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Master of Business Administration Submitted by PADMINI M S REG NO: 10XQCMA067 Under the Guidance of DR. NAGESH MALLAVALLI
M. P Birla Institute of Management Associates of Bharatiya Vidya Bhavan No.43, Race Course Road Bangalore 1
DECLARATION
I, Padmini M S (Reg. No. 10XQCMA067) hereby declare that the internship report, an Organizational study conducted at Aditya Birla Finance Corporate Office Bangalore submitted in partial fulfillment of the requirements of the Bangalore University for the award of degree in Master of Business Administration is a bona fide work carried out by me under the guidance of Dr. Nagesh Mallavalli, MPBIM, Bangalore. This report has not been submitted earlier to any university or institution for the award of any degree/diploma. The content of this report are based on the data collected by me at Aditya Birla Finance, Bangalore under the guidance of Arun Bhat Relationship Manager. Place: Date: Padmini.M.S Reg. No. 10XQCMA067
ACKNOWLEDGEMENT
This project is a product of the invaluable insights, facts and experience I had with the industry people. The learning experience was more than what was visualized as. I would like to express my sincere gratitude to Mr. Arun Bhat Relationship Manager of Aditya Birla Finance for giving me the opportunity to be a part of the Capital Market department. I would like to express my sincere thanks to Mr. Rakesh Singh my project guide in Aditya Birla Finance for extending his Support in making my internship a knowledgeable experience. I would also like to thank all those who have directly and indirectly helped me in completion of the project. I would also like to thank my project guide Dr. Nagesh Mallavalli, who guided me through the entire project. I am indebted to my parents. They have been my guiding light in my passage of this mortal world. Above all I would like to thank all my friends and also my college who have helped me in completing this project.
Padmini M S
CONTENTS
Sl no Index Executive Summary Introduction Background of the study Industry Profile Company Profile Corporate Social Responsibility Vision, Mission and Value Organizational Structure Corporate Organizational Structure Departmental Organizational Structure Authority and Responsibility relationship Functional Areas HR Department Capital Market Department Corporate Finance Department Risk Management Group Mid Office Group Finance Information Technology SWOT Analysis Strengths and Weakness Opportunities and Threats Pg no 1 2 4 5 8 10 14 15 16 16 17 22 23 23 23 24 24 24 24 38 39 41
1 1.1 1.2 1.3 1.4 1.5 2 2.1 2.2 2.3 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4 4.1 4.2
5 5.1
42 42 58 65
Executive Summary
Aditya Birla Finance Ltd. (ABFL), formerly known as Birla Global Finance, is one of India's leading non-banking financial companies. The company is also such an entity consisting of people with rich and varied skills, experience and areas of expertise working together harmoniously to deliver quality outputs.
The organization study helps to understand and make factual observation about the functioning of an organization. The organization study helps to have the firsthand feel of the corporate environment. Organization study helps to know about the following: Learn about the working environment To understand the organization hierarchy To know the functions and activities of various employees To get an insight about the vision, mission values, etc. of the organization.
Chapter 1
INTRODUCTION
1. INTRODUCTION
The Aditya Birla Financial Services Group (ABFSG) has built a significant presence across its verticals, viz. life insurance, asset management, NBFC, private equity, broking, wealth management & distribution and general insurance advisory services
The seven companies representing Aditya Birla Financial Services Group are Birla Sun Life Insurance Company Ltd., Birla Sun Life Asset Management Company Ltd., Aditya Birla Finance Ltd., Aditya Birla Capital Advisors Pvt. Ltd., Aditya Birla Money Ltd., Aditya Birla Money Mart Ltd, and Aditya Birla Insurance Brokers Ltd. ABFSG is committed to being a leader and role model in a broad based and integrated financial services business. Its 7 lines of businesses, with about 5.5 million customers manages assets worth USD 18 billion approximately and prides itself for having a talent pool of about 15,000 committed employees. ABFSG has its wings spread across more than 500 cities in India through over 1600 points of presence and about 200,000 channel partners. This allows ABFSG to offer its customers virtually anything under financial services except a savings or current account. With revenue of over USD 1.25 billion (in 2009-2010) ABFSG is a significant non bank player.
ABFSG is a part of Aditya Birla Nuvo Ltd (ABNL), a USD 3.5 billion conglomerate having leadership position across its manufacturing as well as services sector businesses. ABNL is a part of the Aditya Birla Group, a USD 30 billion Indian business house operating in 27 countries across the globe.
Aditya Birla Finance Ltd. (ABFL), formerly known as Birla Global Finance, is one of India's leading non-banking financial companies (NBFCs). Incorporated in 1991, the company has been rated as A1+ by ICRA, for its short-term borrowings, which indicates highest-credit-quality
ABFL offers specialized solutions in areas of Capital Markets, Corporate Finance and Project Finance. It is one of the largest players in security based lending and the pioneer of IPO Financing in India.
The motive behind considering Aditya Birla Finance as the organization for study was to have a thorough understanding of the Finance sector.
The finance sector of this company is into Secured loans and Unsecured Loans, Aditya Birla has built a strong brand recognition and have established themselves as a strong brand in this sector.
ICICI Group
ICICI offers a wide spectrum of financial products and services in India. The company provides solutions for all needs like Instant Banking, Online Trading, Insta Insure, ICICI Bank immobile etc. The company keeps up the financial profile healthy and diversifies earnings across geographies and businesses. The company's philosophy is to deliver high class financial services for all the cross sections of the society. Their products are Mutual Fund, Private Equity Practice, Securities, Life Insurance etc.
Karvy Group
The company has about 575 offices in 375 destinations in India. It offers services like the Mutual Funds Services, Depository Services, Debt Market Services, Investment Banking and many others.
In India: :: Largest cement player in India :: The top fashion (branded apparel) and lifestyle player :: The second-largest producer of viscose filament yarn :: The largest producer in the chlor-alkali sector :: Among the top three mobile telecom players :: Among top 10 BPO companies :: A leading player in life insurance and asset management :: Among the top two supermarket chains in India
Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not come in the way of the need to keep learning afresh, to keep experimenting.
Beyond business
Transcending business for over 50 years now, the Group has been and continues to be involved in meaningful welfare-driven initiatives that distinctly impact the quality of life of the weaker sections of society in India, South-East Asia and Egypt. In India, the Group's social projects span 3,000 villages. It reaches out to seven million people annually through the Aditya Birla Centre for Community Initiatives and Rural Development, spearheaded by Mrs. Rajashree Birla. Its focus is healthcare, education, sustainable livelihood, infrastructure and espousing social causes. The Group runs 42 schools, which provide quality education to over 45,000 children in India's interiors. Of these, over 18,000 children receive free education. An additional 8,500 students receive merit scholarships. Likewise at its 18 hospitals in India, 500,000 patients are given extremely subsidized medical care. To embed corporate social responsibility as a way of life in organizations, the Group has set up the FICCI Aditya Birla CSR Centre for Excellence, in Delhi. The Group transcends the conventional barriers of business and reaches out to the marginalized because of its conviction of bringing in a more equitable society.
2011 :: Mrs. Rajashree Birla was presented the All India Management Association (AIMA) Managing India Award 2011 for 'Corporate Citizen of the Year'. The award was presented by Mr. P. Chidambaram, Indias Union Minister for Home Affairs. :: The Government of India has bestowed the Padma Bhushan Award on Mrs. Rajashree Birla for her exemplary contribution in the area of Social Work.The Padma Bhushan is among the highest civilian awards in India and was conferred on Mrs Birla at a special ceremony on 01 April 2011.
2010 :: Indian Rayon, Veraval (a division of Aditya Birla Nuvo) is awarded The Rajiv Gandhi Environment Award for Clean Technologies by The Ministry of Environment and Forests, Government of India. :: Mrs. Rajashree Birla, Chairperson, Aditya Birla Centre for Community Initiatives and Rural Development receives 'Hello Hall of Fame' award for 'Exemplary Philanthropist of the year' from Worldwide Media Goup's 'Hello' celebrity journal. :: Ultratech's 'Concern for Health' project awarded the Asian Corporate Social Responsibility Award by the Asian Institute of Management Centre for Corporate Social Responsibility. :: Mrs. Rajashree Birla, Chairperson, Aditya Birla Centre for Community Initiatives and Rural Development, awarded the Global Golden Peacock Life Time Achievement Award for Community Development for the year 2010 for "Outstanding Contribution Towards Community Development and Social Welfare".
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:: Hindalco and Birla White declared winners in the Golden Peacock Awards for Corporate Social Responsibility 2010 by an eminent international jury, headed by Justice P.M. Bhagwati, the erstwhile Chief Justice of India. :: The Aditya Birla Centre for Community Initiatives and Rural Development teams up with Columbia University's research centre, the Columbia Global Centers' Earth Institute in Mumbai, to become its principal partner. The Earth Institute's goal is to help achieve sustainable development primarily by expanding people's understanding of the earth as one integrated system. :: Hindalco wins Amity International Business Schools, Amity Corporate Excellence Award for Corporate Social Responsibility
2009 :: Grasim's pulp and fibre division wins the highly prestigious Asian CSR Award. The Asian CSR Awards, Asia's Premier CSR Awards program, is a project of the Asian Institute of Management, Manila. :: Rajiv Gandhi Award for Eminence in Social Field, 2009 conferred on Mrs. Rajashree Birla by Mr. Jyotiraditya Scindia (Union Minister of State, Commerce & Industry) on 19 August 2009. The award recognises Mrs. Birla's pathbreaking work among the poor, more so in India's villages, carried out through the Aditya Birla Centre for Community Initiatives and Rural Development. :: Vikram Cement and Aditya Cement wins the Federation of Indian Mineral and Industries' "Social Awareness Award for the year 2008-09". :: Reader's Digest Pegasus Star Award conferred on Hindalco in recognition of work that truly exemplifies the highest values of society and corporate leadership for social responsibility and sustainable development initiatives. Mrs. Rajashree Birla, who spearheads all the Group's social projects, received this much coveted award on behalf of Hindalco from Mr. Arun Jaitley, MP, Rajya Sabha, on 21 January 2009 in Delhi.
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2008 :: The President of India, Mrs. Pratibha Patil confers the much coveted Rotary International Polio Eradication Champion Award on Mrs. Rajashree Birla in an elegant function at the Rashtrapati Bhavan (Delhi), attended by the Chairman, select Rotarians and WHO officials.
2007 :: The Aditya Birla Group honoured with the India Today Group's Readers Digest Gold award in recognition of the work that truly exemplifies the highest values of society as well as those of Reader's Digest. The award was received by Mrs. Rajashree Birla, Chairperson, Aditya Birla Center for Community Initiatives and Rural Development, at the Pegasus Corporate Social Responsibility Awards 2007 function. :: Hindalco awarded the CII - Sorabji Green Business Centre "National Award for Excellence in Water Management 2007".
2006 :: Hindalco awarded the Greentech Safety Silver Award for its outstanding safety performance during 2005-06. 2004 :: Grasim, Nagda, receives the FICCI Annual Award 2003-2004 in recognition of corporate initiaitve in rural development. :: Aditya Birla Chemicals (India) Limited, Rehla, Jharkhand, receives the FICCI Annual Award 2003-2004 in recognition of corporate initiative in family welfare. :: Indal wins FICCI Award 2002-2003 for 'Corporate Initiative in Rural Development'.
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2003 :: The Group is ranked 16th in India's first ever survey of 'Great places to work in', published in Business World magazine. The Group's joint venture concern, Birla Sun Life Insurance, is ranked 9th in the same study. :: The Group is ranked 20th in a study on the 'Best Employers in India', conducted by Hewitt Associates and Business Today. :: Hindalco receives the Asian CSR Award for its "Rural Poverty Alleviation Program". The Asian CSR Awards are Asia's premier awards program on corporate social responsibility.
2002 :: The Group receives The Economic Times' "Corporate Citizen" of the year award.
2000 :: The Group announces its intention to launch a 450 MW 'Green Power Project' in Karnataka .
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MISSION
To deliver superior value to our customers, shareholders, employees and society at large.
VALUE
Integrity Commitment Passion Seamlessness Speed
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Chapter 2
ORGANIZATIONAL STRUCTURE
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Products:
Branded garments, Viscose filament yarn, carbon black, fertilizers, insulators, textiles, life insurance, asset management, non-banking financial services, distribution and wealth management, broking, general insurance advisory and broking, private equity investment, advisory and management services, cellular services, ITITeS, branded apparel retailing.
Management Name B L Shah Devendra Bhandari Sushil Agarwal Dr. Rakesh Jain Director Company Secretary & Compliance Officer Chief Financial Officer & Whole Timed Director Managing Director Designation
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GIL Sectors: Cement (grey and white), textiles, chemicals Cement, viscose staple fiber, rayon grade pulp, ready mix concrete, Products: chemicals, textiles
Management Name Kumar Mangalam Birla Ashok Malu Adesh Gupta Chairman Company Secretary And Compliance Officer Whole Director & Chief Financial Officer & Manager Designation
HIL Sectors: Products: Non-ferrous metals, chemicals, mining, agribusiness Aluminum, copper, aluminum rolled products (sheet and foil), cans, primary metal, recycling, caustic soda, aerospace alloys, alumina, power generation and aluminum smelting
Management Name Dr. Kumar Mangalam Birla D Bhattacharya Jagdish Khattar Ram Charan Anil Malik Chairman Managing Director Independent Director Additional (Independent) Director Asst. Vice-President & Company Secretary Designation
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ULTRA TECH CEMENT LTD Sectors: Products: Cement (grey and white) Cement, ready-mix concrete
Management Name Mr. Kumar Mangalam Birla O P Puranmalka Sanjeeb Chatterjee Designation Chairman Whole Time Director Company Secretary
Management Name Shyam Sundar Gupta Akash Mishra Managing Director Company Secretary & Compliance Officer Designation
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Management Name Mr. S Balaji Sudhakar Ramasubramanian Designation Company Secretary & Compliance Officer Managaing Director
Management Name S B Chachan Mr. Alphonsa Domingo Designation Chairman Compliance Officer
Management Name Nitin Parekh Yogesh S Pujara Designation Chairman & Managing Director Compliance Officer
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Management Name Himanshu Kapania Pankaj Kapdeo Managing Director Company Secretary & Compliance Officer Designation
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Chapter 3
Functional Areas
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RMG formulates risk policies in association with Central Risk, ABFSG for overall risk management in ABFL.
3.6 Finance
Finance department deals with various functions such as treasury (including availability of funds and efficient management of surplus funds), optimizing cost of funds, accounts & taxation, managing regulatory compliance as per RBI guidelines, upholding all legal checks and balances to safeguards interests of the company.
IT implements processes to ensure maintenance and high availability of software business solutions & technology infrastructure within the organization, and also drives effective and timely implementation of business solution system projects within the organization, in line with the IT roadmap.
Padmini.M.S. ----M.P. Birla Institute of Management----Organizational Study at Aditya Birla
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Promoter Funding Loan against security of equity shares/ mutual fund units and other marketable securities
Line of Credit against securities IPO Funding ESOP Funding LASi (Margin Financing)
Promoter Funding
This facility is offered to promoters against their share holding in their respective company. It enables you, as a promoter of the company, to increase your share holding or expand and diversify into other areas of business. With specialized valueads such as speed of transaction led by disciplined TAT-driven processes and strong Chinese walls, you can be assured of quality service and utmost confidentiality.
Tenure
Up to 365 days
Shares held by promoter & holding companies in promoter Group Minimum Rs. 1 Crore 30% & above Competitive
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repayment notice Security Loan amount Margin Interest rate Documentation Custodian charges As per list of approved shares Minimum Rs. 50 Lakhs 30% & above Competitive Standard Loan Documents with PDC At Actuals
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Documents Required
In case of Individual borrower Request Letter for Loan against Shares / Securities comprising Loan Amount, Tenure, Securities, Purpose of Loan & Source of Payment Last 2 years Income Tax Returns and financial statements duly self attested. (latest financial should be for FY10, if not ready, provisional must be provided) Latest borrowing details PAN Card Address Proof 2 Photographs In case of Corporate borrower Request Letter for Loan against Shares / Securities comprising Loan Amount, Tenure, Securities, Purpose of Loan & Source of Repayment Certified, updated true copy of MOA duly signed by Director/Company Secretary Form 32 Latest share holding pattern Latest borrowing details Last 2 years audited financials and Income Tax Returns, duly self attested
List of directors with details of their PAN No, DOB, Residence Address with pin code KYC Docs of all signatories authorized by Board, duly self attested (PAN card, address proof etc.)
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Tenure Security
Minimum Rs. 1 Crore 25% and above Competitive As Applicable Standard Loan Documents with PDC
Benefits
Liquidity without selling your long term investments Maximize gains on your existing investments Take advantage of investment opportunities Easier and faster processing Pay interest only for the period of actual funds utilizations
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IPO Financing
This product offers an excellent opportunity to leverage your own funds in primary markets and thereby increase the allotment quantum manifold. We provide loans for subscription in the IPOs of equity / equity linked instruments. The investors have to invest only the margin amount and the balance amount is financed by Aditya Birla Finance. Our 'exclusive' IPO financing scheme provides a single window clearance for application, banking and follow up.
10-15 days Minimum Rs. 1 Crore Competitive Case to case basis depending upon expected allotment of shares
Documentation
Custodian Charges
As applicable
Benefits
Maximize gains on your existing funds available for investments Take advantage of investment opportunities Procure higher allotments in IPO Easier and faster processing
ESOP Financing
For the years of hard work and dedication you have put in to help your company reach newer heights, you have been acknowledged with the much deserved ESOPs, meant only for the chosen few. So dont let this rewarding opportunity go by. You have put in your efforts to get the ESOPs. Now its time to reap the benefits
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Tenure Security Loan amount Interest rate Margin Documentation Custodian Charges
2-13 months ESOPs Minimum Rs. 1 Crore Competitive 25% and above Standard Loan Documents with PDC At Actuals
Documents Required
Address Proof (Passport OR Driving License OR Copy of Lease Agreement OR Landline Telephone Bill OR Electricity Bill) PAN card Employee ID Passport size photographs (signed across) Form 16 Or ITR returns ( last 2 yrs) Pay slip or Salary slip (last 2 months) Cancelled cheque for demat account opening (All the documents should be self-attested. All signatures should match the PAN card signature)
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LASi
LASi enables you to invest/leverage/trade in equity shares at a pre-defined margin. You pay only a part of the total value of purchase with the rest being provided as a loan. You can choose your own quantity to trade and can avail loan upto 10 times of your gross annual income on fulfilling a few simple conditions. This financing solution can be availed for up to 1 year. You can take advantage of the Buy Today Sell Tomorrow (BTST) facility and maximize value. So go ahead take a step towards creating wealth.
Tenure Security Loan amount Margin Interest rate Documentation Custodian charges
Up to 365 days As per list of approved shares Minimum Rs. 2 Lakhs 25% and above Competitive Standard Loan Documents with PDC At Actuals
Benefits of LASi
Leverage the power of your portfolio Use your existing holding to buy more shares Avail a minimum of Rs. 2 Lakhs Margin can be paid in cash or in form of pre-approved shares Interest is charged on the utilized loan amount only
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Documents Required
Income Tax Returns for the past 2 years Net worth Certificate PAN Card Address Proof Photographs
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Our Invoice Discounting facility includes finance against your domestic receivables by discounting invoices. It helps you to convert your receivables into instant cash which improves liquidity resulting into healthy and continuous cash flow of your business.
Benefits
Instant conversion of your receivables into cash Financing facility without any charge on assets Provide hassle-free finance Lower Margin requirements
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Channel Financing
Channel Financing is an innovative product to extend working capital finance to dealers having business relationships with large companies in India. Through this product Dealers are able to leverage their relationship with reputed companies in sourcing low cost funds. It aims to provide integrated financial solutions to the distribution channels. This may be in the form of either invoice discounting or a bill discounting line of credit. The corporate provides services like Stop Supply Letter, Assistance in Recovery & Resale. Facility can be structured as per the requirements to help the dealers/franchises.
Benefits
Assure availability of Working Capital finance to their channel partners at lower cost of credit Acts as a marketing tool and helps in strengthening their relationship with Channel Partners Greater efficiencies in Receivables and Cash Management Process for corporate Ability to introduce payment discipline with their Channel Partners Steady and cheaper source of Working Capital financing for Channel Partners
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Increased Sales through higher purchasing power for Channel Partners Clean facility up to certain limits Simplicity of documentation and approval procedures High service and delivery standards compared to current neighborhood Banker / Moneylender Channel partners may be able to increase profitability by availing of cash discounts from Corporate
Vendor Financing
ABFL understands that longstanding relationship with your vendors is an integral part of your business. Under vendor financing, facilities are made available to vendors of Large Corporate. These credit facilities would be granted against specific transactions such as bill discounting or invoice discounting. Unlike Corporate Bill discounting limit which is a limit to the corporate, this is a limit to the vendor. Accordingly, limit is outside the banking arrangement of the Corporate. Our team would also assist vendors in structuring finance against confirmed purchase orders from their customers.
Benefits
Assured and continuous availability of Working Capital to vendors Financing facility without any charge on assets Improves liquidity of the vendors, which increases his ability to supply larger volumes Competitive Pricing
Debt Syndication
Debt Syndication encompasses funding activities for diverse business requirements of corporations. We assist corporate to leverage on debt as an instrument to raise short-term and long-term capital through structured financial products. This could be for various requirements including expansions, working capital and also for structuring and syndicating funds for acquisitions.
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With a view to capitalize on the opportunities in the infrastructure, core and emerging sectors, ABFL has expanded its product suite to include project and structured finance solutions catering primarily to the growing mid-market clients across the country. Through this initiative, ABFL would not only provide finance but also syndication and financial services leveraging on its synergies across businesses. The company hopes to thus contribute to the development of infrastructure facilities of the country which is a key driver for growth and development
Headquartered in Mumbai, Aditya Birla Finance has a wide network through its branches and associates across the country.
Through our lending and financing solutions we enable you to pursue ambitious growth strategies and execute value-creating transactions. Our aim is to open up a world of opportunities for you and help you achieve your full potential.
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Chapter 4
SWOT Analysis
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4. SWOT
STRENGTHS: Strong brand recognition: Aditya Birla is a successful corporate with an enviable track record, both in India and overseas which has a caring corporate citizen with benchmarked governance practices Anchored by 72,000 employees and trusted by 700,000 shareholders. As a result of which Aditya Birla has built a brand image which is trusted and recognised by people throughout the world. Growing international presence: Aditya Birla operates globally in over 25 different countries like India, USA, UK, Germany, Canada, Brazil, Switzerland, Portugal, China, Australia etc. Overseas operations contribute over 25% of Group revenues. Manufacturing across 9 countries in 3 continents. Superior research and development department: Focus on improving efficiency and returns by investing in research and development. . The company aims to be a world-class organization that delivers innovative solutions, continuously improves core competencies and executes effectively. The centre is supported by state-of-the-art equipment set in a one-of-a-kind brand new technology-led environment. Strong sense of culture in the working environment: At the Aditya Birla Group, opportunities are abundant, the environment warm and the people friendly. Minds are constantly in motion researching, innovating and creating ideas that push as many as 19 industries, forward. Aditya Birla Group constantly strives to be and do better than the best. Aditya Birla Group endeavour to create an ambience where people have the tools and the freedom to deliver their commitments and take great pride in their work. In the fertile ethos of Aditya Birla Group, they find a career that is personally rewarding and professionally enriching. Effective Leadership: In January 2007, we launched LEAD (Leadership Program for the Experienced), an Aditya Birla Group Leadership Program to groom exceptional individuals to be the future leaders of the Aditya Birla Group. LEAD is an intensive six - month, on - the - job training
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program. Individuals with at least four years of pre or post MBA experience are eligible to apply for LEAD Aditya Birla has also built a prestigious Client Base e also known for their customer loyalty, Aditya Birla has achieved technological excellence over diversified business WEAKNESSES: Complexity of operation Financial innovation has over the last few decades allowed us to share risk more effectively than before. At the same time, however, it has introduced a large number of often complex securities, which investors and risk managers have to deal with. We argue that while complexity is an important concept in financial markets with bounded rational agents, it is surprisingly hard to find a workable definition of complexity, posing a challenge for policy proposals that target complex securities. We highlight three ways in which bounded rational investors can deal with complexity: (i) By dividing up difficult problems into smaller sub-problems or by using separation results, (ii) (iii) By using models, but keeping in mind potential modelling pitfalls, Through standardization and commoditization of securities or investor
restrictions. We also point out that, simply increasing the quantity of information disclosed to investors does not resolve complexity, since in the presence of bounded rationality it leads to information overload.
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OPPORTUNITIES: Growth of core sector industries: Growth is something for which most companies, large or small, strive. Small firms want to get big, big firms want to get bigger. Indeed, companies have to grow to survive in the market. Aditya Birla group can rapidly integrate with global economy by targeting the booming construction business in Asia. Aditya Birla Finance has immense opportunity in growing e-commerces business.
THREATS: Competition persists in all and every field of business. There is always a risk of take over Political impact generally is an external factor which cannot be controlled by any business. The impact of foreign currency fluctuation and interest rates: For growing companies that are early in their industry/business development lifecycle, currency management should be a low-level concern. . As a company and/or its industry matures and management becomes focused on "optimization" issues, then currency management will rise in importance as a business factor. Since Aditya Birla is an established firm, it has to concentrate on optimization and currency management.
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Chapter 5
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Conclusion:
This internship is the first major industrial exposure wherein we got an overall view of the company. We found out about the management hierarchy, basic departments and the layout which enhanced our managerial knowledge. Organizational study of this organization has been fruitful. Further it has also given me an opportunity to learn how each section within a department functions and also how the corporate office coordinates with the various divisions. It emphasises the interdependency and cross functionality among various departments and divisions within the organization. The study in this organization proved to be a platform for viewing the inputs gained in the classroom being put into practice. It very well emphasizes the need for the study of MBA.
Suggestions
Must concentrate on the untapped market in order to be more competitive Aditya Birla Finance must provide training for all the employees on a regular basis which can improve the performance and achieve higher productivity. The head count in each department must be analysed to suit the Organizational requirement, along with reducing stress for all its employees.
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Annexure
Balance sheet
------------------- in Rs. Cr. ------------------Mar '10 Mar '09 Mar '08
12 mths
12 mths
12 mths
Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 5.54 5.54 0 0 49.38 0 54.92 5 35 40 94.92 5.54 5.54 0 0 39.9 0 45.44 0 5 5 50.44 5.54 5.54 0 0 39.56 0 45.1 40.3 0.06 40.36 85.46
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Mar '10
Mar '09
Mar '08
12 mths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deferred Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses 58.85 24.34 34.51 1.32 2.01 0 81.47 23.29 104.76 32.93 53.68 191.37 0 132.41 1.86 134.27 57.1 0 94.94 Total Assets Contingent Liabilities Book Value (Rs) 12.54 9.91
12 mths
12 mths
53.58 18.87 34.71 0.17 2.03 0 23.91 13.85 37.76 24.92 26.87 89.55 0 74.64 1.36 76 13.55 0 50.46
46.31 14.28 32.03 0 2.05 0 55.46 47.09 102.55 30.66 46.54 179.75 0 115.24 13.13 128.37 51.38 0 85.46
6.54 8.2
2.81 81.42
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Mar '10 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalized Total Expenses 0 0 23.56 0 14.47 38.78 0 76.81 12 mths 97.7 0 97.7 2.92 0 100.62
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Mar '10
Mar '09
Mar '08
12 mths Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualized) Shares in issue (Lakhs) Earnings Per Share (Rs) Equity Dividend (%) Book Value (Rs) 554 1.71 0 9.91 20.89 23.81 2.61 21.2 5.67 0 15.53 0 15.53 6.05 9.48 76.81 0 0 0
12 mths 10.08 12.94 5.53 7.41 4.73 0 2.68 0 2.68 2.05 0.64 57.74 0 0 0
12 mths 45.2 48.42 8.31 40.11 3.57 0 36.54 -0.55 35.99 14.39 22.14 74.39 0 4.43 0.75
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Ratios
------------------- in Rs. Cr. ------------------Key Financial Ratios
Mar '10 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed (%) Return On Net Worth (%) Adjusted Return on Net Worth (%) 15.57 15.35 15.35 9.38 9.38 19.49 17.25 17.91 21.38 15.06 1 -3.77 17.64 8.71 50
Mar '09
Mar '08
14.86 7.55
37.79 33.88
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Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds (%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio
9.91
8.2
81.42
9.91
8.2
81.42
-1.85 ---2.2
-1.71 ---1.6
---
---
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Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition Expenses as Composition of Total Sales
210.34 --0.52 --
154.66 --
--
--
23.42
Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio
Adjusted Cash Flow Times Mar '10 Earnings Per Share Book Value 1.71 9.91 Mar '09 0.11 8.2 Mar '08 39.96 81.42
50
Mar '11 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 12 mths 23.39 23.39 0 0 328.66 0 352.05 26.05 0.1 26.15 378.2
Mar '10 12 mths 23.39 23.39 0 0 265.97 0 289.36 43.8 0.26 44.06 333.42
Mar '09 12 mths 23.39 23.39 0 0 216.57 0 239.96 45.76 0.41 46.17 286.13
51
Mar '11
Mar '10
Mar '09
Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses
12 mths 384.17 143.45 240.72 14.13 46.02 19.56 25.36 63.02 107.94 28.17 0 136.11 0 53.67 5.11 58.78 77.33 0 378.2
12 mths 379.19 125.57 253.62 2.72 30.94 20.81 24.95 3.26 49.02 24.84 41.99 115.85 0 59.37 10.35 69.72 46.13 0 333.41
12 mths 374.34 105.82 268.52 1.4 0.3 11.13 20.55 1.02 32.7 32.7 28.95 94.35 0 70.88 8.2 79.08 15.27 0.61 286.1
Total Assets Contingent Liabilities Book Value (Rs) 79.72 150.53 74.54 123.73 72.27 102.6
52
12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 113.37 19.52 13.22 4.13 0 8.46 0 158.7 262.65 24.82 237.83 15.2 0.11 253.14
12 mths
12 mths
53
79.24 Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) 94.44 2.64 91.8 20.36 0 71.44 -0.41 71.03
76.35
74.41
Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualized)
Shares in issue (Lakhs) Earnings Per Share (Rs) Equity Dividend (%) Book Value (Rs)
54
Mar '11 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) Net Profit Margin(%) Adjusted Net Profit Margin(%) Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations 33.32 23.27 24.76 32.83 32.83 24.78 24.78 19.58 17.81 17.81 150.53 150.53 10 0.5 33.89 101.7 --
Mar '10
Mar '09
34.02 24.6 25.09 29.18 29.18 26.53 26.53 18.07 20.99 15.96 123.73 123.73
36.28 26.39 27.16 30.9 30.9 21.84 21.84 21.33 19.25 19.18 102.34 102.34
55
Return on Long Term Funds(%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax
19.58
18.65
21.41
Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio 13.43 9.45 13.43 0.62 0.63 0.62 13.05 9.86 13.05 0.59 0.68 0.59 26.19 11.46 26.19 0.55 0.72 0.55
Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition
--117.06
47.66 --
46.55 --
47.39 --
--
1.88
1.32
56
Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio
0.2
0.22
0.38
Adjusted Cash Flow Times Mar '11 Earnings Per Share Book Value 26.81 150.53 Mar '10 25.97 123.73 Mar '09 19.7 102.6
57
Balance Sheet
------------------- in Rs. Cr. -------------------
Mar '10
Mar '09
Mar '08
12 mths
12 mths
12 mths
Sources Of Funds Total Share Capital Equity Share Capital Share Application Money 103.11 103.01 142.07 95.01 95.01 377.41 95.01 95.01 377.41
0.1
Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans Total Debt Total Liabilities
58
Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deferred Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses 3,564.71 2,012.49 1,552.22 263.06 5,435.85 876.34 693.33 13.18 1,582.85 684.4 1.13 2,268.38 0 1,104.09 118.26 1,222.35 1,046.03 0 8,297.16 Total Assets Contingent Liabilities Book Value (Rs) 809.65 438.73 991.33 394.09 810 383.79 3,290.16 1,813.95 1,476.21 128.78 5,712.39 747.6 887.23 36.05 1,670.88 557.7 53.76 2,282.34 0 882.41 96.44 978.85 1,303.49 0 8,620.87 3,111.78 1,680.89 1,430.89 70.73 4,054.17 776.6 760.98 56.19 1,593.77 502.11 40.96 2,136.84 0 791.99 133.48 925.47 1,211.37 0 6,767.16
59
12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses 2,577.99 431.57 347.63 117.12 4,981.85 160.4 4,821.45 -64.69 -3.16 4,753.60
12 mths
12 mths
493.13
463.92
367.72
91.26 0
85.18 0
93.03 0
Total Expenses
4,058.70
4,239.44
3,431.36
60
Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised)
759.59 694.9 334.1 360.8 180.1 0 180.7 4.25 184.95 41.15 283.4 1,480.71 0 51.51 7.95
564.58 624.82 290.64 334.18 165.96 0 168.22 29.23 197.45 60.02 137.43 1,489.82 0 38 4.43
584.76 654.7 204.47 450.23 141.1 0 309.13 41.18 350.31 107.24 243.07 1,194.50 0 54.63 9.28
Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)
61
Mar '10 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) Net Profit Margin(%) Adjusted Net Profit Margin(%) Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds(%) 8.95 438.73 12.01 9.23 9.23 5.79 5.79 7.79 6.27 6 438.73 15.75 11.85 10 5 73.74 468.06 393.52 22.68
Mar '09
Mar '08
11.79 8.22
14.86 11.17
394.09
383.79
7.13
8.75
62
Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio 1.94 0.8 2.47 1.57 1.2 2.14 2.35 0.75 3.04 0.97 1.11 0.8 0.6 0.71 1.54 1.2 0.71 1.04 1.44 0.75 0.5
Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital
2.39
2.04
2.88
63
Profit & Loss Account Ratios Material Cost Composition Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times 20.98 12.82 78.1 86.84 8.05 Mar '10 30.87 13.98 60.1 84.42 16.52 Mar '09 26.29 16.63 62.18 79.39 8.85 Mar '08 13 13.39 16 7.02 6.69 6.48 53.46 56.59 57.44 61 56.87 59.49
27.51 438.73
14.46 394.09
25.58 383.79
64
Bibliography/ Webliography
65