MIRA
INFORM REPORT
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Report Date : |
26.04.2013 |
IDENTIFICATION DETAILS
|
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 : |
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Financials (as
on) : |
31.03.2012 |
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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. 1136.200 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
: |
14724 Approximately |
RATING & COMMENTS
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MIRA’s Rating : |
A (64) |
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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 227100000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Exist |
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Listing : |
Yes |
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Comments : |
Subject is a well established and reputed company having a fine track
record. The performance capability is high. Directors are reported to be well
experienced and knowledgeable businessmen. Financial position of the company
appears to be sound. Trade relations are reported as decent. Business is
active. Payments are reported to be regular and as per commitments. The company can be considered good 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.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
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Rating |
AA+ (Long Term Bank Facilities) |
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Rating Explanation |
High degree of safety and very low credit risk. |
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Date |
28.11.2012 |
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Rating Agency Name |
CARE |
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Rating |
A1+ (Short Term Bank) |
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Rating Explanation |
Very strong degree of safety and lowest credit risk. |
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Date |
28.11.2012 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
INFORMATION DECLINED BY
Management non co-operative
LOCATIONS
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Registered Office : |
Indian Rayon Compound, Veraval - 362 266, |
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Tel. No.: |
91-2876-245711
/ 245735 / 245758 / 248401 |
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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 : |
A-4, Aditya
Birla Centre, S K Ahire Marg, Worli, Mumbai – 400 030, |
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Tel. No.: |
91-22-66525585 |
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Fax No.: |
91-22-66525821
/ 24995821 |
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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 DIVISION Indian
Rayon Division Veraval
362 266, Gujarat, |
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Tel No. |
91-2876-245711 /
248401 |
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Fax No.: |
91-2876-243220 |
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E mail: |
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Factory 3: |
CARBON BLACK DIVISIONS: 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: |
HITECH CARBON, GUMMIDIPOONDI 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
/ 26001200 |
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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: |
Aditya Birla Insulators, Rishra 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: |
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Factory 13 : |
Hi-Tech Carbon, Patalganga Village: Lohop,
Talavali, Patalganga, Taluka: Khalapur, Dist. Raigad - 410 207, |
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Website : |
DIRECTORS
AS ON 31.03.2012
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Name : |
Mr. Kumar Mangalam Birla |
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Designation : |
Chairman |
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Name : |
Mrs. Rajashree Birla |
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Designation : |
Director |
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Name : |
Mr. 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 : |
Dr. Rakesh Jain |
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Designation : |
Managing Director |
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Name : |
Mr. Tapasendra Chattopadhyay |
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Designation : |
Director |
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Name : |
Mr. Sushil Agarwal |
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Designation : |
Whole-Time 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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Aditya Birla Financial Services : |
Mr. Ajay
Srinivasan (Chief Executive Officer) Mr. Pankaj
Razdan (Deputy Chief Executive Officer) |
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Telecom : |
Mr. Himanshu
Kapania (Managing Director) |
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IT-ITeS : |
Dr. Rakesh Jain
(Business Director) Mr. Deepak Patel (Chief Executive Officer) |
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Fashion and Lifestyle And Textiles : |
Mr. Pranab Barua
(Chief Executive Officer) Mr. S.
Krishnamurthy (President - Jaya Shree Textiles) Mr. Ashish Dikshit (President - Madura Garments) Mr. Thomas Varghese (Chief Executive - Textiles) |
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Carbon Black : |
Dr. Santrupt
Misra (Business Head) Mr. S. S. Rathi (President) |
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Agri- Business
and Insulators : |
Dr. Rakesh Jain
(Business Director) Mr. J. C Laddha (Chief Executive Officer) |
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Rayon : |
Mr. Lalit Naik
(Business Head) Dr. Bir Kapoor (President) |
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Insulators : |
Dr. Rakesh Jain
(Business Director) Mr. J. C Laddha
(Chief Executive Officer) Mr. Ravi Sinha
(President) |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.03.2013
|
Category of
Shareholder |
No. of Shares |
% of No. of
Shares |
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(1) Indian |
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Individuals / Hindu Undivided Family |
136203 |
0.12 |
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|
64488494 |
55.1 |
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|
64624697 |
55.22 |
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(2) Foreign |
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Total shareholding of Promoter and Promoter Group (A) |
64624697 |
55.22 |
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(B) Public Shareholding |
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Mutual Funds / UTI |
7210027 |
6.16 |
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Financial Institutions / Banks |
6309498 |
5.39 |
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1774290 |
1.52 |
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18647913 |
15.93 |
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Any Others (Specify) |
6276 |
0.01 |
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Foreign Bank |
6276 |
0.01 |
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33948004 |
29.01 |
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Bodies Corporate |
4138616 |
3.54 |
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Individuals |
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12329412 |
10.54 |
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|
623079 |
0.53 |
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Any Others (Specify) |
1367327 |
1.17 |
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Trusts |
266459 |
0.23 |
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|
1092101 |
0.93 |
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|
8767 |
0.01 |
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Sub Total |
18458434 |
15.77 |
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Total Public shareholding (B) |
52406438 |
44.78 |
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Total (A)+(B) |
117031135 |
100 |
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|
0 |
0 |
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(1) Promoter and Promoter Group |
1425000 |
0 |
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|
1757052 |
0 |
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Sub Total |
3182052 |
0 |
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Total (A)+(B)+(C) |
120213187 |
0 |
Shareholding of securities (including shares, warrants, convertible
securities) of persons belonging to the category Promoter and Promoter Group
|
Sl.No. |
Name of the
Shareholder |
Details of
Shares held |
Details of
warrants |
Total shares
(including underlying shares assuming full conversion of warrants and
convertible securities) as a % of diluted share capital |
|||
|
No. of Shares
held |
% of grand total
|
Number of
warrants held |
As a % total number
of warrants of the same class |
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|||
|
1 |
Shri Aditya Vikram Kumar Mangalam Birla HUF |
150 |
0 |
0 |
0 |
0 |
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2 |
Shri Kumar Mangalam Birla |
4,609 |
0 |
0 |
0 |
0 |
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3 |
Smt Rajashree Birla |
1,27,634 |
0.11 |
0 |
0 |
0.01 |
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4 |
Smt Neerja Birla |
1,975 |
0 |
0 |
0 |
0 |
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5 |
Smt Vasavadatta Bajaj |
1,835 |
0 |
0 |
0 |
0 |
|
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6 |
Birla Group Holdings Private Limited |
36,10,300 |
3 |
0 |
0 |
0.28 |
|
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7 |
TGS Investment and Trade Holdings Private Limited |
1,35,06,736 |
11.24 |
0 |
0 |
1.04 |
|
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8 |
Trapti Trading and Investments Holdings Private Limited |
94,23,935 |
7.84 |
0 |
0 |
0.72 |
|
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9 |
Turquoise Investments and Finance Holdings Private Limited |
64,41,092 |
5.36 |
0 |
0 |
0.5 |
|
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10 |
Birla Consultants Limited |
28,655 |
0.02 |
0 |
0 |
0 |
|
|
11 |
Birla Industrial Finance India Limited |
27,790 |
0.02 |
0 |
0 |
0 |
|
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12 |
Birla Industrial Investment India Limited |
5,955 |
0 |
0 |
0 |
0 |
|
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13 |
ECE Industries Limited |
1,19,163 |
0.1 |
0 |
0 |
0.01 |
|
|
14 |
Grasim Industries Limited |
33,45,816 |
2.78 |
0 |
0 |
0.26 |
|
|
15 |
Heritage Housing Finance Limited |
6,79,012 |
0.56 |
0 |
0 |
0.05 |
|
|
16 |
Hindalco Industries Limited |
86,50,412 |
7.2 |
0 |
0 |
0.67 |
|
|
17 |
IGH Holding Private Limited |
91,32,102 |
7.6 |
7220000 |
73.52 |
1.26 |
|
|
18 |
Mangalam Services Limited |
75,46,111 |
6.28 |
0 |
0 |
0.58 |
|
|
19 |
Manav Investment and Trading Company Limited |
1,14,675 |
0.1 |
0 |
0 |
0.01 |
|
|
20 |
Pilani Investment and Industries Corporation Limited |
1,87,098 |
0.16 |
0 |
0 |
0.01 |
|
|
21 |
Umang Commercial Company Limited |
16,69,642 |
1.39 |
2600000 |
26.48 |
0.33 |
|
|
|
Total |
6,46,24,697 |
53.76 |
9820000 |
100 |
5.73
|
|
(*) The term encumbrance has the same meaning as assigned to it in
regulation 28(3) of the SAST Regulations, 2011.
Shareholding of securities (including shares, warrants, convertible
securities) of persons belonging to the category Public and holding more than
1% of the total number of shares
|
Sl. No. |
Name of the
Shareholder |
No. of Shares
held |
Shares as % of
Total No. of Shares |
Total shares
(including underlying shares assuming full conversion of warrants and convertible
securities) as a % of diluted share capital |
|
1 |
Life Insurance Corporation of India (including Shares held under
various schemes / Funds) |
6146744 |
5.11 |
0.47 |
|
2 |
HSBC Global Investment Fund A/c HSBC Global Investment Funds Mauritius
Limited |
4552369 |
3.79 |
0.35 |
|
3 |
ICICI Prudential Focused Bluechip Equity Fund |
1227334 |
1.02 |
0.09 |
|
4 |
Reliance Capital Trustee Company Limited A/c Reliance Growth Fund |
1612366 |
1.34 |
0.12 |
|
|
Total |
13538813 |
11.26 |
1.04
|
Shareholding of securities (including shares, warrants, convertible
securities) of persons (together with PAC) belonging to the category “Public” and
holding more than 5% of the total number of shares of the company
|
Sl. No. |
Name(s) of the
shareholder(s) and the Persons Acting in Concert (PAC) with them |
No. of Shares |
Shares as % of
Total No. of Shares |
Total shares
(including underlying shares assuming full conversion of warrants and
convertible securities) as a % of diluted share capital |
|
1 |
Life Insurance Corporation of India
(including Shares held under various schemes / Funds) |
6146744 |
5.11 |
0.47 |
|
|
Total |
6146744 |
5.11 |
0.47
|
BUSINESS 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 31.03.2011
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
Garments
* |
Nos /000 |
-- |
12957 |
|
Viscose Filament Rayon Yarn |
MT |
17520 |
15389 |
|
Sulphuric Acid and Allied Chemicals |
MT |
57680 |
51214 |
|
Caustic Soda |
MT |
91250 |
87932 |
|
Chlorine |
MT |
80665 |
73985 |
|
Hydro Chloric Acid |
MT |
11115 |
11372 |
|
Spun Yarn |
MT |
44024
spdls |
10769 |
|
Cloth |
000Mtr. |
106
looms |
6614 |
|
Carbon Black |
MT |
314000 |
275560 |
|
High and Low Tension Insulators and Bushings |
MT |
45260 |
43498 |
|
Liquid
Argon |
‘000 SM3 |
3000 |
1277 |
|
Urea |
MT |
2620
per day |
1100111 |
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 job work basis by outside parties and
purchases.
GENERAL INFORMATION
|
No. of Employees : |
14724 Approximately |
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Bankers : |
·
State Bank
of ·
Corporation
Bank ·
Standard
Chartered Grindlays Bank Limited ·
United
Bank of ·
UCO Bank ·
Canara
Bank ·
Punjab
National Bank ·
Bank of ·
HDFC Bank
Limited ·
Citibank
NIA. ·
American Express
Bank Limited ·
Central
Bank of ·
The
Hongkong and Shanghai Banking Corporation Limited ·
Allahabad
Bank ·
State Bank
of Saurashtra ·
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 Address : Mumbai, ·
S.R. Batliboi and Company Chartered Accountants |
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|
Branch Auditors: |
|
|
Name : |
·
K. S. Aiyar and
Company Chartered
Accountants Address : Mumbai, ·
Deloitte Haskins and Sells Chartered
Accountants |
|
|
|
|
Solicitors : |
·
Amarchand and Mangaldas and Suresh A. Shroff and
Company ·
Mulla and Mulla and Craigie, Blunt and Caroe |
|
|
|
|
Joint Ventures : |
·
Birla Sun Life Asset Management Company Limited
(BSAMC) (Joint Venture of ABFSPL) ·
Birla Sun Life Trustee Company Private Limited
(BSTPL) (Joint Venture of ABFSPL) ·
IDEA Cellular Limited (IDEA) |
|
|
|
|
Associates : |
·
Birla Securities Limited (BSL) ·
Indigold Trade and Services Limited (ITSL) (Upto
29th June, 2010) ·
LIL Investment Limited (LILIL) (Upto 29th June,
2010) |
|
|
|
|
Subsidiaries : |
1.
Aditya Birla
Financial Services Private Limited (ABFSPL) (100% Subsidiary) i.
Aditya Birla Capital Advisors Private Limited
(ABCAPL) (100% Subsidiary of ABFSPL) ii.
Aditya Birla Customer Services Private Limited
(ABCSPL) (100% Subsidiary of ABFSPL) iii.
Aditya Birla Trustee Company Private Limited
(ABTCPL) (100% Subsidiary of ABFSPL) iv.
Aditya Birla Money Limited (ABML) (75% Subsidiary
of ABFSPL) ·
Aditya Birla Commodities Broking Limited (ABCBL)
(100% Subsidiary of ABML) ·
Aditya Birla Financial Shared Services Limited
(ABFSSL) (100% Subsidiary of ABFSPL) v.
Aditya Birla Finance Limited (ABFL) (100% Subsidiary
of ABFSPL) ·
Aditya Birla Securities Private Limited (ABSPL)
(100% Subsidiary of ABFL w.e.f. 31st July, 2010) ·
Aditya Birla Insurance Brokers Limited (ABIBL)
(50.01% Subsidiary of ABFSPL) vi.
Aditya Birla Money Mart Limited (ABMML) (100%
Subsidiary of ABFSPL) ·
Aditya Birla Money Insurance Advisory Services
Limited (100% Subsidiary of ABMML) 2.
Aditya Birla
Minacs Worldwide Limited (ABMWL) (99.85% Subsidiary) 1)
Transworks Inc (TW Inc) (100% Subsidiary of
ABMWL) (upto 9th October, 2011) 2)
Aditya Birla Minacs Philippines Inc. (ABMPI)
(100% Subsidiary of ABMWL) 3)
AV TransWorks Limited. (AVTL) (100% Subsidiary of
ABMWL) ·
Aditya Birla Minacs Worldwide Inc. (ABMWI) (100%
Subsidiary of AVTL) ·
Aditya Birla Minacs BPO Limited (ABMBL) (100%
Subsidiary of ABMWI) Ø Aditya Birla Minacs
BPO Private Limited (ABMBPL) (100% Subsidiary of ABMBL) Ø Compass BPO Inc.
(100% Subsidiary of ABMBL) (Upto 29th September, 2011) ·
Minacs Worldwide SA de CV (MWSC) (100% Subsidiary
of ABMWI) ·
The Minacs Group (USA) Inc. (MGI) (100%
Subsidiary of ABMWI) Ø Bureau of
Collection Recovery, LLC (BCR) (100% Subsidiary of MGI) (w.e.f. 2nd June, 2010) ·
Bureau of Collections Recovery (BCR) Inc. (w.e.f.
4th March, 2011) (100% Subsidiary of ABMWI) ·
Minacs Limited (ML) (100% Subsidiary of ABMWI) ·
Minacs Worldwide GmbH (MWGH) (100% Subsidiary of
ABMWI) Ø Minacs Kft.
(100% Subsidiary of MWGH) 3.
Aditya Vikram Global Trading House Limited
(AVGTHL) (100% Subsidiary 4.
Birla Sun Life Insurance Company Limited (BSLICL)
(74% Subsidiary) 5.
ABNL Investment Limited (ABNLInv) (100%
Subsidiary) 6.
Shaktiman Mega Food Park Private Limited (w.e.f.
2nd December, 2010) (94% Subsidiary) 7.
Madura Garments Lifestyle Retail Company Limited
(MGLRCL) (100% Subsidiary) 8.
Peter England Fashions and Retail Limited (PEFRL)
(100% Subsidiary) 9.
Indigold Trade and Services Limited (ITSL)
(w.e.f. 30th June, 2010) (99.99% Subsidiary) 10.
LIL Investment Limited (LIL) (w.e.f. 30th June,
2010) (99.99% Subsidiary) |
CAPITAL STRUCTURE
AS ON 31.03.2012
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. 50.00 Millions |
|
|
TOTAL |
|
Rs. 1800.000
Millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
113556765 |
Equity Shares |
Rs.10/- each |
Rs. 1135.600
Millions |
|
10000 |
6% Redeemable Cumulative Preference Shares |
Rs.100/- each |
Rs. 1.000 Millions |
|
|
TOTAL |
|
Rs. 1136.600 Millions |
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
113515242 |
Equity Shares |
Rs.10/- each |
Rs. 1135.200
Millions |
|
10000 |
6% Redeemable Cumulative Preference Shares |
Rs.100/- each |
Rs. 1.000 Millions |
|
|
TOTAL |
|
Rs. 1136.200 Millions |
NOTES
1.
Reconciliation of the number of Shares Outstanding
at the beginning and at the end of the period
|
Description |
As At 31.03.2012 |
|
|
Equity Shares |
Preference
Shares |
|
|
No. of Shares Outstanding
at the beginning of the period @ Rs. 10/- each |
113,509,729 |
10,000 |
|
Allotment of
Equity Shares upon conversion of Preferential Warrants to Promoter and
Promoter Group on 20th December 2010@
Rs. 10/- each |
-- |
-- |
|
Allotment of
Rights Shares kept in abeyance on various dates @ Rs. 10/- each |
1,402 |
-- |
|
Allotment of
Shares on exercise of options by employee under ESOS-2006 |
4,111 |
-- |
|
No. of Shares
Outstanding at the end of the period @ Rs. 10/- each |
113,515,242 |
10,000 |
2.
Term/Right attached to Equity Shares
The Company has
only one class of equity shares having a par value of Rs. 10/- per share. Each
holder of equity shares is entitled to one vote per share. The Company declares
dividend in Indian rupees. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the Annual General Meeting.
In the event of
liquidation of the Company, the holders of equity shares will be entitled to
receive remaining assets of the Company, after distribution to all Preference
Shareholders. The distribution will be in proportion to the number of the
equity shares held by the shareholders.
3.
Term of Conversion/Redemption of Preference Shares
In accordance with
the Composite Scheme of Arrangement, 10,000 6% Redeemable Cumulative Preference
Share of Rs. 100/- each fully paid-up (Previous Year: 10,000) were issued to
preference shareholders (other than the Company) of Peter England Fashions and
Retail Limited.
Preference shares
carry cumulative dividend @6% p.a. The Company declares and pays dividend in
Indian rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the Annual General Meeting.
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 the 1st January, 2010, at the
face value. In the event of liquidation of the Company before
conversion/redemption of preference shares, the holders of Preference Shares
will have priority over Equity Shares in the payment of dividend and repayment
of capital.
4.
The Company does not have any holding Company.
5.
Shares in the Company held by each shareholder
holding more than 5 percent shares and the number of shares held are as under:
i)
Equity Shares
|
Name of
Shareholder |
As At 31st
March 2012 |
|
|
No. of Shares Held |
% of Total Paid-Up Equity Share Capital |
|
|
TGS Investment and Trade Private Limited |
13,506,736 |
11.90% |
|
Trapti Trading and Investments Private Limited |
9,423,935 |
8.30% |
|
Life Insurance Corporation of India |
8,803,295 |
7.76% |
|
Hindalco Industries Limited |
8,650,412 |
7.62% |
|
HSBC Global Investment
Funds A/c HSBC Global Investment Funds Mauritius Limited |
8,565,822 |
7.55% |
|
Mangalam Services Limited |
7,546,111 |
6.65% |
|
Turquoise
Investment And Finance Private Limited |
6,441,092 |
5.67% |
ii)
Preference Share Capital
|
Name of
Shareholder |
As At 31st
March 2012 |
|
|
No. of Shares Held |
% of Total Paid-Up Preference Share Capital |
|
|
Naman Finance and Investment Private Limited |
5,000 |
50.00% |
|
Infocyber (India) Private Limited |
5,000 |
50.00% |
6.
Share reserved for issue under options and
contracts, including the terms and amounts:
For details of Shares reserved for issue
under the Employee Stock Option (ESOP) Plan of the Company
7.
There are no Preference Shares issued as fully paid-up
pursuant to any contract in consideration of other than cash or bought back
during the preceding last five years except issue of 10,000 6% Redeemable
Cumulative Preference Shares of Rs. 100/- each pursuant to a Scheme of
Composite Arrangement to shareholders of Peter England Fashions and Retail
Limited.
8.
Pursuant to the provisions of Section 206A of the
Companies Act, 1956, the issue of following Equity Shares are kept in Abeyance
|
Name of
Shareholder |
No. of Shares |
|
31.03.2012 |
|
|
Right Issue (1994) |
12,635 |
|
Bonus Share on Above |
6,318 |
|
Right Issue (2007) |
22,570 |
9.
In the year 1997, the Company had forfeited 4,487
shares held by 299 holders on account of non-payment of call money with interest
on shares issued against each detachable warrant.
10.
3,191,794 equity shares (Previous Year: 3,222,993)
are represented by Global Depository Receipts.
11.
During the last five years preceding 31.03.2012,
there were 1,048 Bonus Shares (Previous Year: 1,048 Bonus Shares) issued out of
shares kept in abeyance.
AS ON 09.08.2012
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. 50.00 Millions |
|
|
TOTAL |
|
Rs. 1800.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
120313187 |
Equity Shares |
Rs.10/- each |
Rs. 1203.132
Millions |
|
|
|
|
|
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
1136.200 |
1136.100 |
1031.100 |
|
|
2] Share Warrants |
0.000 |
0.000 |
1420.700 |
|
|
3] Employee Stock Option Outstanding |
0.000 |
0.000 |
21.300 |
|
|
4] Reserves & Surplus |
55649.700 |
52871.400 |
44142.000 |
|
|
5] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
56785.900 |
54007.500 |
46615.100 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
10957.000 |
9762.100 |
20748.500 |
|
|
2] Unsecured Loans |
29811.000 |
16073.100 |
15651.700 |
|
|
TOTAL BORROWING |
40768.000 |
25835.200 |
36400.200 |
|
|
DEFERRED TAX LIABILITIES |
1582.200 |
1736.100 |
1784.700 |
|
|
|
|
|
|
|
|
TOTAL |
99136.100 |
81578.800 |
84800.000 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
17471.700 |
17695.800 |
15522.200 |
|
|
Capital work-in-progress |
2010.200 |
646.500 |
2630.600 |
|
|
|
|
|
|
|
|
INVESTMENT |
55979.500 |
54774.100 |
54358.500 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
13206.900
|
12032.400
|
8763.400
|
|
|
Sundry Debtors |
16901.900
|
11092.900
|
6933.300
|
|
|
Cash & Bank Balances |
5969.500
|
209.000
|
143.100
|
|
|
Other Current Assets |
2461.900
|
895.700
|
293.300
|
|
|
Loans & Advances |
7879.100
|
4670.800
|
6228.500
|
|
Total
Current Assets |
46419.300
|
28900.800 |
22361.600 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
12273.200
|
9437.100
|
6339.400
|
|
|
Other Current Liabilities |
8823.800
|
9458.700
|
2550.900
|
|
|
Provisions |
1647.600
|
1542.600
|
1182.600
|
|
Total
Current Liabilities |
22744.600
|
20438.400 |
10072.900 |
|
|
Net Current Assets |
23674.700
|
8462.400
|
12288.700
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
99136.100 |
81578.800 |
84800.000 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
84334.800 |
64472.400 |
48274.700 |
|
|
|
Other Income |
1897.400 |
748.600 |
707.900 |
|
|
|
TOTAL (A) |
86232.200 |
65221.000 |
48982.600 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials Consumed |
39814.600 |
31892.100 |
|
|
|
|
Purchase of Stock-in-Trade |
11084.100 |
4671.100 |
|
|
|
|
Employee Benefits Expenses |
5463.800 |
4808.200 |
|
|
|
|
Other Expenses |
20290.800 |
15883.000 |
|
|
|
|
Exceptional Items |
1038.800 |
0.000 |
|
|
|
|
Changes in Inventories
of Finished Goods, Work-in-Progress & Stock-in-Trade |
(926.100) |
(1632.800) |
|
|
|
|
TOTAL (B) |
76766.000 |
55621.600 |
40637.600 |
|
|
|
|
|
|
|
|
Less |
PROFIT
/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
9466.200 |
9599.400 |
8345.000 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
3132.600 |
2708.100 |
3341.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
6333.600 |
6891.300 |
5004.000 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
2030.600 |
1940.500 |
1801.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS)
BEFORE TAX (E-F) (G) |
4303.000 |
4950.800 |
3203.000 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
849.100 |
1153.900 |
369.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS)
AFTER TAX (G-H) (I) |
3453.900 |
3796.900 |
2834.000 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
281.900 |
171.800 |
860.300 |
|
|
|
|
|
|
|
|
|
|
Amount
Transferred on account of Scheme of Arrangement |
0.000 |
0.000 |
(1396.000) |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
2000.000 |
2500.000 |
1000.000 |
|
|
|
Debenture Redemption Reserve |
541.300 |
461.100 |
531.900 |
|
|
|
Proposed Dividend on Preference Shares |
0.100 |
0.100 |
0.000 |
|
|
|
Proposed Dividend on Equity Shares |
681.100 |
624.300 |
515.100 |
|
|
|
Corporate Tax on Dividend |
0.000 |
101.300 |
79.500 |
|
|
BALANCE CARRIED
TO THE B/S |
513.300 |
281.900 |
171.800 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
On Export of Goods (F.O.B. Basis) |
10244.000 |
8250.400 |
6060.800 |
|
|
|
Sale of Certified Emission Reduction |
15.900 |
60.300 |
147.100 |
|
|
|
Service Charge |
0.200 |
0.800 |
17.000 |
|
|
TOTAL EARNINGS |
10260.100 |
8311.500 |
6224.900 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
24616.500 |
19252.100 |
11496.900 |
|
|
|
Stores & Spares |
242.100 |
226.800 |
184.100 |
|
|
|
Capital Goods |
724.000 |
109.400 |
622.000 |
|
|
|
Purchase of Finished Goods |
4003.300 |
451.100 |
304.900 |
|
|
TOTAL IMPORTS |
29585.900 |
20039.400 |
12607.900 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) Basic Diluted |
30.43 30.41 |
35.84 34.98 |
28.81 27.62 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2012 |
30.09.2012 |
31.12.2012 |
|
|
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
20371.400 |
25617.500 |
27359.200 |
|
Total Expenditure |
18438.400 |
23150.400 |
24951.300 |
|
PBIDT (Excl OI) |
1933.000 |
2467.100 |
2407.900 |
|
Other Income |
208.100 |
244.100 |
114.500 |
|
Operating Profit |
2141.100 |
2711.200 |
2522.400 |
|
Interest |
865.300 |
957.700 |
891.900 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
1275.800 |
1753.500 |
1630.500 |
|
Depreciation |
500.500 |
515.300 |
568.100 |
|
Profit Before Tax |
775.300 |
1238.200 |
1062.400 |
|
Tax |
197.100 |
275.000 |
211.100 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
578.200 |
963.200 |
851.300 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
578.200 |
963.200 |
851.300 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
4.01
|
5.82 |
5.79
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
5.10
|
7.68 |
6.63
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
6.73
|
10.62 |
8.45
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.08
|
0.09 |
0.07
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
0.72
|
0.48 |
0.78
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.04
|
1.41 |
2.22
|
LOCAL AGENCY FURTHER INFORMATION
HIGH COURT OF GUJARAT
CIVIL APPLICATION NO 10437 OF 2012
IN SPECIAL CIVIL APPLICATION/ 546/ 2011 (PENDING)
|
Status : PENDING |
CCIN No :
001003201210437 |
|
Next Listing Date: |
30.04.2013 |
|
Coram : |
·
HONOURABLE MR.JUSTICE RAJESH |
|
S.NO. |
Name of the Petitioner |
Advocate On Record |
|
1 |
GUJARAT ELECTRICITY REGULATORY COMMISSION |
MR BD KARIA for: Petitioner(s) |
1|
S.NO. |
Name of the Respondant |
Advocate On Record |
|
1 |
ADITYA BIRLA NUVO LIMITED |
SINGHI & CO for :Respondent(s) |
|
Presented On |
: 12/09/2012 |
Registered On |
: 12/09/2012 |
|
Bench Category |
: SINGAL BENCH |
District |
: AHMEDABAD |
|
Case Originated From |
: THROUGH ADVOCATE |
Listed |
: 9 times |
|
Stage Name |
: ADMISSION - CA |
||
|
Classification |
SJ - CIVIL MISC. APPLICATION - CODE OF CIVIL PROCEDURE, 1908 - REVIEW
/ MODIFICATION / DIRECTION / EXTENSION OF TIME / CLARIFICATION |
||
|
Act |
·
CIVIL PROCEDURE CODE, 1908 |
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Office
Details
|
S.
No. |
Filing
Date |
Document
Name |
Advocate
Name |
Court
Fee on Document |
Document
Details |
|
1 |
12/09/2012 |
APPLICATION |
MR BD KARIA ADVOCATE |
20 |
MR BD KARIA:1 |
Court
Proceedings
|
S. No. |
Notified Date |
Court Code |
Board Sr. No. |
Stage |
Action |
Coram |
|
|
1 |
11/12/2012 |
15 |
-- |
ADMISSION - CA |
NEXT DATE |
HONOURABLE MR. JUSTICE
Z.K.SAIYED |
|
|
2 |
09/01/2013 |
15 |
12 |
URGENT ADMISSION - CA |
NEXT DATE |
HONOURABLE MR. JUSTICE Z.K.SAIYED |
|
|
3 |
22/01/2013 |
15 |
10 |
URGENT ADMISSION - CA |
NEXT DATE |
HONOURABLE MR. JUSTICE Z.K.SAIYED |
|
|
4 |
11/02/2013 |
15 |
11 |
URGENT ADMISSION - CA |
NEXT DATE |
HONOURABLE MR. JUSTICE Z.K.SAIYED |
|
|
5 |
27/02/2013 |
15 |
-- |
URGENT ADMISSION - CA |
NEXT DATE |
HONOURABLE MR. JUSTICE Z. K.
SAIYED |
|
|
6 |
20/03/2013 |
15 |
-- |
URGENT ADMISSION - CA |
NEXT DATE |
HONOURABLE MR.JUSTICE RAJESH H.
SHUKLA |
|
|
7 |
05/04/2013 |
15 |
13 |
URGENT ADMISSION - CA |
NEXT DATE |
HONOURABLE MR. JUSTICE RAJESH H.
SHUKLA |
|
|
8 |
30/04/2013 |
15 |
-- |
URGENT ADMISSION - CA |
NEXT DATE |
HONOURABLE MR. JUSTICE RAJESH H.
SHUKLA |
|
Available
Orders
|
S. No. |
Case Details |
Judge Name |
Order Date |
CAV |
Judgement |
|
1. |
SPECIAL CIVIL APPLICATION/171/2011 |
HONOURABLE MR.JUSTICE RAJESH
H.SHUKLA |
05/04/2013 |
N |
N |
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
Yes |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact
person |
No |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
----- |
|
14] |
Estimation for coming
financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details
(if applicable) |
Yes |
|
21] |
Market information |
----- |
|
22] |
Litigations that the firm
/ promoter involved in |
Yes |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking
account |
----- |
|
26] |
Buyer visit details |
----- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
Yes |
|
30] |
Major Shareholders, if
available |
No |
|
31] |
Date of Birth of
Proprietor/Partner/Director, if available |
No |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
Yes |
UNSECURED LOAN
|
Particulars |
Rs.
In Millions 31.03.2012 |
Rs.
In Millions 31.03.2011 |
|||||||||||||||||||||||||||||||||||||||||||||
|
LONG-TERM BORROWINGS |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Debentures |
2000.000 |
4000.000 |
|||||||||||||||||||||||||||||||||||||||||||||
|
Term loans from |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Banks |
3227.200 |
2647.400 |
|||||||||||||||||||||||||||||||||||||||||||||
|
SHORT-TERM BORROWINGS |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Loan Repayable
on Demand from |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Banks |
21102.200 |
9425.700 |
|||||||||||||||||||||||||||||||||||||||||||||
|
Other Loans and
Advances |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Commercial Papers
[Maximum balance outstanding during the year Rs. 7100.000 Millions. (Previous
Year: Rs. 3850.000 Millions)] |
3481.600 |
0.000 |
|||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
TOTAL |
29811.000 |
16073.100 |
|||||||||||||||||||||||||||||||||||||||||||||
|
NOTES
|
|||||||||||||||||||||||||||||||||||||||||||||||
SUNDRY CREDITORS
DETAILS
(Rs.
In Millions)
|
Particulars |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
Sundry Creditors
|
12273.200
|
9437.100
|
6339.400
|
|
|
|
|
|
|
TOTAL |
12273.200
|
9437.100
|
6339.400
|
STANDALONE FINANCIAL PERFORMANCE
Standalone revenue
at Rs. 84330.000 Millions registered 31% growth. Agri business touched Rs.
21000.000 Millions revenue mark supported by commencement of trading in
imported fertilisers. Textiles business crossed Rs. 10000.000 Millions revenue
mark.
EBITDA rose by 9%
to Rs. 10510.000 Millions – largely driven by the Fashion and Lifestyle, Agri
and Textiles businesses. Higher trading of imported fertilizers in the
Agri-business has augmented profitability, including pricing gain due to
favourable forex movement. Improved realisation in the Rayon and the Textiles
businesses also contributed. However, dumping from China and rise in production
costs strained profitability in the Carbon Black and Insulators businesses.
Earnings before
Tax and Exceptional Items grew by 8%. A provision of Rs. 1040.000 Millions has
been made towards entry tax liability, largely related to the earlier years;
the matter is sub-judice.
As a result, net
profit de-grew by 9% to Rs. 3450.000 Millions.
FINANCE
During the year
2011-12, the Company,
- Raised long-term
loan, aggregating to Rs. 4850.000 Millions by way of foreign currency
borrowings.
- Repaid term
loans aggregating to Rs. 3890.000 Millions and NCDs of Rs. 3900.000 Millions.
AWARDS AND RECOGNITION
The Company has been
the proud recipient of the following awards and recognitions –
INDIAN RAYON DIVISION
Environment
Excellence Award - 2011 in Chemical Sector, Awarded by Green Tech Foundation,
New Delhi
INDO GULF FERTILISERS DIVISIOIN
Certification for
ISO / IEC 27001:2005 Awarded by Bureau Veritas Certification
JAYA SHREE TEXTILE DIVISIOIN
Second position
under Rs. Sustained’ category in CII Eastern Region Productivity Awards 2011-12
CARBON BLACK DIVISION, PATALGANGA
12th Annual
Greentech Environment Silver Award 2011 in Chemical Sector by Greentech
Foundation, New Delhi
MADURA FASHION AND LIFESTYLE
·
Peter England Fashion And Retail Limited was
awarded Brand Equity Award in The Economics Times.
·
Van Heusen won A Power Band Award 2011 in Planman
Marcom.
·
Peter England Fashion And Retail Limited was
awarded Bronze Award in the Best Website in Retail category at BBC.com Campaign
India Digital Media Awards
·
Van Heusen won “Most Popular Western Wear Brand
Award - Female” at Images Fashion Awards 2011.
·
Allen Solly received Best website/ microsite –
Product for spring/summer 2010 collection in Indian Digital Media Awards (IDMA)
2011.
·
3rd Global Youth Marketing Awards to Allen Solly,
Van Heusen Woman and Louis Philippe
ADITYA BIRLA
INSULATORS- RISHRA DIVISION
IMC RAMKRISHNA
BAJAJ NATIONAL QUALITY AWARD – Performance Excellence Trophy 2011 in
Manufacturing Category.
ADITYA BIRLA
INSULATORS- HALOL DIVISION
CAPEXIL Special
Award – Export Achievement in Porcelain Insulators
MANAGEMENT DISCUSSION AND ANALYSIS
INDIAN ECONOMY:
SLOWING INVESTMENTS AND HIGH INFLATION AFFECTING GROWTH
The financial year
2011-12 proved to be a challenging year for the economies across the globe.
Among the
developed economies, the US witnessed a rating downgrade and Euro zone faced debt
crisis while Japan was adversely impacted by earthquake and tsunami. Among the
emerging economies, GDP growth in China and India came under pressure of tight
monetary measures to combat stubbornly high inflation.
Indian economy, per
se, witnessed many highs and lows during the year.
Its GDP growth
rate fell year on year to 6.1% during the third quarter of 2011-12 – touching
its lowest level in past two years. Compared to 8.5% growth attained in
2010-11, GDP growth is expected to decline to 6.9% during 2011-12.
Indian Rupee
weakened against US dollar to its historically low level of 54.
Benchmark interest
rates touched the peak of past ten years, affecting industry growth. Industrial
growth averaged 2.8% during the year vis-à-vis 8.2% growth posted last year.
After hiking key
policy rates thirteen times in the past two years, the Reserve Bank of India
(“RBI”) has cut the cash reserve ratio by 125 basis points and repo rate by 50
basis points in past five months.
Still interest rates
are at high level and RBI will watch for inflationary trend before announcing
further rate cuts to boost the growth.
WPI-based
inflation remained stubborn at 6.9% in March 2012.
A large fiscal
deficit, arising from high social sector spending and a spike in crude oil
prices, has only added to the woes of Indian economy.
Going forward,
though inflation and interest rates are anticipated to ease from current
levels, slowing investments and declining capital formation may have a greater
bearing on the prospective growth of Indian Economy.
ADITYA BIRLA NUVO:
REFLECTING STRENGTH OF ITS CONGLOMERATE MODEL
Amidst this
challenging macro-economic environment, Aditya Birla Nuvo (“ABNL”) has
outperformed the industry across most of its businesses and posted strong
earnings. While some of the businesses were affected due to sector specific
challenges, other businesses supported overall earnings. This reflects the
strength of its conglomerate model. The businesswise key highlights and
achievements are detailed below.
FINANCIAL SERVICES
Aditya Birla
Financial Services (“ABFS”) is a large non-bank player in India. With funds
under management of USD 17.5 billion and revenue size of USD 1.3 billion, it
ranks among top 5 fund managers in India, excluding banks and LIC.
·
Birla Sun Life Insurance and Birla Sun Life Asset
Management improved their rankings and gained market share
·
Aditya Birla Finance, the NBFC arm, almost doubled
its book size and diversified its portfolio.
·
Aditya Birla Private Equity launched its second
fund.
·
The Broking business garnered its all time high
retail market share in commodity as well as equity broking segment.
·
With a strong emergence of profitability, Birla Sun
Life Insurance declared its maiden dividend
TELECOM
With 1.4 billion
minutes of usage per day, Idea Cellular ranks among the top 10 cellular
operators in the world. Idea is third largest in India with a revenue market
share1 of 14.4%. It serves a large 112.7 million subscribers’ base. Idea
Cellular :
·
Has been the biggest revenue market share gainer in
the past two years.
·
Idea ranks 1st or 2nd in eight service areas in
terms of revenue market share.
·
Accounted for 20.6% of industry’s incremental
mobile revenue during the calendar year 2011.
·
Enjoys the highest active subscribers’ ratio in the
Industry and leads as a Mobile Number Portability provider.
·
Is a USD 6.5 billion (Rs. 327000.000 Millions)
company by market cap and USD 4 billion (Rs. 195000.000 Millions) company by
revenue size.
FASHION AND
LIFESTYLE
Madura Fashion and
Lifestyle is the largest premium branded apparel player in India.
·
Madura reached Rs. 22500.000 Millions (USD 450
million) revenue mark.
·
Its revenue almost doubled during the last two years
– growing at a CAGR of 34%.
·
It sells two branded apparels every three seconds
through 1,129 exclusive brand outlets (“EBOs”) spanning across 1.6 million
square feet besides more than 1,400 departmental stores and multi brand outlets
ACQUISITION OF CONTROLLING
STAKE IN FUTURE GROUP’S ‘PANTALOONS FORMAT’ BUSINESS
To fortify the
Company’s position in the Fashion and Lifestyle sector, the Board of Aditya
Birla Nuvo has approved the proposed acquisition of a controlling stake in
Future Group’s ‘Pantaloons Format Business’ post its demerger from Pantaloon
Retail (India) Limited (“PRIL”), subject
to the requisite approvals.
The key strategic benefits of the transaction:
Extending
footprints into the fast growing value fashion segment:
·
Value segment is the largest contributor to the
Indian apparel market size with around 40% share
·
Pantaloons Format is a popular and growing platform
having strong presence across 31 Indian cities.
• Addressing to a larger segment of market
·
Post this acquisition, ABNL’s operating market size
will expand. It will have multiple brands and store formats to offer a complete
range of casuals, formals, ethnic wear, party wear and sportswear for Men,
Women and Kids.
Structure of the transaction:
·
PRIL will issue Rs. 8000.000 Millions Optionally
Fully Convertible Debentures (“OFCDs”) to ABNL or its subsidiary.
• PRIL will
demerge its Pantaloons Format business (resulting entity) through court scheme
of arrangement.
• PRIL will transfer
the net assets of this Format, its apportioned debt of Rs. 8000.000 Millions
and OFCDs of Rs. 8000.000 Millions to the resulting entity.
• ABNL’s stake in
the resulting entity, post demerger will be about 45% triggering an open offer.
• Enterprise Value
of Pantaloons Format business comes to Rs. 26000.000 Millions.
• ABNL will make
an open offer to the shareholders of the resulting entity.
• ABNL’s holding
in the resulting entity post open offer shall be a minimum of 50.01%.
• The resulting entity
will become a listed subsidiary of ABNL.
• The proposed
transaction is likely to be completed within 8 to 10 months, subject to the
finalization of the Scheme of Arrangement, due diligence, statutory and other
requisite approvals.
IT-ITeS
Aditya Birla
Minacs is among the top 10 Indian BPO companies. Aditya Birla Minacs:
·
Achieved Rs. 20750.000 Millions (USD 415 million)
revenue mark.
·
Sold total contract value of USD 730 million and
won 16 new clients.
·
Has global delivery capacities serving more than
100 clients including several Fortune 500 clients through 36 centres and more
than 19,700 employees.
MANUFACTURING
Having a combined
revenue of USD 1.25 billion, manufacturing businesses yielded an ROACE of 20%
during 2011-12.
·
Dumping from China adversely affected the capacity
utilisation and profitability of Hi-tech Carbon, the second largest carbon
black manufacturer in India and Aditya Birla Insulators, the largest
manufacturer of insulators in India.
·
Combined EBITDA was maintained year on year led by
the strong earnings growth in the other manufacturing businesses.
·
Indo Gulf Fertilisers, the 8th largest urea
manufacturer in India, crossed Rs. 2,100 Crore revenue mark. It achieved its
highest ever urea production and sales.
·
Jaya Shree textiles, the largest manufacturer of
linen yarn and fabric in India, achieved its highest ever earnings. Its revenue crossed Rs. 10000.000
Millions mark.
·
Indian Rayon, the second largest manufacturer of
viscose filament yarn in India, became the largest exporter of VFY from India
for the 7th year in a row.
STRONG EARNINGS GROWTH
Aditya Birla Nuvo
has delivered a strong growth in the consolidated earnings.
Most of its
businesses are competitively well placed and are contributing to the earnings
growth.
·
Revenue rose by 20% to Rs. 218400.000 Millions (USD 4.5 billion)
·
EBITDA surged by 21% to Rs. 32590.000 Millions (USD 652 million)
·
Net Profit grew by 8% to Rs. 8900.000 Millions (USD 178 million)
FINANCIAL SERVICES
(ADITYA BIRLA FINANCIAL SERVICES)
India has one of
the highest household savings rate in the world, even though it has come off
its peak due to high inflation. Household savings in India as a percentage of GDP
was around 33% during 2011-12 compared to 22% a decade ago. It is expected to
be further rising. A recent study of Global Financial Literacy points out that
though the country has one of the highest savings rate among its global peers,
the households may not be aware of many options to invest in. A large
proportion of financial savings is being deployed in bank deposits, which
offers a huge potential market size for non bank financial services and
products. Moreover, growing share of working population, burgeoning middle
class segment and rising per capita income levels indicate strong long term
growth potential of the Indian financial services sector.
Besides being
equipped with a nation-wide distribution network, a large customer base, a
talented human resource pool, proven track record of product innovation,
customer centric approach and superior investment performance, Aditya Birla
Financial Services (“ABFS”) has a strong parent brand. This will enable
Aditya Birla Financial Services to capitalise on the long term growth
opportunities offered by the Indian financial services sector.
Currently, the
Indian financial services sector is witnessing growth challenges due to
regulatory changes and unfavourable investment climate. The financial year
2011-12 saw shrinkage across most of the fee and agency based businesses. Only
lending business has grown. In such a market, Aditya Birla Financial Services
has strengthened its market positioning across the business verticals.
Aditya Birla
Financial Services is today a large non bank player. Having funds under
management of about Rs. 867500.000 Millions (USD 17.5 billion), ABFS ranks
among top 5 fund managers in India excluding banks and Life Insurance
Corporation of India (“LIC”). It has a strong presence across seven business
verticals viz., Life Insurance, Asset Management, NBFC, Private Equity,
Broking, Wealth Management and General Insurance Advisory. Anchored by 17,000
employees and trusted by 5.5 million customers, ABFS has a nation-wide reach
through over 1,775 branches and about 200,000 agents / channel partners.
Aditya Birla
Financial Services has launched an online money management platform - Aditya
Birla Money MyUniverse. This unique brand agnostic platform enables customers
to aggregate their various financial relationships in a highly secure
environment and provides customised and completely automated advice on money
management, based on the financial position and risk profile of the customer.
The platform also enables users for expense tracking, setting budgets, getting
alerts, investment transactions, tax filing and registering for bill payment.
Aditya Birla Money
MyUniverse was voted “Product of the year, 2012” for innovation in financial
services, in a survey of over 30,000 people conducted by Nielsen.
While ABFS
registered a moderate growth in revenue, it posted a strong growth in the
profitability. The combined revenue of ABFS grew year on year from Rs.
63130.000 Millions to Rs. 65500.000 Millions (about USD 1.3 billion). Its
earnings before tax surged by 27% from Rs. 4720.000 Millions to Rs. 6000.000
Millions. Net profit at Rs. 5390.000 Millions registered a strong growth over
previous year.
ABFS is the
largest contributor to ABNL’s consolidated earnings before tax – It contributed
45% during 2011-12.
LIFE INSURANCE
(BIRLA SUN LIFE INSURANCE COMPANY LIMITED)
INDUSTRY OVERVIEW
The Indian Life
insurance industry ranks among top 10 life insurance markets in the world and
among the top 5 in Asia. It currently comprises 23 private life insurers and
one public sector life insurer – LIC. The Indian Life Insurance industry covers
a large part of Indian population through the distribution network of more than
11,500 branches and over 2.6 million advisors, in addition to the bancassurance
and other third party distribution channels. The industry garnered new business
premium2 of Rs. 67,770 Crore (about USD 13.6 billion) during 2011-12. LIC
contributed to 65% of industry’s new business while private life insurers
contributed remaining 35% Top 7 out of 23 private players contributed to about
71% of the private sector’s new business. The top 7 private life insurers and
LIC combined together accounted for 90% of industry’s new business.
Following the
issue of new ULIP (Unit Linked Insurance Plan) guidelines by Insurance
Regulatory and Development Authority (“IRDA”) in September 2010, new business
premium growth remained affected in 2011-12 too. During the first half year,
de-growth was prominent since new guidelines came into effect from nearly mid
of the previous year. During the second half year, private players registered
almost flat growth. While rationalisation of distributors’ compensation was a
major factor impacting growth, regulatory uncertainty around new product
launches, ambiguity on the pension products, weak equity markets and high
interest rates were some of the other variables that impacted new business
performance.
PERFORMANCE REVIEW
Birla Sun Life
Insurance (“BSLI”) completed 12 years of its journey towards serving the
protection, health, retirement, children’s future and wealth management needs
of varied customer segments. During 2011-12, BSLI reported lowest de-growth
among top 7 private life insurers and improved its private sector market share
from 7% to 7.8%. It moved one step up to rank 5th among the private life
insurers. BSLI continues to follow a successful multi-channel distribution
strategy with over 650 branches, about 139,000 agents, 5 bank partners and
about 200 third party distributors.
In 2011-12, new business
premium income of BSLI at Rs. 19260.000 Millions de-grew year on year by 7% due
to the ULIP segment. Non-ULIP sales gained traction and contributed to 46% of
BSLI’s individual new business vis-a-vis 25% in the previous year. BSLI has
successfully transitioned its sales force from selling predominantly ULIPs to
now having a balanced product mix. BSLI’s performance in the Group segment was
also strong driven by improvement in the product lines. This has helped BSLI to
achieve 2nd rank amongst private insurers in the group segment.
Renewal premium
rose by 10% to Rs. 39590.000 Millions. The total premium income grew by 4% to
Rs. 58850.000 Millions. The conservation ratio at 76% and the 13th month
persistency at 82% signify customer stickiness and are among the best in the
industry.
AUM grew by 7% to
Rs. 211100.000 Millions (about USD 4.2 billion). BSLI continued to deliver
superior investment returns to its policyholders.
During the year,
operating expenses to premium ratio improved from 21.2% to 20.6% and commission
ratio reduced from 6.7% to 5.5%.
Driven by rising
profit from in-force business, declining expense ratios and changes in product
mix and structures, earnings before tax of BSLI surged by 51% from Rs. 3040.000
Millions to Rs. 4610.000 Millions
No capital
infusion has been required since past two years.
With the strong
emergence of profitability, BSLI declared its maiden dividend amounting to Rs.
985.000 Millions @ 5% of its paid-up capital. Aditya Birla Nuvo received Rs.
730.000 Millions for its 74% shareholding.
During the year,
the Company filed several new products with the regulator to focus on
under-penetrated segments and to broad-base its product mix.
The agency channel
continues to be the largest distribution channel for BSLI contributing to 71%
of its individual new business sales during the year. The bancassurance channel
contributed 14% and Corporate Agents and Brokers accounted for 15%. In 2011-12,
BSLI ranked amongst the top 3 private life insurers in terms of new business sales
from agency channel and has consistently been in the top quartile in terms of
front line sales staff productivity.
OUTLOOK
The last two years
have been challenging for the Indian life insurance industry in terms of new
business growth. However, its long term growth prospects undoubtedly remain
strong considering that India is still a fairly underpenetrated life insurance
market. The insurance density or insurance premium per capita in India at USD
55.5 is one of the lowest in the world. Also looking at the brighter side of
recent regulatory changes, these have not only made ULIPs more cost competitive
for the customers but also pushed life insurers towards improving their
operating efficiencies and enhancing customer service standards – which will be
positive for the industry in the long run. In the short to medium term,
stability in the regulatory environment, improvement in the investment climate
and evolution of the distribution channels will be key growth drivers.
For BSLI, the
action areas will be strengthening the product portfolio, enhancing the
operating competitiveness and distribution efficiencies, leveraging the
bancassurance channel and improving the customer retention and service
standards. A widely trusted brand name, superior investment performance,
experienced team and a proven track record in product innovation will support
BSLI in effective execution of these actions to further strengthen its market
positioning.
ASSET MANAGEMENT
(BIRLA SUN LIFE ASSET MANAGEMENT COMPANY LIMITED)
INDUSTRY OVERVIEW
The Indian mutual
fund industry comprises 44 asset management companies. Top 5 asset management
companies contribute to 54% of industry’s average AUM (AAUM)1. After continuous
growth for the past few years, the Indian mutual fund industry has witnessed
decline in its AUM during last two years. After declining by 8% in the previous
year, the AAUM1 of the industry de-grew by 5% from about Rs. 7008000.000
Millions (USD 140 billion) in 2010-11 to around Rs. 6648000.000 Millions (USD
133 billion).
Industry’s equity
AAUM1 de-grew by 3% to about Rs. 2018000.000 Millions (USD 40 billion) on
account of equity market action. Share of equity AAUM in industry’s total AAUM
remained flat at 30%. Nonequity assets witnessed 6% de-growth during the year
largely due to outflow of banks’ investments in debt and liquid funds following
the direction given by RBI to limit investments in mutual fund schemes up to
10% of net worth as on 31st March of the previous year.
PERFORMANCE REVIEW
Birla Sun Life
Asset Management Company (“BSAMC”) completed 17 years of its journey towards
offering wealth creation solutions to its customers. During the year, BSAMC
outperformed the industry and increased its market share to 9.2% in terms of
domestic AAUM1. BSAMC reported 2nd lowest de-growth in domestic AAUM1 among the
top 5 players
With a total AAUM
of Rs. 644600.000 Millions (USD 13 billion), BSAMC improved its ranking by one
notch to become the 4th largest asset management company in India.
It continued to
focus on alternate assets. Out of total commitments received under the real
estate onshore fund launched in the previous year, about 25% has been deployed.
BSAMC had set up offices in Singapore and Dubai to reach out to international
customers.
Due to reduction
in the AUM size and change in asset mix, earnings remained under pressure
across the industry. Revenue of BSAMC de-grew from Rs. 3660.000 Millions to Rs.
3150.000 Millions and earnings before tax from Rs. 1260.000 Millions to Rs.
890.000 Millions.
BSAMC is serving
its large investor base through a strong distribution network of 103 branches
and about 34,900 financial advisors. About 82% of its AUM is rated under the 4
and 5 Star categories. As an acknowledgement of its investment performance,
following awards and recognitions were conferred on BSAMC at various forums:
·
“The Best Debt Fund House of the year 2011” by CNBC
TV 18 – CRISIL, UTV Bloomberg and Outlook Money
·
“Best Mutual Fund House of the Year - Runner up” by
Outlook Money
·
“Golden Peacock Award, 2011” for innovative ‘Mobile
Investment Manager’ which brings the convenience of transacting and managing
investments to the mobile platform.
OUTLOOK
Growth of the
Indian mutual fund industry was affected during the last two years.
Nevertheless, the long term outlook for the mutual fund industry remains
attractive backed by lower mutual fund penetration, growing incomes and savings
level. Mutual fund AUM as a percentage of Indian GDP has grown from ~6% in
2005-06 to more than 13% in 2011-12. Yet it is very low compared to 50%-90% in
the developed countries. Furthermore, the increasing focus of asset management
companies on the alternate assets and efforts for increasing retail
participation through Systematic Investment Plans (“SIPs”) etc. will also
contribute to the growth.
With a target of
profitable growth in AUM size, BSAMC will focus on enhancing distribution
capacity and productivity across the channels, improving customer engagement
and costs rationalisation. Having a strong brand, experienced management and
proven track record of investment performance, it is well positioned as a
leading player in the Indian mutual fund industry
NBFC (ADITYA BIRLA FINANCE LIMITED)
INDUSTRY OVERVIEW
Aditya Birla
Finance (“ABFL”) is categorized as systematically important non-deposit taking NBFC.
There are more than 300 systematically important non-deposit taking NBFCs in
India. ABFL is one of the leading players in the Loan against Securities
(“LAS”) and corporate bill discounting segments.
While Indian
financial services sector faced growth challenge in the fee and agency based
business verticals in past two years, lending business has grown. However, rise
in cost of borrowings led to contraction of net interest
margin (“NIM”)
across the NBFCs. As a monetary measure to tame inflation, RBI increased the
key policy rates thirteen times between March 2010 and November 2011 which
forced banks to raise the lending rates. Though in past five months, RBI has
cut cash reserve ratio by 125 bps and repo rate by 50 bps, lending rates still
remain at
high level.
PERFORMANCE REVIEW
During 2011-12,
lending book size of ABFL grew significantly across all the lines of business.
Total closing book almost doubled year on year to Rs. 34250.000 Millions. The
Capital Market portfolio (Promoter funding, LAS, broker funding, IPO financing,
ESOP financing etc.) expanded by 22% to Rs. 16250.000 Millions. Corporate
Finance portfolio (Vendor financing, corporate bill discounting, structured
finance, term loans etc.) doubled to more than Rs. 8500.000 Millions. ABFL
forayed into Infrastructure Financing and Mortgage Funding (loan against
property and lease rental discounting) and closed the year with a book of over
Rs. 6500.000 Millions and Rs. 650.000 Millions respectively.
Despite the
uncertain equity markets and slowing down corporate lending activities, ABFL
was not only able to achieve a healthy growth in existing segments, but it has
also built a strong infrastructure financing book.
Revenue of ABFL
surged by 78% to Rs. 3480.000 Millions in line with the growth in its lending
book size. Earnings before tax rose by 51% to Rs. 840.000 Millions. Net
interest margin was lower year on year due to rise in cost of borrowings.
ABFL received a
capital infusion of Rs. 750.000 Millions during the year to support expansion
of its lending book. Its net worth stands increased from Rs. 4970.000 Millions
to Rs. 6280.000 Millions. Its balance sheet has an optimum leverage of around 5
times of net worth. The business is growing at a good pace and will require
capital for future growth.
The short term
borrowings program of ABFL was enhanced from Rs. 25000.000 Millions to Rs.
30000.000 Millions and has been assigned ‘A1+’ rating by ICRA – the highest
credit quality rating assigned by ICRA to short term debt instruments. Its
long-term borrowing limit of Rs. 10000.000 Millions has been assigned ‘AA’
rating by ICRA. Besides these, a Rs. 2500.000 Millions sub-ordinate debt
program (Tier II NCDs of 10 years and above) has been assigned ‘AA’ rating by
ICRA as well as CARE.
OUTLOOK
The outlook for
the NBFC sector remains positive backed by the lower credit penetration and
huge capital formation requirement of the country.
However, in the
short term, the sector may found the macro-economic environment challenging for
growing quality book on account of overall bearish sentiments, volatile stock
markets and high interest rates.
ABFL aims at scaling
up its book size cautiously while managing risks optimally. Leveraging Aditya
Birla Group’s large ecosystem for SME funding will be a key focus area.
Extension of portfolio with entry in new arrays of products, strong parent
brand and an experienced team having seen more than two decades of business
cycles will aid ABFL in reaching towards its goal.
PRIVATE EQUITY (ADITYA BIRLA PRIVATE EQUITY)
INDUSTRY OVERVIEW
Growth momentum of
Private Equity (“PE”) investments in India built during 2010 continued in the
calendar year 2011 too. During 2011, total investments by the PE firms in India
rose by 24% to reach USD 10 billion (including Venture Capital investments and
excluding PE investments in Real Estate) compared to USD 8 billion in the
previous calendar year. The number of PE deals increased from 362 deals in 2010
to over 441 deals in 2011. This takes total investments by PE firms in India to
about USD 47 billion across more than 2,000 transactions over the past five
years
PERFORMANCE REVIEW
After the
successful launch of its first fund at a size of Rs. 8810.000 Millions
(including 20% sponsor’s commitment) in March 2010, Aditya Birla Private Equity
(“ABPE”) launched its second fund called Sunrise Fund.
Sunrise fund
closed for subscription in March 2012 at a size of Rs. 2990.000 Millions
(including 10% sponsor’s commitment) taking total funds under management to Rs.
11790.000 Millions.
The first fund has
already deployed about 50% of its total corpus in following companies:
a) Anupam
Industries – a leading manufacturer of industrial and construction cranes,
b) Bombay Stock
Exchange – the oldest stock exchange in Asia,
c) Credit Analysis
and Research Limited – a leading credit rating agency,
d) GEI Industrial
systems and its subsidiary – a leader in air-cooled heat exchangers and
condensers for more than 40 years
e) Alphion India
Private Limited - Gigabit passive optical networking systems maker for next
generation broadband and mobile backhaul
f) Trimax IT infrastructure
and Services Limited. - Systems Integration, IT Infrastructure Management
Services
Sunrise Fund has
made one investment till date in SMS Paryavaran Limited which is into design
and construction of Water and Waste-Water Treatment systems.
Both the funds
have strong pipeline of deals to deploy the balance of the fund corpus.
Aditya Birla
Capital Advisors Private Limited (“ABCAP”) provides the investment management
and advisory services to ABPE Trust, a venture capital fund registered with SEBI.
During 2011-12, ABCAP posted revenue of Rs. 210.000 Millions and net profit of
Rs. 40.000 Millions vis-a-vis Rs. 180.000 Millions and Rs. 40.000 Millions
respectively in the previous year.
OUTLOOK
In the past six
months, PE investments have slowed down due to economic uncertainty and weak
capital markets. However, according to Venture Intelligence, the large
uninvested capital lying with PE funds and the increasingly attractive
valuations of Indian companies – including the listed ones – signals to a turnaround
in the coming future.
Backed by its
strong investment management team and salient parentage brand, Aditya Birla
Private Equity is well positioned to tap the opportunity offered by the private
equity space.
BROKING (ADITYA BIRLA MONEY LIMITED)
INDUSTRY OVERVIEW
The Indian retail
broking industry is highly fragmented with the top ten players contributing to
less than 20% of equity broking market size. The number of demat accounts in
the country shows the depth of equity penetration. Currently there are about 20
million demat accounts in India, which grew at a CAGR of 14% during the past
five years. However in 2011-12, industry has seen the lowest demat account
additions in past five years.
During 2011-12,
Sensex – the benchmark index of BSE – de-grew by 10% and S and P CNX Nifty –
the benchmark index of NSE – declined by 9%. The total cash equity volumes of
BSE and NSE put together de-grew by 26% to USD 695 billion; however Futures and
Options (“F and O”) volumes grew by 7% to USD 6.3 trillion. F and O segment
accounted for 90% of the combined equity volumes at NSE and BSE vis-a-vis 86%
in 2010-11. Due to increasing
contribution of lower margin F and O segment in total pie, earnings of retail
brokerage houses have been impacted. This trend indicates increasing
speculative activities rather than retail participation. Retail participation
in cash equity segment reduced to 51% compared to 56% in the previous year. The
combined commodities volumes at MCX and NCDEX rose by 55% to USD 3.5 trillion.
PERFORMANCE REVIEW
Aditya Birla Money
(“ABML”) witnessed growth in commodity volumes while cash market volumes were
affected across the Industry. Cash market volumes of ABML de-grew by 19% while
commodity volumes rose by 145%. F and O volumes of ABML grew by 6% despite
falling retail volumes in derivatives. F and O volumes accounted for 81% of
total equity volumes of ABML. During the fourth quarter, its market share in
the retail cash equity segment, retail F and O segment and commodity segment
increased year on year from 0.9% to 1.4%, from 0.5% to 0.9% and from 0.28% to
0.46% respectively.
During 2011-12,
ABML’s revenue de-grew by 23% from Rs. 1140.000 Millions to Rs. 880.000
Millions. ABML has increased its market share across the categories but the
revenue growth was impacted owing to sluggish industry volumes. Its net loss
increased from Rs. 80.000 Millions to Rs. 180.000 Millions.
The number of
customers increased to about 292,000. Its points of presence increased from 969
to 985 consisting of 167 branches and 818 franchisees.
ABML has entered
into a strategic alliance with Allahabad Bank for providing online trading
platform to the bank’s customers. This deal has given ABML an access to a large
customer base of Allahabad Bank.
OUTLOOK
Slow down in the
economy had a bearing on the capital markets and particularly the retail
participation. However, in the long run, growth opportunity does exist for the
Indian equity broking industry – given the lower penetration and rising per
capita income. Technology is going to play a major role in enhancing the retail
participation.
Aditya Birla Money
will continue to focus on the six pillars of this business – Brand, Product,
Distribution, Operations, Service and People – to gain market share and augment
its earnings. It will lay emphasis on cost optimisation and expanding its
business through a cost-effective business partner – based model.
WEALTH MANAGEMENT
(ADITYA BIRLA MONEY MART LIMITED)
INDUSTRY OVERVIEW
While there are a
few large wealth management players in India; mutual fund distribution industry
is very fragmented. Aditya Birla Money Mart (“ABMM”) is the third largest
corporate distributor of mutual funds in India with Assets under Advisory of
more than Rs. 125000.000 Millions as on 31st March 2012 ABMM is also a
significant player in the wealth management space.
PERFORMANCE REVIEW
Financial year
2011-12 was a challenging year for the wealth management industry as fixed
deposits and other safer investment avenues attracted household financial
savings amidst volatile capital markets. Equity broking volumes, new business
sales in the life insurance sector and AUM of the mutual fund industry
witnessed slowdown affecting the business of wealth management and distribution
players.
Revenue of ABMM
de-grew from Rs. 740.000 Millions to Rs. 600.000 Millions due to sluggish
financial markets. ABMM reported a net loss of Rs. 210.000 Millions vis-à-vis
loss of Rs. 190.000 Millions (before one-time exceptional loss) incurred in the
previous year.
ABMM has a strong
nation-wide distribution presence through 32 branches and about 14,000 channel
partners.
OUTLOOK
High savings
growth in India implies a huge opportunity for financial intermediation
services. Distribution and wealth management industry will continue to play an
important role in the growth of life insurance, mutual funds and equity broking
products and services.
ABMM’s thrust will
be to provide quality wealth management solutions to its client through product
innovation and technology support.
GENERAL INSURANCE
ADVISORY (ADITYA BIRLA INSURANCE BROKERS LIMITED)
INDUSTRY OVERVIEW
Gross premium
underwritten in the general insurance segment has grown by 23% from USD 9.5
billion to USD 11.7 billion (Source: "IRDA"). Aditya Birla Insurance
Brokers Ltd. ("ABIBL"), erstwhile Birla Insurance Advisory and
Broking Services Limited, is one of the leading general insurance brokers in
India.
PERFORMANCE REVIEW
The premium
placement by ABIBL surged by 49% from Rs. 2050.000 Millions to Rs. 3040.000
Millions leading to strong earnings growth. Revenue grew by 52% from Rs.
210.000 Millions to Rs. 320.000 Millions. Earnings before tax grew three times
from Rs. 30.000 Millions to Rs. 90.000 Millions and net profit grew from Rs. 20.000
Millions to Rs. 60.000 Millions.
OUTLOOK
Lower general
insurance penetration in India is likely to boost growth of general insurance
industry. ABIBL will focus on reaching a larger customer base in a cost
effective way to grow the business.
TELECOM (IDEA CELLULAR LIMITED)
INDUSTRY OVERVIEW
Indian wireless
sector, the second largest market in the world in terms of subscribers’ base
has seen sharp reduction in tariffs during 2009-10 and 2010-11. This affected
revenue growth of the sector while its subscribers’ base was growing at a
strong pace. To the much respite of the sector, reduction in tariffs seen in
earlier years got arrested during financial year 2011-12, signifying the
unsustainable levels of these tariffs to yield any reasonable return on the
investments.
With a strong net
addition of over 107 million subscribers, sector’s total subscribers’ base has
reached to 919 million as on 31st March 2012. Compared to a 19% growth in
subscribers’ base, gross revenue of the Indian wireless sector rose by 15% to
~USD 27 billion during calendar year 2011. Out of total 15 cellular operators,
the top 3 players namely Bharti Airtel, Vodafone and Idea Cellular contributed
to about 67% of the Industry’s wireless gross revenue. All the major operators
launched 3G services in India during the later part of the previous financial
year.
The industry is
currently facing an uncertain regulatory environment following the cancellation
of 2G licenses by the Hon’ble Supreme Court in February 2012. In April 2012,
the recommendations of the regulator, towards spectrum auctions, pricing and
re-farming, have only added to this uncertainty.
PERFORMANCE REVIEW
With total Minutes
on Network of 1.4 billion per day, Idea Cellular (“Idea”) ranks among the top
10 cellular operators in the world. In India, Idea is 3rd largest in terms of
revenue market share1 at 14.4%. Idea is the market leader in four service areas
namely Kerala, Maharashtra, Madhya Pradesh and Uttar Pradesh (West), in terms
of revenue market share. It ranks 2nd in another four service areas viz.,
Haryana, Punjab, Andhra Pradesh and Gujarat.
Being the fastest
growing major cellular operator in India, Idea has been outperforming the
industry across key parameters. This reflects the strength of its brand and
quality of its services.
For instance, Idea
has been the biggest revenue market share gainer since past two years. Idea has
around 93% of its reported subscribers as VLR (active) subscribers, which is
highest in the industry. With the net gain of 2.9 million subscribers and the
lowest port-out ratio, Idea leads the industry since the launch of Mobile
Number Portability (“MNP”). One out of every four existing customers in India,
who chooses to port out, prefers Idea.
Idea’s
subscribers’ base grew by 26% in past one year from 89.5 million to 112.7
million. More importantly, Idea continued to expand its revenue market share
garnering a much larger share of industry’s incremental revenue. Idea
contributed to 20.6% of industry's incremental mobile revenue during calendar
year 2011.
Idea’s average
realisation per minute (“ARPM”) during the fourth quarter has grown from 0.406
in 2010-11 to 0.422 in 2011-12. Increased share of value added services
contributed to ARPM growth. Idea’s minutes on network grew by 25% to reach 453
billion during the year – growing significantly faster than the sector. Growth
in these drivers spurred Idea’s earnings.
Revenue soared by
26% to Rs. 194890.000 Millions – growing at twice the industry growth rate.
EBITDA grew by 32% to Rs. 51350.000 Millions. However, net profit de-grew from
Rs. 8990.000 Millions to Rs. 7230.000 Millions largely due to higher
depreciation/ amortisation costs and interest expenses on account of front
loaded 3G investments. Higher deferred tax also strained net profit.
Currently, Idea
offers 3G services in 20 service areas (including roaming arrangements with
other operators) covering more than 3,000 towns and 10,000 villages. With this,
Idea is all set to exploit the untapped wireless broadband data market and
other emerging verticals of revenue like Mobile banking, M-commerce, M-health,
M-education etc. In this direction, Idea has launched Idea smart phones at
attractive price points. Idea also provides Mobile Banking services through
‘Idea MyCash’ – in an alliance with Axis Bank.
The Hon'ble
Supreme Court vide its judgment dated 2nd February 2012 quashed the licenses
granted pursuant to two press releases issued on 10th January 2008 and
subsequent allocation of spectrum. The Supreme Court has also directed the
TRAI, to make fresh recommendations for grant of license and allocation of
spectrum by auction and the Central Government to consider the recommendations
of TRAI and take appropriate decision within next one month for grant of fresh
licenses.
However, on an
application from the Government of India, the Hon'ble Supreme Court, vide its
order dated 24th April 2012 extended the date of spectrum auction, to be
concluded by Department of Telecommunications ("DoT"), to 31st August
2012 and allowed licenses to carry on the operations till 7th September 2012.
Idea incurred a
capital expenditure (including capital advances) of Rs. 45450.000 Millions,
during the year. For fiscal 2012-13, capex guidance stands at Rs. 35000.000
Millions excluding any payment towards spectrum.
With the
standalone net debt to EBITDA at 2.48 and net debt to equity at 0.93, Idea has
a strong balance sheet. Idea has been free cash flow positive since past two
quarters. With the declining capex requirements for 2G and 3G, free cash flows
will further strengthen balance sheet and provide cushion for future growth.
OUTLOOK
The Indian
wireless sector continues to offer opportunities, both in voice and data, to
the quality operators in the long run. Though overall tele-density in India has
reached 76%, the rural tele-density still remains at only 38%. Moreover, launch
of 3G services provides a large growth opportunity in the data segment as the
broadband penetration in India stands at only 1.1%. However, some of the recent
regulatory developments are being viewed negatively by most of the industry
players, though the final outcome is yet to be decided by the Government / DoT.
Going forward,
Idea will continue to focus on increasing its revenue market share by
capitalising on brand IDEA besides participating in the evolving wireless
broadband business. Supported by a quality subscribers’ base, sound balance
sheet and strong brand, Idea is well placed to outperform the sector and emerge
even stronger.
FASHION AND LIFESTYLE
(MADURA FASHION AND LIFESTYLE)
INDUSTRY OVERVIEW
Branded apparel
industry has posted healthy growth in the previous two years, driven by same
stores sales growth as well as rapid retail expansion. This growth momentum has
moderated during 2011-12, particularly in the second half of the year, largely
due to the base effect and subdued demand. Overall consumer spends on
discretionary categories, like premium branded apparels, have been affected by
the inflationary pressure coupled with rise in apparel prices. Apparel prices
were increased by 15-20% across the industry to partly pass on the rise in
cotton prices and levy of excise duty. Most of the players reported flat to
negative same stores sales growth. Amidst this scenario, Madura Fashion and Lifestyle
continued to outperform the industry, with its like to like stores sales
growing in double digits.
PERFORMANCE REVIEW
Madura Fashion and
Lifestyle (“Madura”) 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. Madura also retails
international brands like Armani Collezioni, Hugo Boss, Versace Collection,
Hackett, Adidas, Puma, Samsonite and many more under one roof ‘The Collective’.
Madura also has a strategic tie up with leading international brand Esprit for
distribution of its apparels in India.
Madura sells two
branded apparels every three seconds through its retail as well as wholesale
channel, serving varied fashion & lifestyle needs of its customers. Retail
channel comprises of 1,129 EBOs spanning across 1.6 million square feet and
contributes to 47% of Madura’s total revenue. Wholesale channel consists of
more than 1,400 Multi Brand Outlets and departmental stores viz., Shoppers
Stop, Lifestyle, Central etc.
Madura reached Rs.
22500.000 Millions revenue mark. It achieved 24% year on year growth in revenue
supported by a strong 22% growth in branded garments volumes. Retail channel
sales rose by 29%. Stores expansion and 10% like to like stores sales growth
contributed. During the year, Madura added 234 EBOs on a net basis.
Driven by the
strong sales growth across the brands and channels and improved product mix,
EBITDA surged by 46% from Rs. 1360.000 Millions to Rs. 1980.000 Millions.
Higher discounting and cost pressure were compensated by rise in apparel
prices.
Led by sound
profitable growth and improved working capital management, return on capital
employed grew significantly from 11% to 21%. Over the past two years, Madura
has almost doubled its turnover while managing capital employed at similar
levels. Its net working capital turnover is at 5.2 times.
OUTLOOK
The long term
growth outlook of the domestic branded apparel industry remains bright backed
by strong demographics viz., rising disposable income, expansion of aspiring
middle class segment, large young population and increasing inclination towards
branded apparels. However, in the short term, consumer spends on premium
branded apparels are expected to remain subdued on account of high inflation.
Madura will
continue to leverage its brand leadership, expand its retail space and
strengthen channel relationships with a target of outperforming the industry
growth.
IT – ITES (ADITYA
BIRLA MINACS WORLDWIDE LIMITED)
INDUSTRY OVERVIEW
During 2011-12,
global economic conditions remained challenging, especially in Europe. The
IT-ITeS industry did grow and customers did continue to outsource, though at a
slower pace. The business models of customers have started changing from cost
savings to standardisation, global flexibility and better technology. Customers
now expect vendors and outsourcing partners to invest in improving processes
whilst passing on continuing cost savings.
PERFORMANCE REVIEW
With a track
record of over 30 years, Aditya Birla Minacs is a leading global delivery
solutions provider that partners with global corporations and provides solutions
in the areas of Customer Lifecycle, Marketing, Finance and Accounting,
Procurement and IT services.
Aditya Birla
Minacs has been named in the Leaders category in ‘Global Outsourcing 100
companies, 2012’ by International Association of Outsourcing Professionals
(“IAOP”).
Aditya Birla
Minacs ranks among the top 10 Indian BPO companies by revenue size
Aditya Birla
Minacs won 16 new clients during the year. Aditya Birla Minacs sold Total
Contract Value (“TCV”) of more than USD 730 million vis-a-vis USD 775 million
sold in the previous year. About 40% of the TCV sold in 2011-12 was on account
of new business.
However, it has
witnessed slower conversion of sales pipeline due to challenging economic
conditions in the US and Europe.
Revenue grew year on
year by 23% to Rs. 20820.000 Millions. Growth in the existing accounts,
conversion of order book and favourable forex movement contributed to the
growth in top-line. The clients located in US contributed 75% of the revenue
while Canada, Europe and Asia pacific contributed 15%, 4% and 6% respectively.
The revenue mix by the industry verticals (a) Manufacturing (b) TIME (Telecom,
Technology Infrastructure, Media and Entertainment), (c) Banking and Financial
Services, (d) Insurance and Healthcare and (e) IT Services is 56%, 28%, 11%, 1%
and 4% respectively. Revenue contribution from top 5 clients reduced from 53%
in 2010-11 to 50% in 2011-12.
Operating EBITDA
grew by 16% to Rs. 2010.000 Millions. Operating EBITDA margin remained flat
absorbing costs incurred on ramp up for new contracts and opening up of two new
sites. Aditya Birla Minacs posted a net profit of Rs. 700.000 Millions
vis-a-vis Rs. 740.000 Millions attained in the previous year. During last year,
profit was higher to the extent of employment incentive arrears of Rs. 250.000
Millions. Moreover, a one-time cost of Rs. 210.000 Millions was incurred in
2011-12 on closure of one site in North America to achieve cost
rationalization. The business is generating steady cash profit to fund its
capital expenditure and working capital requirements.
Aditya Birla Nuvo
acquired balance 11.72% holding in the ITeS subsidiary. After the merger of IT
and ITeS subsidiaries, ABNL and its subsidiary, holds 99.85% in the merged
entity.
OUTLOOK
While the global
economic outlook seems to remain challenging, outsourcing contracts are
expected to grow at a steady rate. In fact, mid-sized companies that have been
slow adopters of outsourcing are also expected to enter the market due to cost
pressure and need to access technology and best practices. However, with the
clients demanding more than cost benefits out of the outsourcing contracts,
sustaining margin would be challenging for the outsourcing solutions providers
Aditya Birla
Minacs will endeavour to sustain its sales momentum and optimise operating
costs to enhance its margin.
MANUFACTURING BUSINESSES
Aditya Birla Nuvo
has a strong market positioning across its manufacturing businesses. All the
manufacturing businesses of ABNL hold leadership position in their respective
sectors in terms of capacity as well as profitability.
Aditya Birla Nuvo is:
·
The second largest manufacturer of Carbon Black in
India (Aditya Birla Group is the largest manufacturer in the world in terms of
capacity at 2 million tons per annum)
·
The second largest producer and the largest
exporter of Viscose Filament Yarn in India
·
The eighth largest urea manufacturer and among the
top two best energy efficient urea plants in India
·
The largest Linen Yarn and Linen Fabric
manufacturer in India
·
India's largest and world's fourth largest
manufacturer of Insulators
These businesses
have an outstanding track record of consistent generation of strong cash flows
and return on capital employed. Cash flows generated by these businesses have
historically provided cushion to the balance sheet of Aditya Birla Nuvo for
funding the growth capital requirements of other businesses. At the same time,
ABNL continued to invest in the capacity expansion of these businesses to tap
sector growth opportunities.
Combined together,
manufacturing businesses registered a 33% growth in revenue during 2011-12 to
reach USD 1.25 billion. They have posted an EBITDA of Rs. 7520.000 Millions
vis-a-vis Rs. 7760.000 Millions earned in the previous year.
AGRI-BUSINESS (INDO-GULF FERTILISERS)
INDUSTRY OVERVIEW
The financial year
2011-12 has been a mixed year for Indian Agriculture, with an excellent kharif
and an average Rabi. Urea sales volume grew from 28.2 million tons in 2010-11
to 29.5 million tons in 2011-12. Urea imports continued to surge and have
crossed 7 million tons in 2011-12. The industry is eagerly waiting for the new
investment policy to enable Brownfield / Greenfield projects to bridge this
gap.
The Government
policy of nutrient based subsidy ("NBS") for P (phosphorus) and K
(potassium) based fertilisers has ensured better availability of these
fertilisers. However, keeping urea (nitrogen based fertiliser) out of the
preview of NBS has led to lop sided usage of urea and adverse N, P, K ratio.
Usage of urea increased as the prices of P and K fertilisers doubled during the
year owing to increase in international prices and weakening of the Indian
Rupee. The industry is keenly awaiting the extension of NBS to Urea, to correct
this imbalance.
PERFORMANCE REVIEW
Today, Indo Gulf
Fertilisers is positioned as a complete agri solutions provider, offering an
entire range of agri inputs (fertilisers, seeds and agrochemicals) and services
to the farmers and catering to their needs right from sowing to harvesting.
Indo-Gulf is the 8th largest urea manufacturer in India and among the best
plants in India in terms of energy efficiency and productivity. It achieved its
highest ever urea production and sales during the year.
Revenue soared by
69% to Rs. 21070.000 Millions driven by commencement of trading of imported
fertilizers and increase in realisation (subsidy). Rise in feed and fuel
(natural gas) prices resulted in higher subsidies. Higher urea sales volume,
increased share of neem coated urea and increase in sales of seeds and
agrochemicals also contributed.
EBITDA rose by 20%
from Rs. 1760.000 Millions to Rs. 2110.000 Millions. Pricing gain on the
imported fertilisers on account of favorable forex movement also contributed.
Indo-Gulf is operating at a strong return on average capital employed
("ROACE") of 26%. It is lower year on year owing to increase in
working capital largely due to rise in urea prices, commencement of trading of
imported fertilisers and slower recovery of subsidies.
'Birla Shaktiman'
has maintained its leadership position in its entire marketing territory zone –
Eastern Uttar Pradesh, Bihar, Jharkhand and West Bengal. Indo-Gulf has expanded
its product portfolio to cover the full range of N, P, K fertilizers by
offering 'Birla Shaktiman DAP, NPK and SSP'. These products were well received
by the farmers and the channel partners.
OUTLOOK
The recent
government policies intend to encourage indigenous production and reduce
subsidy burden by decreasing imports. This is a welcome move. However, better
clarity on the pricing and availability of the natural gas is awaited.
Indo-Gulf is
working towards de-bottlenecking and revamping of its existing plant for
reducing the energy consumption and enhancing the productivity. Indo-Gulf has
received clearance from the Ministry of Environment and Forests for the
brownfield expansion and it now awaits policy clarity on the allocation and
pricing of the natural gas. It is also evaluating setting up of a customised
fertilisers plant. It also remains focused on scaling the agri-inputs trading
segment. Being located in the agriculture heartland of the country and having
brand leadership, Indo-Gulf is well positioned to capture future growth in this
sector.
CARBON BLACK (HI-TECH CARBON)
INDUSTRY OVERVIEW
Carbon Black is
used in the tyre industry as well as in the non-tyre sector as reinforcing
filler in rubber products and in the printing inks and paints industry. Carbon
Black constitutes ~28% of tyre by weight. Tyre production in India grew year on
year by 5% during 2011-12. Carbon Black imports increased by more than 50%
during the year; affecting the off-take and capacity utilisation of the
domestic carbon black manufacturers. Domestic players have approached the
Government of India for the levy of appropriate duties on cheaper imports from
China. Hi-Tech Carbon, the carbon black business of ABNL and Phillips Carbon
Black Ltd. are the leading carbon black manufacturers in India accounting for
39% and 46% of domestic production during 2011-12.
PERFORMANCE REVIEW
Domestic sales
volume of Hi-Tech Carbon dropped by 3%, mainly due to dumping from China.
Exports volume grew by 4%. Share of exports in total sales volume increased to
20%.
Revenue increased
by 22% to Rs. 19430.000 Millions on account of higher realisation. Carbon Black
realization increased by 25% to Rs. 68,276 per ton to partly pass on rise in
raw material (CBFS) costs which tend to move in line with crude oil prices.
Energy sales grew from Rs. 800.000 Millions to Rs. 940.000 Millions with the
commencement of power sales from two plants.
EBITDA de-grew
from Rs. 2570.000 Millions to Rs. 2050.000 Millions. Higher CBFS prices and lower
capacity utilization due to drop in sales volumes strained profitability
Capital employed
increased primarily on account of higher CBFS prices which inflated the
inventories and receivables. Capital Employed is also higher to the extent of
mark-to-market provision of Rs. 880.000 Millions w.r.t. fully hedged foreign
currency working capital borrowings. Due to lower profitability and higher
capital employed, ROACE de-grew to 13%.
OUTLOOK
The capacity
utilisation and profitability of the domestic manufacturers may improve,
provided appropriate duty is levied and the level playing field is restored.
Long term growth outlook remains positive. The domestic tyre production is
expected to get a boost from the OEM and replacement demand coupled with increase
in exports. Tyre exports from India grew by 24% during 2011-12. This will be a
prime growth driver for the Indian carbon black industry.
Being a leading
and cost effective player, Hi-Tech carbon will be a key driver for as well as
beneficiary of the sector growth prospects.
TEXTILES (JAYA SHREE TEXTILES)
INDUSTRY OVERVIEW
The business
environment in the domestic textiles industry was buoyant during the first half
of the financial year but slowing economic growth across the globe and weak
consumer sentiments impacted demand in the second half. Rise in coal prices
ignited by its shortage and depreciation of Indian rupee inflated costs of
production. Prices of Flax Fibre remained on upward trajectory although prices
of other competing fibres like Cotton tapered off. Wool prices remained
volatile.
PERFORMANCE REVIEW
Jaya Shree
Textiles ("JST") is the largest manufacturer of linen yarn and linen
fabric in India with spinning and weaving capacities at 15,640 spindles and 106
looms respectively. It is a leading manufacturer of wool tops and worsted yarn
in India with a capacity of 7 carding machines and 25,984 spindles
respectively.
JST has led the
successful journey of linen from a commodity product to a lifestyle symbol. JST
retails linen fabric under the well-known brand "Linen Club Fabrics".
JST achieved its
highest ever earnings, driven by improved realisation across the segments and
volume growth in the linen segment.
Realisation
increased across the segments mainly to pass on rise in input costs. Linen yarn
and Linen fabric segments registered 14% and 7% growth in sales volume,
respectively. Wool segment witnessed lower exports volume.
Its revenue at Rs.
10460.000 Millions posted 35% growth, year on year. EBITDA soared by 42% from
Rs. 990.000 Millions to Rs. 1410.000 Millions.
ROACE enlarged to
82% driven by improved earnings and efficient working capital management. In
fact, JST has doubled its earnings in past two years while managing capital
employed at one-third level.
Its efforts for increasing
awareness for linen in the domestic market and creating a wide distribution
channel of whole-sellers, multi brand outlets and EBOs are yielding results.
With a continued
focus on high margin Linen Fabric OTC segment, JST added 17 more EBOs during
the year taking the total count to 57. Share of this segment in total linen
fabric sales volume grew year on year from 41% to 51%.
OUTLOOK
Rising per capita
income levels and gaining popularity of linen as a style and comfort fabric,
paints a bright long term outlook for the linen segment.
JST is evaluating
capacity expansion in the linen yarn and fabric segments to capitalise on the
rising demand. It will also continue to focus on high margin linen fabric OTC
segment.
RAYON (INDIAN RAYON)
INDUSTRY OVERVIEW
Indian Rayon
manufactures and sells viscose filament yarn ("VFY"), caustic soda
and allied chemicals. Domestic consumption of VFY grew by 1% to 56,727 MT in
2011-12. Domestic VFY production increased by 4% to 42,356 MT while imports
increased by 10% to 22,403 MT. VFY exports grew by 12% to 6,118 MT. Century
Textiles and Industries Limited and Indian Rayon are leading domestic VFY
manufacturers having production share of 44% and 39% respectively
Caustic Soda is a
versatile alkali. It is mainly used in the manufacturing process of pulp and
paper, alumina, textiles, soaps and detergents, petroleum products, chemicals
etc. Caustic soda prices increased during the year led by demand supply
mismatch.
PERFORMANCE REVIEW
During 2011-12,
wood pulp prices came down from the peak level of USD 3000 per ton to USD 1200
per ton. Led by drop in raw material costs, cheaper imports from China
increased. This has affected sales volume of the domestic players. Through a
notification issued in May 2012, anti dumping duty on Chinese imports has been
extended by the Government.
Indian Rayon
registered growth in VFY sales volume and maintained inventories at optimum
level driven by higher exports, strategic marketing and better product mix.
Indian Rayon became the largest Indian exporter of VFY for seventh year in a
row - contributing to more than 50% of VFY exports from India.
Revenue of Indian
Rayon from the VFY segment grew by 21% to Rs. 4670.000 Millions. VFY
realization increased by 17% while VFY sales volumes grew by 4%. VFY prices
were increased during the first half of the calendar year 2011 to pass on
higher wood pulp prices. Improved product mix also contributed. Revenue from
the Chemicals segment grew by 18% to Rs. 2130.000 Millions. Caustic soda sales
volumes de-grew by 7% while ECU realisation grew by 24%. Total revenue of
Indian Rayon grew by 20% to Rs. 6800.000 Millions.
EBITDA grew by 16%
from Rs. 1100.000 Millions to Rs. 1280.000 Millions. Higher realisation in both
the VFY and Chemicals segments coupled with growth in VFY sales volume
contributed. Indian Rayon is operating at an ROACE of 19%.
Indian Rayon has
commenced expansion of its VFY capacity using Spool Technology from ENKA,
Germany. Out of total planned capex of Rs. 2700.000 Millions, a sum of Rs.
760.000 Millions has been spent till March 2012. It is targeted to complete by
the end of fiscal year 2012-13. The new technology will help Indian Rayon to
cater to high margin premium segment.
Indian Rayon is
also expanding its caustic soda capacity by 45,625 MTPA at a capex of Rs.
1550.000 Millions. It is expected to complete in 2013-14, taking the total
capacity to 136,875 MTPA.
OUTLOOK
The rising labour
and power costs in China, strong Yuan and extension of anti-dumping duty will
lead to rise in landed costs of Chinese imports, which will be favourable for
the domestic VFY manufacturers. Caustic soda demand is expected to improve
going forward with the expansion plans of customers.
With the planned
VFY and caustic soda capacity expansions, Indian Rayon is well positioned to
tap the growth opportunity in these sectors and augment its earnings.
INSULATORS (ADITYA
BIRLA INSULATORS)
INDUSTRY OVERVIEW
Growth in the
power sector is the key driver for the insulators industry. Investments in the
power sector have slowed down in India due to liquidity crunch, coal linkage
etc., impacting the Indian insulators industry.
Apart from this,
dumping from China has also affected the domestic manufacturers by shrinking
their market and putting pressure on price levels. Exports markets have also
witnessed sluggish demand. Domestic sales volume of the Indian insulators
industry have de-grown year on year by 19% during April 2011- February 2012.
Domestic manufacturers have approached the Government of India for the levy of
safeguard / antidumping duty on cheaper imports from China.
PERFORMANCE REVIEW
Aditya Birla
Insulators, the India's largest and world's fourth largest manufacturer of
insulators, contained de-growth in its sales volume to 12% and maintained its
domestic market leadership. It has increased its geographical reach by
identifying new set of customers in the exports market.
Its revenue is
lower year on year by 10% at Rs. 4680.000 Millions. Sales volume and realization
remained under pressure due to deferment of deliveries by customers and
increase in cheaper imports from China.
EBITDA de-grew
from Rs. 1340.000 Millions to Rs. 670.000 Millions. Lower capacity utilisation
coupled with rise in the production costs strained profitability. ROACE dropped
to 12% owing to decline in earnings.
OUTLOOK
In the near
future, investments in the power sector are likely to remain affected owing to
liquidity crunch and coal shortages. However, the capacity utilisation and the profitability
of domestic manufacturers may improve to certain
extent, provided
the duty is levied on cheaper imports.
Aditya Birla
Insulators will continue to focus on yield improvement and cost rationalization
to enhance its cost competitiveness besides exploring new geographies in the
exports market.
The Standalone
revenue rose by 31% to Rs. 84330.000 Millions fuelled by the robust sales
growth in the Fashion and Lifestyle business, commencement of trading of
imported fertilisers and improved realisation in the Agri, Carbon Black, Rayon
and Textiles businesses.
The Standalone
EBITDA, which grew by 9% from Rs. 9600.000 Millions to Rs. 10510.000 Millions,
is the highest ever. This growth is despite an adverse impact on profitability
in the Carbon Black and the Insulators businesses due to dumping from China.
The Fashion and Lifestyle and the Textiles businesses were the largest
contributors to the earnings growth. Trading of imported fertilisers in the
agribusiness (including pricing gain on favourable forex movement) and increase
in VFY and ECU realisation in the Rayon business also contributed. ABNL has
also received dividend of Rs. 730.000 Millions from its subsidiary, Birla Sun
Life Insurance.
Finance cost rose
by 16% to Rs. 3130.000 Millions mainly due to rise in working capital
requirements. Depreciation grew largely in the Carbon Black and Fashion and
Lifestyle businesses.
Earnings before
tax and exceptional Items grew by 8% to Rs. 5340.000 Millions. However,
provision for entry tax liability, which is largely related to earlier years,
has affected the net profit growth.
The Board of
Directors of the Company has recommended a final dividend of 60% for 2011-12
entailing a total outgo of Rs. 680.000 Millions.
Net debt increased
from Rs. 31420.000 Millions to Rs. 37500.000 Millions mainly due to increase in
working capital requirements. As a result, leveraging ratios showed upward
movement.
With the equity
infusion by promoters, balance sheet will get strengthened.
FIXED ASSETS
·
Land
o
Freehold
o
Leasehold
·
Railway Siding
·
Buildings
o
Freehold
o
Leasehold
·
Leasehold Improvements
·
Plant and Machinery
·
Furniture, Fixtures and Equipment
·
Vehicles and Aircraft
·
Livestock
Intangible Assets
·
Goodwill
·
Trademark / Brands / Technical Know-how
·
Specialised Software
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. 54.29 |
|
|
1 |
Rs. 82.87 |
|
Euro |
1 |
Rs. 70.80 |
INFORMATION DETAILS
|
Information
Gathered by : |
SVA |
|
|
|
|
Report Prepared
by : |
DPT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--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 |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
64 |
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.