hindalco eq research - sa

8/4/2019 Hindalco Eq Research - SA

1/16

MANAGEMENT TEAM

Hindalcos management team consists of experienced individuals with strongcredentials as mentioned below.

Board of Directors Mr. Kumar Mangalam Birla, ChairmanMrs. Rajashree Birla

Mr. C. M. Maniar

Mr. S. S. KothariMr. M. M. Bhagat

Mr. K. N. Bhandari

Mr. A. K. Agarwala

Mr. N. J. Jhaveri Mr. Ram Charan

Mr. Jagdish Khattar

Mr. D. Bhattacharya, Managing Director

Exec President and CFO Mr. S. Talukdar

Exec President Corporate Mr. R. Ram

Projects and Procurement

Company Secretary Mr. Anil Malik


2/16

Indian Subsidiaries

IndianAluminium

Company, Ltd.(currently

awaiting courtorder to mergewith Hindalco)

UtkalAlumina

InternationalLtd. (100%)

BiharCaustic &

ChemicalsLtd.

(54.65%)

DahejHarbour &

InfrastructureLtd. (100%)

Australian Subsidiaries

Birla Maroochydore Pty. Ltd. (50%)

Aditya Birla Minerals Ltd. (51%) Birla Resources Pty. Ltd. (100%)

Birla (Nifty) Pty. Ltd. (100%) Birla Mt Gordon Pty. Ltd. (100%)

HindalcoAlmex

AerospaceLimited(70%)

Canadian Subsidiary

TubedCoal

Limited(60%)

East CoastBauxiteMining

Company

Pvt. Ltd(74%)

Mahan Coal Limited (50%)

A joint venture with the Essar Power (MP) Limited.The two JV partners have been jointly allocated a

coal block in Madhya Pradesh and so a JV is formedto mine the coal for offtake by parent companies

An associate company, primarily aknowledge resource for the Aditya Birla

Group, where some of the major Groupcompanies, which are users of technologyhave a stake

Aditya Birla Science & Technology

Company Limited (49%)

Joint Venture and Associates

HINDALCOHINDALCOS COMPANY STRUCTURES COMPANY STRUCTURE

Novelis Inc. (100%)


3/16

DISTRIBUTION OF SHAREHOLDING

AS ON 30 JUNE 2011

l

- Sh N .

l

h

A %

l .

l

- h

A %

l N .

Sh

h

.

Held by Promoter/ Promoter group 0 0 0

Held by public 0 0 0

T

l 0 0 0

O

g

v

bl

N

.

O

g

A %

l

.

g v

bl

A %

l

h

h

,

g

ll v

h v

Held by Public 0 0 0

T

l 0 0 0

W

N .

w

A %

l

w

A %

l

h

h

g

ll

v

w


Held by public 0 0 0

T

l 0 0 0

T

l

-

l

h

g

ll

v

w

v

bl


1,914,419,297


4/16

Category

code

Category of shareholder Number of

shareholders

Total number of

shares

Number of shares held in

dematerialised form

(I) (II) (III) (IV) (V)

(A) Shareholding of promoter and promoter

group2

1 Indian

(a) Individuals/ Hindu undivided family 6 2,398,696 2,398,696(b) Central government / State government(s) - - -

(c) Bodies corporate 14 595,082,362 595,082,362

(d) Financial institutions/ banks - - -

(e) Any others (specify) - Trust 1 16,316,130 16,316,130

(e-i)

(e-ii)

Sub total (A)(1) 21 613,797,188 613,797,188

2 Foreign

a Individuals (non-resident individuals/foreign

individuals)

- - -

b Bodies corporate - - -

c Institutions - - -

d Any others (specify) - - -

Sub total(A)(2) - - -

Total shareholding of promoter and

promoter group (A)=(A)(1)+(A)(2)

21 613,797,188 613,797,188

(B) Public shareholding3

1 Institutions(a) Mutual funds/ UTI 195 44,173,858 44,144,928

(b) Financial institutions / banks 90 6,253,198 6,162,928

(c) Central government/ State government(s) 1 287,480

(d) Venture capital funds

(e) Insurance companies 24 194,991,393 194,985,173

(f) Foreign institutional investors 544 590,235,325 590,207,105

(g) Foreign venture capital investors - -

(h) Any other (specify)

(h-i)

(h-ii)Sub total (B)(1) 854 835,941,254 835,500,134


5/16

Category

code

Category of shareholder Number of

shareholders

Total number of

shares

Number of shares held in

dematerialised form

(I) (II) (III) (IV) (V)

B 2 Non-institutions

(a) Bodies cor

orate 3,698 94,453,

88 93,596,5

(b) Individuals

I Individuals 323,211 134,458,656 116,753,546

i. Individual shareholders holdingnominal share

capital up to Rs 1 lakh

II ii. Individual shareholders holdingnominal share

capital in excess ofRs. 1 lakh

4 9,331,168 8,253,727

(c ) Non-resident Indians 7,458 9,964,5 8 6,978,977

(c-i ) Foreignbodies corporate 11 34,592,471 2, 36,761

(c-ii ) Foreignnationals -Anyother (specify)

a Shares in transit 551 3,426, 66 3,426, 66

b Educational trusts

Trusts 4 964,433 964,433

Sub total (B)(2) 335,

287,!

,390 232,010,010

(B) Total public shareholding (B)=

(B)(1)+(B)(2)

335,863 1,123,131,644 1,067,510,144

Total (A)+(B) 335,884 1,736,928,832 1,681,307,332

(C) Shares heldby custodians andagainst which

depository receipts have been issued

1 177,49 ,465 177,462,635

1"

romoter and"

romoter Group* 14,542,3 9 14,542,3 9

2"

ublic 1 162,948,156 162,92 ,326

Grand total (A)+(B)+(C) 335,885 1,914,419,297 1,858,769,967

Note: In case ofshares held custodianofDepository Receipts, there is onlyone shareholder

i.e. MORGAN GUARANTY TRUST COMPANYOFNEWYORK


6/16

SHAREHOLDING OF PERSONS BELONGING TO THE CATEGORY

Promoters a # d promoters group Total s $ ares

$ eld

Perce# t(%) S$ ares pledged or

ot$ erwisee # cum% ered

IG&

&

oldings ' vt Ltd 228963487 11.96 (TurquoiseInvestment and Finance ' Ltd 99( 12468 5.17 (

Trapti Trading & Investments ' vt Ltd 93( 63124 4.86 (

GrasimIndustries Ltd 54542475 2.85 (AdityaBirlaNuvo Limited 335( 6337 1.75 (

' ilaniInvestment & Ind. Corp. Ltd. 29185398 1.52 (

) mang Comm. Co. Ltd 26442761 1.38 0

BirlaInstituteofTechnologyandScience 21,583,090 1.13 0Trustee holdingsharesunder theschemeof

merger of & IL 0 IGCL 0 IGFL onbehalfof

& indalco

16,316,130 0.85 0

Birla Group & oldings ' rivate Limited 6,731,467 0.35 01 umar MangalamBirla 865,740 0.05 0

ManavInvestment & Trading Co. Ltd. 672,571 0.04 0

Aditya Vikram Kumar MangalamBirla & uf 648,632 0.03 0

& eritage & ousing Finance Limited 634,591 0.03 0

RajashreeBirla 612,470 0.03 0

TGSInvestment and Trade ' rivate Limited 585,249 0.03 0MangalamServices Limited 153,008 0.01 0

VasavadattaBajaj 121,319 0.01 0NeerjaBirla 114,640 0.01 0

Kumar MangalamBirla F & NG ofAnanyashree

Birla

35,895 0 0

Global & oldings ' rivate Limited 6,336 0 0

Total 613,797,188 32.06 0


7/16

SHAREHOLDING OF PERSONS CATEGORY ISE

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8/16

ANALYSIS OF MD&A

FY11 witnessed a strong pricing environment for commoditiesdriven by continued global economic recovery

The flip side was a sharp rally in crude and energy prices giving

rise to incessant cost pressures

Standalone basic and diluted Earnings er Share were at Rs.11.2

per share FY11 as compared with Rs. 1 . in FY1 . The

consolidated E S was Rs. 12. .


9/16

BUSINESS HIGHLIGHTS

Consolidated Revenue of 72, 7 Crores (USD 15.9 billion)

EBITDA of $1.9 billion

Growth of 19 % year on year

BIT - Rs. ,433 crore as against Rs. 1 , 69 crore in FY1

This included Rs. 2,736 crore (USD 57 million) of unrealizedgains on derivatives, as against unrealised loss of Rs. 291crore

(USD 64 million) in FY11.

Adjusted consolidated EBITDA rose by 25% (31% in Dollar

terms) compared to FY1


10/16

Aluminium Business contributed Rs. 56, 4 crore (up 17%

over last year)

Aluminium EBIT stoodat Rs. 4,469 crore compared to Rs.

5,99 crore in FY1 .

Copper Business revenue was higher at Rs. 15, 7 crore, a riseof 26% from Rs 12,573 crore in FY1

Copper Business EBIT Rs. 1, 2 crore is % higher over last

year

Standalone net sales at Rs. 23, 59 crore grew by 22%.

Standalone EBITDA for FY11 Rs. 3,5 2 crore against Rs. 3,21

crore in FY1


11/16

BUSINESS OUTLOOK

Company has demonstrated the strength of its business model

Companys strategy to achieve global size and scale through the

acquisition of Novelis

Companys ongoing brownfield and Greenfield expansion plans

are progressing well notwithstanding the social, geo-political and

other macroeconomic challenges.


12/16

RISK MANAGEMENT

In addition to the risk and currency fluctuation inherent in its operations,

the company has got significant exposure to commodity prices.

Hindalcos financial performance is significantly impacted by fluctuations in

the prices of Aluminium, Alumina exchange rates and interest rates.

The Company takes a very structured approach to the identification andquantification of each such risk and has a comprehensive risk management

policy.

Clearly defined policies and management controls govern all risk

management activities. Transactions in financial instruments for which thereis no underlying exposure to the company are prohibited.

All of the commodity, interest rate & foreign currency contracts are used to

mitigate uncertainty and volatility & to cover underlying exposures.


13/16

COMMODITY PRICE RISK

Companys commodity hedging activities can be divided into following:

Timin mismatc ris : This is the price risk arising due to timing

mismatch of purchases of copper concentrate, which is priced based

on copper, gold and silver content and sale of copper products, gold and

silver. Company use various spread risk management tools to hedge this risk.

A solute price ris :We have price risk on aluminium that we produce.The company use various derivative tools for hedging this risk from time

to time.


14/16

FOREIGN CURRENCY EXCHANGE RISK

Exchange rate movements, particularly between INR and USD have animpact on Hindalcos cost and revenues. Since the company is long in USD(inflow greater than outflow), the company will benefit from weakening of

the INR against USD and conversely, is disadvantaged if the rupeeappreciates.

In order to hedge this risk, the Company uses various tools such as foreign

currency borrowings, currency forward and option contracts.


15/16

INTEREST RATE RISK

The company uses interest rate swaps to help maintain a strategic balancebetween fixed and floating-rate debts and to manage overall financing

costs. Most of the long term loans are at fixed rate currently.


16/16

PROJECT EXECUTION RISK

The company is in the process of setting up 4 greenfield projects in difficultterrain. The project execution is contingent upon several external factors

including but not limited to land acquisition, project management skills,

timely delivery of equipments, regulatory approvals, changes in government

policies, inflationary factors etc.

Any delay or change in these activities could result in change in

implementation schedule and affect the financial performance of the

company. The company is continuously monitoring the progress to ensure

that the implementation schedules are adhered.

hindalco eq research - sa

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