Stock Code: BSE : 500303 NSE : ABIRLANUVO Reuters : ABRL.BO / ABRL.NS / IRYN.LU Bloomberg : ABNL IN / IRIG LX
Stock Code: BSE : 500303 NSE : ABIRLANUVO Reuters : ABRL.BO / ABRL.NS / IRYN.LU Bloomberg : ABNL IN / IRIG LX
2
Contents
The Aditya Birla Group
Indian Economy and Aditya Birla Nuvo‟s presence
Aditya Birla Nuvo : Overview & Financial Snapshot
Our Businesses
Financials : Profit & Loss Account and Balance Sheet
Annexure: Business-wise detailed overview, Shareholding Pattern, Management Team
3
4 - 6
7 – 11
12 – 21
22 – 27
28 – 55
Note 1: The Hon'ble High Court of Delhi has granted an ex-parte ad interim stay on its earlier order sanctioning the Scheme of Amalgamation of erstwhile
Spice Communications Limited with Idea Cellular Limited (Idea), a joint venture (JV) of Aditya Birla Nuvo Ltd. (ABNL). As a result of this extra
ordinary situation, Idea has not published its Financial Statements (FS) for the quarter and the year ended 31st March 2011. In absence of FS from
Idea, ABNL has decided to publish unaudited consolidated results for the quarter and the year ended 31st March, 2011, considering FS of Idea for
the nine months period ended 31st December, 2010 being the latest period for which Idea has published its financial results. For the purpose of
making consolidated results comparable, ABNL has provided pro-forma consolidated results for the year ended 31st March, 2010 considering FS of
Idea for the nine months period ended 31st December, 2009. ABNL will publish its Audited Consolidated Financial Results for the year ended 31st
March 2011, on receipt of FS of Idea.
Note 2 : USD 1 = ` 45; 1 billion = 100 Crore
Note 3 : The financial figures in this presentation have been rounded off to the nearest ` 1 Crore
3
Part of the Aditya Birla Group
A USD 30 billion Corporation, the Aditya Birla Group is in the league of fortune 500
Operating in 31 countries across 6 continents with over 60% of revenue flowing from its overseas operations
Among the largest and the most reputed business houses in India
Flagship listed companies: Aditya Birla Nuvo (Conglomerate), Grasim & Ultratech (VSF & Cement), Hindalco
- Incl. Novelis (Aluminium & Copper), Idea Cellular (Telecom)
6th great place for Leaders in Asia Pacific Region (Source : Hewitt Associates, in partnership with The RBL Group & Fortune)
Anchored by 1,31,000 employees belonging to 42 nationalities
Trusted by ~ 1.5 million shareholders and over 100 million customers
In India
Leadership Aluminium, Cement, Carbon Black, VSF, VFY,
Position Branded Apparels, Copper, Chlor-alkali,
Insulators (in terms of production / sales)
Top 3 Telecom (in terms of wireless revenue market share)
Top 6 Life Insurance (in terms of new business premium)
Asset Management (in terms of average AUM)
Global positioning
Aluminium World‟s largest aluminium rolling unit
VSF World‟s largest manufacturer
Carbon Black 4th largest manufacturer in the world
Cement 8th largest manufacturer in the world
Our Values – Integrity, Commitment, Passion, Seamlessness, Speed
4
India : On the World Map
-10.0%
-5.0%
0.0%
5.0%
10.0%
Ch
ina
India
Indo
ne
sia
S K
ore
a
Bra
zil
US
Ho
ng
Ko
ng
UK
Ja
pa
n
Ru
ssia
World : Real GDP growth rates – 2009
Source: IMF World Economic Outlook Database, CSO, RBI, Ministry of Finance and CIRA Estimates
The 4th largest economy by GDP (at Purchasing Power Parity) in the World
One of the highest GDP growth rates in the world
A free- market democracy with a robust legal and regulatory framework
Largely domestic driven due to lower dependence on exports
About 70% of India‟s population resides in rural counterparts which is largely isolated from global cues
India has the largest number of listed companies and the third largest investor base in the world
0%
4%
8%
12%
. FY'02 FY'04 FY'06 FY'08 FY'10 FY'12E
India : Real GDP growth rates
5
Savings led Consumption led Infrastructure led Exports led
Growth Drivers
High rate of savings Rising income levelsHigh rate of
capital formationRising outsourcing trend
Lower penetration of
financial servicesA large young population
Steady economic
reform regime
Highly skilled
human capital
Growing awareness
for financial planningBurgeoning middle class
Investor friendly policies
Increasing FII & FDI flowLow cost destination
Key sectors to
benefitFinancial Services
Telecom, Organised Retail,
Fashion & Lifestyle,
Automobiles
Power, Roads,
AgricultureIT-ITeS
India : Huge investment opportunities across the sectors
Source: CSO, UN
0
15
30
45
60
India
Chin
a
US
A
UK
Japan
25
35 3740
45
A Young Population
(Median Age – 2010)
15%
25%
35%
45%
.
FY
'02
FY
'04
FY
'06
FY
'08
FY
'10E
Savings & Capital Formation
(as % of GDP) Capital
Formation
Savings
0
400
800
.
FY
'02
FY
'04
FY
'06
FY
'08
FY
'10
Rising per Capita Income
(USD)
6
Aditya Birla Nuvo : Present across a wide spectrum
1Manufacturing businesses include Agri-business, Carbon Black, Rayon, Insulators and Textiles
Agriculture & Services
57%Industry
43%
Mfg.1
Financial
Services
IT-ITeS
Telecom
Fashion &
Lifestyle2
Well positioned to capitalise on growth opportunities available across the wide spectrum of Indian economy
Anchored by more than
50,000 employees
Trusted by more than 1.5
lacs shareholders
Nationwide presence
through 1 million touch
points / channel partners
Touching lives of ~100
million Indians
Aditya
Birla Nuvo
: A large
eco-system
ABNL‟s presence across sectors
India‟s sectoral GDP
2Branded apparels & accessories
7
Our Vision
“To become a premium conglomerate
with market leadership across businesses
delivering superior value to shareholders
on a sustained basis”
Kumar Mangalam Birla
Chairman
8
Manufacturing
Textiles1
Carbon Black1
Rayon1
Agri-Business1
IT-ITeS2
(88.28%)
Fashion &
Lifestyle1
Financial
ServicesTelecom3 #
(25.35%)
Asset Management3
(50%) *
Life Insurance2
(74%)*
NBFC2
Private Equity2
Broking (75%)2
Wealth management2
General Insurance Advisory (50%)2
Insulators1
A ~USD 4 billion conglomerate
Note : Percentage figures indicated above represent ABNL‟s shareholding in its subsidiaries /JV‟s
Represent Joint VenturesRepresent Subsidiaries *JV with Sun Life Financial, CanadaRepresent Divisions # Listed, Aditya Birla Group holds 46.04%1 2 3
9
Financial snapshot : Consolidated
FY07 FY08 FY09 FY10 FY 10^ FY11^
8,043
11,375
14,331 15,521
14,645
17,102
Revenue (` Cr.)
FY07 FY08 FY09 FY10 FY10^ FY11^
1,163 1,153
867
1,686
1,413
2,420 EBITDA (` Cr.)
Key highlights of FY11^
Revenue grew y-o-y by 17% to ` 17,102 Cr. (~USD 4 billion)
EBITDA surged by y-o-y 71% to ` 2,420 Cr. (~USD 538 million)
Net Profit grew to ` 752 Cr. (~USD 167 million) vis-à-vis ` 84 Cr. (~USD 19 million) in FY10
USD billion
1.8 2.5 3.2 3.4
USD Million
258 256 193 375
^ Pro-forma Results. Refer note 1 on slide 2
USD billion
~3 ~4
USD Million
314 538
10
Consolidated Mix – Nine Months FY2010-11
Financial Services
33%
Telecom22%
Fashion & Lifestyle
10%
IT-ITeS9%
Manufacturing 26%
Financial Services
23%
Telecom23%Fashion &
Lifestyle6%
IT-ITeS6%
Manufacturing 42%
Revenue
` 12,951 Cr.
Segmental EBIT
` 1,126 Cr.
11
3,478 3,9104,982
5,436 5,424
2,651 3,057
3,7683,044
3,437
FY07 FY08 FY09 FY10 FY11
Long Term
Investments
Fixed Assets &
Working Capital
Growth supported by strong Standalone Balance Sheet
3.9 3.8
5.8
4.13.2
0.78
0.62
0.87
0.74
0.58
FY07 FY08 FY09 FY10 FY11
Net Debt / EBITDA Net Debt / Equity
Standalone Capital Employed (` Cr.)
More than 60% of standalone capital employed is deployed in long term investments
Leveraging at comfortable level supported by strong cash flows generated by manufacturing businesses
Equity infusion of ` 1,000 Cr. through preferential allotment of 18.5 million warrants to promoters further strengthened
balance sheet.
Standalone Ratios
12
13
Aditya Birla Financial Services (ABFS)
To be a leader and role model in financial services sector with a broad based and integrated business
Power of One
One Virtual Company : Many real businesses
Lif
e I
nsu
ran
ce
As
se
t M
an
ag
em
en
t
NB
FC
Bro
kin
g
Wealt
h M
an
ag
em
en
t
Pri
vate
Eq
uit
y
Gen
era
l In
su
ran
ce A
dv
iso
ry
In line with its vision, ABFS is today a large non-bank financial services player
Managing AUM of ~USD 20 billion and revenue of over ~ USD 1.4 billion
Anchored by about 15,000 employees and trusted by ~ 5.5 million customers with value creation for clients at its core
Nationwide presence through over 1,700 points of presence and about 200,000 agents / channel partners
Leveraging synergies to be competitive and cost effective
14
1,735
3,223
4,414
5,293 5,511
FY07 FY08 FY09 FY10 FY11
Birla Sun Life Insurance (BSLI)
Robust growth in Total Premium Income Robust growth in AUM
(` Crore)
Covering over 2.4 million lives, BSLI ranks among the top 6 private life insurers in India
Strong distribution reach : A nation-wide presence with ~600 branches, ~150,000 direct selling agents, 5 bancassurance
partners and more than 225 corporate agents & brokers
Focus on superior and consistent fund performance : ~100% of AUM is ahead of set benchmarks
Growing size of in-force book & better expense management led to reduction of loss from ` 702 Cr. in FY09 to ` 435 Cr.
in FY10 and capital infusion from ` 725 Cr. to ` 450 Cr.
Posted net profit of ` 305 Cr. in FY11. No capital infusion was required in FY11
As on 31st Mar‟11, 13th month premium persistency is at ~83% and 25th month premium persistency is at ~77%
Focused on profitable growth : Embedded Value at ` 3,816 Cr. & VNB margin at 22.5% in FY10 (Refer Slide 34)
19,760
Mar'07 Mar'08 Mar'09 Mar'10 Mar'11
4,020
6,893
9,168
16,130
31%40% 36%
52%
Debt
Equity
50%
(` Crore)
15
Birla Sun Life Asset Management (BSAMC)
Robust growth in AUM (` Crore)15 years + journey of continued wealth creation
“Asset Management Co. of the Year-2009 & 2010” - The Asset, HK
Among top 5 players in India with market share of 9.1% in Q4FY11
Consistent rise in its share in industry‟s domestic equity avg. AUM
Building alternate assets :
Maiden Real Estate Onshore Fund collected ` 1,088 Cr.
Expanding International Presence :
Set up offices in Dubai & Singapore
Revenue grew to ` 366 Cr. & Net Profit to ` 85 Cr.
Aditya Birla Private Equity
Huge opportunity in the Private Equity space in India driven by (a) Long term growth potential of Indian Industry, (b)
Rising disposable income and growing participation of HNIs and (c) Mature & liquid financial markets and conducive
government policies for private investment
Maiden fund of Aditya Birla Private Equity closed recently at a size of ` 881 Cr. Invested in Anupam Industries, Bombay
Stock Exchange, Credit Analysis & Research Ltd., GEI Industrial systems.
Launched „Sunrise Fund‟ aiming at emerging sectors viz., Lifestyle, Lifeskills & Education, Lifecare & applied technologies
Strong Investment Performance by BSAMC : 2nd highest number of funds in 4 & 5 star categories across the industry
Mar'08 Mar'09 Mar'10 Mar'11 (Q4)
28,381
42,48951,293 52,383
10,030
6,159
13837 15,177
38,411
65,130
48,649
Equity &
Alternate
Assets1
Debt &
Liquid
67,560
1Equity AUM (Domestic & Offshore) + PMS + Real Estate Onshore Fund
16
Credit penetration in India at ~60% of GDP is lower compared to other emerging and developed economies
NBFCs have around 12% share in overall Credit Outstanding of ~ USD 850 billion (Mar‟10E) in India (Source : RBI)
Credit Outstanding is expected to grow at a CAGR of ~20% for next three years (Source : RBI)
Aditya Birla Finance is among the leading NBFCs in India
Leveraging Aditya Birla Group‟s ecosystem for SME funding
Closing book size more than doubled y-o-y to ~ ` 1,800 Cr. in FY11
Disbursed loans of ~ ` 5,000 Cr. towards IPO funding during FY11
Aditya Birla Money (Broking)
Aditya Birla Money is one of the leading retail broking companies in India with a nationwide branch network of ~220
branches and over 725 franchisees serving ~250,000 customers across more than 150 cities
Aditya Birla Money Mart (Wealth Management & Distribution)
Aditya Birla Money Mart is 3rd largest corporate distributor of mutual funds in India in terms of Assets under Advisory
at~ `139 billion as on 31st March 2011
Nationwide presence with 37 branches and ~14,000 channel partners serving ~ 250,000 customers
Aditya Birla Finance (NBFC)
17
FY06 FY07 FY08 FY09 FY10 9mFY11
2,965
4,366
6,720
10,131
12,398 11,240
FY06 FY07 FY08 FY09 FY10 9mFY11
1,096 1,504
2,376
3,051
3,621
2,757
EBITDA (` Cr.)
Idea Cellular (Telecom)
Revenue (` Cr.)
Ranks 3rd in terms of Pan India wireless revenue market share at 13.3%1 up from 12.7% one year ago
Ranks 2nd with 21%1 revenue market share in 9 service areas where it holds 900 MHz spectrum
Having a market cap of ~USD 5 billion, Idea serves a large customer base of ~90 million subscribers
Ranks among top 10 players globally with total Minutes of Use on network of more than 1 billion per day
Winner of 3G spectrum in 11 service areas which contribute 80% of Idea‟s existing 2G revenue
Idea holds 16% stake in the world‟s largest Indus Towers
Strong balance sheet & cash profit to support growth : Net Debt/EBITDA at 2.9 & Net Debt/Equity at 0.9
1Based on gross revenue for UAS & Mobile licenses only, for Dec‟10 quarter, as released by TRAI
Building sustainable competitiveness while maintaining growth momentum
Focused Area Specific Strategy : Emerging stronger out of the hyper-competition
0.514
0.4660.438
0.423 0.418
0.405
0.362 0.352 0.345 0.339
Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11
Avg. Revenue per minute (̀ ) Avg. Cost per minute (̀ )
Scale benefit driving cost efficiency
18
FY07 FY08 FY09 FY10 FY11
830
1,026 1,116
1,251
1,809
Madura Garments (Fashion & Lifestyle)
Revenue (` Cr.)
FY07 FY08 FY09 FY10 FY11
96
39
(158)
(4)
137
EBITDA (` Cr.)
Domestic apparel market is expected to grow from USD 26 billion in 2009 to USD 37 billion by 2014 (Source : Crisil)
Madura Garments is the largest premium Branded Apparel player in India : A complete lifestyle proposition
Leadership built by Strong Brands : Louis Philippe, Van Heusen, Allen Solly, Peter England, People. Strategic
distributorship tie-up with leading brand Esprit. Retailing international brands under „The Collective‟.
Retailing branded apparels and accessories through ~900 exclusive brand outlets spanning across ~1.3 million
square feet besides reaching customers through more than 1,250 departmental stores and multi brand outlets
Capitalising on brand leadership and enhancing channel productivity to achieve profitable growth
Turnaround in the bottom-line led by revenue growth and overheads reduction measures
19
FY07 FY08 FY09 FY10 FY11
84
45
4
105
183
FY07 FY08 FY09 FY10 FY11
1,109
1,677 1,777
1,530 1,692
Revenue (` Cr.)
Aditya Birla Minacs (IT-ITeS)
EBITDA (` Cr.)
Ranks among top 10 India BPO companies by revenue size
A global solution provider serving more than 100 clients through 33 centres in US, Canada, Europe, India & Philippines
Employees base of ~19,600 (NA : ~7300, APAC : ~12300) – Added about 4,000 headcounts in past one year
Augmenting non-voice capabilities : Acquired UK based Compass BPO, a leading F&A service provider in Mar‟10 and
US based Bureau of Collection Recovery (BCR), a leading accounts receivable management company, in Jun‟10
Total contract value (TCV) of more than USD 775 million sold and 21 new logos won during FY11
About 55% of TCV is on account of new business and balance is renewal business
Diversifying capabilities and building strong order book with a focus on the bottom-line
Turnaround in the bottom-line driven by sites consolidation & cost optimisation measures
20
Capturing sector growth and realising full potential
FY07 FY08 FY09 FY10 FY11
2,816 3,126
3,881 3,725
4,689
18% 19%
15%
20%
16%
24% 23%20%
27% 26%
FY07 FY08 FY09 FY10 FY11
OPM (%) ROACE (%)
Manufacturing businesses
Consistently generating superior operating margin and return on capital employed
Revenue (` Cr.)
Strong market positioning across manufacturing businesses
Second largest producer of Carbon Black in India
India‟s largest & world‟s fourth largest manufacturer of Insulators
Second largest producer and largest exporter of Viscose Filament Yarn in India
Among the best energy efficient Fertiliser plants in India
Largest Linen Yarn and Linen Fabric manufacturer in India
FY07 FY08 FY09 FY10 FY11
500 584 578
748 781
EBITDA (` Cr.)
FY07 FY08 FY09 FY10 FY11
1,836
2,252 2,386 2,255
2,715
Capital Employed (` Cr.)
21
Going Forward ...
Increasing market share while building a profitable book with a strong focus on distribution efficiency,
persistency, expense management and service in the Life Insurance business
Increasing market share profitably with a strong focus on distribution, high margin assets, service and
fund performance in the Asset Management business
Focusing to grow the book profitably while managing risk optimally in the NBFC business
Continue to increase revenue market share by capitalising on brand IDEA while leveraging 3G spectrum
to augment revenue stream and enrich customer experience in the Telecom business
Continue to leverage brand leadership and expanded retail space besides extending range of
merchandise for superior shopper experience in the Fashion & Lifestyle business
Augmenting capabilities, building strong order book, scaling up F&A and Collections verticals in the
IT-ITeS business
Margin enhancement across the Manufacturing businesses by maximising operating efficiency &
passing on rise in input & fuel costs
22
23
Consolidated Revenue - Segmental
( ` Crore)
2010-11 2009-10 2009-10
Published
Life Insurance 5,534 5,309 5,309
Other Financial Services * 579 416 416
Telecom (Nuvo's share) 2,852 2,453 3,331
Fashion & Lifestyle 1,809 1,251 1,251
IT-ITeS 1,692 1,530 1,530
Manufacturing 4,689 3,725 3,725
Carbon Black 1,588 1,161 1,161
Agri-business 1,244 1,022 1,022
Rayon 565 538 538
Insulators 518 428 428
Textiles 774 577 577
Inter-segment Elimination (53) (38) (38)
Consolidated Revenue 17,102 14,645 15,523
Pro-forma^
Full Year
Revenue
@
@ Idea is consolidated at 27.02% till 1st Mar‟10 and at 25.4% thereafter.
* Other Financial Services include Asset Management (consolidated at 50%), NBFC, Private Equity, Broking, Wealth Management & General Insurance Advisory.
^ Refer note 1 on slide 2
24
Consolidated EBIT - Segmental
( ` Crore)
2010-11 2009-10 2009-10
Published
Life Insurance 314 (425) (425)
Other Financial Services * 101 88 88
Telecom (Nuvo's share) 258 315 431
Fashion & Lifestyle 66 (81) (81)
IT-ITeS 116 42 42
Manufacturing 648 628 628
Carbon Black 221 227 227
Agri-business 157 136 136
Rayon 75 120 120
Insulators 114 98 98
Textiles 80 47 47
Segmental EBIT 1502 568 684
Pro-forma^
Full Year
EBIT
@
@ Idea is consolidated at 27.02% till 1st Mar‟10 and at 25.4% thereafter.
* Other Financial Services include Asset Management (consolidated at 50%), NBFC, Private Equity, Broking, Wealth Management & General Insurance Advisory.
Interest cost of NBFC business, being an operating expense as per AS 17, is deducted from Segmental EBIT
^ Refer note 1 on slide 2
25
Consolidated Profit & Loss and Balance Sheet
( ` Crore)
* Aditya Birla Money & Aditya Birla Money Mart, subsidiaries of Aditya Birla Nuvo, had borne one time exceptional loss of ` 104 Cr.
^ Refer note 1 on slide 2
2010-11 2009-10 2009-10
Published
Net income from operations 17,102 14,645 15,523
EBITDA 2,420 1,413 1,686
Less : NBFC Interest expenses 112 80 80
Less : Other Interest Expenses 424 537 582
EBDT 1,884 796 1,024
Less : Depreciation 774 717 866
Earnings before Tax 1,110 80 158
Less : Provision for Taxation (Net) 168 107 114
Less : Minority Interest 86 (111) (111)
Net Profit after minority interest before
exceptional gain / (loss) 856 84 155
Add : Exceptional Gain / (Loss)* (104) - -
Consolidated Net Profit 752 84 155
Pro-forma^
Full Year
Consolidated Profit & Loss Account Balance Sheet
Net Worth 6,448 5,475
Minority Interest 231 186
Total Debt 7,687 6,703
Deferred Tax Liabilities (Net) 248 241
Capital Employed 14,615 12,604
Policyholders' funds
(Incl. funds for future appropriation) 18,660 15,652
Total Liabilities 33,274 28,256
Net Block (Incl. Goodwill) 11,572 9,881
Net Working Capital 907 564
Long Term Investments 219 219
Life Insurance Investments 19,165 16,130
Cash Surplus & Current Investments 1,412 1,462
Book Value (`) 566 529
Net Debt / EBITDA (x) 2.4 3.1
Net Debt / Equity (x) 0.97 0.96
Consolidated
Mar-10Dec-10
26
Standalone Profit & Loss and Balance Sheet
( ` Crore)
March March
2011 2010
Net Worth 5,401 4,662
Total Debt 3,287 3,640
Deferred Tax Liabilities 174 178
Capital Employed 8,862 8,480
Net Block 1,858 1,815
Net Working Capital 1,434 1,049
Long Term Investments 5,424 5,436
Cash Surplus & Current Investments 146 180
Book Value (`) 476 453
Net Debt / EBITDA (x) 3.2 4.1
Net Debt / Equity (x) 0.58 0.74
Market Capitalisation - NSE 9,244 9,336
Balance SheetProfit & Loss Account
2010-11 2009-10
Net income from operations 6,445 4,827
EBITDA 970 835
Less : Interest Expenses 281 334
EBDT 689 500
Less : Depreciation 194 180
Earnings before Tax 495 320
Less : Provision for Tax (Net) 115 37
Net Profit 380 283
Full Year
Note 1 : Capex of ` 241 Cr. was spent during 2010-11
27
28
1000 400
45 15
Lower penetration of financial services
Siz
e in
mil
lio
n
PopulationBank
Account
Holders
Mutual
Fund
Holders
Dmat
Account
Holders
Financial Services Sector in India
The Indian Financial Services sector has yet to tap India‟s true potential
Faster growing economy
Continued to remain among the world‟s fastest growing
economies
GDP grew by 8% in FY‟09-10 & by estimated to grow by
8.6% in FY11
Large population & young demographics
Burgeoning Middle Class Segment
High rate of savings
Lower penetration
57% of savings lying in bank deposits
Over 50% of total revenue pool of Indian financial
services sector flows from non-banking space
Aditya Birla Financial Services is a large non-bank player
occupying significant position across verticals
Huge potential
market size
FY'98-99 FY'03-04 FY'06-07 FY'08-09
42% 39%48%
57%
2%2%
9%3%
11% 14%
18%20%
44% 45%
25% 20%
Source: RBI
Deployment of household financial savings
Others / Cash
Life Insurance
Shares and
Debentures
Deposits
Note : 1 USD = ` 45
$ 46 bn $ 84 bn $145 bn $ 166 bn
29
Aditya Birla Financial Services
* Aditya Birla Money & Aditya Birla Money Mart, subsidiaries of ABNL,, had borne one time exceptional loss of ` 104 Cr.
2010-11 2009-10
Revenue
Birla Sun Life Insurance 5,534 5,309
Birla Sun Life Asset Management 366 293
Aditya Birla Finance 165 73
Aditya Birla Money 114 113
Aditya Birla Money Mart 73 63
Aditya Birla Insurance Brokers 21 21
Others 22 (0)
Total Revenue 6,296 5,871
EBITDA 537 (231)
Net Profit / (Loss) before exceptional items 412 (359)
Exceptional Gain / (Loss)* (104) -
Net Profit / (Loss) 309 (359)
` Crore Full Year
30
FY06 FY07 FY08 FY09 FY10
-100
0
100
200
300
400
500
600
700
0 2 4 6 8 10 12 14 16
Pre
miu
m p
er
cap
ita
(U
SD
)
Premium / GDP (%)
Indian Life Insurance Industry
ICICI Prudential
20.5%SBI Life13.2%
HDFC Standard
11.9%Bajaj Allianz8.4%
Reliance Life8.2%
Birla Sun Life7.0%
Max New York6.2%
Others24.6%
Private Life Insurers market Share in terms of WNRP
(FY11)
256
533
659 639LIC
Private
Players
Private life insurers expanding market size through mass education
WNRP2 (` billion)
Source: Swiss Re, IRDA
2Weighted New Received Premium = 100% of regular first year premium + 10% of single premium
Industry moving towards balanced mix of linked & non-linked
Top 7 out of 22 private players contribute ~75% of private sector‟s new business
Birla Sun Life ranks 6th with 7% market share among private life insurers
Relatively lower insurance density offers ample opportunity for India1
1Bubble indicates size of life insurance premiums
India
China
US
UKJapan
33%45%
57%
75%51%
55%
67%55%
43%
25%
49% 45%
FY05 FY06 FY07 FY08 FY09 FY10
Non
Linked
Linked
5%
84%104%
HKTaiwan
South
Korea
Singapore
30%30%
44% 48%70%
70%
56% 52%
43%
57%
819
13%
31
Distribution reach strengthened across channels
Tie ups with 5 banks & over 225 corporate agents & brokers
Balanced channel sales mix-FY11 (Individual life)-Direct Selling
Agents (71%), Banca (16%), Corporate Agent & Brokers (13%)
137 339
600 632 600
57
115
166 170150
Mar'07 Mar'08 Mar'09 Mar'10 Mar'11
Branches (Nos.)
Direct Selling Agents ('000)
Pioneered ULIPs and Bancassurance in India
Leading player in product innovation
Focus on superior and consistent fund performance
All the funds consistently outperforming benchmarks
Achieved „zero%‟ claim outstanding ratio in FY‟10
A live example of „Customer First‟ approach
Salient Parentage Brand
DistributionCustomer
Focus &
Brand
Profitability
& Value
Creation
Scalable
Operating
Model
Key
Enablers
Birla Sun Life Insurance (BSLI)
Strengthening management team
and putting in place robust IT
platform to support growth
Outsourcing and decentralisation
Flexible organisation structure
„Best Employer‟ tag
Brand recall at 93%
Strong focus on persistency & expense
management
One of the best opex ratios among non-bank backed insurers
Rise in opex in FY09 due to distribution build up in past 2 years
27%
19% 19%23% 21%
27%24%
21%
15% 14% 13% 11% 10% 11% 9%7%0%
10%
20%
30%
40%
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Opex / Total Premium (%)
Commission / Total Premium (%)
32Mar'07 Mar'08 Mar'09 Mar'10 Mar'11
120 30 30 110 60 110211
603725
450
-8 -36 -60 -78 -61 -61 -140
-445
-702
-435
305
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Capital Infusion Net Profit / (Loss)
0
Birla Sun Life Insurance
BSLI‟s new business & market share among private players1
BSLI‟s Assets under Management grew multifold in 4 years
(` Crore)
Expanding retail base with policy growth
New policies issued („000) by BSLI
Achieved 2nd best new policy growth rate among top 7 private insurers in FY10
Strong support from promoters : Infused ` 2450 Cr. in BSLI
since inception till Mar‟10 to fund growth and solvency
An eye on profitable growth leading to reduction in net loss & capital infusion
1New product suite took time to gain acceptance after being completely revamped
in Jan‟10 impacting Q4FY10 sales
(` Crore)
883
1,965
2,821 2,960
2,080
5.3%6.6%
9.0% 8.4%7.0%
FY07 FY08 FY09 FY10 FY11
BSLI's New business Premium (` Crore)
Market share among Private Players in terms of WNRP (%)
44%
123%
5%
427
688
1,383
1,771
1,004
FY07 FY08 FY09 FY10 FY11
101%
61%
28%
4,020
6,893
9,168
16,130
31% 40% 36%
52%
Debt
Equity
50%
19,760
33
Birla Sun Life Insurance
2010-11 2009-10
New Business Premium
Individual Business 1,644 2,288
Group Business 436 672
New Business Premium (Gross) 2,080 2,960
Renewal Premium (Gross) 3,597 2,546
Premium Income (Gross) 5,677 5,506
Less : Reinsurance ceded & Service tax (166) (213)
Premium Income (Net) 5,511 5,293
Other Operating Income 23 16
Revenue 5,534 5,309
EBITDA 352 (378)
Net Profit / (Loss) 305 (435)
Capital 2,450 2,450
Assets under management 19,760 16,130
Full Year
` Crore
34
Created Value of New Business
34
Implied VNB margins of
22.5%* in FY10
(20.3%* in FY09)
* VNB as a % of first year regular premium and 10% of single premium as reported to IRDA
Note : Pl. refer to the basis of preparation and assumptions in annexure at slide no. 52
FY 2009-10 ` Crore
Embedded Value 3,816
Insurance Business Value 3,430
Adjusted Net Worth 386
Value of New Business 506
Total Capital invested till
Mar‟10 - ` 2,450 Cr.
35
3,060
+ 311
+ 506
+ 450 - 317
- 35 - 72 - 86 3,816
EV 31st
March 2009
Expected
Inforce
Contribution
Value of New
Business
Capital
Injection
Acquisition
Cost
Overrun
Maintenance
Overrun
(incl. change
in future
cost
overrun)
Change in
Risk
Discount
Rate
Other
Variances
EV 31st
March 2010
2,684
3,430
376 386
Expected Inforce Contribution
Value of New Business
Other Variances
Capital Infusion
AcquisitionCost Overrun
Maintenance Cost Overrun
(Including change in future cost overruns)
Change in Risk Discount Rate
Insurance Business Value as on 31st March 2009
Adjusted Net Worth as on 31st March 2009
Insurance Business Value as on 31st March 2010
Adjusted Net Worth as on 31st March 2010
35
As on 31st March 2010, Embedded Value at ` 3,816 Cr. grew y-o-y by 25%
Embedded Value
as on 31st March 2009
Embedded Value
as on 31st March 2010
Reconciliation of Embedded Value
( ` Crore)
36
Indian Mutual Fund Industry
Reliance14.5%
HDFC12.3%
ICICI10.5%
UTI9.6%
Birla Sun Life9.1%
Others44.0%
Market Share in terms of quarterly average AUM
(Q4FY11)
Industry AUM (average) more than doubled in past 3 years
(` billion)
Source: RBI, AMFI
Share of Mutual Fund in Household Savings in India is on a rise
Top 5 out of 40 AMCs contribute ~56% of Industry‟s average AUM
Birla Sun Life Asset Management Co. ranks 5th with 9.1% share
Relatively lower MF density offers ample opportunity for India
US Brazil UK South Korea
India
97
47
34 34
14
AUM as % of GDP
Mar'04 Mar'05 Mar'06 Mar'07 Mar'08
1.2%0.4%
3.8%
4.8%
7.7%
Mar'07 Mar'08 Mar'09 Mar'10
3550
5300
4932
7475
37
Created history by winning “Mutual Fund
House of the Year” award by CNBC TV18 -
Crisil, for the second year in a row
“Best Debt Fund House of the year” for the second
year in a row – Outlook Money, 2009 & 2010
“Asset Management Co. of the Year-2009 & 2010” - The
Asset, HK
Superior investment performance :
Recorded 2nd highest number of funds in 4 & 5 star
categories across the industry
Ranked among top 3 equity mobilisers in FY10 garnering
domestic equity net sales of over ` 2,000 Cr. compared to
industry‟s ~ ` 1,450 Cr.
Total avg. AUM at ` 67,560 Cr. as on 31st Mar‟11
Equity & alternate avg. AUM (incl. offshore) grew y-o-y by
12% in FY11 to ` 15,177 Cr.
Off shore equity AUM at ` 2,524 Cr.
Distribution
Investment
performance
Key
Enablers
Birla Sun Life Asset Management
Distribution reach strengthened across channels
3278
115 109 103
8
18
2932 34
Mar'07 Mar'08 Mar'09 Mar'10 Mar'11
Branches (Nos.)
Financial Advisors ('000)
Total Avg. AUM (Incl. offshore & PMS)
(` Crore)
1Equity AUM (Domestic & Offshore) + PMS + Real Estate Onshore Fund
Mar'08 Mar'09 Mar'10 Mar'11 (Q4)
28,381
42,48951,293 52,383
10,030
6,159
13837 15,177
38,411
65,130
48,649
Equity &
Alternate
Assets1
Debt &
Liquid
67,560
2010-11 2009-10
Revenue (Fee Income) 366 293
EBITDA 130 85
Net Profit 85 48
` Crore Full Year
Revenues
Revenues
38
NBFC : Aditya Birla Finance (erstwhile Birla Global Finance)
Lines of business : (a) Loan against securities, (b) IPO financing and (c) Corporate bills discounting
Highest rating of A1+ assigned by ICRA for short term debt in the NBFC business
In FY11, closing book size more than doubled y-o-y to ~ ` 1,800 Cr.
Received capital infusion of ` 225 Cr. in FY11 to support growth and is capitalised with a net worth of ~` 500 Cr.
Extended offerings to LC discounting, ESOP funding, retail LAS and margin funding
Key Enablers
Expanding presence across range of asset products
Leveraging Aditya Birla Group‟s ecosystem for SME funding
Maiden fund Aditya Birla Private Equity – Fund I closed at a size of ` 881 Cr.
Aditya Birla Nuvo will contribute twenty percent of the fund corpus over a period of three years
Fund proposes to target substantial minority stakes, while investing primarily in unlisted, mid-cap, high-growth, India-
centric companies and is sector-agnostic. - Invested in Anupam Industries, Bombay Stock Exchange, Credit Analysis &
Research Ltd. and GEI Industrial systems so far.
Launched „Sunrise Fund‟ aiming at emerging sectors viz., Lifestyle, Lifeskills & Education, Lifecare & applied technologies
Aditya Birla Private Equity
39
Wealth Management : Aditya Birla Money Mart (erstwhile Birla Sun Life Distribution)
Broking : Aditya Birla Money (erstwhile Apollo Sindhoori Capital Investments)
Lines of business : (a) Trading facility in equity and derivative segments, (b) trading facility in commodity segment
through a subsidiary, (c) depository participant services at major locations, (d) online bidding for IPOs and (e) distribution
of mutual funds
Nation-wide distribution network of ~220 own & over 725 franchisee branches serving ~ 250,000 customers across more
than 150 cities
Augmented research capabilities
Key Enablers : Scaling up commodity broking segment and growing customer acquisition engines
Lines of business : (a) Wealth management advisory services to HNIs, (b) sub-broker model to distribute mutual funds,
(c) investment advisory services to Corporate and (d) direct sales force based life insurance selling through subsidiary
3rd largest corporate distributor in terms of assets under advisory at ` 139 billion as on 31st Mar‟11
Nationwide presence with 37 branches and ~14,000 channel partners serving ~250,000 customers
Revenue share from broking and alternate assets rising
New products : Real Estate Advisory Services, WRAP etc.
Key Enablers : Diversifying product portfolio by increasing share of alternate assets and market-customer segmentation
40
Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 Dec'10
4,76310,114 24,793
49,86066,187 70,208
1Incl. Spice & based on gross revenue for UAS & Mobile licenses only, for Dec‟10 quarter released by TRAI
Indian Telecom Industry
India is the fastest growing cellular market in the world
Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 Dec'10
98.8
165.1 261.1
391.8
584.3
752.2
Now a pan India player with operations in all 22 service areas
(Source : TRAI)
Top 6 out of 15 cellular operators contribute ~93% of Industry‟s wireless revenue
30 4467
101124 1127.4
14.024.0
43.0
66.7
81.8
FY06 FY07 FY08 FY09 FY10 9mFY11
Revenue (` billion) Subscribers (million)
Idea Cellular
Idea ranks 3rd in terms of revenue market share at 13.3%1
2Spice results consolidated at 41.09% as JV since 16th Oct‟08 and as 100% subsidiary post
merger since 1st Mar‟10. Indus consolidated at 16% as JV.
2
Cell Sites: Capacity grew multifold in four years
Added 14 service areas in past four years
Robust growth in MOUs (billion minutes)
FY06 FY07 FY08 FY09 FY10 9mFY11
2146 86
165243 261
10.0%
11.7%12.6%
13.3%
Q4FY08 Q4FY09 Q4FY10 Q3FY11
41
Idea Cellular (Telecom)
Ranks 2nd with 21%1 revenue market share in 9 service areas
where it holds 900 MHz spectrum2 : Industry derives ~48% of its gross
revenue from these 9 out of total 22 service areas
Strong balance sheet to support future funding requirements
Net Debt to Equity stands at 0.9 & Net Debt to EBITDA at 2.9
Cash profit grew by 32% from ` 23.4 billion to ` 30.9 billion in FY‟10
Net profit grew to ` 9.5 bn even after absorbing competitive pressure
on realised rate per minute and launch of remaining seven circles.
Idea won 3G spectrum in 11 service areas which contribute to ~80% of
its existing revenue and ~50% of industry‟s all India revenue
Idea ranks 1st or 2nd in 7 out of these 11 services areas
Total payment for 3G at ` 57.69 billion is lowest among major operators
Capex guidance (2G + 3G) for FY11 at ` 30 billion.
Idea holds 16% in Indus Towers, a JV between Idea, Bharti & Vodafone
Indus is world‟s largest with over 100,000 towers
Strategy Going Forward : Leveraging competitive strength in 900 MHz
service areas and optimisation in 1800 MHz service areas to drive cost
efficiencies besides exploiting 3G spectrum to enrich customer experience
1Based on gross revenue for UAS & Mobile licenses only for Dec‟10 quarter, as released by TRAI
2900 MHz spectrum band provides capex/opex advantage over 1800 MHz
Robust growth in Net Profit (` billion)3
3Spice results consolidated at 41.09% as JV since 16th Oct‟08 and as 100% subsidiary post merger since 1st Mar‟10. Indus consolidated at 16% as JV.
FY06 FY07 FY08 FY09 FY10 9mFY11
2.1
5.0
10.4 8.8 9.5
6.2
Net profit grew in FY10 by 8% y-o-y amidst hyper competition
Robust growth in EBITDA (` billion)3
FY06 FY07 FY08 FY09 FY10 9mFY11
11.015.0
23.830.5 36.2
27.6
Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 Dec'10
11 22 35
133 114 120
3343
65
8979
112
Net Worth
Total Debt
Strong Balance Sheet (Figures in ` billion)
EBITDA grew by 19% y-o-y in FY10
42
Successful migration from shirt to lifestyle proposition
Apparel Brands : Louis Philippe, Van Heusen, Allen Solly & Peter England
Store Brands : The Collective & PEOPLE
Strategic distributorship tie-up with leading brand Esprit
Apparel retail space grew multifold to 895 exclusive brand
outlets (EBOs) across ~1.3 million sq. ft.
Retail channel contributes ~45% of branded garments revenue
Expanded retail channel led to 50% y-o-y growth during FY11
Retail Channel achieved 30% like to like stores sales growth
Bottom-line improved considerably driven by robust sales growth
across the channels & brands and achieved savings in
working capital driven by cost rationalisation efforts
Key Enablers :
Capitalising on expanded retail space
Enhancing channel productivity and extending range of
merchandise for superior shopper experience
FY07 FY08 FY09 FY10 FY11
Madura Garments (Fashion & Lifestyle)
Retail Penetration
Revenue (` Cr.)
830
1,026 1,116
Contract
Exports
Branded
Garments
1,251
698 895
1.01.3
Mar'10 Mar'11
EBOs (Nos.) Retail Space (Million Sq. Ft.)
1,809
2010-11 2009-10
Revenue 1,809 1,251
EBITDA 137 (4)
EBIT 66 (81)
Capital Employed 605 549
` Crore
Full Year
43
Nurtured Transworks, BPO acquired in 2003, to grow multifold in 2 years. Acquired Minacs in August 2006, a leading
Canadian BPO company with annual turnover of USD 250 million & re-branded as Aditya Birla Minacs.
Acquired Compass & BCR in 2010 to augment customer lifecycle portfolio
Compass has ranked among top 15 upcoming F&A players (Source : Gartner)
BCR, a leading debt collection co., has domain expertise of over 25 years
Delivering solutions to over 100 clients through 35 centers in
US, Canada, Europe, India & Philippines
Supported by ~19,600 employees
Building strong order book with a focus on bottom-line
Posted Net profit at ` 74 Cr. in FY11 – a swing of ` 87 Cr. over last year
Supported by revenue growth, cost optimisation and savings in interest cost
Sold total contract value of more than USD 775 million in FY11
Won 21 new clients during FY11
Key Enablers
Continue to grow high margin non-voice / KPO segment
Leveraging Aditya Birla Group Ecosystem
Aditya Birla Minacs (IT-ITeS)
FY07 FY08 FY09 FY10 FY11
Revenue Mix – ITeS (FY11)
Mfg.55% TIME
33%BFSI10%Others
2%
Revenue – IT-ITeS (` Cr.)
1,109
1,677 1,777
North
America (NA)
Asia
Pacific (APAC)
1,530
Note : TIME – Telecom, Technology, Infrastructure, Media & Entertainment; BFSI – Banks, Financial Services & Insurance
1,692
2010-11 2009-10
Revenue 1692 1530
EBIT 116 42
Net Profit / (Loss) 74 (13)
Full Year ` Crore
44
Aditya Birla Group is 4th largest globally (Capacity : 900K MTPA)
Operating in 4 countries : Thailand, Egypt, India & China
Achieving synergies through marketing under brand “Birla Carbon” &
central procurement of feed stock (CBFS)
ABNL is 2nd largest domestic producer with ~38% production share in FY10
Lowest cost producer in India and has coastal location at one plant
Value contribution by energy sales
Green field expansion by ~85K MTPA at Patalganga completed in May‟10 end to reach 314K MTPA
Power plants capacity expanded from ~40 MW in past one year to 73 MW
Further planning to expand capacity by 85K MTPA at Patalganga in second phase and by 85K MTPA in southern India
Sharp volatility in crude oil prices and slowdown in tyre demand impacted profitability across industry in FY‟09.
Turnaround in FY10 driven by lower CBFS cost and higher volumes.
Hi-Tech Carbon
25%
Usage of Carbon Black
Carbon black constitutes ~28% of tyre by weight
Replacement segment contributes 60-70% of overall tyre demand
739864
1,096 1,161
1,588181215 204
230275
FY07 FY08 FY09 FY10 FY11
Revenue (` Cr.) Sales ('000 MT)
132 153
50
253 258
18% 18%
5%
22%
16%
FY07 FY08 FY09 FY10 FY11
EBITDA (` Cr.) OPM(%)
487668 753
942
1,22126%
23%
3%
27%
20%
FY07 FY08 FY09 FY10 FY11
Capital Employed (` Cr.) ROACE (%)
Tyre65%
Rubber15%
Belts & Hoses10%
Printing Inks etc.
10%
45
Acute deficit of urea in India – Approx. 20-25% of the demand is imported
Indo Gulf Fertilisers has 10-20% market share in the target markets
of Uttar Pradesh, Bihar, Jharkhand and West Bengal
Strong brand “ Birla Shaktiman” is preferred choice of farmers
Also offering value adding variety – Neem coated “Krishi Dev”
A complete agri-solutions provider – Urea, Seeds, Pesticides
Posted significant growth in FY09 led by increased volumes,
higher subsidy arrears and IPP gain for higher capacity utilisation
Higher agri-input sales contributed to Profitability in FY11
Indo Gulf Fertilisers (Agri-business)
130102
228
155176
17%
13%
18%
15%14%
FY07 FY08 FY09 FY10 FY11
EBITDA (` Cr.) OPM(%)
401
531587
300
496
29%
18%
38%
31%39%
FY07 FY08 FY09 FY10 FY11
Capital Employed (` Cr.) ROACE (%)
785 787
1,2501,022
1,244
1044
870
1073 1106 1099
FY07 FY08 FY09 FY10 FY11
Revenue (` Cr.) Sales ('000 MT)
46
2nd largest producer in India with 39% domestic production share & largest exporter of VFY from India in FY10
Integrated facilities
Capacity : VFY - 17,520 TPA; Caustic soda – 250 TPD
Cost effective 34.5 MW captive power plant
VFY has a niche market globally
Premium is driven by quality and value added yarns
Largest Indian VFY exporter for consecutive fifth year with 47% share in VFY exports from India in FY‟10
Profitability in FY11 was impacted due to sharp rise in raw material prices.
Key Enabler : Increasing share of value added yarn. Caustic soda expansion by 125 TPD
Indian Rayon : VFY and Chlor-alkali
451454
437430
44021% 20% 20%
28%
17%
FY07 FY08 FY09 FY10 FY11
Capital Employed (` Cr.) ROACE (%)
441 476537 538 565
17039 17923 16792 1661615592
FY07 FY08 FY09 FY10 FY11
Revenue (` Cr.) VFY Sales Volume (MT)
120 124 123155
109
27% 26%23%
29%
19%
FY07 FY08 FY09 FY10 FY11
EBITDA (` Cr.) OPM(%)
47
Used in power generation, Transmission & distribution (T&D) and by Original Equipment Manufactures (OEMs)
Indian insulators market size is expected to grow multifold led by
75GW power generation capacity addition planned in XI-Five Year Plan
Aditya Birla Insulators is largest domestic producer & 4th largest globally
Capacity – 45,260 TPA at two plants
Power Grid corporation of India and State Electricity Boards (SEBs),
ABB, Areva, Siemens etc. are amongst major customers
Key Enabler : Increasing share of high rating insulators and yield enhancement to improve margins. Adding 2,000 TPA
through de-bottlenecking.
Aditya Birla Insulators
54
136123 116
135
22%
34%29% 27%
26%
FY07 FY08 FY09 FY10 FY11
EBITDA (` Cr.) OPM(%)
186
240
264
294363
23%
58%
43%
35% 35%
FY07 FY08 FY09 FY10 FY11
Capital Employed (` Cr.) ROACE (%)
241
399 425 428
518
22967
32304 3256137051
44281
FY07 FY08 FY09 FY10 FY11
Revenue (` Cr.) Sales Volumes (MT)
48
Domestic market leader in Linen segment
Branding & promoting linen fabric under “Linen Club”
Spinning & weaving capacities 15,084 spindles & 106 looms
One of the largest player in Wool segment in India
Worsted yarn capacity at 25,548 spindles
Wool combing capacity at 7 card machines
Key Enabler : Focusing on high margin retail segment under “Linen Club” brand
Jaya Shree Textiles
625600 573 577
774
FY07 FY08 FY09 FY10 FY11
Revenue (` Cr.)
67 6854
69103
11% 11%9%
12%13%
FY07 FY08 FY09 FY10 FY11
EBITDA (` Cr.) OPM(%)
311359 345
281
196
19%15%
9%15%
34%
FY07 FY08 FY09 FY10 FY11
Capital Employed (` Cr.) ROACE (%)
49
Annexure II : Shareholding Pattern & Market Cap
Trusted by 153,896 shareholders
Over 96% of shares are in dematerialised form
Face value of ` 10 per share
For analysts coverage on ABNL visit :
Market Cap & Share Price
Source : NSE website
Stock Code – BSE : 500303 NSE : ABIRLANUVO Reuters : ABRL.BO / ABRL.NS / IRYN.LU Bloomberg : ABNL IN / IRIG LX
2,409
6,246
9,992
13,265
4,227
9,3369,244
402748
10711396
445906 814
Mar'05 Mar'06 Mar'07 Mar'08 Mar'09 Mar'10 Mar'11
Market Cap (` Crores) Closing Share price (`)
Category
No. of No. of Shares Shareholding
Shareholders held (in million) (%)
Promoter & Promoter Group* 24 59.37 52.30%
Foreign Institutional Investors 186 19.79 17.44%
Institutional Investors 170 13.80 12.15%
Non-Institutional Investors 153,515 18.75 16.52%
GDRs - Public 1 1.80 1.58%
Total 153,896 113.51 100.00%
* Including 1.425 million GDRs
As on 31st Mar'11
http://www.adityabirlanuvo.com/investors/downloads/third_party_analysts_coverage.aspx
50
Annexure III : House of power brands
A leading player in the Financial Services space
Market leader in the premium Branded Apparels segment
Leadership position in Manufacturing businesses generating strong cash flows
A leading player in the Telecom sector and a prominent player in the BPO space
Telecom IT-ITeS
Carbon Black
Life Insurance Asset Management NBFC General Insurance
AdvisoryPrivate Equity
Agri-business Insulators Rayon Textiles
Broking, wealth
management & distribution
51
Annexure IV : Management Team
Board of Directors
Mr. Kumar Mangalam Birla, Chairman
Mrs. Rajashree Birla
Mr. B. L. Shah
Mr. P. Murari (Independent)
Mr. B. R. Gupta (Independent)
Ms. Tarjani Vakil (Independent)
Mr. S. C. Bhargava (Independent)
Mr. G. P. Gupta (Independent)
Mr. Tapasendra Chattopadhyay (Independent)
Dr. Rakesh Jain, Managing Director
Mr. Pranab Barua, Whole Time Director
Business Head/Director Business
Dr. Rakesh Jain Agri-business
Insulators
IT-ITeS
Mr. Ajay Srinivasan Financial Services
Mr. Pranab Barua Fashion & Lifestyle
and Textiles
Mr. Lalit Naik VFY
Dr. Santrupt Misra Carbon Black
Mr. Himanshu Kapania Telecom
Whole Time Director and Chief Financial Officer
Mr. Sushil Agarwal
52•52
EV & VNB – Key Assumptions
Annexure V : EV & VNB of Birla Sun Life Insurance
Operating Assumptions
The key economic and operating assumptions used in preparing the EV and VNB results as shown on slide 34 of this
presentation are:
Economic Assumptions
Asset Class Expected Returns
Cash/Money Market Instruments 6.50%
Government Bonds 7.25%
Corporate Bonds 8.25%
Equities 12.25%
Other Parameters Assumption
Tax Rate 14.16%
Risk Discount Rate (RDR) 12.50%
The RDR has been increased from 12% last year.
Using an RDR of 12% would increase the Embedded Value of
the company by 2.6% and the VNB by 5.7%.
Using an RDR of 13% would decrease the Embedded Value of
the company by 2.4% and the VNB by 5.4%.
Operating Assumptions
The demographic and business assumptions such as
morbidity, mortality, premium persistency, policy persistency
reflect our best estimate view of future experience in light of
actual past experience.
The expense assumptions are based on our latest approved
5-year business plan.
As per the business plan, the expense allowances are
projected to be 95% of the Operating Expenses in FY 2012-13
from the current position of 71% in FY 2009-10. This could be
favourably impacted by a stronger shift to long-term business
and / or better persistency.
Regulatory environment
The projections assume no significant changes in future regulatory environment. Any impact, positive or negative, resulting from
changes in regulatory environment (e.g. New ULIP Guidelines effective from 1st September 2010) have not been considered.
53
Embedded Value (EV) – EV is the aggregate of:
Insurance Business Value (IBV), which is the present value of after-tax statutory profits expected to emerge in
future from in-force business at the valuation date, discounted at the risk discount rate, less the cost of holding
required capital to support the in-force business.
Adjusted Net Worth (ANW), which is the market value of assets in excess of statutory reserves.
Value of New Business (VNB): VNB is defined as the present value, from the point of sale, of after-tax statutory
profits expected to emerge in future from the new business written in the period, discounted at the risk discount rate,
less the cost of holding required capital to support the new business.
Basis of preparation :
The EV and VNB are computed based on a traditional EV methodology.
Group business is not considered in arriving at the results.
The EV includes the value of tax losses carried forward as at the valuation date.
An allowance has been made in the IBV for the expected maintenance expense overruns. No allowance has been
made in the VNB for the acquisition expense overrun arising in the period.
EV & VNB – Definitions and Basis of Preparation
In the EV and VNB, the cost of capital is calculated as the nominal value of the required capital less the present value, at
the risk discount rate, of the projected after-tax investment earnings and future releases of the required capital.
The methodology, assumptions and results for individual business have been reviewed by Towers Watson. The
conclusions of Towers Watson „s review are shown in the Appendix.
Annexure V : EV & VNB of Birla Sun Life Insurance
54
Towers Watson has reviewed the methodology and assumptions used to determine the EV and VNB as at 31st March 2010 for the
individual business of Birla Sun Life Insurance Company Limited (“BSLI”).
Towers Watson has concluded that:
The methodology used is consistent with recent industry practice in India as regards the calculation and reporting of traditional
embedded values on a deterministic basis;
The economic assumptions used are internally consistent and have been set with regard to current economic conditions;
The operating assumptions, taken in aggregate, have been set with appropriate regard to past, current and expected future
experience, noting the exception of BSLI‟s approach to setting the acquisition and maintenance expense assumptions, and
resultant cost overrun shown in various parts of this presentation including the Key Assumptions section, and noting the
difficulty in setting ultimate persistency assumptions, where management‟s expectations have been used because of the limited
experience data with which to determine these assumptions; and
Allowance for risk has been made through the use of a single risk discount rate and an explicit assumption for the level and
cost of holding solvency capital. Whilst this is in line with recent industry practice as regards traditional actuarial embedded
value calculations, this may not correspond to a capital markets valuation of the risks (a so called “market consistent
valuation”).
Towers Watson has also performed limited high-level checks on the results of the calculations and has confirmed that any issues
discovered do not have a material impact on the disclosed embedded value and value of new business. Towers Watson has not,
however, performed detailed checks on the models and processes involved. Please note that the scope of our work did not
include a review of the Reconciliation of Embedded Value shown in this presentation.
In arriving at these conclusions, Towers Watson has relied on data and information provided by BSLI. This opinion is made solely
to BSLI in accordance with the terms of Towers Watson‟s engagement letter. To the fullest extent permitted by applicable law,
Towers Watson does not accept or assume any responsibility, duty of care or liability to anyone other than BSLI for or in
connection with its review work, the opinions it has formed, or for any statement set forth in this opinion.54
Appendix - Towers Watson Opinion
55
Disclaimer
Certain statements made in this presentation may not be based on historical information or facts and may be “forward looking statements” including,
but not limited to, those relating to general business plans & strategy of Aditya Birla Nuvo Limited ("ABNL"), its future outlook & growth prospects,
future developments in its businesses, its competitive & regulatory environment and management's current views & assumptions which may not
remain constant due to risks and uncertainties. Actual results may differ materially from these forward-looking statements due to a number of
factors, including future changes or developments in ABNL's business, its competitive environment, its ability to implement its strategies and
initiatives and respond to technological changes and political, economic, regulatory and social conditions in the countries in which ABNL conducts
business. Important factors that could make a difference to ABNL‟s operations include global and Indian demand supply conditions, finished goods
prices, feed stock availability and prices, cyclical demand and pricing in ABNL‟s principal markets, changes in Government regulations, tax regimes,
competitors actions, economic developments within India and the countries within which ABNL conducts business and other factors such as
litigation and labour negotiations.
This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer to acquire any shares and should not be
considered as a recommendation that any investor should subscribe for or purchase any of ABNL's shares. Neither this presentation nor any other
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ABNL, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to,
the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this presentation,
unless otherwise specified is only current as of the date of this presentation. ABNL assumes no responsibility to publicly amend, modify or revise
any forward looking statements on the basis of any subsequent developments, information or events or otherwise. Unless otherwise stated in this
document, the information contained herein is based on management information and estimates. The information contained herein is subject to
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This presentation is not for publication or distribution, directly or indirectly, in or into the United States, Canada or Japan. These
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Aditya Birla Nuvo Limited
Regd. Office: Indian Rayon Compound, Veraval – 362 266 (Gujarat)
Corporate Office: 4th Floor „A‟ Wing, Aditya Birla Center, S.K. Ahire Marg, Worli, Mumbai – 400 030
Website: www.adityabirlanuvo.com or www.adityabirla.com or Email: [email protected]