MIRA
INFORM REPORT
|
Report Date : |
14.01.2008 |
IDENTIFICATION
DETAILS
|
Name : |
HINDALCO INDUSTRIES
LIMITED |
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|
Registered
Office : |
Foil and Packaging Business, Kalwa Works, Thane
Belapur Road, Near Vitawa Village, Kalwa, Thane-400605, Maharashtra |
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Country : |
India |
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Financials : |
31.03.2007 |
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Date of Incorporation
: |
15.12.1958 |
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Com. Reg. No.: |
11-11238 |
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CIN No.: [Company Identification No.] |
L27020MH1958PLCO11238 |
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TAN No.: [Tax Deduction
& Collection Account No.] |
MUMI05707C/MUMH00493D |
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PAN No.: [Permanent Account
No.] |
AAACH1201R |
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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 aluminium metal, rolled products, extruded products, conductor
redraw rods, Aluminium foil, hot and
cold rolled flat steel products and
Generation of electricity. |
RATING &
COMMENTS
|
MIRA’s Rating
: |
Aa |
RATING |
STATUS |
PROPOSED
CREDIT LINE |
|
|
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 |
|
Maximum Credit
Limit : |
USD 490000000 |
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Status : |
Good |
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Payment
Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a part
of Aditya Birla Group, a well-established and reputed company having fine track.
Available information indicates high financial responsibility of the
company. Trade relations are reported
as fair. Payments are always correct and as per commitments. The company can
be considered good for any normal business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered
Office : |
Foil and Packaging Business, Kalwa Works, Thane
Belapur Road, Near Vitawa Village, Kalwa, Thane-400605, Maharashtra, India |
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Tel. No.: |
91-22-25347151 |
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Fax No. : |
91-22-24227586 |
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Email : |
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Head Office : |
Century Bhavan, 3rd
Floor, Dr. Annie Besant Road, Worli, Mumbai – 400 025, Maharashtra, INDIA |
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Tel. No.: |
91-22-2430 8491 /
92 / 93/66626666 |
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Fax No.: |
91-22-2422 7586 /
2436 2516 |
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E-Mail : |
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Website : |
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Principal
office & Works: |
District
Sonbhadra, P. O. Renukoot – 231 217, Mirzapur, Uttar Pradesh, INDIA |
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Tel. No.: |
91-5446-252077-9 |
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Fax No.: |
91-5446-252107 /
252427 |
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E-Mail : |
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Birla Copper
Division: |
P. O. Dahej,
Lakhigam, Dist. Bharuch - 392130, Gujarat |
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Tel. No.: |
91-2641-256004-06/251009 |
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Fax No.: |
91-2641-251002-3 |
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E-Mail : |
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Renusagar Power Division:
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P. O. Renukoot,
District Sonebhadra - 231217, Uttar Pradesh, INDIA |
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Tel. No.: |
91-5446-272501-5 |
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Fax No.: |
91-5446-272382 |
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Foil & Wheels Division:
|
Village Khutli,
Khanvel, Silvassa – 396 230, Union Territory of Dadara & Nagar Haveli,
INDIA |
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Tel. No.: |
91-260-2677021-4 |
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Fax No.: |
91-260-2677025 |
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Export Office: |
9/1, R. N. Mukherjee
Road, Kolkata - 700 001, West Bengal |
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Tel. No.: |
91-33-22480949 /
22200464 |
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Fax No.: |
91-33-22200214 |
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Email: |
DIRECTORS
|
Name : |
Mr. Kumar
Mangalam Birla |
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Designation : |
Chairman |
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|
Name : |
Mr. D.
Bhattacharya |
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Designation : |
Managing Director |
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Name : |
Mr. T. K. Sethi |
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Designation : |
Director |
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Name : |
Mr. C. M. Maniar |
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Designation : |
Director |
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Name : |
Mr. E. B. Desai |
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Designation : |
Director |
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Name : |
Mr. S. S. Kothari |
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Designation : |
Director |
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Name : |
Mr. K. N.
Bhandari |
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Designation : |
Director |
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Name : |
Mr. M. M. Bhagat |
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Designation : |
Director |
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Name : |
Mr. A. K.
Agarwala |
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Designation : |
Whole Time
Director |
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|
Name : |
Mrs. Rajashree
Birla |
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Designation : |
Director |
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Name : |
Mr. N. J. Jhaveri
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. S Talukdar |
|
Designation : |
President (Chief Financial Officer ) |
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|
Name : |
Mr. Anil Malik |
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Designation : |
Company Secretary, Joint President (Company Matters, Taxation &
Treasury) |
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|
Name : |
Mr. R. K.
Kasliwal |
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Designation : |
Executive President (Finance & Commerce), Advisor |
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Name : |
Mr. S. K. Tiwari |
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Designation : |
Chief Officer (Manufacturing) |
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Name : |
Ms. N. Chainani |
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Designation : |
Executive President (Corporate Affairs and Development) |
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Name : |
Mr. S. K. Maudgal |
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Designation : |
Executive President (Marketing) & Chief Executive Officer ( Foil
& Wheel) |
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|
Name : |
Mr. R. P. Shah |
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Designation : |
Joint President (Alumina Plant) |
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|
Name : |
Mr. Ajey
Srivastava |
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Designation : |
Joint President (Operation & Planning) |
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Name : |
Mr. P.K. Panda |
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Designation : |
Joint President (H. R.) |
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|
Name : |
Mr. Ramesh Kumar |
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Designation : |
Senior Vice-president (Marketing-Extrusions) |
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|
Name : |
Mr. A. K.
Karmakar |
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Designation : |
Senior Vice-President (Boiler & Co-generation) |
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Name : |
Mr. R. P. Tiwari |
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Designation : |
Senior Vice-President (Projects) |
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Name : |
Mr. S. N. Sharma |
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Designation : |
Senior Vice –President (Finance & Accounts) |
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Name : |
Mr. S. C. Tandon |
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Designation : |
Senior Vice-President (Port Room Operation) |
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Name : |
Mr. K. K. Patodia |
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Designation : |
Senior Vice- President (Raw Material) |
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Name : |
Mr. O. P. Sharma |
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Designation : |
Vice-President (Alumina Mech. Maintenance) |
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|
Name : |
Mr. R. Haridas
Menon |
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Designation : |
Vice-President (Marketing – Primary Metal) |
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|
Name : |
Mr. I. C. Rao |
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Designation : |
Vice President (Marketing – Rolled Products) |
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|
Name : |
Mr. Sanjeev Goel |
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Designation : |
Vice President (Information Technology) |
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Name : |
Mr. N. K. Zalani |
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Designation : |
Vice President ( Industrial
Engineer) |
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ALUMINIUM
BUSINESS : |
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|
Name : |
Mr. S. K. Maudgal |
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Designation : |
Executive President (Marketing) & Chief Executive Officer ( Foil
& Wheel) |
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|
Name : |
Mr. Shankar Ray |
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Designation : |
Joint President (Chemical and International Trade) |
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Name : |
Mr. S M Bhatia |
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Designation : |
President (Foil and Wheel) |
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Name : |
Mr. S Majumdar |
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Designation : |
Head Operations – Demerged Indal Units |
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Name : |
Mr. Amit Basu |
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Designation : |
Joint President (HR) – Demerged Indal Units |
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RENUKOOT
UNIT : |
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|
Name : |
Mr. Ratan K Shah |
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Designation : |
Chief Officer – Operations |
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Name : |
Mr. R P Shah |
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Designation : |
Chief Manufacturing Officer |
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|
Name : |
Mr. Rahul Mahnot |
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Designation : |
Joint Executive President (F and C) |
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Name : |
Mr. Ajey Srivastava |
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Designation : |
Joint President (Fabrication) |
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Name : |
Mr. J Bhowmik |
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Designation : |
Joint President (Renusagar Power) |
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ADITYA
ALUMINIUM : |
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|
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|
Name : |
Mr. S N Bontha |
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Designation : |
Chief Executive Officer |
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UTKAL
ALUMINA : |
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|
Name : |
Mr. Debasis Roy |
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Designation : |
Joint President (Project) |
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COPPER
BUSINESS : |
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|
Name : |
Mr. P Balakrishnan |
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Designation : |
Executive President |
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Name : |
Mr. P S Ghose |
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Designation : |
Joint Executive President (Projects) |
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Name : |
Mr. J P Paliwal |
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Designation : |
Joint Executive President (Commercial) |
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Name : |
Mr. B M Sharma |
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Designation : |
Joint Executive President (Marketing) |
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|
Name : |
Mr. Sanjay Loyalka |
|
Designation : |
Chief Executive Officer, Aditya Birla Minerals Limited (Copper Mines
Australia) |
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CORPORATE :
|
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|
Name : |
Mr. Kim Freeman |
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Designation : |
COO (Mining) |
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|
Name : |
Mr. Pratik Roy |
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Designation : |
Chief People Officer |
MAJOR SHAREHOLDERS
Code
|
Category of Shareholders
|
No. of shares
|
Percentage of
Holding |
|
(A) |
Shareholding of promoter and promoter
group |
|
|
|
1 |
Indian |
|
|
|
(a) |
Individuals /
Hindu undivided Family |
1291496 |
0.11 |
|
(b) |
Bodies Corporate |
367744845 |
29.97 |
|
(c) |
Trust |
16316130 |
1.33 |
|
|
Total (A) |
385352471 |
31.40 |
|
|
|
|
|
|
(B) |
Public Shareholding |
|
|
|
1 |
Institutions |
|
|
|
(a) |
Mutual funds / UTI |
28030740 |
2.28 |
|
(b) |
Financial Institutions / Banks |
8921636 |
0.73 |
|
(c) |
Central government / State Government(s) |
287480 |
0.02 |
|
(d) |
Insurance Companies |
130850193 |
10.66 |
|
(e) |
Foreign Institutional Investors |
165601100 |
13.49 |
|
|
Sub-Total (B) (1) |
333691149 |
27.19 |
|
|
|
|
|
|
2 |
Non-institutions |
|
|
|
(a) |
Bodies Corporate |
117734588 |
9.59 |
|
(b) |
Individuals |
|
|
|
|
I. Individual
shareholders holding nominal share capital up to Rs. 0.100 million |
162406175 |
13.23 |
|
|
II. Individual
shareholders holding nominal share capital in excess of Rs. 0.100 million |
22833386 |
1.86 |
|
(c) |
Non-resident individuals |
19832881 |
1.62 |
|
|
I. Foreign bodies
corporate |
32726923 |
2.67 |
|
(d) |
Shares in transit |
1505676 |
0.12 |
|
|
Sub-Total (B) (2) |
357039629 |
29.10 |
|
|
|
|
|
|
|
Total Public Shareholding (B) = (B) (1) +
(B) (2) |
690730778 |
56.29 |
|
|
|
|
|
|
(C) |
Shares held by custodians and against
which depository receipts have been issued |
15104693 |
12.31 |
|
|
|
|
|
|
|
GRAND TOTAL (A) + (B) + (C) |
1227130192 |
100.00 |
BUSINESS DETAILS
|
Line of Business
: |
Manufacturing and
selling of aluminium metal, rolled products, extruded products, and conductor
redraw rods, Aluminium foil, hot and cold rolled flat steel products and
Generation of electricity. |
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Products: |
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Exports to : |
Bangladesh, North
America, Europe, Africa, Asia, Korea, Nepal, Singapore, Taiwan and UAE. |
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Imports from : |
Australia,
Belgium, France, Japan, Netherlands, Singapore, Spain, UK and USA. |
PRODUCTION STATUS
Class of goods |
|
Installed Capacity
|
Actual Production
|
|
|
|
Tonnes |
Tonnes |
|
Aluminium Metal |
|
455000 |
429140 |
|
Rolled Products |
|
200000 |
190581 |
|
Extruded Products
|
|
27700 |
32328 |
|
Conductor Redraw
Rods |
|
64400 |
67730 |
|
Aluminium Foil |
|
11000 |
26184 |
|
Aluminium Wheel |
|
300000 Pcs. |
194079 Pcs. |
|
Hydrate &
Alumina |
|
1160000 |
1203383 |
|
Electricity |
|
909.20 MW |
7252 MU |
|
Electricity
(Co-generation) |
|
205.40 MW |
1234 MU |
|
Continuous Cast
Copper Rods (CCR) |
|
97200 |
88687 |
|
Copper Cathodes |
|
500000 |
124012 |
|
Phosphoric Acid |
|
180000 |
-- |
|
Sulphuric Acid |
|
1670000 |
314581 |
|
DAP &
Complexes |
|
400000 |
218199 |
|
Gold |
|
7.5 |
6.715 |
|
Silver |
|
75 |
35.076 |
GENERAL
INFORMATION
|
No. of
Employees : |
12000 |
|
|
|
|
Bankers : |
Ř UCO Bank, Mumbai Ř State Bank of India, Mumbai Ř Allahabad Bank, Mumbai Ř American Express Bank Limited, Mumbai Ř Bank of America, Mumbai Ř Citibank N. A., Mumbai Ř Standard Chartered Grindlays Bank Plc, 19,
N. S. Road, Kolkata, West Bengal
Tel. No. 91-33-22220103 Ř ABN Amro Bank N.V., Mumbai Ř Union Bank of India, Mumbai Ř IDBI Bank Limited, Mumbai Ř Hongkong and Shanghai Banking Corporation
Limited |
|
|
|
|
Banking Relations : |
Good |
|
|
|
|
Auditors : |
˛
Singhi &
Company Chartered Accountants Kolkata, West Bengal Cost Auditors
˛
R Nanabhoy
& Company Cost Accountants Mumbai, Maharashtra, India |
|
|
|
|
Memberships: |
Confederation of
Indian Industry |
|
|
|
|
Collaborator: |
Kaiser Engineering
Corporation, USA. |
|
|
|
|
Joint
Ventures: |
Bihar Caustic and
Tanfac Industries Limited. |
|
|
|
|
Associates : |
Ř Grasim Industries Limited Ř Indian Rayon & Industries Limited Ř Mangalore Refinery & Petrochemicals
Limited Ř Birla Power Supply Company Limited Ř Birla Project Development Company Limited Ř Bihar Caustic & Chemicals Limited Ř Birla Sun-Life Joint Ventures Ř Birla Global Finance Ř Bina Power Supply Company Limited Ř Rosa Power Supply Company Limited Ř HGI Industries Limited Ř Eastern Spinning Mills Limited Ř Shree Digvijay Cement Limited Ř Kerala Spinners Limited Ř Essel Mining Ř Tanfac Industries Limited Ř Birla AT & T Communications Limited Ř Birla Global Finance Limited Ř Birla Maroochydore Pty Limited Ř Birla Minerals Resources Pty Limited Ř Birla Capital International AMC Limited Ř Birla Management Corporation Limited Ř Birla Telecom Limited Ř Rajashree Polyfil Ř Thai Rayon, Thailand Ř Indo Thai Synthetics, Thailand Ř Century Textiles, Thailand Ř Thai Acrylic Fibre, Thailand Ř Thai Carbon Black, Thailand Ř Thai Polyphosphates, Thailand Ř Thai Epoxy, Thailand Ř Thai Peroxide, Thailand Ř Thai Organic Chemicals, Thailand Ř Indo Phil Textile Mills, Philippines Ř P T Indo Bharat Rayon, Indonesia Ř P T Elegant Textile Industry, Indonesia Ř PT Indo Liberty Textiles, Indonesia Ř Pan Century Edible Oils, Malaysia Ř Pan Century Rubber Products, Malaysia Ř Pan Century Oleochemicals, Malaysia Ř Alexandria Carbon Black, Egypt Ř AV Cell Inc., Canada Ř Learning Byte International, USA Ř Grasim - Dubai, UAE Ř LNG Ennore Project Ř Lucknow Finance Company Limited Subsidiaries: Ř Minerals & Minerals Limited Ř Renukeshwar Investments & Finance
Limited Ř Renuka Investments & Finance Limited Ř Indian Aluminium Company Limited Ř Indal Exports Limited Ř Annapurna Foils Limited Ř Dahej Harbour and Infrastructure Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1450000000 |
Equity Shares |
Rs. 1.00 each |
Rs. 1450.000 millions |
|
500000 |
14% Free of Company’s
tax but subject to deduction of taxes at source at the prescribed rates,
Redeemable Cumulative Preference shares |
Rs. 100.00 each |
Rs. 50.000 millions |
|
|
Total |
|
Rs. 1500.000 millions |
Issued, Subscribed Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1043248620 |
Equity Shares |
Rs. 1.00 each |
Rs. 1043.249 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 |
1043.250 |
985.660 |
927.770 |
|
|
2] Reserves &
Surplus |
123137.120 |
95076.860 |
75738.010 |
|
NETWORTH
|
124180.370 |
96062.520 |
76665.780 |
|
|
|
|
|
|
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
64102.030 |
28480.470 |
29523.380 |
|
|
2] Unsecured
Loans |
9583.980 |
20553.910 |
8476.590 |
|
TOTAL
BORROWING
|
73686.010 |
49034.38 |
37999.970 |
|
|
|
|
|
|
|
|
DEFERRED TAX
LIABILITIES |
11258.010 |
12333.590 |
11296.980 |
|
|
|
|
|
|
|
TOTAL
|
209124.390 |
157430.490 |
125962.730 |
|
|
|
|
|
|
|
APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
70067.090 |
67828.000 |
56035.290 |
|
Capital work-in-progress
|
14764.250 |
8329.170 |
13229.810 |
|
|
|
|
|
|
|
INVESTMENT
|
86753.170 |
39713.110 |
37021.450 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
43153.140
|
40950.880
|
23745.180
|
|
|
Sundry Debtors
|
15045.020
|
12484.010
|
7873.670
|
|
|
Cash & Bank Balances
|
6654.960
|
9172.850
|
4009.690
|
|
|
Other Current Assets
|
1188.080
|
2447.340
|
422.220
|
|
|
Loans & Advances
|
11742.200
|
7972.410
|
8713.490
|
Total Current Assets
|
77783.400
|
73027.490
|
44764.250
|
|
Less: CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
27433.790
|
21995.620
|
16782.950
|
|
|
Provisions
|
12841.410
|
9531.660
|
8398.980
|
Total Current Liabilities
|
40275.200
|
31527.280
|
25181.930
|
|
Net
Current Assets
|
37508.200
|
41500.210
|
19582.320
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
31.680 |
60.000 |
93.860 |
|
|
|
|
|
|
|
TOTAL
|
209124.390 |
157430.490 |
125962.730 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Sales Turnover
|
183129.880 |
113964.760 |
97932.960 |
|
Other Income
|
3700.690 |
2439.110 |
0.000 |
|
Total Income
|
186830.570 |
116403.870 |
97932.960 |
|
|
|
|
|
|
|
Profit/ (Loss) Before Tax
|
35046.250 |
21026.750 |
19041.830 |
|
Provision for Taxation
|
9403.000 |
4471.250 |
5748.260 |
|
Profit/ (Loss) After Tax
|
25643.250 |
16555.500 |
13293.570 |
|
|
|
|
|
|
|
Export Value
|
NA |
NA |
26051.710 |
|
|
|
|
|
|
|
Import Value
|
NA |
NA |
38469.350 |
|
|
|
|
|
|
|
Expenditures:
|
|
|
|
|
|
|
(Increase) / Decrease in Stocks
|
(4425.170)
|
(10338.400) |
|
|
|
Raw Materials Consumed
|
110553.140
|
65829.480 |
|
|
|
Goods Purchased
|
230.190
|
204.190 |
|
|
|
Payments to and Provision for Employees
|
5195.810
|
4627.620 |
|
|
|
Other Operating Expenses
|
31426.050
|
27591.240 |
78800.100 |
|
|
Interest and Finance Charges
|
2423.880
|
2251.680 |
|
|
|
Depreciation
|
5528.020
|
5166.770 |
|
|
|
Impairment
|
852.40
|
44.540 |
|
|
|
Extraordinary Item
|
0.000
|
(30.220) |
|
Total Expenditure
|
151784.320 |
95346.900 |
78800.100 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1ST
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
46779.000
|
4,9597.000
|
|
Other Income |
|
1246.000
|
1098.000
|
|
Total Income |
|
48025.000
|
50695.000
|
|
Total Expenditure |
|
37936.000
|
40380.000
|
|
Operating Profit |
|
10089.000
|
10315.000
|
|
Interest |
|
562.000
|
632.000
|
|
Gross Profit |
|
9527.000
|
9683.000
|
|
Depreciation |
|
1428.000
|
1446.000
|
|
Tax |
|
1662.000
|
1809.000
|
|
Reported PAT |
|
6029.000
|
6428.000
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
0.56 |
0.50 |
0.44 |
|
Long Term Debt Equity Ratio |
0.43 |
0.48 |
0.42 |
|
Current Ratio |
1.21 |
1.40 |
1.24 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.82 |
1.27 |
1.33 |
|
Inventory |
4.69 |
3.77 |
5.77 |
|
Debtors |
14.31 |
11.99 |
15.27 |
|
Interest Cover Ratio |
15.46 |
10.35 |
12.20 |
|
Operating Profit Margin (%) |
21.82 |
23.34 |
24.65 |
|
Profit Before Interest and Tax Margin (%) |
19.02 |
19.10 |
20.15 |
|
Cash Profit Margin (%) |
15.82 |
17.80 |
17.41 |
|
Adjusted Net Profit Margin (%) |
13.02 |
13.57 |
12.91 |
|
Return on Capital Employed (%) |
21.86 |
17.96 |
19.87 |
|
Return on Net Worth (%) |
23.29 |
19.17 |
18.31 |
LOCAL AGENCY
FURTHER INFORMATION
History:
The company was
incorporated on 15.12.1958 at Mumbai in Maharashtra having Company Registration
Number 11238.
India’s strength in
alumina and downstream products would ideally dovetail with Hindalco’s strong
presence in metal. It is also among the
world’s lowest cost aluminium producers.
Company has recently acquired from Alcan Aluminium around 38.84 millions
shares of Indian Aluminium Company.
The critical factor
for the company’s cost advantage is its strategic control over key inputs,
which include: Access to good quality and low cost bauxite reserves. Captive
power generation to meet most of company’s power needs, Alumina and smelting
facilities Downstream production plants that span several products Strategic
joint venture companies to ensure uninterrupted supply of other key inputs
–caustic soda and aluminium fluoride.
To continue to
deliver superior value to its shareholders in the future and as part of its growth
strategy, the company had embarked on a brownfield expansion in Renukoot. It
has enhanced the copper smelter capacity by 100000 TPA and the albumin refining
capacity by 210000 TPA. A matching increase in the captive power generating
capacity is also on the anvil. The project is being implemented at a cost of
Rs. 18000 billion. Its first phase was completed, when the 9th pot
line with an installed capacity of 33000 TPA was commissioned in September
2001. The 10th Pot line and 11th Potline marks the milestone
of the company's brownfield expansion.
In 2002-03 the capacity of Albumin, Metal Production was enhanced by
35000 tones and 220000 tones respectively. By enhancing, the smelter capacity
is now pegged at 310000 TPA, Albumin at 660000 TPA. The total power generation
is now increased to 699 MW. The expanded capacities of the Smelter, Albumin
Refinery and Power plant will be fully operational in current financial year.
The project
Rocket-2k was implemented successfully, aimed at improving through increase in
thru-put, better efficiencies and productivity as well as reduced cost and the
annualized savings is estimated at around Rs.400-500 millions over a two year
periods.
Further, the
company is evaluating an integrated information technology solution. Its major
objective is: to integrate operations, ensure real time date reliability,
speedier decision, enhanced supply chain management and customer relationship.
This initiative will result in significant gains to the company.
The company will be
able to further consolidate its leadership in the domestic market and also
cater to a far greater extent to customers in the global market.
The project
Rocket-2K was implemented successfully, aimed at improving profitability
through increase in throughout better efficiencies and productivity as well as
reduced cost and the annualized savings is estimated at around Rs.400-500
millions over a two-year period.
The company is
recently entered the Rs.2500.000 millions branded foils market under the
“Hindalco Wrap” brand name. The company wants to address a category in the FMCG
sector. Launched in 54 cities across
the country, Hindalco Wrap is currently available at most retail outlets in a
unique dispenser pack at Rs.42 for a nine-metre roll. The company also plans to
enter the aluminium-based kitchen utility products market in a big way.
Aluminium Business:
The Aluminium business demonstrated a stellar performance with:
Ř
Highest
ever Alumina and Primary Aluminium production with over 100% capacity utilization
at all operating units.
Ř
Highest
ever turnover and business profit
Ř
Highest
ever EBITDA margins at 47.0%
Operational Review:
Ř
Products
Net Sales (Rs. Mn) Sales Volumes (MT) FY06 FY05 FY06 FY05
Ř
Hydrate
and Alumina (Standard 8,007 5,696 388,646 322,828Metallurgical & Specials)
Ř
Aluminium
Ingots/Billets 14,480 14,375 146,785 158,518
Ř
Redraw
Rods 7,045 5,908 67,895 62,841
Ř
Rolled
Products 18,603 16,380 151,568 144,158
Ř
Extruded
Products 4,102 3,379 32,181 28,453
Ř
Aluminium
Foil 4,847 4,543 26,003 26,004
Ř
Aluminium
Wheels (Pcs) 374 198 199,403 111,045
Alumina:
Alumina refinery utilization attained 104% of rated capacity and production
stood at 1,203,383 MT. Third party sales volumes expanded by 20.4% while
realizations rose 16.8% resulting in Rs. 8,007 million in revenues, 40.6%
higher than the previous year.
Primary Metal:
Primary metal output from the Company's Smelters increased to 429,140 MT, up 5%
over that of previous year. There has been an increased flow of primary metal
into value added products leading to lower merchant sales volumes for the
product category. Realizations, however, improved by 8.8% reflecting the strong
trend in global aluminium prices.
Redraw Rods:
Redraw rods production grew by 9% from 62,392 MT to 67,730 MT, while sales
tonnage rose by 8.0% to 67,895 MT as compared to 62,841 in the previous fiscal.
Further, average realizations stepped up to Rs.103,768/MT, reflecting a growth
of 10.4%, which is the highest growth amongst all the metal products. This is
primarily a result of significant growth in the power transmission sector, a
major end-user segment for the category.
Value Added Products (VAP):
The share of VAP (i.e. flat rolled products, extrusions and foils) in tonnage
terms extended from 47.3% to 49.4% while revenue share stood at 56.1% vis-a-vis
54.5% during the preceding fiscal. Value Added Products remain a key focus area
for the Company to enhance profitability, de-risk product portfolio, and grow
the market for aluminium products in the country. A slew of initiatives to
further bolster this segment have been taken.
The Company had already put in place a Key Account Management practice, which
started yielding results during the year under review. There are plans to implement
CRM practices to enhance customer satisfaction.
A number of application areas like Plates for Bus Ducts and Bus Bars, Fin Stock
for Auto Radiators, Roll Bond coils for Roll Bond Panel etc. have been
identified where imports can be substituted by locally manufactured products of
comparable quality.
To widen its distribution network, the Company has added 10 new dealers and
Stockists.
Their product development team is working on several projects to develop and
commercialize new products. These application areas include high value added
products like components of Heating Ventilation and Air conditioning system
used in the automotive sector, viz. Auto Fin - Bare, Alclad (Fin/Header/ Side
Plate) etc.
Additionally, significant potential areas include Truck bodies, Baby Coils,
Aluminium Composite Panel, High Security Registration Plate and other new
profiles.
Everlast roofing sheets, Freshwrapp foil packaging and Aura wheels from the
Company are among the leading brands today.
Flat Rolled Products:
Flat Rolled Products (FRP) output rose to 190,581 MT from 175,734 MT during the
previous year. Sales tonnage amplified from 144,158 MT to 151,568 MT, growing
by 5.1%. Realization increased by 8.0% to Rs.122, 734/MT while premium over
primary metal rose by Rs.1,143/MT to Rs.24,086/MT. This was achieved through a
richer product mix with higher contribution.
Extrusions:
Extruded products registered an impressive 13.2% growth from 28,551 MT in
2004-05 to 32,328 MT. Sales tonnage also surged from 28,453 MT to 32,181 MT
while realizations increased by 7.3 % to Rs.127,469/MT.
Foils:
Steps to optimize the foils business product mix and move away from lower
end products have been initiated. Consequently, production of foils was at a
level similar to that achieved during the last year, and sales tonnage also
remained flat. Realizations improved by 6.7% to Rs.186, 412/MT. The premium
realized over primary metal, advanced by 4% from Rs.84, 018/MT to Rs.87,
765/MT.
Wheels:
This segment witnessed a high growth of 80.9% with production increasing to
194,079 wheels vis-a-vis 107,279 wheels achieved during the previous fiscal.
Sales volumes expanded by 79.6% from 111,045 wheels to 199,403 wheels. The
Company was an early entrant in this segment to develop and expand the market.
These efforts have now come to fruition. The Indian alloy wheel market has
grown at a CAGR of 27% over the last three years. Interestingly, during the
year under review, the market registered a growth of 48% fueled by alloy wheels
being introduced in a number of new launches in the passenger vehicles segment.
Pricing, Cost & Profitability:
Aluminium prices on
the London Metal Exchange started at $1960/MT, moved down to $1675/MT and
touched a high of $2,634/MT before ending at $2,512/MT with the average for the
fiscal being $2,028/MT.
The Aluminium business faced significant cost pressures from high prices of key
raw materials such as fuel oil, coal, caustic soda and CP Coke. Freight costs
added to cost of all the raw materials including bauxite. However, the impact
of these factors was limited through cost reduction measures. Among these
are:
Enhancing Hirakud captive power capacity from 67.5 MW to 167.5MW to substitute
power from the state grid.
Setting up a 5,300 tpa captive Aluminium Fluoride plant at Dahej to convert
Fluosilicic acid, a by-product, into aluminium fluoride to be used in aluminium
smelters.
High utilization levels through de-bottlenecking and process optimization based
on in-house technical knowledge.
Bolstered by firm aluminium prices, average product realizations improved by
8.9%. Net Sales and Turnover increased by 15% to Rs.60,423 million and Earnings
before Interest & Taxes (EBIT) rose 33.4% to Rs.21,281 million. Business
profitability improved substantially as reflected in EBIT margins at 35.2% as
compared to 30.4% a year earlier.
Performance
The Company registered its best ever performance during the
year under review. Higher capacity utilization, increased realization, product mix
enrichment and improved operational efficiencies resulted in both revenues and
profits surpassing their previous levels. Alumina and Aluminium plants
continued to operate at utilization levels well above their rated capacities.
With the stabilization of the Hirakud brownfield expansion, metal production
rose by 3.2% to 442,686 MT. The production of Value Added Products i.e. rolled
and Extrusions increased due to acquisitions completed in FY06 as well as
higher utilization of available assets. Of the total sales volume, the share of
value added products was an impressive 55%.
Despite falling alumina prices in the international market, the Company was
able to maintain high realizations, largely because of its focus on Speciality
business as well as a prudent mix of forward contracts and spot sales.
The production of Copper cathodes went up by 38% to 290,529 MT in comparison to
previous year on the back of the expanded capacity commissioned last year.
Production of value added CC rods grew 23% to 109,029 MT. Sulphuric acid output
was up by 40% to 892,597 MT. In view of the overall economics, Copper II
operations remained suspended for a part of year with copper concentrate in
international markets becoming more expensive due to supply constraints. The Company
expects this situation to be transient.
The Chairman's letter to shareholders and the Management's Discussion
& Analysis, which form a part of this Annual Report, provide the strategic
direction and a more detailed analysis on the performance of individual
businesses and their outlook.
Rs. in Million
Financial Results for the year ended 31.03.2007 31.03.2006
Net Sales & Operating Revenue 183,130 113,965Profit before
Extraordinary Items and Tax 35,046 21,027Extraordinary Items - 30Profit before
Tax 35,046 21,057Provision for Current Tax 9841 3241Provision for Deferred Tax
(551) 1160 Provision for Fringe Benefits Tax 113 100Net Profit 25,643
16,556
Financing
An amount of Rs. 38900.000 millions was drawn at an average rate of 8.62% p.a. against
the 10 year Secured Rupee Term Loan facility syndicated in earlier years. The
Company met its entire obligation on payment of interest and repayment of
principal.
As part of the bidding process under Canadian Law for undertaking the
arrangement transaction for the acquisition of Novelis, the Company obtained
commitment letter from ABN AMRO, Bank of America and UBS of US$3.1 Billion with
recourse to the Company and secured by Hindalco's corporate guarantee for
paying the shareholders of Novelis. It also obtained back-stop facility of
approximately US$2.4 Billion from UBS and ABN AMRO for refinancing the existing
loans of the Novelis Balance Sheet with recourse limited to the cash flows and
assets of Novelis.
The Company was adjudged the successful bidder and all steps are being taken to
complete the legal and other formalities required to draw the committed
funds.
Prices:
Aluminium prices have risen significantly over the past year and reached
17-year highs of $2,634/MT in February 2006. This has been accompanied by
falling inventories and rising costs across the world. Reported primary
aluminium stocks have declined to a mere 5 weeks of consumption, while reported
total aluminium inventories stand at 8 weeks of consumption, close to the multi-year
lows. Importantly, aluminium smelters worldwide have been under tremendous cost
pressure from rising key input costs like alumina, power, carbon and oil. These
factors, along with rising global demand, are anticipated to support aluminium
prices above historical levels over the long term.
Domestic prices continue to be determined by international prices on the
London Metal Exchange and the movements of the Indian Rupee vis-a-vis US
Dollar. With the reduction in import duty on aluminium and its products, the
relationship is expected to become even stronger.
Business Outlook for
Hindalco:
The Company is at an inflection point on the growth curve with its strategic
initiatives and competitive strengths set to propel it forward from domestic leadership
to global scale operations based on India's significant mineral potential. The
large deposits of coal and high quality bauxite possess enormous potential for
low cost aluminium production. To exploit these competitive advantages, the
Company is pursuing an aggressive growth strategy through various brownfield
and greenfield opportunities in Aluminium. Brownfield Expansions:
The Company's brownfield expansion projects are on track. * The expansion of
Muri Alumina Refinery from 110,000 TPA to 450,000 TPA is slated for mechanical
completion in the second half of fiscal 2006-07.
The Hirakud Smelter and Power expansions from 65,000 tpa to 146,000 tpa and
67.5 MW to 367.5 MW (100 MW already commissioned during the year),
respectively, are on course and expected to be commissioned partly in the last
quarter of FY07 and the balance by the end of FY08.
Plans to extend the refining capacity at Belgaum from 350,000 TPA to 650,000
are awaiting government approvals relating to bauxite mines.
Greenfield Projects:
Greenfield projects have also made significant progress. Utkal Alumina, the
1-1.5 million tpa alumina refining project in a JV with Alcan Inc., is
progressing well, with completion of 66% of land acquisition and transfer of
ownership for the balance 34% in progress. Phase I of the government approved
rehabilitation and resettlement package has been completed with 100 houses
built and possession handed to the displaced families. Basic infrastructure
work on roads, bridges and accommodation is advancing well with the approach
road from the nearest town getting completed. Detailed engineering contract for
the project has been awarded and the project is slated to go on-stream as per
plan.
The Company's integrated aluminium project, Aditya Aluminium, encompassing
1-1.5 million TPA alumina refineries, 325,000 tpa aluminium smelter and 650 MW
captive power plant is on course. Clearances from the Ministry of Environment
& Forest are in place, while water scheme for the smelter and the power plant
have been approved. A joint venture agreement on bauxite mines has been signed
with Orissa Mining Corporation Limited. Requisite clearances for mining are
being obtained. The refinery project has received in principle approval.
Contracts for construction power at smelter and power plant site have been
awarded. Rehabilitation and Resettlement plan has been submitted to the Revenue
Divisional Commissioner and other authorities. The Rehabilitation Advisory
Committee meeting is expected to start in May 2006. The Company along with
Mahanadi Coalfields Limited and Neyvelli Lignite Corporation Limited has been
allotted the coal blocks - Talabira II & III for jointly developing and
mining coal for captive consumption, a significant development from the perspective
of securing key inputs. The Company has applied for a coal block under the MoU
signed earlier with the Government of Jharkhand. The project which envisages a
325,000 TPA smelter and a 750 MW captive power plant will proceed once the
Company is allotted the coal block.
The Company has been allotted Mahan coal block in the Sidhi district of Madhya
Pradesh along with the Essar Group. This will be developed and mined through a
joint venture - Mahan Coal Company Limited. The Company is planning to set up a
325,000 TPA smelter and a 750MW captive power plant in the state.
A suitable financing plan for the projects is already in place. These projects
will significantly enhance the scale of the Company's operations and add to its
competitive strength by virtue of being one of the lowest-cost producers of
alumina and aluminium world-wide in a regime where cost curves are shifting
upwards.
Copper Business:
The Copper business faced one of the most trying years in its entire nine years
history. Despite the high prevailing copper prices and improved long term and
spot Tc/Rc as compared to the previous year, the business suffered on account
of difficult operating conditions.
Production:
The copper business suffered production disruptions on account of various
problems, both external and internal. The heavy rainfall in the state of
Gujarat during the first week of July resulted in flooding of the plant as well
as the neighboring areas. Road transportation was cut off resulting in serious
dislocations in the movement of essential inputs and personnel not getting
access to the site.
The 180,000 tpa Smelter I had been working at less than optimal levels due to
longer campaign runs and underwent a 25-day overdue bi-annual maintenance
shutdown in the months of November-December 2005. Besides, the lower than
anticipated utilization of the 70,000 tpa Smelter II due to refractory life
stabilization issues resulted in a shortfall in production.
The Company's new smelter (250,000 tpa Smelter III) was commissioned in July
2005. The commissioning of a new Copper Smelter is always associated with a
long-drawn ramp-up process, and the experience at Dahej was no exception. It
faced its share of teething problems and also took a 19-days shutdown due to a
minor metal leakage and resultant damage to nearby equipment.
These issues have, since, largely been sorted out. The Copper Smelter I am
running at optimal utilization level post its maintenance shutdown. Smelter II,
which had taken a shutdown in January 2006 for refractory change, has shown
improvement in its refractory life. Smelter III is slated to complete a 30-day
review shutdown in the month of May 2006, after which it is expected to ramp up
gradually to full capacity. Following these developments, the Copper business
should attain its targeted production and conversion cost levels.
Profitability:
The sharp rise in LME copper prices, led to higher revenues for the company
despite flat volumes.
However, since
copper prices are in the nature of a pass through for a Custom Smelter like
theirs, the runaway increase in LME copper prices did not have any significant
impact on profitability.
The Company benefited from the prevailing high Tc/Rc margins. Regardless, other
macro factors impacted the business adversely. The fall in import duty on
copper from 15% to 10% in February 2005 impaired domestic metal realizations
for the year. Though overall prices remained high, the premium for value added
CC Copper Rods reduced as compared to base copper prices.
As already discussed, the business experienced difficult operating conditions,
so EBIT from the business declined from Rs.2538 Million to Rs.193 Million for
the year, despite accrual of significant one-time benefits under the Target
plus Scheme.
Copper Industry Outlook:
During CY05 global copper consumption is estimated to have grown at less than
one percent. A key feature has been de-stocking by consumers across the
consumption chain in view of high and volatile copper prices. Copper demand is
expected to recover during CY06 as consumers in North America and European
regions return to markets after having run down their inventories.
Importantly, Asia would continue to be the strongest growth driver for Copper
demand. Chinese industrial Hindalco's Birla Balwan, the branded fertilizer
commands a strong market position in India's agricultural sector growth
continues to remain robust adding to the demand for copper wires and cables,
which account for more than 60% of the country's copper demand. The Japanese
market is displaying healthy signs of recovery as demand for consumer
electronics (televisions, cameras, mobile phones etc,) is picking up.
Construction activity is also adding to wiring and air conditioning
requirement. East & South East Asian demand is expected to shore up on the
back of increased production of automobiles, air conditioners and consumer
electronics.
Overall, refined copper demand is slated to rise at a modest pace of around 5%
in CY06, with Asia being thefastest growing region
Copper Prices & Tc/Rc Outlook:
Low copper inventories combined with a series of output disruptions through
natural calamities, industrial actions and operating difficulties have driven
the sharp rally in copper prices which had run up to $5,528/MT by the end of
the year under review. Tc/Rc for copper concentrate supplies witnessed an
extremely volatile year with spot terms rising to as high as 54c/lb before
ending the year at 24c/lb. The benchmark Japanese contract terms increased from
18-20c/lb to 22-23c/lb.
With substantial smelting capacity projected to come online in 2006 and 2007,
the concentrate market is anticipated to become tight and exert downward
pressure on Tc/Rc rates. Meanwhile, low refined copper stocks and growing
demand is expected to keep copper prices extremely sensitive to any supply side
developments.
Domestic Industry Outlook:
The domestic demand for copper is expected to rise by 7-8% fuelled by growth in
key end-use segments, viz consumer electronics, industrial machinery and
equipments. The buoyant construction sector is likely to add to wiring and air
conditioning requirements.
Lowering of import duties in the Union Budget is expected to reduce the threat
of imports under FTA substituting domestic supply. In addition, the domestic
copper industry enjoys significant market presence in other Asian countries in
Middle East, East & South East Asia and China.
STRATEGIC INITIATIVES:
Enhancing Value Added Products
Capability:
To enhance its focus on Value added products, the Company has acquired certain
assets of Pennar Aluminium Company Limited (PALCO) from Asset Reconstruction
Company (India) Limited (ARCIL) on 'as is where is and as is what is' basis.
The assets include a 30,000 tpa Aluminium Rolling Mill and a 14,400 ktpa
Conductor Rod complex at Nagpur. The Directors are pleased to inform you that
production in Rolling Mill has commenced and its performance is in line with
expectations.
Landmark move to Strengthen Copper
Mining Portfolio:
To meet Hindalco's copper
concentrate requirement on a self financing basis, the Company's subsidiary
Aditya Birla Minerals Limited (ABML), formerly Birla Mineral Resources Pty
Limited, has come out with an Initial Public Offering (IPO) to issue 154
million equity shares. It represents 49% of the post issue share capital of the
Company. The shares will be listed for trading on the Australian Stock Exchange
(ASX). Hindalco will continue to hold 159mn or 51% of the voting rights. This elevates
the Company to the rank of the first Indian business group to list in
Australia, with the largest pure copper stock on ASX. The total issue size is A
$ 299 million, based on a price of A$ 1.95 per share. The issue opened on April
27, 2006 and is scheduled to close on May 10, 2006.
Cost Reduction Initiatives:
With the commissioning of the 100MW power unit at Hirakud, Orissa in April,
2005 and the output from the unit being stabilized to full capacity in June
2005, there has been a substantial cost saving in the first 10 months of
operation.
Growth plans underway in
Aluminium:
The Company is aggressively
pursuing various brownfield and greenfield growth opportunities in Aluminium.
Brownfield Expansions:
The Company's brownfield expansion projects are on track. The expansion of Muri
Alumina Refinery from 110 ktpa to 450 ktpa is slated for completion in the
second half of the fiscal 2006-07. The Hirakud Smelter and Power expansions
from 65ktpa to 146ktpa and 67.5MW to 367.5MW (100MW already commissioned during
the year), respectively, are on course and expected to be commissioned partly
in the last quarter of FY07 and the balance by the end of FY08. The plans to
extend the refining capacity at Belgaum are on hold, awaiting government approvals
relating to bauxite mines.
Greenfield Projects:
Utkal Alumina, the 1-1.5 million TPA alumina refining project in a JV with
Alcan Inc., along with the integrated Aditya Alumina and Aluminium project is progressing
as scheduled. In Aditya Aluminium, the Company is setting up a 325,000 tpa
smelter and a 650MW power plant. To take it forward, the Company has been
allotted the Mahan coal block in the Sidhi district of Madhya Pradesh in a
joint venture with the Essar Group.
OTHER SIGNIFICANT DEVELOPMENTS:
Stock Split:
To encourage active
retail investor participation and enhance liquidity, the Company has
sub-divided its equity shares of Rs.10 each into 10 equity shares with a face
value of Re.1 per share. The split was approved by the shareholders at their
Extra-Ordinary General Meeting held on 6th August, 2005 and is effective from
6th September, 2005.
Rights Issue:
As part of the arrangement to finance its expansion plans, the Company has made
an offer of equity shares on 1:4 rights basis to raise Rs.22266 million. This
was the largest rights issue ever in the domestic capital markets.
The full amount will be mobilized in three phases viz 25% in phase I have
already been mobilized, the next tranche of 25% is to be called within 9-12
months and the balance within 18-24 months. The allotment of shares was
completed on February 15, 2006. Trading of the new partly paid shares commenced
on the stock exchanges (BSE and NSE) on February 22, 2006. (BSE Code: 890120,
NSE Code: HINDALC0 Market Type: E1)
Business:
The company is
engaged in manufacturing and selling of aluminium metal, rolled products,
extruded products, conductor redraw rods, aluminium foil, hot and cold rolled
flat steel products and generation of electricity.
The company is one
of the promoter members of Birla Management Corporation Limited (BMCL), a
company limited by guarantee which has been formed to provide a common pool of
facilities and resources to its members, with a view to optimize the benefits
of specialization and minimize cost for each member. The company has participated in the common pool and has shared
the expenses incurred by BMCL and accounted these under appropriate heads.
The Company has delivered a commendable performance amidst significant
challenges. Though a rise in LME prices benefited, both aluminium and copper
businesses suffered on account of a steep cut in import tariff, appreciation in
the value of Indian Rupee against the US Dollar, high energy and caustic
prices. Being a custom copper smelter, the company gained little from the steep
rise in LME price. The business bore the brunt of a heavy reduction in export
incentives and a 10% cut in import tariff effected through the two budgets. The
dramatic recovery in the Treatment Charges and Refining Charges (Tc/Rc) did not
have any significant positive impact on profitability as most of the long term
contracts for FY05 were negotiated towards the end of CY2004.
The company's foil
and an aluminium alloy wheel plant at Silvassa, which has helped the company to
optimize capacity, and enhance the share of value-added semi-fabricated
products.
Awards & recognition
Subject was
adjudged the worldwide Runner-up for the "Millennium Business Award for
Environmental Achievement" under the auspices of the United Nations
Environment Programme.
Subject has been
categorized as a Star Trading House by the Government of India. It is also the recipient of EEPCs Award for
Export Excellence for exports during 1998-99 as well as a Special Award from
CAPEXIL exports during 1999-2000.
The prestigious
International Aluminium Institute has selected the company's Alumina Refinery
as "Joint Best Running Refinery for 1999".
The company's mines
also bagged several awards instituted for exemplary work accomplished in
Reclamation & Rehabilitation, Afforestation, Top Soil Management and Water
Quality Management.
The company is a
Government Recognized Trading House and has received several awards from Export
Promotion Councils as well as the Government of India.
The company had
been recognized through the Ministry of Power, Government of India, conferring
upon its Aluminium division the National Award for Energy Conservation.
The company's
aluminium division also bagged the "Yogayata Praman Patra" - for its
safety record from the National Safety Council of India.
The Aluminium
division of the company was honoured by FICCI-SEDF with the "Social
Responsiveness Award". In addition it was the proud recipient of FICCI
award 2001-02 for excellent work in Family Welfare.
It is in trade
terms with:
Ř
Air Control
& Chemical Engineering Company Limited
Ř
Alba Security
Systems Private Limited
Ř
Brassomatic
Private Limited
Ř
BVM Compresor
Spares Syndicate
Ř
Grip Engineers
Private Limited
Ř
Webb India
Private Limited
The company has
been accredited with ISO 14000 and ISO 9002 certification.
Fixed Assets
Ř
Tangible
Assets
Ř
Mining Rights
Ř
Land &
Site Development
Ř
Buildings
Ř
Plant &
Machinery
Ř
Vehicles &
Aircraft
Ř
Railway
Sidings
Ř
Furniture St
Fittings
Ř
Live Stock
Ř
Road &
Drainage
Ř
Leased Plant
& Machinery
Ř
Intangible
Assets
Ř
Technological
Licenses
Ř
Computer
Software
Website Details Attached:
Profile
Hindalco Industries Limited, the metals flagship company of the Aditya Birla
Group, is an industry leader in aluminium and copper. A metals powerhouse with
a consolidated turnover in excess of US$ 14 billion, Hindalco is the world's
largest aluminium rolling company and one of the biggest producers of primary
aluminium in Asia. Its Copper smelter is the world's largest custom smelter at
a single location.
Established in 1958, Hindalco commissioned its aluminium facility at Renukoot
in Eastern U.P. in 1962. Later acquisitions and mergers, with Indal, Birla
Copper and the Nifty and Mt.Gordon copper mines in Australia, strengthened the
company's position in value-added alumina, aluminium and copper
products, with vertical integration through access to captive copper
concentrates.
In 2007, the acquisition of Novelis Inc. a world leader in aluminium rolling
and can recycling, marked a significant milestone in the history of the
aluminium industry in India. With Novelis under its fold Hindalco ranks among
the global top five aluminium majors, as an integrated producer with lowcost alumina
and aluminium facilities combined with high-end rolling capabilities and a
global footprint in 12 countries outside India. Its combined turnover of US$ 14
billion, places it in the Fortune 500 league.
In May 2007, Novelis became a Hindalco subsidiary with the completion of
the acquisition process. The transaction makes Hindalco the world's largest
aluminium rolling company and one of the biggest producers of primary aluminium
in Asia, as well as being India's leading copper producer.
In May 2006, the company signed an MoU with the Government of Madhya
Pradesh for setting up a greenfield aluminium smelter and a captive power
plant. The company also entered into a joint venture with Essar Power (M.P.)
Limited to develop and operate coal mines at Mahan, Madhya Pradesh. The joint
venture will supply coal to the proposed aluminium smelter and power complex in
Madhya Pradesh
In May 2006, the company's copper mining subsidiary Aditya Birla
Minerals Limited (formerly Birla Mineral Resources Pty Limited) came out with
an equity offering and subsequent listing on the Australian Stock Exchange
(ASX)
In March 2006, the company acquired an aluminium rolling mill and wire
rods facility, from Asset Reconstruction Company (India) Limited (ARCIL),
belonging to Pennar Aluminium Company Limited
In January 2006, the company concluded 4:1 rights issue of its shares on
partly paid basis. It was the largest ever rights issue in the history of
corporate India and first one to issue partly paid instruments
In September 2005, the company split its shares in ratio of 10:1 in
order to enhance liquidity and to encourage participation from retail investors
In April 2005, the company signed an MoU to establish a world class
integrated aluminium project in the state of Orissa
In April 2005, the company entered into MOUs with the Orissa and
Jharkhand governments for setting up a greenfield alumina facility and
aluminium facility respectively, in the states
Hindalco's businesses
Hindalco in India enjoys a
leadership position in aluminium and copper. The company's aluminium units
across the country encompass the entire gamut of operations from bauxite
mining, alumina refining, aluminium smelting to downstream rolling, extrusions,
foils and alloy wheels, along with captive power plants and coal mines. The
Birla Copper unit produces copper cathodes, continuous cast copper rods along
with other by-products, including gold, silver and DAP fertilisers.
Hindalco is the world's largest
aluminium rolling company and one of the biggest producers of primary aluminium
in Asia. In India, Hindalco enjoys a leadership position in speciality alumina,
primary aluminium and downstream products.
Hindalco's major products
include standard and speciality grade aluminas and hydrates, aluminium ingots,
billets, wire rods, flat rolled products, extrusions, foil and alloy wheels
Copper
Hindalco's
Birla Copper unit at Dahej in Gujarat is the world's largest single location
custom copper smelter with 500,000 tpa capacity. The plant is backed by captive
power plants, oxygen plants, as also by product facilities for fertilisers and
precious metals. A captive jetty with cargo handling capacity of over four
million tpa, facilitates easy input of copper concentrate and other imported
raw materials.
The two copper mines in Australia were acquired in 2003. Birla Nifty
mine consists of an open-pit mine, heap leach pads and a solvent extraction and
electrowinning (SXEW) processing plant, which produces copper cathode. Birla
Nifty's copper cathode capacity is 25,000 tpa.
A copper sulphide deposit is located at the lower levels of the Nifty open pit
mine and an underground mine and concentrator have been developed to mine and
process ore from this deposit. The Nifty sulphide operation commenced ore
production from stoping in December 2005 and concentrate production in March
2006. With the start-up of the Nifty sulphide operation and its progressive
ramp up during FY2007, Aditya Birla Minerals (ABML) is entering a period of
rapid growth.
|
Division |
Capacity |
Location |
|
Alumina chemicals |
1,160,000 tpa |
700,000 tpa (Renukoot) |
|
110,000 tpa (Muri) |
||
|
350,000 tpa (Belgaum) |
||
|
Primary aluminium |
461,000 tpa |
345,000 tpa (Renukoot) |
|
|
||
|
1,02,000 tpa (Hirakud) |
||
|
14,000 tpa (Alupuram)1 |
||
|
|
||
|
Extrusions |
27,700tpa |
19,700tpa (Renukoot) |
|
8,000 tpa (Alupuram) |
||
|
Rolled products |
200,000 tpa |
80,000 tpa (Renukoot) |
|
45,000 tpa (Belur) |
||
|
45,000 tpa (Taloja) |
||
|
30,000 tpa (Mouda) |
||
|
Wire rods |
64,400 tpa |
40,000 tpa (Renukoot) |
|
10,000 tpa (Alupuram) |
||
|
14,400 tpa (Mouda) |
||
|
Aluminium foil |
11,000 tpa |
5,000 tpa (Silvassa)** |
|
6,000 tpa (Kalwa) |
||
|
Aluminium wheels |
300,000 pcs |
Silvassa |
|
Power |
1087.2 mw |
741.7mw (Renusagar) |
|
78 mw (Renukoot) |
||
|
267.5 mw (Hirakud) |
||
|
Copper cathodes |
500,000 tpa |
Dahej |
Additional 17,000 tpa thick gauge foil capacity at Silvassa
1. Alupuram capacities have been de-energised and are not included in
working capacity
2 For Taloja recycling plant
Press Releases
31 October 2007
Hindalco announces Q2 FY 2007- 2008 results
- Revenues: Rs.
49600 Millions
- EBIDTA: Rs.
10320 Millions
- PAT: 6430
Millions
Financial highlights
|
(In Rs. Millions) |
Quarter |
Quarter |
Half
year |
Half
year |
|
Net sales and operating revenue |
4,9597.00 |
4,6342.00 |
9,6376.00 |
8,9079.00 |
|
Other income |
1098.00 |
1108.00 |
2344.00 |
1884.00 |
|
EBITDA |
1,0315.00 |
1,0972.00 |
2,0404.00 |
2,1082.00 |
|
Depreciation and impairments |
1446.00 |
2080.00 |
2874.00 |
3421.00 |
|
Interest and finance charges |
632.00 |
515.00 |
1194.00 |
1149.00 |
|
Profit before tax (PBT) |
8237.00 |
8377.00 |
1,6336.00 |
1,6512.00 |
|
Tax expenses |
1809.00 |
2401.00 |
3879.00 |
4521.00 |
|
Net profit |
6428.00 |
5976.00 |
1,2457.00 |
1,1991.00 |
|
EPS (basic and diluted) |
58.00 |
61.00 |
112.00 |
122.00 |
Hindalco
Industries Limited, the flagship company of the Aditya Birla Group, today
announced its unaudited financial results for the quarter ended 30 September
2007.
Net
sales and operating revenues have grown by 7 per cent to Rs. 49597.000 Millions
as compared to Rs. 46342.00 Millions in the corresponding period in FY07.
Despite the strengthening of the Rupee which resulted in the lowering of
aluminium prices, net profit for the quarter at Rs. 6428.00 Millions is up by 8
per cent, vis-ŕ-vis Rs. 5976.00 Millions in the corresponding period of
previous year.
Of
the total revenue of Rs. 49597.00 Millions, aluminium business contributed Rs.
1785.00 Millions on the back of production growth of 8 per cent. Margins were
maintained due to increased value-added products, better sales mix and higher
sales volume. The value-added products in volume terms increased by 11 per cent
and 15 per cent in rolled products and extrusion products respectively.
The
profit before interest and tax for aluminium business was lower at Rs. 6620
Millions from Rs. 6710 Millions in the corresponding quarter in the earlier
year mainly on account of the sharp appreciation of the Rupee against USD and
the impact of custom duty cut on imports. The rupee has appreciated 11 per cent
from Rs. 46.21 / USD in Q2 FY 07 to Rs. 41.15 / USD in the current quarter. On
the positive side, the aluminium business benefited from higher LME prices,
greater efficiencies, enhanced volumes through better capacity utilisation and
reduced input costs due to better procurement management.
In
the copper business, revenue stood at Rs. 31783.00 Millions from Rs. 27825.00
Millions in Q2FY07 driven by higher sales volumes and realisation resulting
from an enriched product mix. The profit before interest and tax grew
marginally at Rs. 1261 Millions from Rs. 1233 Millions in the corresponding
quarter last year despite the fall in TcRc due to better by-product realisation
and improvement in operational efficiency.
The
improvement in the market mix resulting from increased duty paid sales was
setoff by the reduction in the duty differential. The grid power usage was
lower on account of improved captive power availability and a significant improvement
in energy consumption.
Strategic initiatives
The
company has acquired the shareholding of Alcan Inc consisting of 78,564,384
shares of Rs. 10 each in Utkal Alumina International Limited (Utkal).
Consequently, Utkal is now a wholly owned subsidiary of the company.
Operational review
Aluminium
All the aluminium plants operated at consistently high capacity utilisation.
The full advantage of Phase I of Hirakud expansion helped in increasing metal
production by 8 per cent. The downstream assets purchased in the last two years
were fully utilised, in addition to improved production from other plants.
Production of value-added products (VAP) grew by 7 per cent. Rolled products
and extrusions production extended by 18 per cent and 13 per cent respectively.
Alumina production is less than last year primarily due to the hooking of
existing alumina refinery with expanded facility at Muri.
|
Production |
Units |
Q2
FY08 |
Q2
FY07 |
Change
(per cent) |
H1
FY08 |
H1
FY07 |
Change
(per cent) |
|
Alumina |
MT |
282,292 |
290,462 |
-3 |
584,722 |
589,911 |
-1 |
|
Primary metal |
MT |
118,257 |
109,324 |
8 |
234,426 |
216,480 |
8 |
|
Wire rods |
MT |
18,031 |
17,255 |
4 |
35,464 |
34,273 |
3 |
|
Rolled products |
MT |
57,273 |
52,794 |
8 |
114,366 |
104,766 |
9 |
|
Extruded products |
MT |
11,107 |
9,848 |
13 |
21,293 |
18,393 |
16 |
|
Foils |
MT |
6,618 |
6,715 |
-1 |
13,143 |
13,321 |
-1 |
|
Wheels |
Nos. |
41,576 |
53,958 |
-23 |
86,152 |
100,064 |
-14 |
|
Power |
MT |
2,102 |
2,095 |
0 |
4,266 |
4,153 |
3 |
Copper
In copper cathodes and CC rods production
increased by 11 per cent and 32 per cent respectively on YoY basis on the back
of the ramp up of the copper-III smelter and consistent production from
smelter-I. The operations at copper smelter -II continue to remain suspended as
cost of production is not economically feasible.
|
Production |
Units |
Q2
FY08 |
Q2
FY07 |
Change
(per cent) |
H1
FY08 |
H1
FY07 |
Change
(per cent) |
|
Copper Cathodes |
MT |
79,181 |
71,391 |
11 |
158,415 |
136,061 |
16 |
|
CC Rods |
MT |
35,335 |
26,711 |
32 |
69,430 |
54,016 |
29 |
Expansion projects
Muri
The expansion of the Muri Alumina
refinery from 110,000 tpa to 450,000 tpa is slated for commissioning in the
third quarter of the current fiscal.
Hirakud
Phase II of the expansion of the
smelting capacity from 100,000 tpa to 143,000 tpa is well on track. The power
generation capacity from 267.5 mw to 367.5 mw will go on stream by December
2007.
Belgaum
The allotment of the lease for
bauxite mines for expanding the alumina refinery capacity at Belgaum, Karnataka
from 350 ktpa to 650 ktpa is awaited.
Aditya Aluminium
Aditya Aluminium, the integrated
aluminium project, encompassing 1 to 1.5 million tpa alumina refinery, 260,000
to 325,000 tpa aluminium smelter and 750 mw captive power plant is progressing
as planned. The major portion of the total land required for the project has
been acquired. Environmental clearances have been obtained for the smelter, the
captive power plant (CPP) and the refinery. Joint venture agreement with
Mahanadi Coal Limited and Neyveli Lignite Corporation Limited has been inked
for coal requirements. The water drawal agreement is also finalised. The
smelter is expected to be commissioned by March 2011 and the refinery by May
2011.
Mahan
The Mahan Aluminum project with a
smelter capacity of 325 ktpa and a CPP of 750 mw is on schedule. The land
acquisition for the project is underway. The company has been allotted a coal
block in a JV with Essar Power for the coal requirement of the CPP. Preliminary
environmental clearances have been obtained. The power connectivity for
commencing construction has been approved. The water resource department has
provided necessary facilities as well. Project is expected to roll on by October
2011.
Latehar
For the Latehar project with a
smelter capacity of 325 ktpa and CPP of 750 mw, a tubed coal mine has been
allocated jointly with Tata Power. Preliminary environmental clearances have
been obtained. Land acquisition is in progress. The expected date of
commissioning is March 2012.
Utkal
Work on Utkal Alumna's 1.5 mtpa
alumina refinery is underway. The company has acquired the land for the plant
and facilities. The second phase of the rehabilitation and resettlement process
is in progress. Mining activities will start by March 2009. The commissioning
of the plant is expected by March 2010.
Hindalco Almex Aerospace
Limited
This project for manufacture of
high strength aluminium alloys for applications in the aerospace, sporting
goods and surface transport industries is on target. It is slated for
commissioning in fourth quarter in the current fiscal.
Industry outlook
Aluminium
Global primary aluminium
consumption has witnessed a strong demand growth of 8.8 per cent. US production
levels remained flat, the construction market continues to disappoint and
demand from the transportation markets remain weak. The demand from Western
Europe has been relatively stronger, while that from Japan continued to be
unexciting. China remains the strongest driver of the demand as the metal grew
at 34 per cent in this period, with transportation, construction and foil
sectors remaining firm on the back of strong industrial activity.
Copper
The year-to-date has witnessed
good demand for copper. The world refined copper consumption growth is forecast
at 4.3 per cent for 2007, driven by China, the Gulf and Europe. The exchange
stock continues to remain below normal levels and a weak US exchange rate will
support current copper prices throughout 2007. The first half of 2008 may see
an improvement in exchange stocks and market moving towards a balance.
The tightness in the concentrate
market is the result of rapid expansion in the smelting capacity — mostly in
China and India. Smelters have been buying on aggressive spot terms thereby
placing miners in an advantageous position in their negotiations for fixing
long-term benchmark TcRc for 2008 which is expected to be lower than 2007.
Smelters with large spot exposures are not likely to meet their entire requirements
and consequently production cutbacks cannot be ruled out. Increasingly smelters
are scouting for participation in mine development to secure long-term
concentrate contracts. New major mining projects under implementation are
expected to come on-stream during 2010 to 2011. This would change the market
balance.
Company outlook
Higher volumes from asset sweating
of existing plants and from the brownfield expansion along with the continued focus
on maximising free cash flow will be the major driver for the growth of the
company in the coming quarters. A stronger Rupee and soft alumina prices will
put the profit margins under pressure. However, with the benefits of brownfield
expansions and various cost optimisation initiatives in both aluminium and
copper businesses are expected to sustain satisfactory performance, going
forward.
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 records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or investigation
registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws, regulations
or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.29 |
|
UK Pound |
1 |
Rs.77.02 |
|
Euro |
1 |
Rs.58.16 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
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 |
|
73 |
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 |
|