 |
6499.800 |
|
Depreciation |
|
1050.000 |
1068.600 |
|
Tax |
|
1318.700 |
730.600 |
|
Reported PAT |
|
5141.900 |
4195.000 |
200806 Quarter 1 --------------- Notes Status of Investor Complaints for
the quarter ended June 30, 2008 Complaints Pending at the beginning of the
quarter Nil Complaints Received during the quarter 05 Complaints disposed off
during the quarter 05 Complaints unresolved at the end of the quarter Nil 1.
Consolidated Results have been prepared in accordance with Accounting Standard
on Consolidated Financial Statements (AS-21), Accounting Standard on Accounting
for Investments in Associates (AS- 23), and Accounting Standard on Financial
Reporting of Interest in Joint Ventures (AS-27) issued by the Institute of
Chartered Accountants of India (ICAI). 2. Segments have been identified in line
with the Accounting Standard on Segment Reporting (AS-17), taking into account
the organisational structure as well as differential risks and return of these
segments. Details of products included in each of the above segments are as
under : Fibre and Pulp - Viscose Staple Fibre and Wood Pulp Cement - Grey and
White Cement Sponge Iron - Sponge Iron Chemicals - Caustic Soda and Allied
Chemicals Textiles - Fabric and Yarn Others - Mainly Telecom (in consolidated
results) 3. During the quarter the board has decided to transfer companys
sponge iron business as a going concern by way of slump sale to its subsidiary,
Vikram Sponge Iron Ltd (VSIL) incorporated during the quarter, for a
consideration of Rs 10300 million under a Scheme of Arrangement u/s 391-394 of
the Companies Act 1956 (the scheme). The said sale is subject to various approvals
of the companys shareholders, creditors and that of the Hon¦ble High Court of
Madhya Pradesh. With implementation of the scheme for sale/transfer of sponge
iron business, Welspun Power and Steel Ltd,(Welspun), a company who has agreed
to acquire VSIL, will invest funds in VSIL by way of equity and debts, which
will be utilised towards payment of sale consideration. 4. a. The standalone
financial results of the company for three months ended June 30, 2008 do not
include the financial results of the erstwhile Textile Units at Bhiwani, as the
same have been transferred to Grasim Bhiwani Textiles Ltd. (GBTL), a subsidiary
of the Company; w.e.f. October 01, 2007. The impact of the same is not material
on the Companys standalone financial results for three months ended June 30,
2008. 4. b. The financial results of GBTL for three months ended June 30, 2008
are included in the consolidated financial results of the company for the said
period of three months. 5. The consolidated results of the company for three
months ended June 30, 2008 do not include the financial results of Shree
Digvijay Cement Company Ltd (SDCCL) as it ceased to be a subsidiary of the
company w.e.f. March 25, 2008. The net profit (after minority share) of SDCCL
included in the companys consolidated net profit for the three months ended
June 30, 2007 was Rs 80.900 million. 6. During the quarter, the company has
revised estimated useful life of some of the assets, on account of which
depreciation is higher by Rs 90.000 million for three months ended June 30,
2008. 7. Previous periods figures have been regrouped / rearranged wherever
necessary to conform to the current periods classification. 8. The above
Unaudited results for the quarter ended June 30, 2008 have been reviewed by the
Audit Committee of the Board and approved by the Board of Directors at the
meeting held on July 25, 2008. The limited review, as required under Clause 41
of Listing Agreement has been completed by the auditors of the Company and the
related report is being submitted the concerned Stock Exchanges.
200809 Quarter 2 --------------- Notes Status of Investor Complaints for
the quarter ended September 30, 2008 Complaints Pending at the beginning of the
quarter Nil Complaints Received during the quarter 05 Complaints disposed off
during the quarter 05 Complaints unresolved at the end of the quarter Nil 1.
Consolidated Results have been prepared in accordance with Accounting Standard
on Consolidated Financial Statements (AS-21), Accounting Standard on Accounting
for Investments in Associates (AS-23) and Accounting Standard on Financial
Reporting of Interest in Joint Ventures (AS-27) issued by the Institute of
Chartered Accountants of India (ICAI). 2. Segments have been identified in line
with the Accounting Standard on Segment Reporting (AS-17), taking into account
the organisational structure as well as differential risks and return of these
segments. Details of products included in each of the segments are as under:
Fibre and Pulp - Viscose Staple Fibre and Wood Pulp Cement - Grey and White
Cement Sponge Iron - Sponge Iron Chemicals - Caustic Soda and Allied Chemicals
Textiles - Fabric and Yarn ( Refer note 6(a) and (b) below) Others - Mainly
Telecom (in consolidated results) 3. The matter of implementation of the Scheme
of Arrangement u/s 391 to 394 of the Companies Act, 1956 to transfer Companys
sponge iron business to its subsidiary Vikram Sponge Iron Ltd., as reported in
previous quarter, is progressing. The equity shareholders, secured creditors
(including debenture holders) and the unsecured creditors of the company have
approved the Scheme unanimously at their respective court convened meetings
held on October 13, 2008. Company Petitions have been filed by both the
Companies in the Hon¦ble High Court of Madhya Pradesh, Indore Bench for seeking
its approval for the Scheme. 4. During the Quarter, the Company has started
commercial production of clinker from expansion line at Aditya Cement,
Shambhupura, of cement from grinding unit at Dadri and power from Thermal Power
Plants at Grasim Cement, Raipur and Vikram Cement, Khor. 5. The company has
revised estimated useful life of some of the assets, on account of which
depreciation is higher by Rs 36.60 million for three months ended September 30,
2008 and by Rs 126.600 million for six months ended September 30, 2008. 6. (a)
The standalone financial results of the company for three / six months ended
September 30, 2008 do not include the financial results of the erstwhile
textile units at Bhiwani, as the same have been transferred to Grasim Bhiwani
Textiles Ltd. (GBTL), a subsidiary of the company, w.e.f. October 01, 2007. The
impact of the same is not material on the companys standalone financial results
for three months ended September 30, 2008. (b) The financial results of GBTL
for three / six months ended September 30, 2008 are included in the
consolidated financial results of the Company for the said period of three
months / six months. 7. The consolidated financial results of the company for
three / six months ended September 30, 2008 do not include the financial
results of Shree Digvijay Cement Company Ltd. (SDCCL), as it ceased to be a
subsidiary of the company w.e.f. March 25, 2008. The net profit (after minority
share) of SDCCL included in the companys consolidated net profit for the three
and six months ended September 30, 2007 were Rs 8.100 million and Rs 89.000
million respectively. 8. Previous periods figures have been regrouped /
rearranged wherever necessary to conform to the current periods classification.
9. The above Unaudited results for the quarter ended September 30, 2008 have
been reviewed by the Audit Committee of the Board and approved by the Board of
Directors at the meeting held on October 23, 2008. The limited review, as
required under Clause 41 of Listing Agreement has been completed by the
auditors of the Company and the related report is being submitted to the
concerned Stock Exchanges.
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt Equity Ratio |
0.43 |
0.44 |
0.43 |
|
Long Term Debt
Equity Ratio |
0.35 |
0.37 |
0.36 |
|
Current Ratio |
0.90 |
0.94 |
0.93 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.62 |
1.49 |
1.26 |
|
Inventory |
12.90 |
12.20 |
10.64 |
|
Debtors |
18.05 |
19.41 |
16.26 |
|
Interest Cover
Ratio |
27.83 |
20.91 |
13.39 |
|
Operating Profit
Margin (%) |
28.65 |
27.65 |
20.97 |
|
Profit Before
Interest and Tax Margin (%) |
25.61 |
24.34 |
17.13 |
|
Cash Profit
Margin (%) |
20.28 |
19.30 |
15.18 |
|
Adjusted Net
Profit Margin (%) |
17.24 |
15.98 |
11.35 |
|
Return on Capital
Employed (%) |
29.04 |
28.98 |
19.61 |
|
Return on Net
Worth (%) |
27.93 |
27.42 |
18.56 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
An arm of Aditya Birla Group is aggressively known as the Grasim
Industries Limited. It was incorporated in 25th August 1947, exactly 10 days
after India's independence and it was started as textile manufacturer in the
year 1948. The company ranks among India's largest private sector companies.
The Grasim's businesses comprise Viscose Staple Fibre (VSF), Cement (grey and
white), Sponge Iron, Chemicals and Textiles. VSF and Cement are core business
of the company.
The company started its fabrics Production at Gwalior with imported man-made
rayon in the year 1950. The VSF production of the company was commenced at
Nagda (Madhya Pradesh) in 1954, now the company is world leader in VSF. Grasim
manufactures VSF at its units located at Nagda in Madhya Pradesh, Kharach in
Gujarat and Harihar in Karnataka, with a combined installed capacity of 270,100
tpa. In 1962, incepted Engineering Division for plant and machinery for VSF.
During the year 1963 the company composite the textile mill at Bhiwani
(Haryana). The Rayon production was commenced in the year 1968 at Mavoor, Kerala.
Nagda commenced the country's second largest rayon grade caustic soda unit in
1972 and started production of caustic soda for an important raw material in
VSF production, also the VSF and Pulp plant at Harihar (Karnataka) based on
in-house engineering and know-how. In the year 1977, the company's third rayon
plant was goes into production at Harihar, Karnataka. During 1985, Grasim's
first cement plant goes on stream at Jawad (Madhya Pradesh), which was named
under Vikram Cement and subsequently in the year 1987, the Vikram Cement's
second production line was bespoke and also added its third production line in
1991, since then it has grown to become a cement major. The company's cement
operations today span the length and breadth India, with 11 composite plants, 7
split grinding units, 4 bulk terminals and 20 ready-mix concrete plants and all
units are ISO 9001 for Quality Systems and ISO 14001 for Environment Management
Systems.
Grasim sets up Birla International Marketing Corporation (BIMC), a merchant
exporter during the period of 1992 and in the same year the company issued
Global Depositary Receipt (GDR) for US$ 90 million. The company ventured into
Sponge iron segment, the Vikram Ispat, India's third largest gas-based sponge
iron plant was commissioned at Salav in Alibag, Maharashtra in the year 1993
and Birla Consultancy and Software Services was sets up in the year, to provide
IT consulting services and for software development. In 1994, the company made
second issue of GDRs for US $100 million. During the period of 1995, the Grasim
established its two Greenfield Cement plants namely Grasim Cement at Rawan
(Chattisgarh) and Aditya Cement at Shambhupura (Rajasthan), the Vikram Woollens
Spinning unit at Malanpur (Madhya Pradesh) was sets up in the equivalent year.
The first phase of the company's fourth VSF plant was made to order in 1996 at
Kharach (Gujarat). During the year 1998, Grasim acquired the Atholville Pulp
Mill, the Canada Company; it was the first acquisition in overseas. In the same
year, the company acquired Dharani Cements Limited and Shree Digvijay Cements
Limited Grasim acquired the cement business of Group Company, Indian Rayon and
Industries Limited (IRIL) was transferred to Grasim in a corporate
restructuring exercise. The viscose staple fibre (VSF) and rayon grade pulp
units at Mavoor are closed down owing to lack of raw material in the year
1999.
The Lawson Competency Centre was activated as a division of Birla Consultancy
and Software Services, the software arm of Grasim in the year 2000, followed a
tie up with Lawson Software (USA), among Fortune's top five private software
companies. Under the cement business, the four Ready-Mix Concrete plants
commissioned in the year 2001 with an aggregate capacity of 1 million cubic meters.
The company's consultancy and software services spun off; becomes separate
entity, Birla Technologies Limited in 2001 and Grasim divests its holding in
Birla Technologies to PSI Data Systems. VSF Research and Application Centre was
established in the year 2002 at Kharach in Gujarat. The company divests its
Gwalior textiles unit in the year 2002 and the Textile operations were
consolidated at Bhiwani to manufacture Grasim and Graviera brands.
During the year 2003 Grasim's Chemical Division received the SA 8000
(Social Accountability) and OHSAS 18001 certifications and in 2004, for the
recognition of its social accountability initiatives the Staple Fibre Division
and Engineering and Development Division of Grasim, Nagda received SA 8000:2001
certification from SAI. During the year 2004, the company completed the
implementation process to de-merge the cement business of LandT and made open
offer by Grasim, with the latter acquiring controlling stake in the newly
formed company UltraTech. The company acquired St. Anne Nackawic Pulp Mill,
Canada with Tembec Inc in the year 2005 along with Thai Rayon and PT Indo
Bharat Rayon. Grasim bagged Environmental and Ecological Gold Award by
Greenland Society and Golden Peacock Eco-Innovation Award by IOD in the year 2005.
In the year 2006, Grasim Industries Limited, India; Thai Rayon Public Company
Limited, Thailand and P.T. Indo Bharat Rayon, Indonesia formed a JV with Hubei
Jing Wei Chemical Fibre Company, China, for VSF and also the chlor alkali and
chlorine derivatives businesses of Grasim, Aditya Birla Nuvo and Bihar Caustic
become a single SBU. Received the Greentech Environmental Excellence Award by
Greentech Foundation in 2006. The company awarded the IMC Ramakrishna Bajaj
National Quality Special Award for performance excellence 2007 in the
manufacturing category.
Some facts on the company embrace, Grasim in Aditya Birla
Group is the world's largest producer of VSF, the 11th largest cement producer
in the world and the seventh largest in Asia, Largest merchant producer of
sponge iron, Second largest producer of caustic soda in India and the Grasim
and Graviera range of fabrics signify the 'power of fashion'.
The Company has posted an impressive performance during the
year. Its turnover increased by 21% at Rs.115520.000 Millions. Net Profit
(before Extraordinary items) rose appreciably by 33% at Rs.20480.000 Millions
Cement and VSF businesses continued to be the growth drivers.
The performance of the VSF business has been encouraging. Sales volumes
recorded an increase of 8% at 269,781 tons. Despite the steep rise in input
costs, Operating margins were higher due to realisations being up by 21% at
Rs.103,316 per ton.
The Cement business recorded a good performance. Both Production and Sales
volumes grew by 7% at 15.36 Mn. tons and 15.54 Mn. tons respectively. The share
of blended cement increased from 62% to 68%. Higher volumes and economies of
scale contributed to profitability. However, the sharp hike in fuel cost led to
lower operating margins. The Company continued its efforts to achieve over 100
percent capacity utilisation to meet the growing demand. RMC (Ready Mix
Concrete) volumes expanded by 36%, buoyed by the rapid expansion in RMC
network. The White Cement performance too has been good. Production was higher
by 12% at 407,882 tons, while Sales volumes extended by 8% at 396,295
tons.
The Sponge Iron business posted improved performance. Production at 562,000
tons reflected an increase of 7%. Sales volumes, however, were lower by 2% at
557,187 tons. Realisations expanded by 24% owing to a surge in global scrap
prices. The gains on this account were offset by higher prices of iron ore,
naptha and propane. The non-availability of adequate quantity of natural gas
and its pricing continued to remain an area of concern.
The Chemical business put up a moderate performance. Production of caustic
soda, which was affected in the corresponding year due to the breakdown of a
captive power plant, grew by 38% at 188,537 tons. Sales volumes too moved in
tandem, growing by 36% at 187,356 tons. But for the cost pressure on key inputs
and fall in realisation, its performance would have been better.
COMPANY'S CONSOLIDATED FINANCIAL
RESULTS:
The Company has posted an excellent performance for the year ended 31st March
2008 on the consolidated basis as well. Higher capacity utilisation, improved
sales volumes and realisations drove the enhanced performance. The Company's
consolidated revenue was at Rs.170370.000 Millions, a rise of 20%. Net Profit
(after minority share) rose appreciably by 46% at Rs.28910.000 Millions. The
Company's performance has been driven by its VSF and Cement businesses and its
subsidiaries.
AWARDS
and ACCOLADES:
The Company's pursuit of excellence has earned for it national and
international honours. Some of the significant accolades received during the
year were:
India's Best Managed Company in 2007-08 (Materials Sector) - Award by Business
Today based on a study by Ernst and Young
Forbes Asia's Fabulous 50 Companies - Grasim was adjudged one of the Best of
Asia Pacific's Biggest Listed Companies
Safety Innovation Award by Quality Forum of The Institute of Engineers (India) bestowed
on Staple Fibre Division, Nagda, Madhya Pradesh
IMC Ramkrishna Bajaj National Quality Special Award for Manufacturing
Excellence 2007 conferred upon Grasilene and Pulp Divisions, Harihar,
Karnataka
IMC Ramkrishna Bajaj National Quality Award for Manufacturing Excellence 2007
awarded to Vikram Ispat, Salav, Maharashtra
State Energy Conservation Award - 2007 (Second Prize) and CII Energy Efficient
Unit received by Cement South, Reddipalayam, Tamilnadu
FICCI's Outstanding Achievement of Environmental Sustainability of Business
Award - 2006-07 received by Cement South, Reddipalayam, Tamilnadu.
MANAGEMENT
DISCUSSION and ANALYSIS
OVERVIEW:
The Indian economy recorded yet another year of robust growth, in FY08. The
last three years have proved to be one of the best phases for the economy, with
growth averaging above 9%. During the latter half of the last fiscal, however,
there has been a slowdown in the growth momentum, partly contributed by the
deteriorating global economic environment and uncertainty in global financial
markets. Nevertheless, India is likely to maintain a high level of growth rate,
given the uptrend in the saving and investment rate in the last few years. The
Company has benefited from the strength in the economy. Key businesses of the
Company, Cement and Viscose Staple Fibre, have performed well during the year,
even as they faced the challenge of managing rising input costs as global
commodity prices, viz. pulp, oil, coal, etc. touched new highs.
KEY STRATEGIC DEVELOPMENTS:
Sale of stake in Shree Digvijay Cement
Company Limited (SDCC):
The Company sold its entire equity stake of 53.63% in SDCC to CIMPOR
Inversiones SA at a consideration of Rs.3220.000 Millions. SDCC was acquired in
1998 to gain a presence in the Gujarat market. Subsequently, the Company
acquired a 6 million TPA capacity in Gujarat through its acquisition of
UltraTech Cement in 2004. The divestment of equity stake in SDCC has
been done to rationalize its portfolio of cement plants.
Textile Business:
The Company's Textile units at Bhiwani have been transferred to a subsidiary,
Grasim Bhiwani Textiles Limited w.e.f. 1st October, 2007. The move is aimed at
enabling the new entity to have a more focused approach to the development of
textile business and pursue emerging growth opportunities in the textile
sector.
BUSINESS
PERFORMANCE REVIEW:
Viscose Staple Fibre (VSF):
Performance Review:
FY 08 has been a good year for VSF business with all-round improvement in
production, sales and profitability. A strong global demand for cellulosic
fibres led to higher volumes and significant increase in realisations. On the
input side, the pulp prices continued to rise, albeit at a slower pace. Sulphur
which is a major component of the cost witnessed increase in prices to
unprecedented levels.
Though the year as a whole was good, the last quarter witnessed a reversal of
trend. Several adverse macro economic factors like US recession, strengthening
of Indian rupee, slowdown of yarn exports from India to Turkey, Brazil etc. led
to a drop in the demand for VSF in the last quarter. Coupled with high
inventory levels in the value chain, it led to a drop in VSF prices.
In this rapidly changing environment, the business averaged a production growth
of 13% and realisation increase of 21%. The operating margins grew from 31% to
37% during the year.
Sector Outlook:
The long-term outlook for the VSF business remains positive in line with the
overall textiles outlook. In the short term, both demand and realisations are
expected to remain subdued. Margins may remain under stress and are likely to
see a further decline in the short to medium term due to the impact of
increasing input costs, coupled with softening of VSF prices.
Business
Outlook:
In line with the weak outlook for sector in short term, the VSF business
performance is likely to remain restrained. Profitability may be impacted due
to lower volumes and weak margins.
The expansion project at the Kharach unit was commissioned in March 2008,
taking the total installed capacity of the Company from 270,100 TPA to 333,975
TPA. The Company is in the process of obtaining requisite approvals for
Brownfield expansion at Harihar in Karnatka (31,000 TPA) and Greenfield project
at Vilayat in Gujarat (88,000 TPA).
The Company has been working towards strengthening its captive pulp supply.
Towards this objective, its stake in AV Cell, the Canadian pulp JV, has been
increased from 16% to 45%. Further, the conversion of AV Nackawic facility in
Canada, from paper grade pulp to dissolving grade pulp is underway and is
expected to be completed in Q2FY09.
The division forayed into VSF consumer products by launching wipes under the
brand names KARA and PRIM. These products have been test launched in select
markets and the national roll out is planned in FY 09. The Company's Research
and Application Development Centre at Kharach (Gujarat) continues to nurture
the development of new applications and value added products which in time
would propel the demand for VSF.
Chemicals:
Caustic Soda:
Performance Review:
The Chemical business recorded an improved performance during the year.
Production of caustic soda was at its highest, given the expanded capacity and
normal operations. During the previous year, production was affected due to
water shortage and shut down of a captive power plant for major repairs. Sales
volumes were higher by 36% aided by increased production and higher captive
demand from VSF division. The operating margins improved despite a fall in
realisations and cost pressure on key inputs, aided by lower power cost and
economies of scale.
Sector Outlook:
The high growth anticipated in domestic alumina production will lead to a
healthy demand for caustic soda. Prices are expected to remain range bound as
new capacities get commissioned.
Business Outlook:
With various measures taken for reduction in power consumption and
rationalization of manpower, the business is expected to perform well.
Cement:
GREY CEMENT:
Performance Review:
The Cement business has delivered an encouraging performance. Despite capacity
constraints, sales volume grew from 14.52 million tonnes in FY 07 to 15.54
million tonnes in FY08, a growth of 7%.
While realisations at Rs.3,192 per tonne improved by 11%, the same was
inadequate to meet the impact of sharp rise in energy prices and increase in
other input costs. Average fuel cost soared by 31% due to increase in prices of
imported coal, petcoke and indigenous coal. Operating margins witnessed a
nominal reduction from 33.2% in FY07 to 31.9% in the current year.
The Company successfully transited the 'Birla Plus' brand to 'UltraTech Cement
- The Engineer's Choice' for a common brand identity across the country.
The Ready Mix Concrete (RMC) business expanded its network at a rapid pace
across the country. The number of plants increased from 13 at the start of the
year to 31. Consequently sales volumes grew by 36% at 1.95 million cubic
meters.
The White Cement division has recorded yet another year of good performance
supported by 8% volume growth against the industry growth of 2%. Wall Care
Putty, a value added product, grew by 59%.
UltraTech's performance has been good. Revenues rose by 17% to Rs.56110.000
Millions. Domestic cement sales were higher at 14.25 million tonnes, an
increase of 7%. Exports of cement and clinker were curtailed to meet the
domestic demand and consequently, were lower by 25% from 3.48 million tonnes to
2.61 million tonnes.
RMC business, which was started in FY07 in UltraTech, scaled up impressively
and volumes grew manifold to 0.89 million cubic meter.
Domestic cement realisations increased by 11% at Rs.3,266 per tonne. Export
realisations of cement witnessed an increase of 16%. The gains from better realisations
were offset to a large extent by sharp increase in input cost. As a result,
operating margins expanded nominally from 30.8% to 32.1%. Costs rose largely on
account of rise in raw material and fuel costs.
Profit after Tax grew by 29% crossing the Rs.10000.000 Millions mark for the
first time.
Outlook for Cement Business:
The Cement industry has been growing at a healthy pace. Domestic cement
consumption grew by 9.8% during FY08. Large scale investments have been planned
in infrastructure during the Eleventh five year plan period. The housing demand
will continue to grow with rise in income levels and growing urbanization. The
strong demand from infrastructure and housing sector will drive the cement
demand. Large capacity expansion plans by various sectors in the industry
and incremental demand for commercial space will also contribute to demand
growth.
Energy cost which is the largest component of the cement cost, rose sharply
during FY08 with galloping coal prices in the international market, rising sea
freight and lower availability of linkage coal. Coal availability has become a
concern in India as coal production has not been able to keep pace with the
rising demand. Significant increase in energy prices may have an adverse impact
on margins going forward. New captive thermal power plants and reduced lead
distance, post commissioning of new capacities, may moderate the cost increase
to some extent.
The industry may witness a surplus of supply over demand on account of large
capacity additions planned during the Eleventh Plan period. This is expected to
have an impact on domestic prices in calendar year 2009. However, the strong
momentum in demand would help in absorbing the increased supply in the long
term.
Capex Plan - Cement Business:
Debottlenecking at existing locations led to an increase in the capacity by
2.40 million TPA during the year. A cement grinding unit of 1.3 million TPA at
Panipat in Haryana was also commissioned during the year. The progress on
various projects has been satisfactory. The expansion at Shambhupura plant in
Rajasthan (4.4 million TPA) will be operational in H1FY09. The Kotputli plant
in Rajasthan (4.5 million TPA) is expected to go on stream in Q3FY09.
A thermal power plant of 23 MW was commissioned at Jawad
(M.P.) in March 08. Thermal power plants with capacity of 144 MW are under
construction at various locations to reduce dependence on grid and DG power.
All the power plants are likely to get commissioned in a phased manner in FY09.
Upon commissioning, the total power generation capacity will be 268 MW, which
will meet around 80% of the total power requirement.
RMC network is being expanded rapidly and the number of RMC plants will
increase from 31 at the end of FY08 to 55 by the end of FY09.
A total capex plan of over Rs.5100.000 Millions on capacity expansions, captive
thermal power plants, RMCs, modernisation, infrastructure build up etc. is
under implementation, out of which Rs.2900.000 Millions have already been
spent. The balance amount will be spent over the next two years.
UltraTech has a capex plan of Rs.37000.000 Millions, which includes 4.9 million
TPA project at Tadpatri (Andhra Pradesh), thermal power plants, RMCs,
modernization, etc. Out of this, Rs.21000.000 Millions have already been spent
and the balance amount will be spent over the next two years. The Tadpatri
project is progressing satisfactorily and will be operational in H1FY09.
UltraTech is putting up 225 MW of thermal power plants at different locations.
It is also investing in RMC plants which will increase from 22 at the end of
FY08 to 39 by the end of FY09.
Upon completion of the above capex plan of the Company and
UltraTech, the aggregate cement capacity will stand augmented at 48.8 million
TPA. The aggregate power generation capacity will be 536 MW. The total number
of RMC plants will increase to 94.
Sponge
Iron:
Performance
Review:
The Sponge Iron business continued to face shortage of natural gas leading to
low capacity utilisations. Production increased by 7% with the use of alternate
fuels. Average realisations were higher by 24% given the firm trend in
international scrap prices. The impact of higher realisations was partially
offset by higher cost of iron ore and use of costly alternate fuels.
Sector Outlook
Given the high growth trajectory of the Indian economy, the demand for steel is
expected to remain buoyant. Consequently, sponge iron being an intermediate
product will benefit. Scrap prices are on the rise fuelled by a substantial
increase in finished steel prices in the global markets. As a result, prices of
sponge iron are expected to remain firm.
Business Outlook:
The Dahej-Dabhol pipeline has been commissioned during the year. Adequate gas is
expected to be available as spur pipeline connecting the same to the existing
GAIL pipeline is likely to get commissioned in the first half of FY2009. This
will enable higher capacity utilisation and cost optimisation, though pricing
of gas being uncertain continues to remain a matter of concern.
Grasim Bhiwani Textiles Limited
(GBTL):
During the six months of its operation, GBTL, a subsidiary of the Company,
incurred a loss of Rs.4.7 Crores, due to increase in raw material and power
costs. Depressed export markets further weakened the performance. A thermal
power plant of 8 MW is under construction which will lead to a reduction in
power cost. GBTL is taking various measures to enhance operational efficiency
and better its performance.
Consolidated
Results:
The Consolidated results of the Company include inter alia, the results of its
subsidiaries, UltraTech Cement Limited, UltraTech Ceylinco Private Limited,
Shree Digvijay Cement Company Limited(upto 24th March 08), Grasim Bhiwani
Textiles Limited, share in the joint ventures and associate company. The
Company's consolidated turnover increased by 21% from Rs.140700.000 Millions to
Rs.169740.000 Millions. Operating profit increased by 26% from Rs.2900.000
Milllions to Rs.54220.000 Millions. Net profit including profit from
extraordinary activities was higher by 47% at Rs.28910.000 Millions.
Standalone Results:
Net Turnover:
Net turnover at Rs.102150.000 Millions grew by 19% during
the year, as explained under the Segmental Review and Analysis.
Other Income:
Other income increased by 34% from Rs.2820.000 Millions in FY07 to Rs.3780.000
Millions in FY08 on account of higher treasury and other interest income.
Operating Profit (PBIDT):
PBIDT was at Rs.34250.000 Millions in FY08 as against Rs.26190.000 Millions in
FY07, an increase of 31% as elaborated upon under the Segmental Review and
Analysis.
Interest:
Interest cost reduced by 4% to Rs.1070.000 Millions (net of interest
capitalised) due to repayment of debts (on net basis).
Depreciation:
Depreciation charges increased from Rs.3180.000 Millions in FY07 to
Rs.3530.000 Millions in FY08, an increase of 11%, following a net addition of
Rs.8170.000 Millions to the Gross Block.
Exceptional Items:
The Company has written back provision of Rs.460.000 Million s
towards diminution in value of investments in Shree Digvijay Cement Company
Limited, (SDCC) as the Company sold its stake in SDCC during the year, at a
profit.
Total Tax Expenses:
The total tax increased by 39% on higher profits earned during the year. The
provision for current tax (including fringe benefit tax) was Rs.9520.000
Millions as against Rs.6920.000 Millions ores in FY07. There was a deferred tax
debit of Rs.100.000 Millions as against credit of Rs.20.000 Millions in
FY07.
Net Profit after Total Tax (Before Extra
Ordinary Activities):
Net profit after total tax but before extra ordinary activities rose by 33%,
from Rs.15360.0000 Millions in FY07 to Rs.20480.000 Millions in FY08.
Extra Ordinary Items:
A gain of Rs.1850.000 Milllions was realised from extra ordinary activities, of
which Rs.1800.000 Millions was from sale of stake in Shree Digvijay Cement
Company Limited and Rs.50.000 Millions was from transfer of the Company's
textile units at Bhiwani to its subsidiary, Grasim Bhiwani Textiles
Limited
Net Profit including Extra Ordinary Activities:
Net Profit including Extra Ordinary Activities stepped up by 45%, from
Rs.15360.000 Millions in FY07 to Rs.22330.000 Millions in FY08.
Notes
on Accounts:
|
Particulars |
31.03.2008 Rs. In Millions |
|
1.1 Contingent Liabilities not provided for in respect of : |
|
|
a) Claims not acknowledged as debts (Net of tax Rs. 1829.100 Millions Previous
year Rs. 1905.400 Millions) |
2664.200 |
|
b) Uncalled liability on quoted equity shares |
-- |
|
c) Custom duty which may arise if obligation for exports is not
fulfilled against import of raw materials and machinery (Net of tax Rs. 2.800
Millions, Previous year Rs. 5.900 Millions) |
4.300 |
|
d) Custom duty on import of technical know-how and other services
relating to projects against which Bank Guarantee/Bond of Rs. 53..600
Millions (Previous year Rs. 56.800 Millions) is furnished. |
108.100 |
|
1.2 Letter of Undertaking cum Indemnity, Corporate Guarantee given
to Bank/FI for finance provided to
subsidiary company |
800.000 |
|
2 The Ministry of Textiles, vide its orders dated 30th June, 1997 and
1st July, 1999 has deleted cement from the list of commodities to be packed in Jute
bags under the Jute Packaging (Compulsory use in Packing Commodities) Act 1987. In
view of this, the company does not expect any liability for non-despatch of cement
in Jute bags in respect of earlier years. |
-- |
|
3 Estimated amount of Contracts remaining to be executed on capital
account and no provided (net of Rs. 3608.700 Millions advance paid , Previous
year Rs. 7607.100 Millions). |
9106.900 |
4 Land, Building and Plant and Machinery of some of the Units were
revalued on 1st April, 1974, 1st April, 1980,
1st April, 1982 and 1st April,1985 by approved valuers on the basis of
assessment about the then current value of the similar assets. As a result book
value of such assets was increased by Rs. 1164.000 Millions which had been
transferred to Capital Reserve, out of which unamortised balance is Rs.36.000
Millions.
5 The Company has sold its total holding of 75816681 equity shares
representing 53.63%of issued equity share capital of its subsidiary company,
Shree Digvijay Cement Company Limited(SDCCL) at a price of Rs.42.50 per share
to Cimpor Inversiones S.A.. Accordingly, SDCCL has ceased to be a subsidiary of
the Company w.e.f. 25th March, 2008. Profit on Sale of Shares of SDCCL
amounting to Rs 1802.700 Millions is reported as extra ordinary item in Profit
and Loss account.
6 In terms of Company’s Shareholder’s approval, the Textile Units at
Bhiwani have been transferred w.e.f. 1st October, 2007 to a subsidiary, Grasim
Bhiwani Textiles Limited on a going concern basis as slump sale, at a
consideration of Rs. 831.600 Millions, based on independent valuer’s report.
The financial statements of the Company for the year ended 31st March, 2008 do
not include the figures of the erstwhile Textile Units at Bhiwani for a period
of six months from 1st October, 2007 to 31st March, 2008. Impact of the same is
not material on the Company’s financial statements for the year ended 31st
March, 2008.
7 During the year, the Company has invested Rs. 199.800 Millions for
acquiring 30000 ‘A’ Class equity shares of A V Cell Inc., Canada, a joint
venture of the Company, resulting in increase in the Company’s holding from
16.67% to 25%. 8 Advances recoverable in cash or in kind include: a) Payments
made to / on behalf of Bina Power Supply Company Limited Rs. 93.400 Millions
(Previous Year Rs.93.400 Millions), are intended to be adjusted against the
value of the Equity Shares to be issued in the event of implementation of the
related project after getting all regulatory approvals.
b) Advance to A V Nackawic Inc., Canada Rs 279.100 Millions against
additional equity to be issued. c) Payments made to employees by way of Loans and
Advances in the nature of loan where no interest is cha ged or interest
is charged at a rate less than the rate prescribed in Section 372A of the
Companies Act,1956.
The company is in
trade terms with:-
· Fine Polycolloids Private Limited
· Sankalp Chemical, Mumbai
· VRW Refractories
· Bright Star Industries
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
AS PER WEBSITE
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 – Vikram Ispat, India’s third largest gas-based sponge iron plant, was commissioned. Birla Consultancy and Software Services set up to provide consulting services in the IT area and for software development.
1995 – The company commissioned two Greenfield cement plants – the Grasim Cement at Raipur (Madhya Pradesh) and Aditya Cement at Shambhupura (Rajasthan). The company set up tow new spinning units – Elegant Spinners at Bhiwani (Haryana) and Vikram Woollens at Malanpur (Madhya Pradesh).
1997 – The first phase of company’s fourth VSF plant was commissioned at Kharach (Gujarat).
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, Punjab on December 2001.
2001-02 – Gwalior fabric unit was sold to Melodeon Exports and decided to close the Mavoor plant in Kerala. The company also divested its entire stake in Birla Technologies, a software subsidiary of the company to PSI Data Systems.
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 Gwalior to Melodeon Exports and its Associates. The Gwalior unit, with a block value of Rs 150 millions would be sold for a negative consideration of Rs 150 millions.
PRESS RELEASE
1 October 2008
Cement performance for September 2008
The Aditya Birla Group’s cement production for the period April-September 2008
has moved up by 1.37 per cent at 15.006 Millions mt as against 14.804 Millions
mt during April-September 2007. Dispatches grew by 1.91 per cent at 14.987
Millions mt in April-September 2008 vis-a-vis 14.706 Millions mt in the
corresponding period last year.
Cement production for the month of September 2008 rose by 2.74 per cent
at 2.391 Millions mt. Dispatches are up by 4.12 per cent at 2.393 Millions mt
over September 2007.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration:
No exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration:
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime:
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws:
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards:
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government:
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package:
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report:
No press reports / filings 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. 50.52 |
|
UK Pound |
1 |
Rs. 75.08 |
|
Euro |
1 |
Rs. 63.72 |
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 |
|