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Aditya Birla Fashion & Retail Ltd.

BSE: 535755 Sector: Industrials
NSE: ABFRL ISIN Code: INE647O01011
BSE 00:00 | 16 Jun 203.45 -1.20
(-0.59%)
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205.80

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205.80

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202.00

NSE 00:00 | 16 Jun 203.30 -1.20
(-0.59%)
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204.95

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OPEN 205.80
PREVIOUS CLOSE 204.65
VOLUME 112050
52-Week high 223.55
52-Week low 111.80
P/E
Mkt Cap.(Rs cr) 17,245
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 205.80
CLOSE 204.65
VOLUME 112050
52-Week high 223.55
52-Week low 111.80
P/E
Mkt Cap.(Rs cr) 17,245
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Aditya Birla Fashion & Retail Ltd. (ABFRL) - Chairman Speech

Company chairman speech

oss the country this year. All of theseinitiatives

• believe will help us expand our network and strengthen consumer facingbusinesses.

Further strengthening our global presence remains a key focus area of your Company. Toattain and sustain on international edge our business presence is more than in 42countries for which we strive to build platform for new and existing buyers by providingcompetitive and innovative products. We intend to leverage our healthy businessrelationships and engage experienced local representatives to grow our overseas saleschannels.

Business Outlook

While the current scenario is challenging the long-term market dynamics appear to beattractive. Government's strong thrust on installation of smart meters across the countryis a major step in the right direction and will open tremendous opportunities for us. Weare already witnessing huge in_ux of enquiries and expect more tenders to be floated soon.Moreover the liquidity injection for discoms will help them deal with the financialdifficulties caused by the pandemic and support demand for smart meters over themedium-to-long term. We are well placed in this segment with our comprehensive productsportfolio including prepaid meters and software communication driven meters and strongprequalification credentials.

The government is consistently placing strong thrust on making India self-reliant withnumerous policy reforms such as promoting indigenous manufacturing infrastructuredevelopment rural electrification and augmenting digital connectivity. Under theNational Infrastructure Pipeline Rs 102 trillion has been earmarked for infrastructureover the next five years. These initiatives along with favourable structural drivers likerapid urbanisation rising incomes and increasing consumer awareness will drive demandfor our products.

Overall the social and economic implications of the pandemic are going to be felt fora long time. Against this backdrop we remain agile and responsive to capture the evolvingbusiness trends. Our focus is on enhancing our revenues and profitability while seizingthe enormous opportunities to drive sustainable growth.

Conclusion

On behalf of the Board I would like to thank all our esteemed stakeholders for theirimmense faith and trust reposed in us. It is a matter of pride for us to partner India'sjourney towards self-reliance with our robust manufacturing marketing and manpower.Together I am confident that we will sail through these testing times and emerge as astronger organisation.

Warm Regards
Lalit Seth
Chairman

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Dear Stake holders

It is my honor as the Chairman of M/s. R & B Denims Limited to beentitled to present our Annual Report for the Financial Year 2019-2020. This year we marka decade to the foundation of our Company.

The corona crisis is the most disruptive event in modern human history.The resultant economic crisis has compounded the global community's hardships. However Ihave no doubt India and the world will achieve faster progress greater prosperity and anew quality of development post the Covid crisis.

This financial year continues our record of an unchanging progress forthe company and the company has recorded a Profit after Tax (PAT) of Rs. 329.02 Lakhs.

India being the 2nd largest manufacturer of the Denim fabricin the world has performed remarkably in the Indian Textile Industry. Interestinglytextile exports jumped by 9% to US$ 329536 mn for FY 2018-19 as compared to US$ 303376 mnfor FY 2017-18. Denim is exported in huge quantities from India and has been the fastestgrowing apparel fabric segments being one of the most versatile fabrics with multipleapplications in everyday use.

As per ICRA note India continues to experience headwinds in the formof intense competitive pressures from nations having a cost advantage over India whichseem to be constraining the overall momentum- of the apparel export sector of India. As aresult India's apparel exports in Q3 FY-2019 remained lower than the averagequarterly exports during the past five years due to amid downward revision in exportincentives under the GST regime. This year the Indian economy has continued its journey ofgrowth and the key demand driver being its growing population of young and aspiringentrepreneurs and the platform provided by the Indian Government in the form of Start-UpIndia and all the related subsidies.

The Company provides its utmost attention towards the sustainabilityand protection of the environment and therefore the entire functioning of the plant isplanned in such a manner that causes the least or no harm to the purity and beauty of ourecosystem. The Company also makes sure that it complies with all its official obligationsrelating to the environmental aspects.

The company understands the necessity of safety and welfare among allits employees from top to low management and has taken due care of the same for all itsworkers and other members. The company has made sure that its workers are provided withall the necessary equipment to promote the importance of safety among its skilled as wellas unskilled labors and also makes sure that proper lighting and ventilation facilitiesand congestion free places and all the required amenities for improving the workenvironment are available without any discomfort experienced by them. We are alsoconscious about the current situation caused due to the pandemic COIVD -19 and have takenall the safety measures prescribed by the World Health Organization and our IndianGovernment to ensure good health and safety of ourselves and our employees.

The textile industry is going through multiple changes from differentdimensions which are changing global and regulatory regime as well as technologicaldisruptions and there is no stopping to the increasing levels of competition. The companyis diligently striving to provide complete denim solutions by enrooting new product linesand gaining a deep understanding of consumer preferences through every passing year.

We at the Company believe that industry is a beaming industry and theincreasing consumption degree will show a smoother growth curve in the coming years.

I would like to thank the Central and State Governments shareholdersinvestors lenders suppliers and customers for their consistent and resolute support. Ithank all my colleagues on the Board for their oversight in this crucial phase of ourgrowth their support and immense encouragement. I have special words to acknowledge thecollective efforts of the entire R & B Denims team working tirelessly to create andsustain this growing enterprise.

Thank you for your support
Yours Faithfully
Sd/-
Rajkumar Mangilal Borana
Chairman & Managing Director

S

Dear Shareholders

It gives me immense pleasure to present you the 32nd Annual Report on the performanceof your company for the FY 2019 -20.

You will be glad to know that your company performed well for the FY 2019-20 and it hassuccessfully migrated trading of its equity shares of the Company from NSE Emerge Platformto the Main Board of NSE Ltd on June 24 2020.

Your Company's standalone turnover is Rs.191.83 Crores in FY 2019-2020 which showssustainability and stable growth as compared to previous year. Net Profit of the Companystands at Rs. 3.78 Crores in FY 2019-20 compared to Rs. 5.83 Crores in FY 2018-19 whichshows decline in profits as some of the projects turns out to be less profitable due tounhealthy competition in the market Increase in Fixed Cost i.e Deputees Salaries etc.

On Consolidated basis The Company has achieved turnover of Rs. 218.64 Cr. and Netprofit of Rs. 7.17 Cr. during the FY. 2019 - 20.

The Company has been rated as SME-1 by CRISIL for ‘Highest Credit Worthiness' for13th year at a stretch.

The ratings continue to reflect an established market position in supply of technicalmanpower. CRISIL believes AARVI will continue to benefit from an established marketposition and improved financial flexibility.

There have been slow down dues to COVID-19 and people working from home. There havebeen delay in implementation of few projects and hence delay in fresh mobilization of newmanpower on these projects. As a country may benefit from company leaving China as primemanufacturing base and moving to India we are keeping close watch on these companies.

After successful implementation of UAE branch Aarvi is evaluating branch offices inOman Qatar and Indonesia.

You will be glad to know that AARVI ENCON FZE based in UAE is doing good work alongwith ‘Bon Accord' company in Abu Dhabi. Now it has became a material subsidiary ofthe Company which has contributed more than 10% revenue in consolidated income of ParentCompany. The turnover of the subsidiary Company is Rs. 26.83 Crores and net profit of 3.41Crores approx. These figures are growing very fast and we expect good result in FY 2020-21provided the external factors remain in favor of the Company.

We are happy to announce that your Company did a very large offshore jobs for TurkishPetroleum Company in last quarter of FY 2019-20.

Due to ongoing Covid-19 Pandemic across the globe there is no significant impact onthe operations of the Company. The Company has allowed its employees to work from home andthereby it has been able to maintain the operations smoothly in these tough times. TheCompany is following government directives regarding the health and safety measures ofemployees and has encouraged all employees to practice work from home till the situationgets stabilized or improve.

This Covid Pandemic and lockdown situation may cause delay in income accrual in nearfuture. We believe the sales and profitability of FY 2020-21 is likely to be impacted. TheCompany is closely monitoring the situation and will take the action accordingly.

Your Company has spent Rs. 13.45 Lakhs towards CSR activities across the country byproviding various medical support to the needy people supported many educationalinstitutes. In FY 2019-20 the Company through its CSR partnership with Saifee Hospitalcould help many patients in need for their immediate treatments especially in accidentcases. The Company looks forward to take various initiatives across livelihood educationwater sanitation and health to create measurable impact for communities around our areasof operations.

The Board has proposed dividend of 10% i.e. Rs. 1 per equity share subject to theapproval of the members of the Company at the ensuing 32nd Annual GeneralMeeting (Third AGM Post - IPO of the Company).

At this moment I would like to express my gratitude to all stake holders for theircontinuing faith in the company.

Thanking you once again and assure you of better results in future.

Your Sincerely
Sd/-
VIRENDRA D. SANGHAVI
Managing Director

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Built to endure

Dear Stakeholders

At the outset let me wish all of you and your family members the best of health andwell-being. These are difficult times with a global health crisis disrupting our livesand posing newer challenges. These unprecedented circumstances made us introspect and arepaving the way for a new normal to emerge. I am pleased to share with you that despiteall-round slowdown in the economy as well as within the automotive and lubricantindustry we continued to demonstrate resilience in delivering industry-leadingperformance.

A year of multiple macroeconomic challenges

Global economies continued to slow down in FY 2019-20 amid weakening demand dampeningconsumer and investor confidence and rising uncertainty around US-China trade. Even beforebenefits from a temporary resolution between US and China could begin to fructify theoutbreak of COVID-19 pandemic brought economic activity across the world to a standstill.

Even in these testing times owing to our robust business model and the passion of ourteams we continued to focus on our strategic priorities and gained market share acrossall our core segments.

Indian economy though dealing with its own problems remained one of the fastestgrowing around the world. Global headwinds liquidity constraints and subdued consumptiondemand were leading to some moderation in the growth rate. However with a nationwidelockdown coming into effect (in last week of March) the country's GDP grew at amulti-year low rate of 4.2%.

The automotive sector felt the ripples from a slowing economy and witnessed one of itstoughest years with new vehicle sales covering all product segments declining sharply.Limited availability of vehicle loans growing congestion in bigger cities risingprominence of shared mobility services and weakening consumption were other pressurepoints. Implementation of BS VI norms entailed replacement of older inventory and alsocontributed to the slowing automobile sales. Implementation of the nationwide lockdownfurther aggravated the situation. Consequently the lubricants industry in India toowitnessed a decline of about 5-6% (as per our internal estimates) including automotiveand industrial segments during the year.

A resilient performance by Gulf Oil

Even in these testing times owing to our robust business model and the passion of ourteams we continued to focus on our strategic priorities and gained market share acrossall our core segments. In fact we were clocking double-digit volume growth in our keysegments upto February 2020 except factory fill which is around 8-10% of our totalvolumes. Factory fill is directly linked to new automobile production which droppedsignificantly during FY 2019-20.

We continued to strengthen our distribution reach relationships with our existing OEMsand also welcomed several new OEMs and B2C and B2B customers across automotive industrialand construction sectors. This along with new products with superior customer valuepropositions and innovative engagement initiatives with customers mechanics and otherbusiness partners were the key drivers of our performance.

But for the impact of lockdown in the economy during March our full year performancewould have reflected the buoyancy witnessed until February. Our core volumes stood at110500 KL slightly lower than the volumes sold in FY 2018-19 due to macro factors beyondour control. However we continued to perform better than the industry for yet anotheryear even amid several adversities.

For FY 2019-20 we posted the highest-ever PAT in our history of Rs 203 crores anincrease of 13.9% over FY 2018-19. EBITDA too touched an all-time high of Rs 287 croresinching up by 1.2% over FY 2018-19. The challenges notwithstanding we declared a totaldividend of Rs 14 per equity share during the year (dividend payout ratio of 35%) as a wayof expressing our gratitude to our shareholders for their unwavering support to ourCompany.

Fortifying brand Gulf

During the year under review we continued to strengthen our brand and gain strengthfrom our many India-centric and global branding associations as we have consistently donefor over a decade. Our innovative marketing communication and activations across focussegments added to the growth of our brand and businesses. I am truly delighted to sharewith you that with all the work done in this area brand Gulf has climbed up to becomethe second placed brand in the Industry in terms of brand recall metrics and importantlyfor the brand consideration scores (as per our extensive internal brand track done inJanuary-February 2020) in India. This certainly puts us in a position to attract and addeven more 'value' and ‘premium brand' conscious customers consumers and continueincreasing our market shares in the future.

Gulf Oil International's global brand associations like Manchester United ApriliaRacing for the Moto-GP and the recently announced multi-year strategic partnership withMcLaren racing and luxury supercar McLaren Automotive augur well and will furtherstrengthen our brand recall in India.

Growing responsibly

At Gulf Oil we believe in driving inclusive growth and giving back to our communitiesbusiness partners and other stakeholders. Our focus areas include supporting waterconservation security and development initiatives at a group level skill developmentprogrammes for mechanics road safety community support programmes and providing medicalhealth services in Silvassa. During the pandemic we stepped up our existing initiativesand started several measures to actively support communities who were affected the most.These included our mechanics daily wage earners/communities around Silvassa and in TamilNadu. We worked closely with local and government bodies to be a part of programmes thatprovided immediate help and relief to those worst hit.

At Gulf Oil ethics transparency and sincere governance practices are absolutelynon-negotiable. This approach has enabled us to gain the trust of all our stakeholders andcreate sustained value for them through the ebbs and flows during different businesscycles.

Embarking on an exciting future

As the situation normalises around the country the world as we know is likely tochange for the better. We are ready for the new and the team is looking at tapping intothe current focus segments more and more and looking at newer opportunities where we cantake the lead and work on how we can reimagine the ways to grow. Our strategies will needto evolve to leverage our core strengths and exemplary execution capabilities which willremain the tools for our future success. We will continue to build on our collectivestrengths grow our reach and offer distinctive products that will offer more value to ourcustomers. Gulf Oil International will continue to stand together with Gulf Oil India tosupport the brand and its technology and facilitate value add in these important areas forall our stakeholders.

With this I want to extend my heartfelt gratitude to all of you including our teamswho continue to take the Company to greater heights under the able guidance of the MD& CEO Ravi Chawla. I am also thankful to our customers business partners bankers aswell as shareholders for being our solid pillars of support.

While India's long-term growth prospects remain intact good monsoon along withpositive effects of several fiscal and monetary measures could provide support in theforeseeable future.

We see a new way forward and are confident of continuous and consistent value creation.

Yours sincerely

Sanjay G Hinduja