Sunday, July 22, 2012

Notes From GRP Limited Annual Report 2011-12

Financial Performance
• Sales & other income increased by 31% to 24,928 lacs
• Exports increased by 26% to 16,023 lacs
• PBDT increased by 47% to 4,532 lacs
• Profit before tax increased by 49% to 3,845 lacs
• Net Profit increased by 46% to 2,580 lacs
• EPS increased by 46% to Rs 192.91
• Dividend Rs. 33 per share (Rs. 10 one time)
• Debt to equity ration increased from 0.6 to 0.87
• Market price - 865 to 1620 - PE range based on FY 10-11 EPS - 6.55 to 12.27
Cash Flow
Net cash from Operating activities - 2612 lacs (greater than net profit)
Free Cash flow = 2612 - 4237.04 + 7.41 = -1617.63

Industry Structure
- Recycling of rubber out of waste and scrapped tyres, tubes and other such rubber products. The resultant product, commercially known as reclaim rubber, is a valuable ingredient used by the rubber industry for making various products by part replacement of virgin rubber.
Total rubber consumption for India is expected to reach 1.49 million tonnes and 1.64 million tonnes in years 2012 and 2013 respectively.
To meet this demand of rubber, natural & synthetic rubber source will not be sufficient. There are predicted shortages in availability on account of climate change (which is reducing yields of natural rubber plantations) and shortages in key ingredients like butadiene (which is a key raw material for production of commodity rubbers such as PBR, SBR, among others). With no short term solutions , reclaim rubber, at approximately 30-50% of virgin rubber prices and with 50% rubber content, is the best alternative to counter the supply constraints of virgin rubbers.
While historically the usage of reclaim in India as a percentage of virgin rubbers has been around 8%, the penetration has been rising and the Company is aggressively developing new grades to increase the usage of reclaim.

recessionary trends in Europe and weakening demand in the second half of the year.
An extremely volatile currency scenario, coupled with depressed prices of virgin rubbers led to substantial swings in margins on a monthly basis.
A high industrial inflation mainly on account of energy cost increases, pushed up input costs particularly during the last quarter of the year.
On December 30, 2011, there was a major fire at Company’s plant located at Akkalkot Road, Solapur, leading to loss of approximately 1000 tons of production.
Foreign exchange fluctuation could also pose a threat particularly at the time of repayment of foreign currency loans. However, Company’s export sales are about 67% of total turnover, which provides natural hedge against exchange risks.
The performance of the company in the industrial polymers and custom die forms business has been steady, yet continues to be promising. Capacity addition in these businesses has been steady and the businesses have become self reliant in the financial year 2011-12.
The export presence of the company continues to grow with exports now contributing 67% share of the total sales value of reclaim rubber.
While Europe continues to remain in recession mode, the Company has been able to spread its presence in other geographies, thereby continuing to maintain its leadership position across the world.
The domestic markets are going through an exciting phase, with new tyre capacity additions by domestic tyre majors and the entry of multinational tyre companies. The anticipated growth in the tyre capacity in India combined with the Company’s thrust in new geographies shall ensure that new capacities being commissioned in the current financial year shall find suitable end use.
The Company has set up new plant at Chincholi, Solapur and first phase was fully operational in the financial year 2011-12. Second phase has been partially commissioned during the financial year 2011-12 and will be fully operational in current financial year.
With bulk of new tyre capacities being commissioned in South India, the company has also set up new plant at Perundurai, Tamilnadu for the production of reclaim rubber, which started production in March, 2012 and will be fully operational in current financial year. The above two expansions would add approximately 25% more capacity compared to March 2012.
In spite of increased borrowings for new project, the Company has managed its funds well and maintained interest cost at 2% of the turnover.
- Chairman - K M Philip- The only 100 year old chairman in the country !!!
The company is focussing on sales of synthetic rubber reclaims which command higher value and realisation compared with the natural rubber based reclaims.

Saturday, July 14, 2012

Notes from Indag Rubber Annual Report 2011-12

Financial Performance
Sales and Operating income - 21634.40 from 15027.62 lacs - growth 44%
PBT- 2701 from 1364 lacs -  growth 98%
PAT - 2087 from 1075 lacs - growth 94%
Dividend - Rs 6 per share - 15% of PAT

Debt - Free

Stock price for last year - 82 to 205 - PE range 4 to 10 based on FY 10-11 earnings.
Cash Flow
Net cash flow from operating activities - 1470 lacs (70% of PAT)
Free Cash flow = 1009 (48% of PAT)


- With IT facility, the Company has faster and effective communication with its customers, which further strengthened sales, service and debt collection.

- The growth of tyre retreading industry is fuelled by a number of factors such as rise in prices of tyres, growth in vehicle population, increasing level of radialisation, development of national highways and increased hub & spoke transportation.

- However, the steep rise in the cost of raw materials has already affected the retreading industry.

- OPPORTUNITIES AND THREATS India is still a bias tyre market in the truck segment. However, radialisation is picking up with the fleet operators due to longer life and fuel efficiency. Radial tyres are driven longer before needing to be retreaded compared to bias-ply tyres, which would impact overall retread volumes. With the fast pace of radialisation, retreaders need to upgrade their technology. Indag is imparting its knowledge and experience to various retreaders to deal with new situation arising with radialisation.

Monday, July 9, 2012

Notes from VST Industries Annual Report FY 2011-12

- Revenue from Operation grew from 139654 to 159846 lacs - 14.4%
- PAT from 9501 to 14251 lacs - growth of 49.9%
- EPS from 61.53 to 92.29 - growth of 49.9%
- Dividend from 45 5o 65 - growth of 45%
Cash Flow
- Net Cash flow from operating activities - 15117 lacs
- Free cash flow = 15117.76 - 3438.68 + 522.59 =  12201 lacs (85% of PAT)
Market Price
- Between 635 to 1500 - PE of 10.32 to 24 times based on FY10-11
- Current price of 1700 roughly - PE of 18 times.

The Union Budget presented in February 2011, did not propose any changes in the excise rates, which was a welcome relief for the industry and your Company.
The industry as a result had a marginal growth in volumes of around 4%; however, your Company was able to beat the general industry trend and grow volumes by 12% when compared to same period last year.
Financial year 2011-12 was one of the best years in terms of volume growth. Filter volumes now cover virtually 98% of your Company's volume.
The increase in VAT rates across states continued with more states increasing the VAT rates during the current financial year. Two key states e.g. West Bengal and Andhra Pradesh, where your Company has sizeable presence, increased VAT rates to 20% each. This will impact margins and profitability both in the current year and in the future.
During the financial year 2011-12, increase in VAT rates were affected in 17 states ranging from 0.75% to
Stable tobacco prices and higher foreign exchange volatility were the other highlights for the current financial year.
-The new graphic health warnings have come into effect from 1st December, 2011.
Your Company's brands were stable during 2011-12, with most brands gaining volumes.
Brands like SPECIAL EXTRA FILTER, MOMENTS and CHARMS VIRGINIA FILTER were the key contributors to the growth in volume.
Your Company continued its strategic thrust of launching new brands in value for money segments in markets which provide opportunities as these continue to help grow the volumes.
During the year under review the cigarette volumes stood at 762 mns up by 12% when compared to 2010-11. The value realisations were higher at 1435 crore, up by 16.4% when compared to 1230 crore during the
previous year.
Competition has intensified with many brands now available at different price points where your Company's brands are present. This is apart from your Company's brands having to face the non-duty paid cigarettes which are available across markets in India. 
- Leaf TobbacoYour Company has recorded leaf export turnover of 154 crore, in the year 2011-12,  despite glut in the international market and volatility in exchange rate.
As on 31st March, 2012, your Company had a strength of 931 employees, with 296 management staff
and 635 workmen.

Tuesday, July 3, 2012

Note From Page Industries Annual Report 2011-12

Current Year Financial Performance
- Sale increased from Rs. 4,915.62 million to Rs. 6,834.09 million registering a growth of 39 %
profit before tax increased from Rs. 877.61 million to Rs.1,340.95 millionincrease of 53%
- Tax increased from 292.12 million to 441.08, increase of 51%
The net profit stood at Rs.899.85 million as against Rs. 585.49 million, growth of 54%.
- EPS moved from 52 to 81, growth of 55%
- Dividend , Rs. 37/- for the year.
- 4% growth in inventories.
- Trade receivable grew by 69%
- Long term loans grew by 30% to 265 million
Cash Flow
- Net cash generated from Operating activities is 1225.8 million. ----- (1)
- Free cash = (1) - Purchase of fixed assets + (sale of fixed assets)
- Free cash  = 1225.8 - 271.4 + 6.8 =  961.2 million i.e., slightly higher than the reported PAT.
Market Price
- Market price moved between 1600 to 2700 in the FY 11-12 between a PE of 30 to 52 based on FY11-11 EPS.
- currently the market price of roughly 2900 is 35 times of FY 11-12.

- New Territory: company has appointed a UAE Distributor for Jockey and has made the first shipment to UAE during the year under review. Trying to portray a high brand image as was done in India.
- Opened 11 Jockey exclusive Brand outlets. Total now at 71, well spread out in all major cities. (My take: That's very less for India , isn't it ?, still lot of scope to grow)
In the year under review, your company commissioned ‘Nielsen’ research agency to conduct an independent ‘brand health’ study for the Jockey brand in India. The research involved fourteen cities in all four zones across the nation. Your Directors are happy to inform you that the results of the study were very heartening and showed that Jockey scored a Brand Equity Index of 4.6 on a scale of ten in the Men’s Innerwear category and 2.9 in the Women’s innerwear category. To put things in perspective, worldwide only 23% of brands across all product categories score a Brand Equity Index 3.0 or over on a scale of ten and only 8% of brands score 5.0 and above. Jockey India Brand Equity Index scores were way above all
other brands in both the Men’s and Women’s Innerwear categories. The research agency has rated the Jockey brand health in India among the most powerful brands in their research experience across all categories
With the backing of Jockey International, USA, and access to ideas, trends and innovations from forty other Jockey international licensees throughout the world, your company’s long term commitment to newness & innovation will never waver be it product, back end processes or marketing.
AGREEMENT WITH SPEEDO INTERNATIONAL LIMITED:We have on 1st July 2012 entered into a License and Distribution agreement with M/S. Speedo International Limited, London, UK for the
exclusive right to manufacture and distribute Speedo products in India consisting of swimwear, apparel, water shorts, equipments and footwear. We launched Speedo brand of products in January of 2012 and have achieved Sales of Rs. 27.75 million during the current financial year.
One of India’s leading sectors, the textile industry contributes 4% to the country GDP, provides direct
employment to 35 Million people, accounts for 14% of the industrial production, 12 % of the total exports
and 17% of exports earnings.
The Indian domestic apparel sector is expected to grow from INR 1,850 billion in 2010 to INR 5,300 billion by 2020, representing CAGR of 11 %. Of this , the innerwear market currently valued at INR 143 Billion (in 2011) is expected to grow to INR 437 Billion by 2020 growing at CAGR of 13.2%, outpacing the growth of the overall apparel market.
The innerwear market in India is underpenetrated with per capita spend - 90% below Thailand and China.
The market has been growing faster than the overall clothing market, driven by premiumisation. With discretionary consumer spend in India continuing to grow, these trends should persist, aided by rising
urbanization and growth in consumer.
- Stabilized the implementation of SAP and BO.

Opportunities: The premium innerwear industry is expected to grow at high rate due to the following
a) Increased urbanization b) Higher Disposable Income c) Change in Consumer behavior particularly in
our target 15-34 age group d) Larger marketing spend by Companies creating general awareness for the category e) Increased brand awareness by consumers f) Shift from unorganized to organized sector
g) Rapid expansion of modern retail format

All the major international innerwear Brands have commenced operations in India realizing that Indian Market is likely to emerge as one of the largest market in the World in the next few decades.

In anticipation of growing demand, the Company has substantially expanded its installed production capacity. And with the ongoing addition of new buildings, infrastructure and facilities, the installed capacity is scalable and can be ramped up with incremental machinery to meet the expected healthy growth in demand.

Risk and Concern:
The areas of risk and concern are:
1. Increase in labour costs
2. Increase in input cost.
However we are confident that increase in input cost can be passed on to consumers. We are also
taking steps to monitor and improve labour productivity which will mitigate the impact of increase in labour cost to some extent. Moreover there has been softening trend in the price of input material especially cotton.

Sunday, July 1, 2012

Notes From IDFC Annual Report 2011-12

10 Year highlights
- Dividend per share has seen a jump in last 3 years from 1.50 to 2.30 for current year, started with and remained constant at 1 rs from 2003-07. CAGR 10%
- Balance sheet size has grown from 3575 to 60979 crore - CAGR of 35%
- Loans - 2695 cr to 48,888 crores - CAGR 38%
- Share holders fund - 1553 cr to 12285 cr - CAGR 12,285 - CAGR 26%
- Borrowings - 2175 cr to 46435 crore - CAGR 41%
- Total income - 459 to 635 cr - CAGR 34%
- PAT - 180 to 1545 cr - 27%
- EPS - 1.80 to 10.20 - CAGR 21%
- Book value 16 to 81 - CAGR 20%

Business Highlight's from Chariman Deepak S Parekh (Same as IDFC)
As IDFC completes its 15th year, our footprint extends across all major infrastructure sectors. We have funded a fifth of the National Highways being constructed with private participation. Our contribution has helped create more than half of our country’s telecom towers and two-thirds of the wireless subscriber base.
We have financed more than half of the container cargo capacity addition at Indian ports, and the airports aided by us handle over a fourth of India’s passenger and cargo traffic.
We have also helped create more than half of India’s private sector thermal and large hydro-generation capacity. Last but not the least, we have the largest renewable portfolio in the country.
Issues with Power Sector
Notwithstanding the huge increase in capacity addition last year, the power sector is facing a growing crisis of supply arising from domestic fuel availability constraints and the mounting financial losses of the distribution companies (discoms). The present impediments have resulted in about 20 GW of stranded generation
capacity. The mess ailing the sector has reached a point where the initial euphoria of investing in power generation is beginning to wane.
Ensuring the financial viability of discoms needs tariff reforms and state governments to keep their commitments on subsidy support. With mounting pressures on discoms due to drying up of short-term funds from banks and financial institutions, discoms are looking to restructure loans and facing the imperatives
of tariff revisions. Some State Electricity Regulatory Commissions (SERCs) have raised tariffs in the past year, albeit with delays.
- The subsidy dependence of the discoms is extremely high at ` 43,000 crore, and thus timely disbursement
of subsidy by states is extremely important for maintaining the liquidity position of discoms. In particular, Rajasthan and Andhra Pradesh have defaulted significantly in meeting their subsidy commitments over the last few years.
Issue with Telecom sector

- The telecom sector is illustrative of how the government needs to regain momentum in the policy domain. The cancellation of 122 licenses will impact nearly 70 million subscribers and 8 companies which were new entrants to the telecom market in India. Proactive action on this issue is even more imperative as subscriber
growth has slowed down, and there is limited progress on broadband access.

Most critical for sustaining growth in the sector is to resolve spectrum related issues. TRAI has already made recommendations on issues of spectrum allocation that emerge from the Supreme Court directives. The much awaited New Telecom Policy now needs to take a definitive view on these recommendations
and provide specific and time-bound policy directions to address the issues.
The government also needs to immediately respond to the Supreme Court directives with an action plan for re-awarding the 2G licenses while balancing the license fees, consumer interests on tariff issues and overall viability of the sector.
There is no doubt that private sector operation has grown significantly in Indian ports. The private or non-major ports have grown to account for nearly 42% of total port capacity in India. Moreover, as much as 88% of total container traffic at Indian ports is handled by private players. Until recently, bulk cargo traffic was predominantly operated by Port Trusts themselves and hence was government controlled. Privatization of bulk terminals is picking up; however progress has been slow. As a result, capacity in major ports is stagnating and there is need for greater modernization.
The regulatory uncertainty due to differential tariff regimes in major ports needs to be resolved. The 2005 tariff guidelines followed by the Tariff Authority for Major Ports (TAMP) provided for three-yearly tariff reviews for private terminals in major ports. These were revised in 2008, with the new guidelines setting
tariffs for the entire concession period. It is important that concessionaires under each of these regimes be brought on a level playing field in terms of tariff regulation. Moreover, the role of TAMP in an increasingly competitive environment and a move towards tariff based competitive bidding should be explored.
Urgent action is required in the coming year so that we see an improvement in regulatory processes; we make progress in finding the right balance between growth and environmental concerns; we remove the most
troublesome supply bottlenecks; and we make the environment more conducive to private investment in Indian infrastructure. I can assure you of IDFC’s strong continued commitment to building sustainable and inclusive infrastructure in India. 

That's a depressing macro environment for the IDFC, isn't it ??

Few more point's on sectors
Net addition of wireless subscribers dropped by over 50% to about 9 million per month during FY12 compared to approximately 19 million per month in FY11. The fall in net additions was primarily due to urban saturation without a sustained increase in rural penetration as telecom operators slowed the pace of network roll out in rural areas. The wireless subscriber base at the end of March 2012 was 919 million as against 812 million in March 2011 (active subscriber - 74%).  
The overall teledensity increased from 71% in March 2011 to 79% in March 2012. Urban teledensity
reached 169% while rural teledensity stood at 39% by the end of March 2012. The teledensity
growth has slowed down considerably during FY12 as compared to FY11.
Roll out of 3G services by telecom operators has helped the tower companies increase their tenancies during this year. No major M&A transactions have taken place during the year.
Broadband penetration continues to be a major challenge for the Indian economy. Broadband subscriber base reached 13.8 million in March 2012 from 11.5 million in March 2011, a growth of almost 15%. National Broadband Policy (NBP) released by the Telecom Regulatory Authority of India (TRAI) in December 2010 had suggested a roadmap to increase the Broadband subscriber base to 75 million connections by 2012 and to 154 million subscribers by 2014. NBP had also envisaged development of National Broadband Network (NBN), an open access optical fibre network connecting all habitation with population of 500 and above, planned to be built with an investment of approximately 60,000 crore by National Optical Fibre Agency, a special organisation proposed to execute this project. The last mile  connectivity was to be provided by mix of 3G / 4G network, cable network and wireline broadband. No action has been taken on this front so far.
Sorry Lost patience at this point to learn about the ills of other sector's like transport, railways etc etc... Keeping it for some other day, maybe. Let's move current year Financials

Current Year Financials
- Revenue from operations 6,094.32 compared to 4,524.00 crore in FY11, growth of 34.71%
- Provision and contingencies 283.85 Vs 234.94 crore in FY11. (If the condition is so bad in the sector's to which it lends, shouldn't the contingencies be higher ?)
- PBT 2,201.36 cr. Vs 1,730.44 cr. in FY11. (27.21%)
- Tax of 598.40 cr. Vs 453.30 cr. in FY11. 
- PAT of 1,602.96 cr. Vs 1,277.14 cr. in FY11. (25.51%)
NPAs at 71.43 crore as on March 31, 2012.
- EPS 10.54 Vs .
- Dividend at 2.30 rs per share.
On February 11, 2012, 84,000,000 Compulsorily Convertible Cumulative Preference Shares having a face value of 100 each (CCCPS), issued by the Company in August 2010, were converted into 47,727,272 equity shares of 10 each at a conversion price of 176 per share. As per the terms and conditions of CCCPS, the Company paid dividend @ 6% p.a. to the preference shareholders, at the time of conversion of CCCPS into equity shares, for the period starting from April 1, 2011 to February 10, 2012.

Business Again
Balance Sheet grew by 24% Year on Year (YoY) to reach 60,706 crore and Net Loans at
` 48,185 crore witnessed an increase of 28% YoY. As on March 31, 2012, IDFC’s total
exposure was 69,718 crore, of which Energy was highest 41%, followed by Transportation
28%, Telecommunication 21% and Others 10%.
During the year, IDFC reduced it's dependence on bank borrowings. More cost-effective sources of borrowings such as Commercial Paper, Bonds, Infrastructure Bonds having tax benefits
under Section 80CCF of the Income-tax Act, 1961, Foreign Currency Loans, were utilised,
which resulted in lower increase in cost of funds.

 - During the year, IDFC sold 25% plus one equity share each in IDFC Asset Management
Company Limited and IDFC AMC Trustee Company Limited to Natixis Global Asset Management Asia Pte.

Out of 20,750,721 options outstanding at the beginning of the current financial year, 1,340,668 options
lapsed on account of resignations and 3,687,948 (EPS goes down from 10.54 to 10.05 when accounted for the option) options were exercised during the year. Additionally, during the year, 22,248,000 options were granted to eligible employees under the Scheme. Accordingly, 37,970,105 options remain outstanding as of March 31, 2012.
Huh , quite an extensive AR. Need to read it again.. they have own some Silver Shield for Excellence in Financial reporting too.