My dear fellow Shareowners,
It gives me great pleasure to share with you the highlights of our
Companys performance during the year 2007-08.
In a short span of three years since the re-organisation of the
Reliance Group in June 2005, our Company has emerged as a leading
Indian financial powerhouse. We are today the largest mutual fund
(Reliance Mutual Fund) as well as the largest brokerage & financial
distributor (Reliance Money) in the country. We continue to remain the
fastest growing private sector player in the insurance industry. We are
among the top 3 general insurers and top 4 life insurers in the private
sector. Our Company has a market capitalisation in excess of Rs.35,000
crore and a shareholder base of over 1.3 million.
Our Company now ranks among the top 3 private sector banking and
finance companies on all major parameters, with interests in asset
management and mutual funds, life and general insurance, private equity
and proprietary investments, stock broking and depository services,
consumer finance and financial products distribution.
We have over 14 million customers, served by 9,700 outlets in over
4,300 cities and towns, representing one of the largest distribution
networks in the financial services space.
Our Company is an integral part of the Reliance Anil Dhirubhai Ambani
Group, Indias second largest business house. Our goal is not just to
build a great enterprise for our stakeholders but a great future for
India - the new India of the new millennium - an India that desires
real and rapid change and seeks a quality of life that is second to
none.
Today, each of us can claim with great pride that the Reliance Anil
Dhirubhai Ambani Group touches the life of one in ten Indians, every
single day.
Across different companies, our group enjoys the support of a customer
base of over 150 million and a shareholder base of over 11 million -
the largest for any group in the country.
This proud association defines our vision and values. It defines who we
are, what we stand for and what we aspire to achieve.
We are not just about scale and size; we are about the pursuit of
excellence, the integrity of our values and the quality of our
services.
Performance Review
You will be happy to learn that during the year, our Company achieved
substantial improvement in its financial and operational performance.
The salient points are
- Consolidated Total income of Rs.4,919 crore (US$ 1.2 billion),
against Rs.2,158 crore in the corresponding period, an increase of 128
per cent.
- Consolidated Net profit of Rs.1,009 crore (US$ 251 million), against
Rs.703 crore in the corresponding period, an increase of 44 per cent.
- Total Income of Rs.2,080 crore (US$ 516 million), against Rs.884
crore in the corresponding period, an increase of 135 per cent.
- Net Profit of Rs.1,025 crore (US$ 254 million), against Rs.646 crore
in the corresponding period, an increase of 59 per cent.
- Consolidated Earnings per share (EPS) of Rs.41.08 (US$ 1.02), against
Rs.30.88 in the corresponding period, an increase of 34 per cent.
- Earning per share (EPS) of Rs.41.75 (US$ 1.04), against Rs.28.39 in
the corresponding period, an increase of 47 per cent.
- Total Assets of the company stood at Rs.15,374.31 crore (US$ 3.8
billion).
- Total Net worth of the company stood at Rs.5,927.5 crore (US$ 1.5
billion).
Your Companys short term borrowing program has been assigned a rating
of A1+ by ICRA, the highest credit rating given by ICRA. Fitch
assigned the borrowing program a rating of F1+, which stands for the
highest credit quality and indicates the strongest capacity for timely
payment of financial commitment - a resounding re-affirmation of our
unwavering and long- standing commitment to financial prudence and
conservatism.
Our robust financial numbers have enabled us to recommend and increase
dividend to 55%.
Achievements during the year
The year under review saw our Company reach new milestones of growth
across various businesses.
Reliance Mutual Fund (RMF) further consolidated its unchallenged
leadership position in the country expanding its market share to 17 per
cent at the end of March 2008 from 14 per cent at the end of March
2007. We managed assets worth Rs.90,938 crore (US$ 22.8 billion) as on
March 31, 2008, as against Rs.46,307 crore a year ago, an increase of
96 per cent against an industry average of 63 per cent.
Reliance Life Insurance is amongst the top four private sector life
insurance companies in India. The new business premium grew at 195 per
cent, from Rs.932 crore to Rs.2,751 crore (US$ 684 million).
Reliance General Insurance is amongst the top three private sector
general insurance companies in India. Its gross direct premium for the
year ended March 31, 2008 was Rs.1,946 crore (US$ 484 million) as
against Rs.912 crore in the corresponding period, an increase of 113
per cent.
Reliance Money has emerged as the largest brokerage and distributor of
financial products in India with more than 2 million customers and the
largest distribution network in the country. With annual revenues of
Rs.239 crore (US$ 59 million), it achieved break even in the first year
of operations.
Reliance Consumer Finance, which saw its commercial launch in May 2007,
marked our entry into the rapidly expanding consumer finance segment.
Our consumer finance portfolio includes a wide range of products,
including personal loans, vehicle loans (car and commercial), home
loans, loan against property and SME loans. As on March 31, 2008, the
loan book size was of Rs.7,120 crore (US$ 1.8 billion).
In February 2008, our Company received the approval of the Reserve Bank
of India for launching our asset reconstruction business. Reliance
Capital has 49% shareholding in Reliance Asset Reconstruction Company
Ltd. This company will be in the business of managing and resolving
distressed debt and will commence operations in the current financial
year.
The current year will also see us making a foray into investment
banking and institutional broking.
Future Growth Drivers
Our future growth will be propelled by the quality of our human
capital, the use of cutting- edge technology and our extensive
distribution reach.
Technology, together with human and intellectual capital, will be the
key differentiators for our Company going forward. We will use them as
strategic tools to reduce the cost of delivery, improve the speed of
execution and enhance customer experience at every point of interface.
Reliance is amongst the most trusted brand names in India. We will
leverage this brand equity to further increase our market share and
launch innovative products and services. We will strengthen and expand
our already extensive distribution reach to further penetrate the
Indian market and reach sections of people who have hitherto been
denied the benefits of informed investment advice and world class
financial services.
Corporate Governance
We have adopted the Reliance Anil Dhirubhai Ambani Group Corporate
Governance Policies and Code of Conduct which has prescribed a set of
systems, processes and principles conforming to the international
standards, aimed at promoting the interests of all our stakeholders.
Social Commitments
The Company continued to contribute actively to community welfare
activities and took up several initiatives and measures related to
education and healthcare.
Our Commitment
Our founder, the legendary Dhirubhai H. Ambani, gave us a simple
mantra: to aspire to the highest global standards of quality,
efficiency, operational performance and customer care.
We remain committed to upholding that vision.
Dhirubhai exhorted us to think big.
We will think bigger. Indeed not just bigger but better, creating ever
greater value for all our stakeholders.
Anil D. Ambani
Chairman
April 29, 2008
