2007-08 - Aditya Birla Nuvo, Ltd

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MANAGEMENT’S DISCUSSION AND ANALYSISBusiness OutlookIndia is one of the fastest growing markets in Asia in the life insurance industry. It offers a strong potential forgrowth driven by buoyant economic growth, increasing penetration, regulatory reforms and rising awarenessamongst the population about the need for insurance. The ratio of life insurance premium to GDP in India is,currently, about 4 per cent, much lower than developed market levels of 6 to 9 per cent. This will change asIndia witnesses strongly accelerating household income and a more favourable demographic profile overthe next two decades.BSLI is well positioned to capitalise on these opportunities with a vision to be in top 3 private players. It hasproactively taken steps to increase its distribution reach. Further, the business has plan to open 661 newbranches in the financial year 2008-09 to reach the 1,000–branch mark, besides doubling direct sales force.ASSET MANAGEMENT (BIRLA SUN LIFE ASSET MANAGEMENT COMPANY LIMITED)Rs. Crores2007-08 2006-07 Change (%)Branches (Nos.) 78 32 144%Investors Folios (Nos. in Lacs) 18.9 11.5 65%Assets Under ManagementDomestic 34,864 19,047 83%Offshore 2,296 1,783 29%37,160 20,830 78%Revenues 119.3 81.9 46%PBIT 4.2 21.7 –81%PAT 2.8 14.3 –81%Capital Employed/Net Worth 84.2 81.4 3%ROACE (%) 5% 29% —Performance ReviewIn the Asset Management business, Birla Sun Life Asset Management Company (BSLAMC) moved one step upduring the year to Rank 5 th with 6.9% market share in domestic Assets Under Management (AUM) up from5.8% as on 31 st March, 2007. Its domestic AUM grew by 83% during the year, which is the second highestgrowth rate amongst top seven AMCs. Total AUM stood at Rs. 37,160 Crores including offshore equity AUM ofRs. 2,296 Crores.To improve share of high paying equity AUM, BSLAMC launched four new equity-oriented funds during theyear collecting Rs. 2,700 Crores. To enhance its competitive strength, BSLAMC more than doubled itsdistribution network to reach 78 branches and over 17,500 financial advisors in March 2008. In terms ofcreating value for investors, 69% of Assets Under Management feature in the top quartile of performancebased on one year returns. In the month of March 2008, BSLAMC was the only fund house in the industry toshow positive month-on-month growth in terms of average AUM. The investors’ base grew by 65% duringthe year to 18.9 Lacs folios up from 11.5 Lacs folios last year.The business attained 46% year-on-year growth in revenues at Rs.119.3 Crores. However, marketing anddistribution expenses on new fund offerings lowered profitability during the reported year; benefit thereofwill be seen in the current financial year.(16)
MANAGEMENT’S DISCUSSION AND ANALYSISIn recognition of its performance, BSLAMC won the prestigious “Mutual Fund House of the Year” Awardduring the year along with 5 CNBC TV-18 Crisil Awards, 2 ICRA Awards and 4 Lipper Awards.Business OutlookThe favourable outlook for GDP growth coupled with high household financial savings, and increasingawareness and preference towards mutual funds with the help of professional fund management, augurswell for the mutual fund industry in the long-run.With a vision to be in top 3 players and to capitalise on the emerging opportunities, the business is expandingits branch network and augmenting relationships across channels besides launching innovative products.DISTRIBUTION (BIRLA SUN LIFE DISTRIBUTION COMPANY LIMITED)Rs. Crores2007-08 2006-07 Change (%)Gross Mobilisation (Rs. Crores) 104,947 26,167 301%Branches (Nos.) 36 13 177%Assets under advice (Rs. Crores) 12,242 4,953 147%FinancialsRevenues 37.5 21.0 78%PBIT 3.9 1.0 294%PAT 2.7 0.7 305%Capital Employed / Net worth 13.9 11.2 24%ROACE (%) 31% 8% —Performance ReviewBirla Sun Life Distribution (BSDL) ranked 6 th in the mutual fund distribution business in terms of assets underadvice. The assets under advice more than doubled to Rs. 12,242 Crores with 2.4% market share. The grossmobilisation during the year was quadrupled to Rs 104,947 Crores supported by expanded distributionreach. The business expanded its network to 36 branches and over 3,800 channel partners.BSDL posted healthy growth in revenues at Rs. 37.5 Crores and reported net profit at Rs. 2.7 Crores.Business OutlookThe increasing preference towards investment with the help of professional fund management, coupled withhigh financial savings, portends well for the wealth management and distribution industry.With a vision to be amongst top 5 players in the wealth management space and to be a leading distributor ofthe financial products, BSDL’s thrust will be on increasing distribution reach, providing valued added adviceto its clients and institutionalising processes.(17)
Page 2 and 3: Mr. G. D. Birla and Mr. Aditya Birl
Page 4 and 5: THE CHAIRMAN’S LETTER TO SHAREHOL
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Page 9 and 10: ADITYA BIRLA NUVO LIMITEDBOARD OF D
Page 11 and 12: FINANCIAL HIGHLIGHTS - STANDALONERs
Page 13 and 14: MANAGEMENT’S DISCUSSION AND ANALY
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ANNEXURE ‘A’ TO THE DIRECTORS
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AUDITORS’ REPORT TO THE MEMBERSAn
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AUDITORS’ REPORT TO THE MEMBERS(x
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PROFIT & LOSS ACCOUNT FOR THE YEAR
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SCHEDULESSCHEDULE 2RESERVES & SURPL
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SCHEDULESRs. CroresAs atAs atFace V
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SCHEDULESSCHEDULE 7INVENTORIESAs at
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SCHEDULESRs. CroresYear EndedYear E
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SCHEDULESSCHEDULE 19SIGNIFICANT ACC
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SEGMENT DISCLOSURES FOR THE YEAR EN
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CASH FLOW STATEMENT FOR THE YEAR EN
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AUDITORS’ REPORT ON THE CONSOLIDA
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CONSOLIDATED PROFIT & LOSS ACCOUNT
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SCHEDULES FORMING PART OF CONSOLIDA
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SEGMENT DISCLOSURES FOR THE YEAR EN
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CONSOLIDATED CASH FLOW STATEMENT AS
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ANNEXURE ‘1’ OF STATEMENT PURSU
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STATEMENT PURSUANT TO SECTION 212(8
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ANNEXURE ‘A’ OF STATEMENT U/S 2
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ANNEXURE ‘A’ OF STATEMENT U/S 2
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ADITYA BIRLA NUVO LIMITEDRegistered
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2007-08 - Aditya Birla Nuvo, Ltd

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