Bpl Registers Economic Value-Added Of Rs 13 Crore

India's largest consumer electronics and white goods major, BPL Ltd has registered an EVA (economic value-added) of Rs 12.94 crore during 2000-01, compared with Rs 21.36 crore during 1999-2000.

The EVA has been constructed by the New York-based consulting firm, Stern Stewart company. It shows the business profits left after adjusting for the cost of servicing the capital employed in the business.

If the EVA is positive, the business has generated wealth in excess of what is expected by the shareholders and vice-versa. If the figure for a particular year drops below zero, it indicates that the expectation of the shareholders was not met during the period under review.

 

The EVA of Rs 12.94 crore in 2000-01 indicates that the company was able to meet the expectations of the shareholders. The weighted average cost of capital fell to 9.54 per cent in 2000-01 from 13.29 per cent in 1999-2000, the current annual report of BPL Ltd has said.

The net profit per person during 2001 was Rs 2.68 lakh compared with Rs 3.15 lakh during 2000. Sales per person was Rs 56 lakh during 2001 compared with Rs 59 lakh per person during 2000. More than 50 per cent of employees are below the age of 30 years. The employee strength of BPL Ltd reduced to 3,030 during 2001 compared with 3,404 during 2000.

The report said the gross value added which reflects the difference between corporate output (turnover) and manufacturing costs, for 2000-01 was Rs 225.5 crore compared with Rs 214.86 crore for the previous year. The value-added reflects the wealth created by the company through its manufacturing process.

The net value-added for the company for 2000-01 was Rs 193.6 crore for 2000-01 compared with Rs 214.86 crore for 1999-2000. The net value added emerges after deducting depreciation.

Borrowings rise to Rs 753 crore

The total borrowings of the company rose to Rs 752.90 crore during 2000-01 compared with Rs 486.46 crore in 1999-2000.

The total interest paid by BPL in 2000-01 was Rs 51.89 crore, higher by 7 per cent compared with Rs 48.48 crore in 1999-2000. Interest costs ranged between 9.52 per cent to 19.5 per cent for different borrowings over varying tenures.

The debt equity ratio of the company increased to 0.87 in 2000-01 compared with 0.50 in 1999-2000. The increase in debt equity is primarily on account of the loans availed during the end of the financial year, 2000-01.

BPL registered an ROCE of 9.88 per cent compared with 15.72 per cent during the previous year. The capital employed increased to Rs 1,346 crore from Rs 990 crore. This was primarily on account of the increase in working capital to Rs 671 crore from Rs 413 crore.

The report said the company is focussing on reducing money deployed in working capital. The operating profit margins of the company rose to 10.20 per cent in 2000-01 compared with 9.60 per cent during the previous year.

The improvement in margins is on account of the company's ability to control raw material costs.

The report said BPL is on target with its scheduled restructuring exercise. it has streamlined itself to centre on four business areas: entertainment electronics, home appliances, soft energy and health care.

With regard to its subsidiaries, through acquisition of 2 crore equity shares of Rs 10 each in BPL Soft Energy Systems Ltd, BPL Ltd has become its holding company.

25% payout, Rs 18 cr outflow

The board of directors has recommended a dividend of 25 per cent of the paid up equity share and a dividend of 12 per cent on preferential share capital of the company. This will entail on outflow of Rs 6.925 crore.

towards dividend on equity shares and outflow of Rs 8.423 crore towards dividend on preference shares. The total payout including the dividend tax would be Rs 17.94 crore.

The paid up capital of the company has increased with the allotment of 20,00,000 -- 9.65 per cent and 20,00,000 -- 9.25 per cent cumulative redeemable preference shares of Rs 100 each aggregating Rs 40,00,00,000.

A total of 12 per cent cumulative redeemable preference shares aggregating Rs 8.83 crore, have been redeemed during the year under review. An additional amount of Rs 8.33 crore has been redeemed as on date, as per the terms of redemption.