2007-08 - Aditya Birla Nuvo, Ltd

DIRECTORS’ REPORT TO THE SHAREHOLDERSDear Shareholders,Your Directors are pleased to present the 51 st Annual Report together with the Audited Accounts of theCompany for the year ended 31 st March, 2008.Your Company has taken many strategic steps during the year to strengthen its financials and to achieve allroundgrowth across all the businesses. The focus during the year was:‣ To accelerate growth in existing circles of Idea through widening of network and expediting roll out inother circles on receipt of spectrum.‣ To regain market share in the Financial Services businesses through expansion of distribution reach.‣ To execute integration of Transworks-Minacs and build global delivery capacities towards profitablegrowth, amidst challenges of US Dollar weakening.‣ To build sizeable world class presence in Apparel Retailing.‣ Expanding capacities in various Value Businesses to capitalise on the growth opportunities besidesoptimum utilisation of the resources.FINANCIAL PERFORMANCEAs a result of these initiatives, your Company has posted growth-oriented results during the year. YourCompany’s consolidated revenues crossed USD 3 billion mark during the year registering a year-on-yeargrowth of 45% to Rs. 12,134 Crores from Rs. 8,366.8 Crores.The Company’s consolidated net profit at Rs. 150.8 Crores is, however, lower by 46% during the year, againstRs. 280.9 Crores attained in the preceding year largely on account of gestating impact of growing share ofnew business premium in Life Insurance business. Without Life Insurance business, consolidated net profithas grown up by 25% to Rs. 480.3 Crores from Rs. 384.3 Crores.The standalone revenues of your Company grew by 15% to Rs. 3,924.2 Crores vis-à-vis Rs. 3,420.5 Crores inthe previous year. The standalone net profit rose by 8% to Rs. 243.1 Crores from Rs. 225 Crores in the previousyear.OPERATIONAL REVIEWAll the businesses are on high growth trajectory and have contributed significantly to your Company’sgrowth.1. TelecomIdea Cellular Limited (IDEA), your Company’s telecom venture, added about 10 million subscribers duringthe year to reach 24 million subscribers as on 31 st March 2008, registering a 71% rise over last year’ssubscriber base. The all-India market share has improved to 9.4% from 8.6%. The Company more thandoubled its net profit to Rs. 1,042.3 Crores from Rs. 502.2 Crores.2. Financial ServicesLife InsuranceIn the Life Insurance business, new business premium income grew by 123% to Rs. 1,965 Crores on theback of expanded reach and innovative product launches. Consequently, Birla Sun Life Insurance CompanyLimited improved its market share amongst private players to 6.6% during the year up from 5.3% in thelast year.Consequent to intensification of distribution channel and growing share of new business, net lossincreased to Rs. 445.3 Crores from Rs. 139.7 Crores.Asset ManagementYour Directors are pleased to inform that Birla Sun Life Asset Management Company Limited (BSLAMC)has won the “Mutual Fund House of the Year” award besides wining 5 awards in other categories organisedby CNBC TV-18 and Crisil. It also bagged 4 Lipper and 2 ICRA awards for superior fund performance.(57)