MIRA
INFORM REPORT
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Report Date : |
23.07.2011 |
IDENTIFICATION DETAILS
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Name : |
ADITYA
BIRLA NUVO LIMITED (w.e.f.27.10.2005) |
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Formerly Known
As : |
INDIAN
RAYON AND INDUSTRIES LIMITED (w.e.f.23.01.1987) INDIAN
RAYON CORPORATION LIMITED |
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Registered
Office : |
Indian Rayon Compound, Veraval - 362 266, |
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Country : |
India |
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Financials (as
on) : |
31.03.2010 |
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Date of
Incorporation : |
26.09.1956 |
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Com. Reg. No.: |
04-001107 |
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Capital
Investment / Paid-up Capital : |
Rs. 1031.100 millions |
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CIN No.: [Company Identification
No.] |
L17199GJ1956PLC001107 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
BRD100317C |
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PAN No.: [Permanent Account No.] |
AAACI1747H |
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Legal Form : |
A Public Limited Liability Company. The company’s shares are listed on the
Stock Exchanges. |
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Line of Business
: |
Manufacturing and Marketing of Viscose Filament Yarn,
Sulphuric Acid, Carbon-di-sulphide, Anhydrous Sodium Sulphide, Yarn, Cloth,
Reinforced Rubberlined Hosepipes, other Hosepipes, High and Low Tension
Insulators and Bushings, Portland Black and Liquid Argon. |
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No. of Employees
: |
8197(Approximately) |
RATING & COMMENTS
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MIRA’s Rating : |
A (67) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD
180000000 |
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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 well established and reputed company
having fine track. Financial position of the company appears to be sound.
Trade relations are reported as fair. Business is active. Payments are
reported to be regular and as per commitments. The company can be considered normal for business
dealings at usual trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
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Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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A1 |
A1 |
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Risk Category |
ECGC Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
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Registered Office : |
Indian
Rayon Compound, Veraval - 362266, |
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Tel. No.: |
91-2876-245711/245735/245758 |
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Fax No.: |
91-2876-243220 |
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E-Mail : |
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Website : |
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Corporate Office : |
Survey
No. 62/2A, 62/2B, Parappana Agrahara, off Hosur Road, Vegur Hobli, Bangalore
– 560068, Karnataka, India |
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Tel. No.: |
91-2876-245711 |
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Fax No.: |
91-2876-243220 |
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Head Office : |
91
Sakhar Bhawan, 9th Floor, 230 Nariman Point, Mumbai – 400 021, |
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Tel. No.: |
91-22-2204
5004 |
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Fax No.: |
91-22-2204
3686 |
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E-Mail : |
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Factory 1: |
GARMENTS DIVISION: Madura
Garments M G
House, Plot No. 5B, Doddanekkundi Industrial Area, 1 Stage, Krishnaraja Puram
Hobli, Brookefields, Bangalore-560048, |
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Tel No. |
91-80-67271600 |
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Fax No.: |
91-80-67272626 |
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E mail: |
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Factory 2: |
Rayon and Caustic Soda Plants: Indian
Rayon Division Veraval
362 266, Gujarat, |
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Tel No. |
91-2876-245711 |
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Fax No.: |
91-2876-243220 |
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E mail: |
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Factory 3: |
Carbon Black Plants: Hi-Tech
Carbon Murdhwa
Industrial Area, P. O. Renukoot 231 217, District Sonbhadra, |
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Tel No. |
91-5446-252387
to 391 |
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Fax No.: |
91-5446-252502
/ 252858 |
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E mail: |
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Factory 4: |
Argon Gas Plant: Rajashree
Gases IGFL
Complex, P. O. Jagdishpur Industrial Area - 227 817, District Sultanpur, |
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Tel No. |
91-5361-270032
to 38 |
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Fax No.: |
91-5361-270595
/ 270165 / 270172 |
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E mail: |
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Factory 5: |
K-16,
Phase II, SIPCOT Industrial Complex, Gummidipoondi - 601 201District
Tiruvallur - Tamil |
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Tel No. |
91-4119-223233
to 36 |
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Fax No.: |
91-4119-223129/223116 |
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E mail: |
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Factory 6: |
Textile Plants: Jaya Shree Textiles P.
O. Prabhasnagar - 712 249, District Hooghly, West |
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Tel No. |
91-33-26721146 |
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Fax No.: |
91-33-26721683
/ 26722626 |
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E mail: |
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Factory 7: |
Rajashree
Syntex P.
O. Tantigaria, District Midnapur Paschim, PIN: 721 102, (West Bengal), |
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Tel No. |
91-3222-263131
/ 275820 / 263964 |
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Fax No.: |
91-3222-275528 |
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E mail: |
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Factory 8: |
Other Division: Aditya Birla Insulator (Domestic
Marketing) P.
O. Meghasar Taluka Halol, District Panchmahal, Gujarat - 389 330, |
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Tel No. |
91-2676-221002 |
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Fax No.: |
91-2676-223375 |
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E mail: |
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Factory 9: |
Fertilizer Plant : P.O.
Jagdishpur Industrial Area, District Sultanpur - 227 817, |
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Tel No. |
91-5361-270032-38 |
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Fax No.: |
91-5361-270165
and 270595 |
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E mail: |
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Factory 10 : |
Financial Services Division Appejay,
2nd Floor, |
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Tel No. |
91-22-22880660 |
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Fax No.: |
91-22-22881088 |
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E mail: |
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Factory 11: |
Insulator
Plants P.O.
Meghasar, Taluka: Halol, District Panchmahal-389330, |
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Tel No. |
91-2676-221002 |
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Fax No.: |
91-2676-223375 |
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E mail: |
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Factory 12: |
P.O.
Prabhas Nagarl, Rishra, District Hoogly-712249, West |
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Tel No. |
91-33-26723535 |
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Fax No.: |
91-33-26722705 |
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E mail: |
DIRECTORS
AS ON 31.03.2010
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Name : |
Mr. Kumar Mangalam Birla |
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Designation : |
Chairman and Managing Director |
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Name : |
Mrs. Rajashree Birla |
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Designation : |
Director |
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Name : |
Mr. B. L. Shah |
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Designation : |
Director |
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Name : |
Mr. P. Murari |
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Designation : |
Director |
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Name : |
Mr. B. R. Gupta |
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Designation : |
Director |
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Name : |
Ms. Tarjani Vakil |
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Designation : |
Director |
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Name : |
Mr. G. P. Gupta |
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Designation : |
Director |
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Name : |
Mr. S. C. Bhargava |
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Designation : |
Director |
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Name : |
Mr. Pranabl Barua |
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Designation : |
Director |
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Name : |
Mr. Rakesh Jain |
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Designation : |
Managing Director |
KEY EXECUTIVES
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Name : |
Mr. Sushil Agarwal |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Manoj Kedia |
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Designation : |
Deputy Chief Financial Officer |
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Name : |
Mr. Devendra Bhandari |
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Designation : |
Company Secretary |
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Carbon Black : |
·
Dr. Santrupt Misra (Business Head) ·
Mr. S S Rathi (Executive President) |
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Fashion and Lifestyle and Textiles : |
·
Mr. Pranab Barua (Business Director) ·
Mr. Ashish Diskshit (President – Jaya Shree
Textile) ·
Mr. Ashish Dikshit (President – Madura Garments) |
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Agri Business : |
Mr. S K Jain (Senior President) |
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Insulators: |
Mr. Jayant Dua (Chief Executive Officer) |
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IT - ITeS: |
Mr. Deepak Patel (Chief Executive Officer) |
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Financial Services: |
·
Mr. Ajay (Chief Executive – Financial Services ,
Managing Director – Birla Sun Life Insurance Company Limited) ·
Mr. Pankaj Razdan (Deputy Chief Executive –
Financial Services) |
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Telecom: |
·
Mr. Sanjeev Aga (Managing Director – Idea
Cellular Limited) |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 30.06.2011
|
Names of Shareholders |
No.
of Shares |
Percentage
of Holding |
|
(A) Shareholding of Promoter and Promoter Group |
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|
136203 |
0.12 |
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57808494 |
52.42 |
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57944697 |
52.54 |
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Total shareholding of Promoter and Promoter Group (A) |
57944697 |
52.54 |
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(B) Public Shareholding |
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|
1146482 |
1.04 |
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10026742 |
9.09 |
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2336712 |
2.12 |
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|
0770766 |
18.83 |
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|
6286 |
0.01 |
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|
6286 |
0.01 |
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34286988 |
31.09 |
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|
3383486 |
3.07 |
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|
12695061 |
11.51 |
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733244 |
0.66 |
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|
1243260 |
1.13 |
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|
147360 |
0.13 |
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1087133 |
0.99 |
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|
8767 |
0.01 |
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18055051 |
16.37 |
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Total Public shareholding (B) |
52342039 |
47.46 |
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Total (A)+(B) |
110286736 |
100.00 |
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(C) Shares held by Custodians and against which Depository
Receipts have been issued |
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(1) Promoter and Promoter Group |
1425000 |
-- |
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(2) Public |
1797993 |
-- |
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Total (A)+(B)+(C) |
113509729 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Foreign BankBUSINESS DETAILS
|
Line of Business : |
Manufacturing and Marketing of
Viscose Filament Yarn, Sulphuric Acid, Carbon-di-sulphide, Anhydrous Sodium
Sulphide, Yarn, Cloth, Reinforced Rubberlined Hosepipes, other Hosepipes,
High and Low Tension Insulators and Bushings, Portland Black and Liquid
Argon. |
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Products : |
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PRODUCTION STATUS AS ON 31.03.2010
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
Garments |
Nos/000 |
-- |
3300* |
|
Viscose Filament Rayon Yarn |
MT |
16400 |
16759 |
|
Sulphuric Acid and Allied Chemicals |
MT |
55300 |
47671 |
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Caustic Soda |
MT |
91250 |
88250 |
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Chlorine |
MT |
80665 |
72377 |
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Hydro Chloric Acid |
MT |
11115 |
17356 |
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Spun Yarn |
Spd/MT |
43768
Spdl. |
9610 |
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Cloth |
Lm/’000mtr |
106 |
4375 |
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Carbon Black |
MT |
230000 |
233370 |
|
High and Low Tension Insulators and Bushings $ |
MT |
48760 |
36063 |
|
Liquid
Argon |
‘000 SM3 |
3000 |
485 |
|
Urea |
MT |
2620
per day |
1097705 |
Notes:
The Installed
Capacity is as Certified by the Management and licensed capacity is not given
as licensing has been abolished.
@Turnover quantity
includes captive consumption, damages, sample sales, and shortages, and value
includes export benefits.
* Garment
production includes items produced on jobwork basis by outside parties and
purchases.
** Includes
Quantity 2185322 and Value Rs. 143.100 millions of inventories as a result of
composite scheme of arrangement.
GENERAL INFORMATION
|
No. of Employees : |
8197 (Approximately) |
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Bankers : |
Ř
State Bank
of Ř
Corporation
Bank Ř
Standard Chartered
Grindlays Bank Limited Ř
United
Bank of Ř
UCO Bank Ř
Canara
Bank Ř
Punjab
National Bank Ř
Bank of Ř
HDFC Bank
Limited Ř
Citibank
NIA. Ř
American
Express Bank Limited Ř
Central
Bank of Ř
The Hongkong
and Shanghai Banking Corporation Limited Ř
Allahabad
Bank Ř State Bank of Saurashtra Ř Standard Chartered Bank |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Khimji
Kunverji and Company Chartered Accountants |
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Address : |
Mumbai, |
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Branch Auditors: |
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Name : |
K. S. Aiyar and Company Chartered Accountants |
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Address : |
Mumbai, |
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Joint Ventures : |
·
Birla Sun Life Asset Management Company Limited (BSAMC)
(directly held by the Company till March 22, 2010, thereafter Joint Venture
of ABFSPL) ·
Birla Sun Life Trustee Company Private Limited
(BSTPL) (directly held by the Company till March 22, 2010, thereafter Joint
Venture of ABFSPL) ·
Birla Sun Life Distribution Company Limited
(BSDL) (on becoming Subsidiary, ceased to be Joint Venture w.e.f. March 31,
2009) ·
IDEA Cellular Limited (31.78% up to August 12,
2008; 27.02% up to February 28, 2010, and thereafter 25.38%) |
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Subsidiaries : |
·
Aditya Birla Financial Services Private Limited
(ABFSPL) (w.e.f. November 4, 2008) ·
Aditya Birla Capital Advisors Private Limited
(ABCAPL) (Subsidiary of ABFSPL) (w.e.f. November 4, 2008) ·
Aditya Birla Customers Services Private Limited
(ABCSPL) (Subsidiary of ABFSPL) (w.e.f. December 11, 2008) ·
Aditya Birla Securities Private Limited (ABSPL)
(Subsidiary of ABFSPL) (w.e.f. November 4, 2008, and ceased to be a
Subsidiary w.e.f. March 13, 2009) ·
Aditya Birla Trustee Company Private Limited
(ABTCPL) (Subsidiary of ABFSPL) (w.e.f. November 28, 2008) ·
Aditya Birla Financial Shared Services Limited
(ABFSSL) (Subsidiary of ABFSPL) (w.e.f. June 19, 2008) ·
Aditya Birla Money Limited (ABML) (formerly known
as Apollo Sindhoori Capital Investments Limited) (Subsidiary of ABFSPL)
(w.e.f. March 6, 2009) ·
Aditya Birla Commodities Broking Limited (ABCBL)
(formerly known as Apollo Sindhoori Commodities Trading Limited) (100%
Subsidiary of ABML) (w.e.f. March 6, 2009) ·
Birla Insurance Advisory and Broking Services
Limited (50.01% Subsidiary of ABFSPL) ·
Aditya Birla Money Mart Limited (ABMML) (formerly
known as Birla Sun Life Distribution Company Limited) (w.e.f. March 31, 2009) ·
Aditya Birla Money Insurance Advisory Services
Limited (formerly known as BSDL Insurance Advisory Services Limited) (100 %
Subsidiary of ABMML) ·
Aditya Birla Minacs Worldwide Limited (ABMWL) ·
Transworks Inc. (TW Inc.) (100% Subsidiary of
ABMWL) ·
Aditya Birla Minacs Philippines Inc. (ABMPI)
(100% Subsidiary of ABMWL) ·
AV Transworks Limited (AVTL) (100% Subsidiary of
ABMWL) ·
Aditya Birla Minacs Worldwide Inc. (ABMWI) (100%
Subsidiary of AVTL) (formerly known as Minacs Worldwide Inc.) ·
Compass BPO Limited, U.K. (Subsidiary of ABMWI)
(w.e.f. March 9, 2010) ·
Compass BPO, Inc., U.S.A (w.e.f. March 9, 2010) ·
Compass Business Process Outsourcing Private
Limited, India (w.e.f. March 9, 2010) ·
Compass BPO FZE, U.A.E. (w.e.f. March 9, 2010) ·
Minacs Worldwide SA de CV (100% Subsidiary of
ABMWI) ·
Minacs Group (USA) Inc. (100% Subsidiary of
ABMWI) ·
Minacs Limited (100% Subsidiary of ABMWI) ·
Minacs Worldwide GmbH (100% Subsidiary of Minacs
Limited) ·
Minacs Kft. (100% Subsidiary of Minacs GmbH) ·
Aditya Vikram Global Trading House Limited
(AVGTHL) ·
Aditya Birla Finance Limited (ABFL) (formerly
known as Birla Global Finance Company Limited) ·
Birla Sun Life Insurance Company Limited (BSLICL) ·
ABNL Investment Limited (ABCL) (formerly known as
Laxminarayan Investment Limited) ·
Madura Garments International Brand Company
Limited (MGIBCL) (on becoming Associate, ceased to be an Subsidiary w.e.f.
November 27, 2009) ·
LIL Investment Limited (w.e.f. July 27, 2009, and
on becoming Associate, ceased to be a Subsidiary w.e.f. November 27, 2009) ·
Madura Garments Exports Limited (MGEL) (merged
with the Company w.e.f. January 1, 2010) ·
Madura Garments Exports US, Inc. (ceased to be a
Subsidiary from February 9, 2010) ·
Madura Garments Lifestyle Retail Company Limited
(MGLRCL) ·
MG Lifestyle Clothing Company Private Limited
(MGCCPL) (merged with the Company w.e.f. January 1, 2010) ·
Peter England Fashions and Retail Limited (PEFRL) ·
Aditya Birla Minacs IT Services Limited (ABMITS)
(formerly known as PSI Data Systems Limited) ·
Birla Technologies Limited (100% Subsidiary of
ABMITS) |
|
|
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Associates : |
·
Birla Securities Limited ·
Madura Garments International Brand Company Limited
(MGIBCL) (w.e.f. November 27, 2009) ·
LIL Investment Limited (w.e.f. November 27, 2009) |
CAPITAL STRUCTURE
AS ON 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
175000000 |
Equity Shares |
Rs.10/- each |
Rs. 1750.000 Millions |
|
500000 |
Redeemable Preference Shares |
Rs. 100/- each |
Rs. 50.000 millions |
|
|
Total |
|
Rs. 1800.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
103009542 |
Equity Shares |
Rs.10/- each |
Rs. 1030.100
Millions |
|
10000 |
6% Redeemable Cumulative |Preference Shares |
Rs. 100/-
each |
Rs. 1.000
millions |
|
|
Total |
|
Rs. 1031.100 millions |
Notes:
1.
* Includes:
— 24,989,914 equity
shares (Previous Year: 24,989,914) alloted as fully paid-up pursuant to
contracts for consideration other than cash.
— 23,375,235
equity shares (Previous Year: 23,375,185) issued as bonus shares by
Capitalisation of Reserves
and Securities
Premium.
— 3,262,792 equity
shares (Previous Year: 3,277,725 ) represented by Global Depository Receipts.
2.
Outstanding Warrants exercisable into 10,500,000
(Previous Year: 18,800,000) Equity Shares of Rs. 10/- each
3.
Pursuant to the provisions of Section 206A of the
Companies Act, 1956, the issue of following equity shares are kept in abeyance:
|
Particulars |
No of shares |
|
|
|
31.03.2010 |
31.03.2009 |
|
Right Issue (1994) |
12635 |
12735 |
|
Bonus Shares on above |
6318 |
6368 |
|
Right Issue (2007) |
24159 |
24281 |
|
|
43112 |
43384 |
4. Outstanding
Employee Stock Options exercisable into 208,632 (Previous Year: 265,783) Equity
Shares of Rs. 10/- each (Refer Note 4 of Schedule 20).
5. + In Accordance
with the Composite Scheme of Arrangement, 6% Redeemable Cumulative Preference
Shares of Rs. 100/- each fully paid-up are issued to preference shareholders
(other than the ABNL) of Peter England Fashions and Retail Limited. These
preference shares are redeemable by the Company at any time after completion of
one year and on or before completion of five years from 01.01.2010 at the face
value.
6. Figures in
brackets represent corresponding number of shares of Previous Year.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
1031.100 |
950.100 |
950.100 |
|
|
2] Share Application Money |
1420.700 |
3774.100 |
3774.100 |
|
|
3] Reserves & Surplus |
44163.300 |
36492.400 |
35513.200 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
46615.100 |
41216.600 |
40237.400 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
20673.800 |
22170.700 |
18567.200 |
|
|
2] Unsecured Loans |
15682.700 |
22821.400 |
8867.000 |
|
|
TOTAL BORROWING |
36356.500 |
44992.100 |
27434.200 |
|
|
DEFERRED TAX LIABILITIES |
1784.700 |
1802.400 |
2003.100 |
|
|
|
|
|
|
|
|
TOTAL |
84756.300 |
88011.100 |
69674.700 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
15522.200 |
14762.100 |
14308.900 |
|
|
Capital work-in-progress |
2630.600 |
1287.800 |
707.300 |
|
|
|
|
|
|
|
|
INVESTMENT |
54358.500 |
57123.900 |
40073.300 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
8763.400
|
7476.000
|
7766.000
|
|
|
Sundry Debtors |
6933.300
|
8872.300
|
7531.900
|
|
|
Cash & Bank Balances |
143.100
|
898.100
|
971.500
|
|
|
Other Current Assets |
293.300
|
374.500
|
2.100
|
|
|
Loans & Advances |
6259.00
|
4951.200
|
5239.600
|
|
Total
Current Assets |
22392.100
|
22572.100 |
21511.100 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
6413.600
|
4508.200 |
3945.100 |
|
|
Other Current Liabilities |
2550.900
|
2262.200
|
1646.000
|
|
|
Provisions |
1182.600
|
964.400
|
1334.800
|
|
Total
Current Liabilities |
10147.100
|
7734.800 |
6925.900 |
|
|
Net Current Assets |
12245.000
|
14837.300
|
14585.200
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
84756.300 |
88011.100 |
69674.700 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
48274.700 |
47861.800 |
39530.700 |
|
|
|
Other Income |
707.900 |
652.500 |
381.900 |
|
|
|
TOTAL (A) |
48982.600 |
48514.300 |
39912.600 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
(Increase) / Decrease in Stocks |
50.600 |
[216.700] |
[836.800] |
|
|
|
Cost of Material |
23912.000 |
25646.900 |
20617.800 |
|
|
|
Salaries, Wages, Bonus, etc. |
3477.300 |
2879.100 |
2586.100 |
|
|
|
Manufacturing Expenses |
13197.700 |
14016.000 |
10951.500 |
|
|
|
Exceptional Items |
0.000 |
0.000 |
[7.300] |
|
|
|
TOTAL (B) |
40637.600 |
42325.300 |
333113 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
8345.000 |
6189.000 |
6601.300 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
3341.000 |
2906.400 |
2044.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
5004.000 |
3282.600 |
4556.600 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
1801.000 |
1659.600 |
1411.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
3203.000 |
1623.000 |
3145.600 |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
369.000 |
248.700 |
714.900 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-I) (J) |
2834.000 |
1374.300 |
2430.700 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
860.300 |
210.600 |
169.000 |
|
|
|
|
|
|
|
|
|
|
Amount
Transferred on account of Scheme of Arrangement |
(1396.000) |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
1000.000 |
137.500 |
1750.000 |
|
|
|
Debenture Redemption Reserve |
531.900 |
162.800 |
0.000 |
|
|
|
Proposed Dividend on Equity Shares |
515.100 |
380.000 |
546.300 |
|
|
|
Corporate Tax on Dividend |
79.500 |
44.300 |
92.800 |
|
|
BALANCE CARRIED
TO THE B/S |
171.800 |
860.300 |
210.600 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
6224.900 |
6806.500 |
6388.600 |
|
|
|
|
41.200 |
46.100 |
51.700 |
|
|
|
Service Charges |
1.800 |
0.700 |
1.200 |
|
|
TOTAL EARNINGS |
6267.900 |
6853.300 |
6441.500 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
11496.900 |
12899.000 |
11877.300 |
|
|
|
Stores & Spares |
184.100 |
236.600 |
218.300 |
|
|
|
Capital Goods |
622.000 |
902.000 |
353.100 |
|
|
|
Others |
304.900 |
406.000 |
328.500 |
|
|
TOTAL IMPORTS |
12607.900 |
14443.600 |
12777.200 |
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
(Rs.) |
28.81 |
14.46 |
26.05 |
|
QUARTERLY RESULTS
(Rs.
In Millions)
|
PARTICULARS |
30.06.2010 |
30.09.2010 |
31.12.2010 |
31.03.2011 |
|
Net Sales |
13111.400 |
16388.100 |
17150.400 |
17795.300 |
|
Total Expenditure |
11221.600 |
13908.200 |
14733.600 |
15460.800 |
|
PBIDT (Excl OI) |
1889.800 |
2479.900 |
2416.800 |
2334.500 |
|
Other Income |
146.800 |
203.800 |
135.500 |
93.900 |
|
Operating Profit |
2036.600 |
2683.700 |
2552.300 |
2428.400 |
|
Interest |
685.600 |
731.600 |
701.400 |
692.100 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
PBDT |
1351.000 |
1952.100 |
1850.900 |
1736.300 |
|
Depreciation |
454.000 |
488.900 |
486.900 |
509.700 |
|
Profit Before Tax |
897.000 |
1463.200 |
1364.000 |
1226.600 |
|
Tax |
248.800 |
267.400 |
360.200 |
277.500 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
648.200 |
1195.800 |
1003.800 |
949.100 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
648.200 |
1195.800 |
1003.800 |
949.100 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
5.79
|
2.83
|
6.09 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
6.63
|
3.39
|
7.96 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
8.45
|
4.35
|
4.78 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.07
|
0.04
|
0.08 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.03
|
1.28
|
0.85 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.21
|
2.92
|
3.11 |
LOCAL AGENCY FURTHER INFORMATION
FINANCE
The Company raised
long-term loan aggregating to Rs. 1400.000 millions by way of foreign currency
borrowings and Rs. 2000.000 millions by way of Non- Convertible Debentures.
During the year, Term
Loan aggregating to Rs. 4280.000 millions and Commercial papers aggregating to
Rs. 9000.000 millions (net) were repaid.
Standalone Net
Debt to EBITDA reduced significantly from 5.9 times as on 31st
March, 2009 to 4.1 times on 31st
March, 2010 resulting
from equity infusion by Promoters, improved profitability and debt repayments.
AWARDS AND RECOGNITION
The Company has
been the proud recipient of the following awards and recognitions –
INDIAN RAYON DIVISION
• Gold Award in
Chemical Sector for outstanding achievement in Environment Management from
Greentech Foundation, Kerala.
• Excellent Energy
Efficient Unit Award under the National Energy Management Award, 2009.
• Environment
Excellence Award in Chemical Sector from Greentech Foundation.
• National Award
for Excellence in Energy Management 2009 from Confederation of Indian Industry.
• ISO 9001:2000
Certification awarded for conforming to the Quality Management System Standard
by DET NORSKE VERITAS.
• OHSAS 18001:2007
Certificate awarded by DET NORSKE VERITAS for conforming to the Occupational
Health and Safety Management System Standard.
• ISO 14001:2004
Certificate from UL DQS Inc. for implementation and maintenance of –
Environmental, Responsible Care and Health, Safety and Security Management
System.
• Social
Accountability 8000:2008 Certification received from DET NORSKE VERITAS for
conforming to the Social Accountability Standard in manufacturing category.
JAYA SHREE TEXTILES DIVISION
• SHE Award for
Best Entry (Small and Medium Scale) from Confederation on Indian Industry.
INDO GULF FERTILISERS DIVISION
• The FAI
Runner-up Award for Best Production Performance of Nitrogenous Fertiliser from
Fertiliser Association of India.
• ISO 9001:2008
Certification from AFNOR Certification for meeting the requirements of Quality
Management System
• ISO 14004:2004
Certification from AFNOR Certification for meeting requirements of Environment
Management System
• OHSAS 18001:2007
from AFAQ-EAQA Limited for complying with the requirements of Occupational
Health and Safety Management System (OHSAS 18001:2007)
• ISO / IEC /
27001:2005 Certification from Bureau Veritas Certification for Management of
Information Security for all operations.
MADURA GARMENTS DIVISION
• Peter England was
awarded Second Best “Brand Equity- Most Trusted Brands 2009” in Apparel
segment.
• Louis Philippe
received Partner’s Choice Award in Men’s Formal Wear category, by Central
Icons.
ADITYA BIRLA INSULATORS DIVISION – RISHRA
• Certificate of
Merit in IMC Ramakrishna Bajaj National Quality Awards 2009 in manufacturing
category.
• Bronze-Level
Recognition received by Quality Circle Team “Kiran” in International Convention
on Quality Circle held in Philippines.
ADITYA BIRLA INSULATORS DIVISION – HALOL
• TOP Award in the
category of ‘Product covered by the Ceramic and Allied Products including
Refractories Panel’ received from Chemicals and Allied Products Export
Promotion Council.
HI TECH CARBON DIVISION – RENUKOOT
•
‘Excellent’-level recognition received by the Quality Circle Teams, “Asset
& Dynamic” in the National Level Competition, at Bangalore.
MANAGEMENT
DISCUSSION AND ANALYSIS
LIFE INSURANCE
(BRILA SUN LIFE INSURANCE COMPANY LIMITED)
Industry Overview
The Indian Life
insurance industry currently comprises 22 private life insurers and one public
sector insurer – Life Insurance Corporation of India. Life insurance industry
has revived successfully out of the slowdown witnessed in the previous
financial year 2008-09. The weighted new received premium (new business) of the
industry surged by 28% to about Rs. 820000.000 millions in 2009-10 after
de-growing by 3% in 2008-09. New business of private life insurers at about Rs.
350000.000 millions grew by 13% compared to 6% in the previous financial year
[Source: Insurance Regulatory and Development Authority (“IRDA”),
www.irdaindia.org]. About 80% of private sector’s new business continues to be
contributed by the top seven private life insurers including Birla Sun Life
Insurance – indicating their dominance in the industry. With increased thrust
on conservation of capital and profitability, top industry players opted to
slowdown the growth in the distribution infrastructure and focused on higher
productivity and efficiency for achieving growth.
Performance Review
Birla Sun Life
Insurance (“BSLI”) completed its 10th year of successful operations in a
challenging external and uncertain regulatory environment. The IRDA guidelines
on ‘capping on charges’ necessitated redesigning and launching new Unit Linked
Insurance Products (“ULIP”). BSLI revamped its entire ULIP portfolio by
building a competitive suite of products to balance the needs of customers,
distributors and shareholders.
BSLI outperformed
the private sector growth in the previous financial year 2008-09 with a 44%
rise in new business and continued to outperform during the nine months ended
31st December 2009. However, a complete revamp of ULIP portfolio in December
2009 led to an expected impact on the sales during the fourth quarter. During
2009-10, new business premium income of BSLI grew by 5% to Rs. 29600.000
millions. It garnered 8.4% market share among private life insurers in terms of
new business (Source: IRDA).
The total premium
income of BSLI grew by 20% to Rs. 55060.000 millions led by a robust growth of
45% in the renewal premium which was driven by high persistency levels. BSLI
achieved 13th month persistency by annualized premium at ~85%. AUM
has been scaled up by 76% to Rs. 161300.000 millions (~USD 3.6 billion).
BSLI took several
steps to rationalize expenses across the operations to increase value to the
customers without compromising on profit margins. As a result, expense ratio
improved from 27% to 24%. Driven by declining expense ratio, increasing size of
in-force business and improved product mix; net loss reduced from Rs. 7020.000
millions to Rs. 4350.000 millions. Capital requirement also reduced from Rs.
7250.000 millions to Rs. 4500.000 millions out of which subject contributed Rs.
3330.000 millions as its 74% share.
BSLI became the
first Indian life insurance company to get the results, assumptions and
methodology for preparing Embedded Value (“EV”) and Value of New Business
(“VNB”) for the financial year 2008-09, peer reviewed by an international
actuarial firm. The EV of BSLI is measured at Rs. 30600.000 millions as at 31st
March, 2009 against capital of Rs. 20000.000 millions infused till that date.
EV reflects the value of future profits embedded in the in-force policies
written by the life insurance company. The VNB margin, a measure used for
gauging profitability of new business stood at 20.3% for the financial year
2008-09.
With a clear focus
on profitable growth, BSLI started the financial year with a thrust on driving
higher productivity across the channels, growing alternate channel
relationships, launching innovative products, delivering strong investment
returns and superior service to the policyholders.
Direct Selling
Agents channel continues to be the largest distribution channel for BSLI
contributing 68% of its individual life business. Various initiatives were undertaken to
improve productivity across the sales force by way of segmentation and
structured training. BSLI continued to strengthen alternate channel
relationships which grew from over 425 in March 2009 to over 600 in March 2010.
Bancassurance channel contributed 15% and Corporate Agents and Brokers
contributed 17% of its individual life business.
BSLI launched 11
new products including guaranteed ULIPs, over the counter products and highest
NAV plans. Some of the new product suites include Saral Solutions, Dream
Solutions and Titanium Plus. BSLI continued to deliver superior investment
returns to its policyholders with every fund beating the benchmark performance.
BSLI
achieved the
distinction of attaining ‘zero percent’ claims outstanding ratio for a
consecutive second year, that means, 100% of all the claims intimated during
the year have been processed. This is a live example of its ‘Customer First’
approach and clearly speaks of the strong system and processes it has set in.
The brand recall score of BSLI has improved from 84% to 93%.
Outlook
In an uncertain
and volatile economic environment, last two years have been quite challenging
for the life insurance industry in terms of new business growth and regulatory
changes. This has given an opportunity to existing players to review and
improve their operating models to drive higher efficiencies. There could be
some challenges in the short term in terms of driving higher capacity utilisation,
especially in the agency channel and change in the industry business model in
light of the ongoing regulatory changes. However, in the long run, regulatory
changes like capping on charges will make ULIPs more cost competitive and
attractive for customers and will prove beneficial for the industry.
The outlook for
Indian life insurance industry continues to be robust. The future growth will
be strongly driven by factors like long term economic growth, lower penetration
levels, growing middle class, younger working population, high saving rate and
rising awareness among the population on the need for life insurance. The level
of penetration, particularly in life insurance, tends to rise as income levels
increase. The share of life insurance in deployment of annual financial
household savings has doubled in past ten years from 11% in 1998-99 to 20% in
2008-09
BSLI is well
positioned to capitalise on these opportunities with a vision to be in top 3
private players’ league. It will continue to focus on improving persistency and
maximising its in-force book through superior investment performance and
customer service. While BSLI will continue to maintain leading edge on the ULIP
platform, it is in advanced stages of expanding its non-ULIP portfolio, to augment
its product offerings and safeguard against regulatory risks. It will continue
to drive higher efficiencies in the areas of operations and across the
distribution channels to achieve profitable growth. BSLI also plans to achieve
excellence in the areas related to brand saliency, customer experience, risk
management and compliance.
ASSET MANAGEMENT (BIRLA SUN LIFE ASSET MANAGEMENT
COMPANY LIMITED)
Industry Overview
The Indian mutual fund
industry currently comprises 43 asset management companies including 16 foreign
players/predominantly foreign joint ventures. The industry witnessed entry of 8
new players during 2009-10. The
average AUM of the
Indian mutual fund industry grew by 52% from Rs. 4929360.000 millions (~USD 110
billion) in March 2009 to Rs. 7475250.000 millions (~USD 166 billion) in March
2010, driven by higher inflows into liquid funds and mark-to-market gains in
equity funds. Equity average AUM almost doubled from Rs. 1129950.000 millions
(~USD 25 billion) in March 2009 to Rs. 2132820.000 millions (~USD 47 billion)
in March 2010, backed by strong recovery in equity markets. Share of equity AUM
in total industry AUM increased from 23% to 29%. Debt and liquid fund assets continue
to contribute majority proportion of total industry AUM dominated by banks’ and
corporates’ treasury investments
In the recent
past, the market regulator SEBI has introduced a number of initiatives and
regulatory changes to safeguard and empower retail investors. Among important
regulatory developments, SEBI introduced no load regime where by entry load on
mutual funds was removed w.e.f. 1st August 2009. Consequently, industry faced
significant equity redemption and net equity sales de-grew from Rs. 40840.000
millions in 2008-09 to Rs. 14560.000 millions in 2009-10
Performance Review
Birla Sun Life
Asset Management Company (“BSAMC”) completed 15 years journey of continued
wealth creation. It ranked 5th with 8.3% market share as on 31st March 2010.
The total average
AUM of BSAMC surged by 34% from Rs. 486490.000 millions to Rs. 651300.000
millions (~USD 14.5 billion). About half of the increase in the AUM in absolute
terms was contributed by growth in equity AUM.
Average equity AUM
(including offshore) more than doubled to Rs. 134700.000 millions, led by
higher net sales and strong fund performance. BSAMC achieved highest growth
rate in terms of domestic average equity AUM among the top five players. It
garnered domestic equity net sales of over Rs. 20410.000 millions to rank among
the top three equity mobilisers during the year. For industry, mark to market
gain contributed to 98% of growth in average equity AUM while only less than 2%
growth coming from equity net sales. For BSAMC, more than 32% of growth in
domestic average equity AUM was contributed by equity net sales. BSAMC’S share
in industry’s average equity AUM grew from 4.1% in March 2009 to 5.2% in March
2010.
Increase in high
margin assets like equity, PMS and offshore coupled with better expenses
management has helped BSAMC in delivering excellent financial performance. Net
income from operations grew by 65% to Rs. 2930.000 millions. Net profit grew
from Rs. 80.000 millions to Rs. 480.000 millions.
BSAMC has a strong
distribution network with 109 branches and over 32,000 financial advisors as on
31st March 2010. The investor’s base grew from 2.3 million folios to 2.5
million folios. Live SIPs grew year on year by 47%. BSAMC recorded the highest
number of funds in 4 and 5 star categories across the industry throughout the
year reflecting its strong investment performance. According to Lipper Global
Data, ‘Birla Sun Life Tax Relief ’96’ was
awarded as the
‘World’s best performing equity fund’ for the period September, 1996 to
September, 2009 among 3006 eligible equity funds. BSAMC was adjudged as the
‘Best Wealth Creator – Best Mutual Fund House’ and ‘Best Wealth Creator – Best
Debt Fund House’ by Outlook Money – NDTV Profit in October, 2009. It was also
adjudged as best ‘Onshore Fund House India, 2009’ by Asian Investor Magazine.
It was also awarded ‘Asset management Company of the Year – 2009’ by The Asset,
Hong Kong.
Outlook
Mutual fund AUM as
percentage of GDP at ~13% is very low in India compared to 50%- 90% in the
developed countries. Currently, only ~5% of Indian population invests in mutual
fund. Indian mutual fund industry is expected to grow by 15%-25% from 2010 to
2015, backed by growth drivers such as lower penetration, long term economic
growth, increase in retail participation with preference for mutual funds over
asset classes perceived to be more risky, rising disposable incomes and
savings, favourable demographics. Moreover, the mutual fund players are
increasingly focusing on the high margin and alternate assets such as PMS, real
estate and offshore.
BSAMC aspires to
be among the top 3 players league with a focus on increasing share of high
margin and alternate assets like equity, PMS, real estate and offshore funds.
BSAMC will continue to augment relationships across channels besides launching
innovative products, optimising costs, building a strong retail customer
franchise and enhancing brand loyalty through consistent returns as well as
superior customer service.
NBFC (ADITYA BIRLA FINANCE LIMITED, FORMERLY KNOWN
AS BIRLA GLOBAL FINANCE COMPANY LIMITED)
Industry Overview
Demand for credit
in a developing country like India is huge and traditional financial
institutions like banks are often not able to meet the overall demand. There
NBFCs play an important role. Credit growth in India has been robust at a CAGR
of 28% from 2004-05 to 2008-09. NBFCs have around 12% share in overall credit
outstanding of ~USD 850 billion (March 2010 – Estimate) in India.
In the previous
financial year 2008-09, most NBFCs had slowed down growth and curtailed
exposure as a risk mitigation against the general slowdown in financial markets
and liquidity crisis, IPO financing market had also dried up due to sharp
volatility in the equity markets. However, in 2009-10, market conditions have
improved and most of the NBFCs again scaled up the book size.
Performance Review
Aditya Birla
Finance (“ABFL”) is one of the leading players in the Loan against Securities,
IPO financing and Corporate bill discounting segments. ABFL not only absorbed
the effects of challenging environment in 2008-09 by proactive reduction of
exposure, but also overcome the same and emerged strong in 2009-10 by
re-aligning, re-structuring and re-engineering its business policies and plans.
Loan against securities portfolio more than doubled in 2009-10 compared to the
previous year. It also disbursed more than Rs. 15000.000 millions for IPO
financing. It also introduced new products like Loan against Share Individual,
ESOP Financing, Bond Financing etc. to cater to the needs of different customer
segments.
Net income from
operations decreased from Rs. 1200.000 millions to Rs. 730.000 millions since
in later half of the previous financial year 2008-09, exposure was cautiously
reduced to manage downturn in the financial markets. Surplus funds were
judiciously invested and net profit was maintained at Rs. 300.000 millions.
ABFL’s short term
debt programme has been assigned a rating of ‘A1+’ by the rating agency ICRA –
the highest credit quality rating assigned by the agency to short-term debt
instruments. Instruments rated in this category carry the lowest credit risk in
the short term.
Outlook
Credit penetration
in India at ~60% of GDP is lower compared to other emerging and developed
economies. Credit outstanding is expected to grow at a CAGR of ~20% for next
three years. This coupled with Government’s move in the Union Budget to give
banking licenses to NBFC poses significant growth opportunities for NBFCs. ABFL
aspires to be a significant player and aims to expand its asset book by
extending offerings and leveraging Aditya Birla Group’s large ecosystem for SME
funding.
PRIVATE EQUITY (ADITYA BIRLA PRIVATE EQUITY)
Industry Overview
Despite the global
economic environment and capital market conditions improving gradually during
the year under review, the private equity investments in India (excluding real
estate investments) could touch only USD 3.8 billion
in the calendar
year 2009 as against the peak level of USD 14 billion in the calendar year 2007
and USD 10.5 billion in the calendar year 2008.
Performance Review
Aditya Birla
Private Equity successfully launched its maiden fund ‘Aditya Birla Private
Equity – Fund-I’, notwithstanding the challenges of weak fund raising environment
globally and increasing competition in India with increasing number of players
starting to offer private equity funds. Various institutional investors and
HNIs showed confidence in the fund and it closed at a size of ~ Rs. 8810.000
millions (including 20% sponsor’s commitment) well above planned commitments of
Rs. 5000.000 millions. The fund proposes to target substantial minority stakes,
while investing primarily in unlisted, mid-cap, high growth, India-centric
companies and is sector-agnostic.
Outlook
Though the fund
raising by private equity funds is yet to revert to the peak levels, there is a
huge opportunity in the private equity space in India, driven by long term
growth potential of Indian industry, rising disposable income and growing participation
of high net-worth individuals, mature and liquid financial markets coupled with
conducive government policies for private investment.
Aditya Birla
Private Equity is well positioned to tap this opportunity backed by strong
investment management team and salient parentage brand of the Aditya Birla
Group.
BROKING (ADITYA BIRLA MONEY LIMITED, FORMERLY KNOWN
AS APOLLO SINDHOORI CAPITAL INVESTMENTS LTD.)
Industry Overview
Indian retail
broking industry is highly competitive and fragmented comprising of several
broking players with top five players contributing to only ~16% of equity
broking market size. Indian retail broking sector has witnessed excellent
growth in recent past. Indian Cash market and derivatives market grew at a CAGR
of ~18% and ~32% respectively in the past four years. During the same period,
Depository Participant accounts grew at a CAGR of ~19% and commodity segment at
~35%.
The financial year
2009-10 has been an outstanding year for the Indian equity markets. Sensex, the
benchmark index of BSE, rallied 77% and S&P CNX Nifty, the benchmark index
of NSE, surged by 74%, making India one of
the best
performing equity markets globally. Total Cash and Futures and Options volumes
at NSE and BSE, combined together, surged by 54% to over USD 5 trillion. The
combined commodities volumes recorded in both MCX and NCDEX increased by 43% to
~USD 1.6 trillion.
Performance Review
Subject acquired
Apollo Sindhoori Capital Investments Limited in March 2009 and re-branded it as
Aditya Birla Money Limited. (“ABML”). The key task was to stabilise the
business, rationalize costs, bring operating efficiencies and get the business
back on a track of sustained profits, which was successfully achieved as is
reflected in the financial performance.
Its net income
from operations increased from Rs. 830.000 millions to Rs. 1120.000 millions
supported by 55% rise in equity broking volumes and 45% rise in commodity
broking volumes. Its net profit increased from Rs. 10.000 millions to Rs.
130.000 millions. The number of clients increased from 1.96 lacs in March 2009
to over 2.2 lacs in March 2010. ABML has a strong nation-wide network of more
than 230 own and 550 franchise branches spread across more than 150 cities.
Outlook
Currently, only
~6% of household financial savings are invested in equity in India compared to
10%-30% in developed countries. This under penetration translates into a huge
opportunity for retail broking sector given the positive long term outlook for
India’s equity markets.
Going forward,
ABML will focus on strengthening the five pillars of business – Brand, Product,
Distribution, Operations, Service and People – in a sustained manner. It also
plans to augment its research and product offerings to match the best in the
industry. It will increase its footprint mainly through business partners.
Additional branches are being added predominantly in Western and Northern India
which represent a large opportunity for broking.
WEALTH MANAGEMENT AND DISTRIBUTION (ADITYA BIRLA
MONEY MART LIMITED, FORMERLY KNOWN AS BIRLA SUN LIFE DISTRIBUTION COMPANY
LIMITED)
Industry Overview
Mutual fund
distribution is still a fragmented industry with top 40 distributors
contributing only 37% of the Industry AUM. During the year, the market regulator
SEBI implemented some significant policy changes in the mutual fund
distribution
space. In order to empower investor through transparency in payment of
commission and load structure, SEBI abolished the payment of entry load for all
Mutual Fund Schemes w.e.f. August 1, 2009. This impacted the margins of mutual
fund distribution industry in 2009-10. Distributors are looking to change their
business model and move from transaction based business model to advisory
business model. Distributors are also looking to increase their basket of
services by moving to alternate assets like structured products, private
equity, real estate etc.
Performance Review
In the wake of
above dynamic regulatory changes witnessed during the year, Aditya Birla Money
Mart (“ABMM”) diversified its offerings and product portfolio to increase the
customer base and mitigate the impact on mutual fund distribution segment. The
new product offerings encompassed investment solutions such as private equity,
Gold SIP, alternative investments, structured products and real estate broking
services. It also launched online platform ‘MF Insta-Invest’ enabling the
customers to transact mutual fund through online mode.
This has helped
ABMM to safeguard its revenues even after removal of entry load. Its net income
from operations increased from Rs. 240.000 millions to Rs. 590.000 millions.
However, bottom-line was strained due to business building costs viz.,
investment in the people, process and technology related infrastructure coupled
with reduction in margins due to removal of entry load. Its net loss marginally
grew from Rs. 110.000 millions to Rs. 120.000 millions.
The assets under
advisory grew by 72% from Rs. 95250.000 millions to Rs. 163870.000 millions.
During the year, ABMM mobilised funds aggregating more than USD 75 billion
under different asset classes. ABMM has a strong nation-wide presence through
37 branches and over 7,000 channel partners serving more than 2.5 lacs
customers.
ABMM became the
second largest corporate distributor of mutual funds in India in terms of
assets under advisory. It also became
the largest distributor for Aditya Birla Private Equity Fund–I launched during
the year and the third
largest corporate
agent for Birla Sun Life Insurance.
Outlook
The long term
outlook for the wealth management sector portends well with the increasing
preference towards investment with the help of professional advisors coupled
with high financial savings.
ABMM’s thrust will
be to provide quality financial planning to its clients through product
innovation and technology support. It will also focus on expanding its
offerings to diversify its product portfolio besides deriving synergies with
other Aditya Birla Financial Services verticals.
GENERAL INSURANCE ADVISORY (BIRLA INSURANCE
ADVISORY AND BROKING SERVICES LIMITED)
Industry Overview
The General
Insurance industry premium grew by 13% in 2009-10 over the previous financial
year. The financial year 2009-10 witnessed hardening of prices in the health
insurance segment towards the end. In view of the adverse loss experience, the
insurance companies also capped brokerage on health insurance at 7.5%.
Performance Review
Supported by the
reinsurance and retail broking segments, net income from operations of Birla
Insurance Advisory and Broking Services Limited grew by 25% from Rs. 160.000
millions to Rs. 210.000 millions. Profitability was lower due to capping of
health insurance brokerage. Net profit de-grew from Rs. 50.000 millions to Rs.
40.000 millions.
Outlook
In 2010-11, the
general insurance industry is expected to grow by more than 15%. Improved
economic outlook is also likely to boost growth in general insurance premium.
However, margins for general insurance brokers may remain under pressure due to
hardening of rates following higher losses incurred by insurance companies and
restrictions imposed by the reinsurers.
TELECOM (IDEA CELLULAR LIMITED)
Industry Overview
During the last 15
months, the number of operators has jumped as licenses obtained during the telecom
bubble days in 2007 got converted into live operations. The consequent
over-capacity and hyper competition led to tariff
war. To grab
market share, new launches offered subscription at throw away prices loaded
with free talk time. This led to use and throw phenomenon of new SIM cards.
Introduction of per-second billing even worsen the situation. Consequently,
though wireless subscribers’ base grew by 49% from 392 million to 584 million
in 2009-10, national mobility sector revenue growth for the calendar year 2009
contracted to 12% (after normalisation for Interconnection Usage Charges)
compared to 22% growth in the earlier year.
Performance Review
Idea Cellular
became a Pan India player with the launch of operations in remaining seven
service areas i.e. Orissa, Tamil Nadu and Chennai, Jammu and Kashmir, West
Bengal, Kolkata, Assam and North East. It added its highest ever yearly net
adds to reach 63.82 million subscribers from 43.02 million a year ago. Spice
Communications was merged with Idea w.e.f. 1st March 2010.
Idea ranks 3rd in
terms of revenue market share which grew from 11.7% in the fourth quarter of
2008-09 to 12.6% in the fourth quarter of 2009-10, amidst hyper competition. It
ranks 2nd with ~20.6% revenues market share in
9 service areas
where it holds 900MHz spectrum. Industry derives ~48% of its gross revenues
from these 9 out of total 22 service areas. Idea holds 16% stake in the world’s
largest tower company, Indus Towers, a joint venture with Bharti Infratel
Limited and Vodafone Essar Limited.
Idea registered a
22% upsurge in revenues from Rs. 101310.00 millions to Rs. 123980.000 millions.
Cash profit grew by 32% to Rs. 30900.000 millions. Net profit grew from Rs.
8820.000 millions to Rs. 9540.000 millions even after absorbing a drop of 23%
in average realized rate per minute due to competitive pressure and the
gestating impact of seven new service areas launched during the year.
Net Debt to Equity
stands at 0.6 and Net Debt to EBITDA stands at 1.8 as on 31st March, 2010
reflecting a strong balance sheet. In the recently concluded 3G auction, Idea
won 3G spectrum in 11 service areas, which cover ~80% of its existing 2G
revenues. These eleven service areas account for ~ 49% of Industry’s all India
revenues. Ideas ranks 1st or 2nd in seven out of these
eleven service areas. The total payment made for the 3G spectrum was Rs.
57690.000 millions which was lowest among the major operators.
Outlook
The business models
of most of the telecom operators are facing the stress test from an
overcapacity led hyper-competition. With most of the new operators operating at
tariffs lower than the cost, these operations are unsustainable in the long run
and eventually, sector consolidation looks inevitable. In the long run,
prospects of the Indian telecom industry looks positive in the light of lower
tele-density and lower penetration of value added services. With the roll of 3G
operations, usage of value added services is expected to increase multi-fold.
Idea’s service
area specific strategy, its improving capacity utilisation, its sophisticated
management processes supported by a power brand, underscore Idea’s ability to
ride out the rough times, and to emerge competitively enhanced once the phase
of overcapacity and hyper competition draws to its inevitable close.
IT-ITeS
ITES (ADITYA BIRLA MINACS WORLDWIDE LIMITED)
Industry Overview
The global ITeS
industry has also been affected by the recessionary situation. Whilst business
volumes declined due to customer business and rate reductions, overall global
ITeS is estimated to have grown by 4%-5% in 2009. There were fewer new deals in
the markets and the trend has been that a significant share of these contracts
insisted that the jobs be retained in the home country. Most clients asked for
and negotiated prices downwards on existing contracts. Most of the companies
have looked at the recession and its aftermath as an opportunity to optimise
costs and contain attrition.
Performance Review
With a track
record of over 28 years, Aditya Birla Minacs provides business solutions across
the clients’ value chains. Its portfolio span across their customer lifecycle
management processes, from marketing solutions, to sales and order management,
technical, product and channel support, customer care and loyalty processes,
and to collections outsourcing. Minacs also delivers enterprise services
supporting finance and accounting, procurement, and IT requirements of its
clients – along with its IT services unit, Aditya Birla Minacs IT Services Ltd.
Aditya Birla Minacs ranks among the top 10 Indian ITeS companies by revenues
size.
Aditya Birla
Minacs continued augmenting capabilities, building strong order book with a
sharp focus on bottom-line. To diversify and strengthen its business solutions
capabilities, it acquired Compass BPO Ltd., a leading UK
based pure play
end-to-end Finance and Accounting (“F and A”) service provider in March 2010
and Bureau of Collection Recovery LLC (“BCR”), a leading US based accounts
receivables management company in June 2010. Compass has 10 years of domain
expertise and has been ranked among the top 15 upcoming F and A players. BCR
has 25 years of domain expertise in the US credit industry.
Aditya Birla Minacs
witnessed de-growth in the top-line due to the weak order flow from few clients
suffering slowdown. However, during the year, it has built a strong sales
pipeline of ~USD 1 billion (TCV) and order book of ~USD 600 million, which will
benefit going forward.
Aditya Birla
Minacs serves more than 80 clients located mainly in US, Canada, Europe and
India with revenues mix of 77%, 13%, 6% and 4% respectively. It is working
continuously on de-risking its business and as a result, the revenues
contribution from the top 5 clients reduced from 69% in 2008-09 to 63% in
2009-10. Its revenues mix by verticals (a) Manufacturing, (b) TIME (Telecom,
Technology Infrastructure, Media and Entertainment), (c) Banking and Financial
Services and (d) Insurance and Healthcare is 53%, 31%, 15% and 1% respectively.
Aditya Birla
Minacs has 29 delivery locations in Canada, US, Europe, India and the
Philippines. It scaled up its operating capacities by adding about 2,000 seats
and more than 3,000 employees to reach a total of 9,916 seats and more than
14,724 employees as on 31st March, 2010.
Aditya Birla
Minacs has undertaken various initiatives to mitigate the impact of slowdown
and improve operating efficiencies. Towards sites rationalisation, three sites
were consolidated in 2008-09 and one in 2009-10 by shifting their business to
more cost effectives sites.
Supported by cost
control initiatives, business remained positive at cash profit level throughout
the year. EBITDA margin improved by 600 basis points over the previous financial
year. Net loss reduced significantly from Rs. 1210.000 millions to Rs. 230.000
millions.
Aditya Birla
Minacs strengthened its balance sheet by issuing zero-coupon Compulsory
Convertible Debentures for Rs. 2500.000 millions which were used to repay
loans, acquire Compass and for capital expenditure.
IT SERVICES (ADITYA BIRLA MINACS IT SERVICES
LIMITED, FORMERLY KNOWN AS PSI DATA SYSTEMS LIMITED)
After getting
requisite approval from the shareholders, PSI Data Systems Limited Was
de-listed from BSE w.e.f. 6th April 2009 and re-branded as Aditya Birla Minacs
IT Services Limited. As on 31st March 2010, Aditya Birla Nuvo held 82.92% stake
in it, directly and indirectly through a wholly owned subsidiary. The IT
services business posted an improved performance. While its net income from
operations remained flat at Rs. 94 Crore, it posted net profit at Rs. 100.000
millions in 2009-10 vis-ŕ-vis loss of Rs. 70.000 millions incurred in 2008-09.
Outlook
The global ITeS
industry is expected to witness a robust growth of around 6%-7%. Current
penetration levels, for both, Indian exports and domestic ITeS markets are
extremely low. Increased outsourcing, even in low cost economies, is a
testimony that clients prefer to outsource what is not vital to their
businesses and are looking at vendors for their domain and process expertise -
not just for cost benefits. India is a great example of this trend, as the
domestic ITeS industry is expected to grow by an estimated 15%-20% in 2010-11.
Over the next decade, majority of growth across the globe, is expected to come
from currently untapped/non-core markets such as healthcare, public sector,
media, utilities etc. This huge incremental growth opportunity will favour a
global business solutions delivery model vis-ŕ-vis current offshore mindset.
Aditya Birla
Minacs will continue to meet customers’ expectations with a thrust on
excellence in execution. It will focus on achieving profitability by building a
robust sales pipeline, improving seats utilisation, off-shoring support
functions to low
cost locations, increasing share of high margin KPO segment and reduction in
overheads. Its global footprint, its capabilities in multiple industry
verticals, its culturally diverse and knowledgeable workforce, and its
partnership model that works to support its clients’ business results are
strategic assets which it will leverage in the emerging post-recession global
market.
FASHION AND LIFESTYLE (MADURA GARMENTS)
Industry Overview
Apparel industry
has shown signs of recovery in the second half of 2009-10. Like-to-like growth
numbers are now improving with better economic conditions and higher consumer
discretionary spends. Industry is reassessing its
position and
looking for expansion, however, luxury brands are still cautious. Apparel
players are focusing on exploring new opportunities in fast growing segments
like casual wear, denim and value fashion. Growth in US and Europe has been
near stagnant and the global brands are evaluating expansion outside their home
markets into growing markets like India and China.
Performance Review
Madura Garments
represents the Fashion and Lifestyle business of the Company. It is the largest
premium branded apparel player in India. Its premium brands – Louis Philippe,
Van Heusen, Allen Solly and its mass brand – Peter England, are leaders in
respective categories. It also retails international apparel and accessory
brands viz., Armani Collezioni, Hugo Boss, Versace Collection, Adidas, Puma,
Samsonite and many more under the brand ‘The Collective’. It caters to
menswear, womenswear and kidswear segments under family store format ‘PEOPLE’.
It also manufactures and exports apparels on a contract basis for global
brands. It also has a strategic distribution tie up with leading international
brand Esprit.
Madura Garments
retails branded apparels and accessories through 396 exclusive brand outlets
spanning across 8.2 lacs square feet. The retail channel contributes about 50%
of the revenues from the branded apparel segment. It also reaches customers
through about 100 departmental stores and more than 1,000 multi brand outlets.
Net income from
operations of Madura Garments grew by 12% year on year, supported by a 15%
sales growth from retail channel. The branded apparels segment contributed more
than 85% of total revenues while the contract exports segment contributed the
balance.
The business
turned EBITDA positive (before store closure costs) during the year. Focus on rent
re-negotiation, manpower rationalisation, exit from unviable stores, overheads
reduction and rightsizing measures led to an improvement of more than Rs.
1500.000 millions in EBITDA and savings of about Rs. 750.000 millions in the
working capital requirements.
The business has
been restructured w.e.f. 1st January 2010 to derive operational
synergies.
Outlook
The outlook for
domestic apparel and accessories industry remains positive in view of
favourable demographics viz., rising
disposable income levels, burgeoning aspiring middle class segment, large young
population etc., which will drive demand going forward. Expected population
shift towards higher income classes will further promote consumerism and higher
spend on apparel. Domestic apparel market is expected to grow from USD 26
billion in 2009 to USD 37 billion in 2014.
The Fashion and
Lifestyle business of the Company will leverage its expanded retail channel to
achieve improved sales per square feet. The business is also focusing on
achieving cost efficiencies through exiting from unviable stores, manpower
rationalisation, increasing supply chain management efficiency, reducing
overheads and better working capital management. Besides this, new store
openings will be re-aligned to match the demand scenario.
Manufacturing Businesses
The manufacturing
businesses of the Company comprise Carbon Black, Agri-business, Insulators,
Rayon and Textiles. All the manufacturing businesses are among the leaders in
their respective sectors in terms of size as well as margins. They have an
outstanding track record of consistently generating strong cash flows,
operating margins and return on capital employed.
Collectively, they
have posted their highest ever EBITDA at Rs. 7480.000 millions vis-ŕ-vis Rs.
5780.000 millions in the previous year – a year on year growth of 29%. They
have also achieved the highest ever operating margin at 20% and return on
average capital employed (“ROACE”) at 27%. Carbon Black (Hi-Tech Carbon)
Industry Overview
Carbon Black is a
black powder which is used to provide tensile strength and abrasion resistance
to rubber. The tyre industry accounts for about 65% of carbon black demand in
India. It constitutes ~28% of tyre by weight. The
demand for carbon
black is largely linked to the demand scenario in the tyre industry. Indian
tyre industry achieved 15% year on year growth during April 2009 to February
2010 led by revival in demand from the domestic auto sector coupled with good
replacement demand. To tap buoyant demand from tyre sector, domestic
carbon black
manufacturer Phillips Carbon Black Limited. (“PCBL”) expanded its capacity by
90,000 MTPA and Himadri Chemicals and Industries Limited by 50,000 MTPA during
the year. Hi-Tech Carbon, the carbon black business of the Company, has also
expanded its capacity by 85,000 MTPA recently in May 2010 end. PCBL and Hi-Tech
Carbon are the leaders accounting for ~42% and ~38% of total production in
India during 2009-10.
Performance Review
Hi-Tech Carbon,
the second largest manufacturer in India, achieved 13% increase in sales
volumes. However, realisation was lower by 8% reflecting movement in raw
material [Carbon Black Feed Stock (“CBFS”)] prices in line with crude oil
prices. Net income from operations grew by 6% to Rs. 11610.000 millions.
EBITDA of Hi-tech
Carbon grew from Rs. 500.000 millions to Rs. 2530.000 millions supported by
higher sales volumes and energy sales. Higher profitability during part of the
year is reflective more of one time input price advantage. Revenues from sale
of power and steam grew from Rs. 430.000 millions to Rs. 730.000 millions. The
business posted ROACE of 27%. During previous financial year 2008-09,
profitability was impacted due to consumption of high priced CBFS and lower
sales volumes given the demand slowdown in auto/tyre sector.
Power plant of 10
MW capacity has been commissioned in March 2010 at Renukoot. Power plant of 23
MW capacity has also been set up at Patalganga in May 2010 end along with the Greenfield
expansion. This has increased the total Carbon Black capacity from 230,000 MTPA
to 315,000 MTPA and installed power plant capacity to ~75 MW. Hi-Tech Carbon is
planning to augment its capacity further by 85,000 MTPA at Patalganga
in the second phase
besides 85,000 MTPA expansion in the Southern India.
Outlook
The demand from
the tyre industry is expected to grow by 13%-14% on account of continued
recovery in demand from auto industry and improvement in the replacement market
which accounts for 60%-70% of overall tyre demand. Many new projects have been
announced by leading domestic and international tyre manufacturers such as
Michelin, MRF, JK tyres and Apollo in southern India over next two years.
Government has also imposed anti-dumping duty ranging from USD 84 per MT to USD
423 per MT on import of carbon black from various countries to support domestic
carbon black industry.
With its planned
170,000 MT capacity expansion, Hi-tech Carbon is well positioned to tap the
demand growth and improve its market share.
AGRI-BUSINESS (INDO-GULF FERTILISERS)
Industry Overview
The Indian
agricultural sector registered a growth of 0.2% in 2009-10 as against a growth
of 1.6% in 2008-09 as a consequence of subnormal rainfall. While Kharif season
saw drop in production of key crops like rice and oilseeds
due to scanty
rainfall, Rabi season witnessed an increase in the sowing of wheat and maize
crops with favourable weather condition. The demand for Agricultural inputs
viz., Fertilisers, Seeds and Agro-chemicals, was under pressure in Kharif, but
got picked up in Rabi. The overall Urea consumption remained flat at 26.5
million MT in 2009-10. Imports accounted for more than 20% of total domestic
consumption of urea. The Government of India has announced Nutrient Based
Subsidy policy for all fertilizers w.e.f. 1st April 2010 in which the retail
price of
Urea was increased
from Rs. 4,830 per MT to Rs. 5,310 per MT
Performance Review
Indo-Gulf
fertilisers, the agri-business of the Company, achieved its highest ever
production and sales volumes led by higher per day productivity. Neem–coated
urea, which fetches higher realisation by Rs. 241.5 per MT, accounted for 20%
of total production as maximum permitted by the government regulations.
Indo-Gulf was also conferred Runners up Award for Best Production performance
of Nitrogenous Fertiliser–2009 from Fertiliser Association of India.
Net income from
operations de-grew by 18% despite higher sales volumes mainly because higher
input/fuel (Natural Gas/Naphtha) prices prevailing during the previous
financial year 2008-09 were reflected in higher subsidies in the last year.
Revenues were also lower to the extent of lower subsidy arrears received in
2009-10 and lower revenue from agri-products trading.
EBITDA de-grew to Rs.
1550.000 millions largely to the extent of lower subsidy arrears and lower
Import Parity Price (”IPP”) linked incentive accrued in 2009-10 compared to the
previous year. Indo-Gulf earned Rs. 30.000 millions from sale of carbon
credits. It posted ROACE of 31%.
‘Birla Shaktiman’
Urea continues to maintain its leadership position among the private players in
the target markets of Uttar Pradesh, Bihar, Jharkhand and West Bengal with a
market share between 10%-20% Indo-Gulf also markets seeds and agro-chemicals in
an effort to provide complete agri-solutions to the farmers. Indo-Gulf ranks
second best among the Indian fertiliser plants and best among the same vintage
fertiliser plants in terms of specific energy consumption, a key cost driver
for the fertilisers business.
Outlook
The per hectare
consumption of fertilisers in nutrient terms has increased from 106 Kg. in
2005-06 to 129 Kg. in 2008-09 but it is still lower as compared to other
countries like China and US. The marginal productivity of soil also remains a
challenge. This requires increased and proper use of N-P-K
(Nitrogen-Phosphorus- Potassium) application based on soil analysis. Besides,
the recent government policies intend to encourage indigenous production and
reduce subsidy burden by decreasing imports. The outlook for the fertilisers
industry continues to
be positive.
In the Nutrient
Based Subsidy policy, recently announced by the Government, all the fertilizers
other than Urea have been decontrolled. This change involves shifting from a
fixed retail price and variable subsidy mechanism to a fixed subsidy and
variable retail price system. This is a path breaking move, which will enable
the industry to offer value added customized products to the Indian farmers, to
meet their total nutrient needs in a balanced manner.
Indo-Gulf is
evaluating viability of setting up a manufacturing facility for producing the
customised fertilisers. Indo-Gulf has a unique geographical advantage of being
based in the Indo-gangetic plains. With a strong brand equity
and market reach,
it is well positioned to capture an increasing share of this growing market.
Rayon (Indian Rayon)
Industry Overview
Indian Viscose
Filament Yarn industry witnessed a production of 42,678 MT in 2009-10 which
remained flat compared to the previous financial year 2008-09. Out of total
sales volumes of 42,401 MT, about 13% was exported. With the lower wood-pulp
and sulphur prices during 2009-10, the margins of VFY manufacturers improved.
Century Textiles and Industries Limited is the largest manufacture in India
with 42% production share in 2009-10, followed by Indian Rayon, the VFY
business of the Company, with 39% production share. For the fifth year in a
row, Indian Rayon became the largest VFY exporter from India with 47% share in
exports in 2009-10.
Performance Review
Net income from
operations of the VFY segment of Indian Rayon grew by 8% to Rs. 3710.000
millions led by 10% rise in VFY realisation. Caustic soda sales volumes grew by
15% to 88,897 MT supported by 9,125 MTPA capacity expansion in December 2008.
ECU realisation de-grew by 19% to Rs. 18,328 per MT due to lower caustic soda
prices. Net income from operations from Chemicals segment de-grew by 14% to Rs.
1670.000 millions largely due to lower ECU realisation.
Indian Rayon
achieved its highest ever EBITDA at Rs. 1550.000 millions led by higher VFY
realization and lower wood– pulp and sulphur prices, absorbing impact of lower
ECU realisation in the chemical segment. ROACE improved from 20% to 28%.
Outlook
The long-term
outlook of VFY business is moderate, as demand is expected to grow at a modest
rate. Besides increasing share of value added yarns, Indian Rayon will lay
thrust on technological upgradations to improve the intrinsic yarn quality.
These efforts will help the business to provide superior customer value, to
fetch a premium
and improve
margins. The Company is also planning to expand the caustic soda capacity by
45,625 MTPA at a cost of Rs. 1500.000 millions.
INSULATORS (ADITYA BIRLA INSULATORS)
Industry Overview
Insulators are
used in power generation, transmission and distribution and by original
equipment manufacturers. The growth of insulators industry is linked to the
growth of the power sector. Power sector has achieved 66% of targeted capacity
addition of 14,500 MW during 2009-10. This is 3 times capacity added in the
previous financial year.
Domestic
insulators Industry witnessed lower demand and slowing down of projects during
the first half of 2009-10 due to lower capacity additions. It faced realisation
pressure due to increased competition. However, in the second half, project
activities gained momentum and demand for insulators also spurred.
Performance Review
Aditya Birla Insulators,
the insulators business of the Company, is India’s largest and world’s fourth
largest manufacturer of insulators. It has expanded its capacity in the
transmission segment by about 10,000 MTPA in first half of 2009-10 to reach a
total capacity of 48,760 MTP
Aditya Birla
Insulators achieved highest ever volumes led by capacity expansion and improved
yield. Domestic volumes grew by 20%, however, realisation remained under
pressure due to increased competition. Exports volumes were lower by 13%. Net
income from operations marginally grew to Rs. 4280.000 millions.
EBITDA was lower
by 6% at Rs. 1160.000 millions. During the first half year, profitability was
impacted due to lower realisation. In the second half year, though realisation
remained under pressure, profitability improved over last year, driven by
expansion led higher volumes. The business achieved ROACE of 35%.
Outlook
The demand for
energy in India exceeds its supply especially in the rural sector. The peak
supply shortage in India was 12.2% and energy deficit was 11.3% as of March
2010. The Government of India plans to provide electricity throughout the
country by 2012 and plans to increase installed power generation capacity by
78,700 MW in its 11th Five-Year Plan (2007-2012). The expansion of
India’s power infrastructure is expected to increase demand for electrical
equipments and components including insulators.
To capitalise on
the vibrant demand in the power infrastructure sector, Aditya Birla Insulators
will focus on full utilisation of the recently expanded capacity. Thrust will
also be on yield enhancement and manufacturing high rating insulators range.
TEXTILES (JAYA SHREE TEXTILES)
Industry Overview
Domestic demand is
expected to remain buoyant but the sluggishness continues in major overseas
markets. Volatility in major currencies like US Dollar, Great Britain Pound,
Euro and Australian Dollar has made business decisions very complex. Acquiring
profitable customers and improving margins will remain the key for survival. Imposition
of anti dumping duty by the Government on import of linen fabric was a move in
the right direction and provided relief to the domestic industry. Additional
incentives, if provided by the Government, will help the industry in overseas
territories.
Performance Review
Jaya Shree
Textiles, the textiles business of the Company, displayed strong resilience and
achieved its highest ever profitability supported by low input prices, improved
margins, cost containment measures, prudent working capital management and
benign interest rates. Eleven exclusive outlets of Linen Fabric were rolled out
under the buy and sell mode without incurring any capital expenditure taking
such stores count to a total of 32.
Net income from operations
of Jaya Shree Textiles grew marginally to Rs. 5770.000 millions. Linen yarn
witnessed robust demand leading to increase in volumes. In wool segment, higher
share of commission combing reflected in lower revenues.
Jaya Shree
Textiles achieved its highest ever EBITDA at Rs. 690.000 millions led by higher
linen yarn volumes, lower flax fibre prices and improved plant efficiency. In
the previous financial year 2008-09, wool segment was also impacted by usage of
high priced stock due to sudden fall in commodity prices.
Outlook
The outlook of the
textiles business remains positive in view of stronger domestic demand led by
favourable viz., rising disposable income levels, burgeoning aspiring middle
class segment, large young population etc. Gradual
global recovery
will further support the business. However, rising wool prices remain a matter
of concern.
Jaya Shree
Textiles will focus on increasing share of high margin retail segment through
roll out of more exclusive showrooms of Linen Fabric.
WEB SITE DETAILS
PROFILE
Subject is a US$3.5 billion, diversified conglomerate and the
platform that has launched many new businesses for India’s premier business
house, the Aditya Birla Group. Aditya Birla Nuvo has a portfolio of
manufacturing as well as service sector businesses under its umbrella ranging
from textiles to financial services.
The razor sharp focus on each business has made it a leading
player in most segments, including viscose filament yarn, carbon black, branded
garments, agri business, textiles and insulators. Over the past few years,
Subject, through its subsidiaries and joint ventures, has
made successful forays into life insurance, telecom, business process
outsourcing (BPO), IT services, asset management and financial services.
Powered by an intellectual capital of over 50,000 employees
and an optimum mix of revenue and profit streams, the company is in a strong
position to invest in high growth businesses to maximise long-term shareholder
gains.
NEWS
PRESS RELEASE
Debonair on the runway
Over 250 participants at The National Model
Auditions – Male Van Heusen India Men's Week. 2-4 September, The Grand, New
Delhi
A score of talent heated up competition and raised the bar for men’s
fashion as the runway was thrown open for the auditions of Van Heusen India
Men’s Week 2011. Buoyed by the success of the second edition, Fashion Design
Council of India (FDCI) has scheduled the third edition of the Van Heusen India
Men’s Week from September 2-4, 2011 at The Grand, New Delhi. The event is expected
to witness participation from some of the leading lights of the men’s fashion
industry.
The applicants for the model auditions had to meet selection criteria of 5 feet
11 inches and above, and came from various parts of India, with large representation
from Mumbai, Delhi, Chandigarh, Jaipur and Pune.
Mr. Sunil Sethi, President, FDCI, said, “Van Heusen India Men’s Week 2011
provides young male models an opportunity to prove their talent. The number of
participants wanting to associate with the Men’s week is increasing every year,
making VHIMW one of the largest platforms for talent identification and
recognition. The event will not only witness participation from the best
fashion designers of India but also bring the best from the modeling industry.
For the first time we will be choosing over 20 debutant models, which is
relatively a large number.”
Says Mr. Shivaraj Subramaniam, Marketing Director, Van Heusen, “The model
auditions for the Van Heusen India Men’s Week provides the perfect platform for
both upcoming and established male models to put their best foot forward. The
third edition of the Van Heusen India Men’s Week is an exciting platform for
new talent to be discovered.”
Our distinguished jury
Jury members who have been designated the crucial task of choosing the final
models and the future stars of the Indian ramp include Ashish Soni, Aparna
Bahl, Gautam Kalra, Jamal Shaikh, Namrata Joshipura, Naveen Ansal and Rohit
Bal.
The esteemed jury selected models on several attributes, such as their
confidence, attitude and physique.
What our jury had to say
Rohit Bal, said, “We want our models to convey a sense of confidence in every
step that they take. Great clothes need to be combined with necessary poise for
a stellar performance.”
Ashish Soni, said, “We are looking for models with proportionate physique, a
good torso and lower body ratio.”
Namrata Joshipura, said, “A great model should have a combination of three
things – a great body, charming face and an impressive walk.”
Aparna Bahl, said, “An unusual face, with a proportionate physique and a great
walk.”
Naveen Ansal, said, “A good male model needs to have an attractive personality.
He may not be conventionally good looking but needs to be fit and grab
attention.”
Gautam Kalra, said, “A relaxed walk and appropriate body measurement.”
Jamal Shaikh, said, “A face that conveys emotion and a pleasing personality.”
FDCI and Van Heusen came together in 2009 to change the dynamics of the Indian
fashion landscape by successfully organising the first exclusive fashion week
for men. The third edition of the Van Heusen India Men’s Week marks the
continuing commitment of the two esteemed organizations towards pioneering a
new era in men’s fashion in the country and introducing the best influences of
the fashion scene in the West to the Indian audience.
Fashion Design Council of India: A not-for-profit organization FDCI is
the apex fashion council of India. Represented by over 300 designers, FDCI
takes Indian fashion global by promoting the 'business of fashion'.
About Van Heusen
Van Heusen is the world’s No.1 Dress Shirt brand. It’s no different in India,
except that it is also the country’s No. 1 premium lifestyle brand for men,
women and youth. With a rich heritage of 128 years, the brand entered India in
1990. It has had the unique distinction of establishing not only the brand, but
also the ready-to-wear category. The brand epitomises ‘fashion for the
corporate’, and its design driver is the combination of fashion and elegance. Since
its launch in 1990, Van Heusen has consistently tracked and understood the
Indian male. In the last two decades the clothing preferences of Indian men
have undergone many stages of evolution. At each turning point Van Heusen has
stood witness to these changes – and has been ahead of the curve when it has
come to forecasting emerging trends and making it accessible to the Indian
consumer.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No 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.44.37 |
|
|
1 |
Rs.72.34 |
|
Euro |
1 |
Rs.63.87 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
67 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.