2007-08 - Aditya Birla Nuvo, Ltd

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MANAGEMENT’S DISCUSSION AND ANALYSISOTHER FINANCIAL SERVICESRs. Crores2007-08 2006-07 Change (%)FSD & BGFCLRevenues 102.2 76.1 34%PBT 32.2 17.9 80%Capital Employed 214.3 90.3 137%Nuvo’s Investment 102.6 72.6 41%BIASLRevenues 10.6 8.2 28%PAT 3.2 2.8 15%Performance ReviewThe Financial Services Division (FSD) along with Birla Global Finance Company Limited (BGFCL), a subsidiaryof your Company is a large player in the IPO finance and loan against securities market. Loan againstsecurities almost doubled during the year to Rs. 738 Crores as on 31 st March, 2008, against Rs. 434 Croreslast year. The down-turn in the Capital Markets towards the end of the financial year caused a few companiesto defer their IPOs. Hence, the total amount extended to various investors in IPO finance was lower atRs. 2,555 Crores as against Rs. 3,305 Crores in the last year. The Corporate Finance Segment of FSD/BGFCLis also amongst the large players in the bills discounting market. It was managing a portfolio ofRs. 125 Crores as on 31 st March, 2008. The business posted revenues of Rs. 102.2 Crores and profit beforetax of Rs. 32.2 Crores.Birla Insurance Advisory and Broking Services Limited (BIASL) has carved a dominant position for itself in theGeneral Insurance broking business. It placed a business of over Rs. 125 Crores for the year with several nonlifeinsurance companies on behalf of its clients. Birla Insurance Advisory posted revenues of Rs. 10.6 Croresand the net profit of Rs. 3.2 Crores. The business has also received a licence to conduct Reinsurance Brokingbusiness from Insurance Regulatory and Development Authority.Business OutlookIncreased volatility in the capital markets has slowed the pace of new public offerings. This should revivesoon with companies approaching the capital markets to meet their long term fund requirements. Entry ofmany more players into the segment and rising interest rates, could put some pressure on margins in thenear term. However, with the strong economic growth and underlying strength of capital market in India, thelong term prospects of the financial services sector remain optimistic. The business will keep its growthmomentum through focus on value enhancing opportunities with a vision to be amongst top 5 NBFCs bybalance sheet and profitability.(18)
MANAGEMENT’S DISCUSSION AND ANALYSISBUSINESS PROCESS OUTSOURCING (ADITYA BIRLA MINACS WORLDWIDE LIMITED)Rs. Crores2007-08 2006-07* Change (%)Operating Seats (Nos.) 9,089 7,483 21%Employees (Nos.) 12,908 10,914 18%Revenues 1,577.7 1,015.5 55%- North America 1,395.4 818.4 71%- Asia Pacific 182.3 197.2 –8%PBIT (26.5) 33.8 –178%- North America (20.4) (2.9) —- Asia Pacific (6.1) 36.7 –117%PAT (88.9) (17.5) —Capital Employed 493.1 407.5 21%Nuvo’s Investment 218.8 218.8 —* Note : Minacs Worldwide Inc. (North America) was acquired on 18 th August, 2006. Last year figures include Minacsperformance only for the period from 18 th August, 2006 to 31 st March, 2007.Performance ReviewAditya Birla Minacs has strengthened its global delivery capabilities by adding three new sites in NorthAmerica, two in India and one in Philippines. Aditya Birla Minacs has now 26 delivery centres across the globehaving 9,089 seats and 12,908 employees. The BPO business added ten new clients during the year, takingthe total number of Fortune 500 clients to 18. The launch of one new site in India and further expansion atexisting sites are on cards.The revenues and profitability of the business was impacted due to the weakening of the US Dollar.The business posted revenues of Rs. 1,577.7 Crores with a net loss of Rs. 88.9 Crores. The North Americaregion posted revenues of Rs. 1,395.4 Crores and a net loss of Rs. 61.4 Crores. Higher interest costs onborrowings for the acquisition of Minacs also impacted profitability of the Asia Pacific region.The business has undertaken a number of initiatives to achieve profitable growth by critically focusingon improving operating efficiency, improving seats utilisation and increasing share of high margin KPOsegment.Business OutlookThe business process outsourcing sector is on a high growth trajectory. Aditya Birla Minacs is well positionedto maintain the growth momentum, and is committed to increase its share in the industry. The BPO businesswill continue to meet customers’ expectations with a thrust on excellence in execution. It will continue toenhance its performance by building a robust sales pipeline, improving capacity utilisation, migrating to newlow cost geographies, increasing share of high margin KPO segment and focusing on high growth sectorslike retail banking, insurance and telecom/technology.GARMENTSPerformance ReviewThe Garments business leveraged its brand equity by executing strategic brand architecture. Madura Garments’brands, viz, Louis Philippe, Van Heusen and Allen Solly strengthened their position as “Lifestyle Brands” by(19)
Page 2 and 3: Mr. G. D. Birla and Mr. Aditya Birl
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Page 9 and 10: ADITYA BIRLA NUVO LIMITEDBOARD OF D
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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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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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SEGMENT DISCLOSURES FOR THE YEAR EN
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CONSOLIDATED CASH FLOW STATEMENT AS
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STATEMENT PURSUANT TO SECTION 212(8
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ADITYA BIRLA NUVO LIMITEDRegistered
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2007-08 - Aditya Birla Nuvo, Ltd

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