Jindal Stainless Ltd. received a rating upgrade from CARE

Jindal Stainless Ltd. has received a rating upgrade from CARE, to ‘BBB-’ from BB+, reflecting Company’s improved profitability, strengthening balance sheet, and sustained operational progress. Commenting on the report, Managing Director of JSL, Mr Abhyuday Jindal said, “We are encouraged by the improvement in our rating. This development endorses that we are now more than financially and operationally stable, and poised to take our product mix and growth trajectory to the next level. The CARE ratings are a reflection of the inner health of the organization.”

Detailing the key drivers for JSL’s improved ratings, the report reads, ‘The Company has reported improvement in operational and financial performance during Q4FY18 with capacity utilization of 99.86% during Q4FY18 as against 90.95% in similar period previous year. The same has resulted in improved total operating income (TOI) and Profit Before Interest, Leasing, Depreciation and Tax (PBILDT), which increased to Rs. 3,183 crore and Rs. 399 crore respectively in Q4FY18, representing a growth of ~37% and ~22% respectively over similar period previous year. During full year FY18, the Company reported healthy growth in income and profitability with TOI of Rs. 10,803 crore and PBILDT of Rs. 1,299 crore, representing a growth of ~30% and ~18% respectively over FY 17. The Company reported healthy gross cash accruals of Rs. 787 crore during FY 18 which was significantly higher than Rs. 397 crore reported in FY 17.’

The CARE report further acknowledges the inherent strengths of the Company, given its long track record and strong position in the domestic market. ‘The Company has captive thermal power plant, captive ferro-chrome facilities, rolling mill, and downstream value added facilities,’ it states. The above ratings are reflective of JSL’s leading position in the stainless steel space – a diversified product portfolio, strong financial profile, and improving prospects of the sector.

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ITDC continues profit making journey; posts profit of Rs. 27.16 cr in FY 2017-18

India Tourism Development Corporation (ITDC), the public sector undertaking under the aegis of the Ministry of Tourism, posted a significant performance for the financial year 2017-18.  Total income stood at Rs 370.64 cr as compared to Rs. 356.11 cr (As per Ind AS) in last financial year. Revenue from operations stood at Rs. 343.87 cr as compared to Rs. 330.77 cr (As per Ind AS) in the last fiscal. Corporation posted profit before tax (PBT) of Rs. 27.16 cr and profit after tax (PAT) of Rs. 23.62 cr in 2017-18 against Rs. 17.00 cr (As per Ind AS) and Rs. 11.43 cr (As per Ind AS) respectively in the previous year.

The Total Comprehensive income for the financial year 2017-18 is Rs. 19.14 crore as against Rs. 10.62 crore during the previous year.

The company has adopted Ind AS (Indian accounting standards) during the financial year 2017-18. The previous year’s figures have been realigned accordingly.

The results were announced in the Board Meeting of the company held on 30th May at the Group’s flagship hotel, The Ashok, New Delhi.

FY 2017-18 has been a crucial and important year for ITDC, especially in view of the ongoing disinvestment process of some hotels. The profit is result of realignment of activities and several proactive initiatives taken by the organization to improve its productivity and efficiency at the beginning of the year.

Besides posting continuous profit year after year, ITDC has maintained its status of Mini Ratna and its commitment towards the shareholders by announcing consistent dividend for last five consecutive years.

ITDC sustained its profit even after implementation of 3rd Pay Revision as well as increase in minimum wages. Hotel The Ashok & Hotel Samrat, Ashok Travel & Tours and Ashok Events division of ITDC were major contributors to the performance of the organization in FY 2017-18.

Centre to incorporate electronics manufacturing specifics in segments ruled by imports in new National Electronics Policy: MeitY secy

The Centre will hold discussions with the industry on electronics manufacturing related specifics in segments like automotive, defence, medical and power that are currently ruled by imports and the same will be incorporated in the new National Electronics Policy to be out in a couple of months’ time, a top official said at an ASSOCHAM event held in New Delhi today.
 
“It is very important for us to also grow seriously in many other segments where imports are ruling the market, we have huge scope in India for – medical electronics, automotive electronics, power electronics, defence electronics and we are hoping to sit with industry to understand as to what will it take specifically to make it happen in India and that is going to be part of the new national policy on electronics, which we are coming out with,” said Mr Ajay Prakash Sawhney, secretary, Ministry of Electronics and Information Technology (MeitY) at an ASSOCHAM conference on Electricals & Electronics Manufacturing.
 
Mr Sawhney added, “We have had fairly extensive rounds of discussion with the industry, we have taken note of your concerns, opportunities that you have pointed out to us and hopefully in a couple of months we should be coming out with the new national policy on electronics.”
 
He further said that time is ripe for India to position and prepare itself to become more competitive and start building exports and not just for mobile segments. “There are a number of segments where we have grown significantly over the past 3-5 years, in the area of LED lights and products we are fairly competitive today, we have seen scorching pace of growth in that as well.”
 
He also stressed upon the need to position India as not only a manufacturing hub but as a hub for design, innovation and manufacturing. “Our policy will make tremendous effort to help this along.”
 
The secretary added, “As we complete our electronic ecosystem, as we fill that gap, it will be possible to combine our existing strength in design and software with the emerging strength that we are acquiring in the entire ecosystem of electronics.”
 
Mr Sawhney also said “We have significant growth in LCD and LED tvs being assembled and manufactured within the country, we have seen more and more work in the solar panel segment as well, though still the import content is very high but we are making progress in that area.”
 
Noting that India continues to be a huge market for electronics, the MeitY secretary said that demand is mushrooming and growing roughly at around 20 per cent year on year and it is expected to continue this kind of huge growth.
 
Talking about the increasing number of SMT (surface mount technology) lines for PCB (printed circuit board) assembly, Mr Sawhney said that his ministry expects that this year India would be able to attract about 400 SMT lines, marking a very significant increase in number of SMT lines that exist.
 
“Hopefully in a couple of years’ time and we are working hard towards this goal, we would be able to get most of the important sub-assemblies and the basic components also increasingly being manufactured in India, this helps us in value addition,” he said.
 
Mr Sawhney further said that when India had started assembly of mobile phones in 2014-15, there were about 60 million units being assembled with a value of around Rs 19,800 crore. “This moved year-on-year to 115 million in 2015-16, 175 million in 2016-17, 225 million in 2017-18 and now with an overall value of Rs 1.32 lakh crore in a matter of three years.”
 
Urging the industry to start looking at new segments, he said that once the SMT lines, electronics subsystems, camera modules, displays, audio and others come in and become part of Indian ecosystem, they are the same things that go into anything electronic, India would be able to make not just the mobile phones but almost everything confidently.
 
In his address at the ASSOCHAM conference, Union Minister of State Electronics and IT, Mr S.S. Ahluwalia said, “To ensure its survival in today’s competitive world, India needs to compete with other technologically advanced countries like China, Japan, the US and others.”
 
He said that while there is no dearth of talent in India, the government is constantly creating requisite policies and atmosphere to promote electronics manufacturing in the country. “Youth needs to be trained and skilled, certificates merely will not make them employable.”
 
“A conducive business environment, political stability and pro-industry initiatives helps in the overall process of nation building. And, amongst these initiatives one of the key building blocks is manufacturing. Under the aegis of Make in India, the GoI aims to increase the share of the manufacturing sector to the gross domestic product (GDP) to 25 per cent by 2022, from 16 per cent, and to create 100 million new jobs by 2022. We at Appliance and Consumer Electronics (ACE) industry currently are contributing significantly towards this. For instance, for every appliance sold there is three jobs created – installation, service and repair, indicating a widespread scope for skilling and job creation. However, to further build upon the program’s success we need to build an ecosystem of skilled workforce, to ensure zero defect manufacturing across segments to enhance product efficiency”, said Manish Sharma, President and CEO Panasonic India and South Asia and President CEAMA.
 
 
Amid others who addressed the event included, ASSOCHAM president, Mr Sandeep Jajodia and Ms Swati Rangachari, chief of corporate affairs, Sterlite Technologies.

Max Life Insurance records a growth of 31% in the Value of New Business for FY18

Max Life InsuranceCo. Ltd, a leading Indian life insurance company, recorded Individual adjusted first year premium of Rs 3,215 crore achieving growth of 22% in the Financial Year 2017-18 (FY18). During this period the Gross Written Premium of the company grew by 16% to Rs 12,501 crore, while the renewal premium recorded growth of 15% to Rs 8,152 crore. The Company recorded shareholder profit (Post Tax) of Rs 528 crore.

Max Life Insurance Co. Ltd. performed well on other key business parameters for FY18:

  • New Business Premium (Individual + Group) at Rs. 4,349 crore, recorded growth of 19%while retaining private market share at 9%.
  • Solvency Ratio of263%,significantly higher than the regulatory requirement of 150%, indicating the Company’s strong and stable financial position.
  • Conservation ratio was at 90%as compared to 89% in the previous year
  • Claims paid ratio grew to 98.26% in FY18 from 97.81% in FY17

Commenting on the performance of the company, Mr. Rajesh Sud, Executive Vice Chairman & Managing Director, Max Life Insurance said, “I am delighted to share yet another year of strong financial performance of the company inFY18. Max Life Insurance actively leveraged growing household interest in financial savings and digitisation in India. During the year Max Life Insurance not only recorded increase in case size but also covered more lives than in past years which resulted in a robust growth in new business. Max Life Insurance continued its leadership position in online term plans as well as claims management. The increase in embedded value reflects high quality of our business. Our strong business performance has resulted in superior returns for both our policyholders in form of bonus and investment return in ULIPs fund and shareholders in form of dividend. At Max Life, we believe that engaged employees create happy customers which leads to great shareholder outcomes.”

The VNB represents the value added to the EV due to the new business written by the Company during the year. For FY18, the VNB was Rs 656 Cr, calculated at actual costs, resulting into new business margin of 20.2%.

**Embedded Value post final shareholder dividend

Key Business Drivers Unit Year Ended Y-o-Y Growth
Mar 18 Mar 17
a)  Individual Adjusted Premium Rs. cr. 3,215 2,639 22%
b)  Gross Written Premium Income Rs. cr. 12,501 10,780 16%
New Business Premium (Individual + Group) Rs. cr. 4,349 3,666 19%
      Renewal Premium Rs. cr. 8,152 7,114 15%
c) Expense to Gross Premium Ratio Rs. cr. 14.8% 12.9% 190 bps
d)  Shareholder Profit (Post Tax) Rs. cr. 528 660 -20%
e)   Share Capital including reserves and surplus Rs. cr. 2,689 2,506 7%
f)  Conservation Ratio % 89.6% 88.6% 100 bps
g)  Number of Agents (Agency) Nos. 54,791 54,283 1%
h)  Individual Policies in Force No. Lacs 40.8 39.1 4%
j)  Sum Insured in Force Rs. cr. 5,11,541 3,77,572 35%
k) Assets Under Management Rs. cr. 52,237 44,370 18%
l) Embedded Value Rs cr. 7,509 6,590 20.6%
m) Operating return on EV (ROEV) % 20.6% 19.9% 70 bps
n) Margin % 20.2% 18.8% 140 bps

 

FY 2017-18 (April 2017 – March 2018) compared with FY 2016-17 (April 2016 – March 2017)

Revenue

The Gross Written Premium for FY18 increased by 16% to Rs.12,501 crore with 19% increase in new business premium to Rs. 4,349 crore and the renewal premium recording a growth of 15% to Rs.8,152 crore. The adjusted individual first year premium increased by 22% to Rs. 3,215 crore and retained market share of 9% amongst the private players. A growth of 4% in the number of policies has been recorded, taking it to 40.8 lakhs for FY18, in comparison to 39.1 lakhs in FY17.

Cost Management

The Company continued to remain focused on providing greater value to its policyholders through improvement in efficiency. The operating expenses (policyholders) to grosspremium ratio improved from 14.8% in FY17 to 12.9% in FY18 and the cost (Commission plus policyholders operating expenses) to gross premium ratio improved from 23.5% FY17 to 20% in FY18.

Shareholders’ Profit After Tax (PAT)

During the FY 2017-18, Max Life Insurance, recorded a shareholders’ Net Profit After Tax of Rs. 528 crore, compared to Rs 660 Cr (current year’s profit is less due to non-repeatable high investment income recorded in FY17).

Final shareholders’ dividend (net of Dividend Distribution Tax) of Rs.163.10 crore has been proposed by the Board of Directors, which takes the total dividend distribution to Rs. 326.20 crore translating to 17% of the face value of each share.

Policyholder Bonus

Considering the surplus that arose over the financial year in the participating fund, Max Life Insurance announced policyholder bonus. The total bonus estimated to be paid out in the 12 months in financial year 2018– 19 is Rs. 1084 crore, an increase of Rs. 230 crore from the previous year figure of Rs. 854 crore.

Assets Under Management

The Company’s Assets under Management (AUM) of Rs. 52,237 crore recorded a growth of 18% over the last year. As on March 31, 2018 Rs 35,139 of the AUM was in controlled fund and Rs 17,098 in ULIP funds.

 

Embedded Value

The Embedded Value(EV), post final shareholder dividend, as at 31st March 2018 is Rs 7,509 Cr. The operating return on EV of 20.6% is mainly driven by new business growth and healthy experience on persistency & mortality.

Service Parameters

Customer retention is the best proof of not just selling right product solutions but also the quality of service a company provides to its customers which leads to better engagement. During FY18, the renewal premium grew by 15% to Rs. 8,152 crore and Max Life Insurance continued its leadership in conservation ratio at 89.6%.The 13th Month persistency has been 80.49% with an improvement of 9 bps. The 61st month persistency has been 52.5% this year.

Payment of death claim is the biggest moment of truth in a life insurance contract.Max Life continued its leadership journey on that front with Claim Paid Ratio improving to 98.26%. The company paid 10,152 death claims worth Rs. 353 crore during the Financial Year 2017-18. Since inception, Max Life Insurance has paid Rs. 2,223 crore towards death claim to 81,253 families.  Customer Experience Index, a cumulative index of customer experience across key policyholder transactions, witnessed an increase in Top 2 box score to 81% with 5 out of 10 touchpoints having score of about 80% which is in line with global standard results. The surrender to gross written premium has also improved from 21% in FY17 to 20% in FY18. In addition, the Customer Confidence Index improved to 80% due to significant increase in Treating Customer Fairly culture to 91%.

“Sustained Structural Reforms having a Ground-level Impact”: CII

There are now strong indications that the economy is set on a recovery path. “The impact of sustained structural reforms is now being felt on the ground as a mammoth economy is turning around,” said Mr. Rakesh Bharti Mittal, President, Confederation of Indian Industry (CII). “Businesses across several key sectors are experiencing firm growth in sales and orders, indicating better capacity utilization and higher investment expectations,” he added.

According to CII, strong rural consumption is reflected in sectors such as consumer non-durables, two-wheelers and tractors. Prudent macroeconomic management has encouraged growth and investments for capacity expansion are being planned as demand conditions recover.

The Government has avoided slippage in the fiscal deficit despite the rise in oil prices. Inflation too has remained under control to the extent possible even as cost of oil is going up.

The capital goods sector is showing steady improvement and order books are filling up. Exports, too, are poised to grow at a faster pace in the current fiscal year, which started on a good note, noted CII.

“The feedback from businesses is that the rebound in the economy is now firmly entrenched and the positive impact of the actions taken by the government, including major structural reforms, are being felt on the ground,” added Mr Mittal.

The CII statement pointed to eight key areas where reform measures have unlocked growth forces.

First, introduction of the Goods and Services Tax (GST), India’s biggest indirect tax reform, has been relatively smooth due to quick response in addressing roadblocks. Businesses have now settled down after the initial disruptions. With the elimination of interstate barriers and implementation of e-way bill system, transport and logistics have become more competitive and less expensive. The impact of this seminal tax is now being felt in formalization of enterprises, wider tax base and higher tax revenues, said CII.

Second, the strong emphasis on ease of doing business, where India has improved 42 ranks has now impact on the ground. Starting a business, paying taxes, trade facilitation and obtaining permits are being emphatically taken up. CII highlighted that with active participation of state governments, a facilitative investment climate is evolving.

Third, Industry believes that the Insolvency and Bankruptcy Code will transform the business environment and make it easier for failing enterprises to exit unviable businesses. It is also helping address the non-performing assets problem, reducing job losses, and will have positive long-term ramifications, stated CII.

Fourth, the foreign direct investment (FDI) limits have been enhanced in sectors such as insurance, real estate and defence manufacturing, along with facilitative regulations. FDI inflows increased to a record $60 billion in 2016-17 and a similar amount is expected in 2017-18.

Fifth, the government has stepped up infrastructure spending despite budget constraints with visible outcomes on the ground. The pace of road building has steadily picked up to 21.5 km per day during April-January 2017-18 from 18.3 km per day in the same period of the previous year.

CII welcomed the milestone achievement of electrification of all 6 lakh villages in the country and said that this will contribute greatly to inclusive development.

UDAN is also a major achievement, stated CII, adding that this move will connect India and offer new opportunities for growth in the hinterland. Indian aviation has witnessed one of the fastest growth phases over the last three years and India has become the third-largest market globally in terms of domestic traffic.

Sixth, notable initiatives have been taken to strengthen micro, small and medium enterprises (MSME), added the CII press release. Measures such as lowering corporate income tax rates to 25% for 99% of enterprises, redefinition of MSME, addressing delayed payments, and differential treatment for MSME non-performing assets have been announced. The MUDRA scheme has helped millions of small entrepreneurs obtain loans and generated millions of jobs.

Seventh, specific initiatives in agriculture have helped improve rural incomes. These include upgradation of rural marketing infrastructure through Grameen agricultural markets (GrAM), the scaling up of electronic National Agriculture Market (e-NAM), tax benefits to Farmer Producer Organisations, and model act for land leasing.

Eighth, a major step has been taken to introduce fixed term employment across sectors which will impart flexibility to the use of labour. Once companies start using this provision, there should be a rise in employment levels along with economic growth.

With several major development campaigns such as Make in India, Digital India, Swachh Bharat, Clean Energy and others gaining traction as well as recovery in the global economy and expectations of a normal monsoon, CII expects growth to record 7.3 – 7.7% in 2018-19.

Large cut in Odisha mining, post court ruling to pay hefty penalty of Rs 17,576 crore: ASSOCHAM

 Iron ore mining has witnessed a sizeable decline in Odisha , following the Supreme Court’s direction to the miners  for payment of compensation of Rs 17,576 crore for exceeding  output beyond the quantum fixed under the environmental clearances , the ASSOCHAM has said, seeking Centre’s immediate intervention to resolve the issue in consultation with the state government , and cautioning that thousands of jobs are at stake.
 
“The ASSOCHAM would like to request for your kind intervention to take up the  matter with State Government of Odisha and impress upon them to take correct legal position on the concern of miners in Odisha,” the chamber said in its letter to the Union Mines Ministry.
 
In February 2014 a writ petition was filed in the Supreme Court, alleging illegal mining activities in Odisha. The apex court had directed in May, 2014 the Odisha Government  to suspend  operations of 102 mining lessees with a  liberty given to the lessees to apply for resumption of mining operations by providing all the statutory clearances.
 
In its August 2, 2017 judgement, the Supreme Court has directed the defaulting Iron Ore Mining lease holders to deposit the compensation for production of minerals in excess of environmental clearance . This compensation adds to Rs. 17,575.99 crore, beyond the paying capacity of the miners.
 
“Post the judgment of August 2, 2017, there has been a visible decline in the production of iron ore as the mining operations of a lot of lessees who were unable to pay the compensation by 31st December, 2017 were suspended. The mining lessees have been struggling hard to pay the  compensation amount and the closing down of mining operations have further increased the troubles of the mining lease holders,” the ASSOCHAM letter to the Mines ministry stated.
 
It said, while most of the operating mines have deposited the compensation, the mine owners whose mines were closed back in 2014, four years ago, have been struggling to arrange the required way to pay the compensation. The banks are not willing to lend the credit making the situation for these lease holders even worse.
 
Due to closure of mining operations, there has been a sharp decline in the production of mineral,thus, escalating the prices of iron ore. Since August, 2017, prices of fines (+) 62.5% Fe went up from Rs.1127/tonne to Rs.2050/tonne and those of Lump from Rs.2348/tonne to Rs.3915/tonne. This exorbitant hike in prices has severely the Industries making them globally uncompetitive.
 
The chamber said the mining industry provides over direct employment to 60,000 persons and indirect employment to over one  lakh persons in ancillary activities like transportation, human resourcing, marketing & various other downstream activities in the State. The industry has also developed the surrounding areas, built schools, colleges, hospitals etc. for the local populace.
 
“It is this very mining industry that provided lucrative opportunities to various downstream activities, thus generating employment and stimulating development and economic growth. However, in light of the recent developments stated herein, the people of Odisha have become the major sufferers due to unemployment and loss of opportunities in the allied downstream activities.”
 
As much as 42 per cent of the employment in mining sector is from Iron & Manganese mines alone. Odisha is among the richest mineral bearing states of the country and the mineral reserves here constitute 33% Iron ore, 24% coal, 59% Bauxite and 98% Chromite of India’s total deposits and therefore, it contributes to a large part of raw materials for the mineral based industry not in only in Odisha but in the entire country.

Hero Cycles is exploring investment opportunities and synergies with companies in The Netherlands

In order to explore investment opportunities and synergies with businesses in the world’s most cycle friendly nation, Hero Cycles’ CMD,Mr. Pankaj M Munjal, met the visiting Prime Minister of the Netherlands, Mr. Mark Rutte and convened to discuss their mutual love for cycling over dinner. Netherlands is universally acclaimed for its ubiquitous bicycling culture which forms an integral part of the Smart Cities Mission of the Ministry of Housing and Urban Affairs of the Indian Government.

Mr. Pankaj M Munjal could be seen cycling with Dutch Deputy PM, Ms. Kajsa Ollongren and Smt. Supriya  Sule, Member of Parliament from Baramati in Maharashtra, as they discussed mutual plans for environment-friendly solutions to the urban problem of traffic congestion. The Netherlands also boasts excellent cycling infrastructure that promotes road safety and incentives for bicycle users.

Mr. Mark Rutte was accompanied by his Minister for Foreign Trade and Development Cooperation, among others. About 231 delegates consisting of prominent Dutch businessmen and representing 130 well known companies are part of the Dutch visit. Among the various industries represented by the commercial initiative are logistics and smart cities – both of which consider cycling an integral instrument of provisions for last mile connectivity. Also accompanying the delegation is Ms. Kajsa Ollongren, Deputy Prime Minister, is the designated Deputy to the Official Head of Government in the Netherlands (the Prime Minister).

“The Netherlands is said to have transformed commuting modes from motorized transport to cycling after witnessing alarming increases in road accidents due to motor vehicle congestion on the roads. It has the best cycling infrastructure and urban planning optimized for moving people and not vehicles. By learning from business models in the Netherlands, we hope to evolve to the same effectiveness in terms of solving the problems of road users for daily commute. At the same time, as the world’s largest single cycle manufacturer, we can contribute designs with our years of experience facing unique challenges in providing for the diverse geographies and uneven terrains of the Indian hinterland”, says Mr. Pankaj M Munjal, CMD, Hero Cycles.

Hero Cycles has invested in a high end design unit in Manchester that is associated with designs of upcoming hi-tech bikes, and is in a unique position to leverage its reach in mainland Europe with its Insync brand, launched from the UK.

The Netherlands is the leading nation in terms of a bicycling culture with the BBC reporting cycling use for commute reaching 70% in cities such as Amsterdam. Every household is said to have at least two bicycles. Roads often have separate, dedicated cycle lanes and even separate crossings and traffic lights. Because cycle lanes lead to places one can’t approach by car, road users are incentivized to travel by bicycle. There are special signposts and traffic signals exclusively meant for the cycle user. Even Prime Minister, Mr. Mark Rutte and other members of the Dutch government have often been photographed riding bicycles to work.