2007-08 - Aditya Birla Nuvo, Ltd

DIRECTORS’ REPORT TO THE SHAREHOLDERSThe business has moved one step up to reach the 5 th position with a 6.9% market share in the domesticAssets Under Management (AUM) up from 5.8% last year.3. BPOIn the BPO business, focus is to build global delivery capacities to achieve profitable growth. During theyear, the business launched six new sites to reach a total of 9,089 seats and 12,908 employees across 26global delivery centres. The business, which is under the integration phase, has been adversely impactedby the weakening of the Dollar and US slowdown.4. GarmentsThe Branded Garments business expanded its customer-reach, by opening up of 115 new exclusivebrand outlets (EBOs) during the year, to reach 253 EBOs covering 5.1 Lacs square feet of retail space.The business launched two new sub-brands — Peter England Elite and Louis Philippe Young — to enrichbrand value and cater all customer profiles. Consequently, revenues grew by 23% to Rs. 825.7 Crores.However, gestating impact of new stores and high lease rental lowered profitability of the business.In the contract exports business at Madura Garment Exports Limited, a wholly owned subsidiary of yourCompany, the profitability was impacted due to US Dollar weakening and stabilisation of the newlyadded capacity.5. IT ServicesPSI Data Systems Limited reported revenues at Rs. 101.1 Crores and net profit at Rs. 2.5 Crores during theyear. The weakening of US Dollar arrested higher growth in revenues and profitability.6. Carbon BlackThe brownfield capacity expansion of 60,000 MTPA at Gummidipoondi was commissioned in July 2007.The business achieved highest ever revenues at Rs. 863.8 Crores and operating profit at Rs. 152.6 Croreson the back of expanded capacity. As part of its growth initiative, your Company is accelerating thegreenfield capacity expansion of 120,000 MTPA.7. FertilisersIn Fertiliser business, the urea production was impacted due to plant shutdown for de-bottleneckingand maintenance and subsequent plant breakdown. The loss was partly offset by insurance claim ofRs. 20.3 Crores, accounted for during the year. The business posted revenues at Rs. 765 Crores andoperating profit at Rs. 102.4 Crores.8. InsulatorsAs informed last year, Aditya Birla Insulators Ltd. (ABIL) had become a subsidiary of your Company in2006. Through a Scheme of Amalgamation, ABIL has been merged with your Company, with effect from1 st April, 2007.On a like-to-like basis, revenues from insulators business rose by 65% to Rs. 398.7 Crores during the yearagainst Rs. 241.2 Crores achieved last year. The Operating Profit of the business, on a like-to-like basis,more than doubled to Rs. 136.3 Crores during the year from Rs. 54.3 Crores last year.The capacity of Halol Unit was expanded by 3,000 MTPA through de-bottlenecking. Your Company plansto expand capacities at the Rishra Unit by 12,000 MTPA in two phases besides foraying into polymerinsulators.9. RayonThe Rayon business showed satisfactory performance amidst a challenging business environment.Revenues were up by 8% to Rs. 475.2 Crores from Rs. 441.5 Crores. Operating Profit was up at Rs. 124.4Crores as against Rs. 119.7 Crores in the previous year despite sharp rise in input material and fuel prices.(58)