Financial Corporate Presentation May08

CORPORATE PRESENTATION Financial Services Group ADITYA BIRLA NUVO LTD.

MAY 2008

India & the Financial Services Sector Fast growing economy Large population & young demographics Fast growing aspirations High rate of savings Financial simpleton safety over returns seeking reassurance from a Trusted face Low penetration 55% of savings lying in bank deposits Household penetration in Mutual Funds < 5%, Life Insurance < 15%

The Indian Financial Services sector has yet to tap India’s true potential

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Aditya Birla Financial Services Group : Our Vision

To be a leader and role model in financial services sector with a broad based and integrated business

3

Aditya Birla Financial Services Group : Our Key Drivers Product Distribution Brand People Customer experience

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Aditya Birla Financial Services Group : Our Structure

Capital Market & Corporate Finance

Insurance advisory & broking services

Distribution & Wealth Management

Asset Management

Life Insurance

Aditya Birla Financial Services Group

One virtual company : Many real businesses To leverage synergies and be more competitive and cost effective

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Aditya Birla Financial Services Group : A Focused Approach Phase 1 : Laying a firm foundation Build momentum in Life Insurance and Asset Management Put together a winning team Set scalable processes Phase 2 : Setting new goals for other existing business Distribution & Wealth Management NBFC and Insurance advisory and broking services Phase 3 : Exploring new horizons Mapping our target customer needs and building products/services accordingly

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Aditya Birla Financial Services Group : Our Strategy VISION

STRATEGY

ACTION PLAN

To be a leader and role model in financial services sector with a broad based and integrated business

EXPANSION

Growing faster than the market Scaling up distribution to reach across markets and channels Product and segment expansion Potential entry in new financial services segments

DIFFERENTIATION

People bound by a Vision Product innovation Speed to market Consistent and superior investment performance Customer engagement model Capital efficient

TRANSFORMATION

Leveraging on synergies within financial services within Aditya Birla Group Sun Life Financial Structural changes Outsourcing & Decentralisation

EXCELLENCE

Best employer Trusted Brand, across households in India Risk & Compliance

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Birla Sun Life Insurance

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Focus To Achieve Leadership Key Aspiration

To be amongst top 3 private players and superior value creation for stakeholders

Pioneered Unit Linked Insurance Plan (ULIP) & bancassurance

Branches (Nos.)

~ 1000

Tie-ups: 7 banks & 229 corporate agents with 800+ insurance specialists and relationship managers 339

Aggressive approach towards strengthening distribution reach across channels

44

85

137

FY05

FY06

FY07

Branch network and Direct Sales Force quadrupled during last two years to reach 339 branches and 115K agents respectively Further 261 new branches are targeted to roll out by end May’08 Targeting to reach 1000 branches mark and to double direct sales

FY09E

Direct Selling Agents (‘000) ~ 200

force in FY2008-09

115

Product portfolio strengthened in the year through launch of 10 products in individual life segment and 2 products in group business

FY08

9

18

57

Targeting penetration in health, pension and traditional product segments to fill product gaps and cater all customer profiles

FY05

FY06

FY07

FY08

FY09E 9

Product Launch: 2007-08

Group Interest Credit- with Guaranteed returns

Gold PlusInvestment Plan

Launch of Micro Insurance for rural population

“Maximizer fund” for 4 Existing Products

“Maximizer fund” (100 % Equity fund launched

Apr 07

Jun07

Launch of OTC – Saral Jeevan

Group Unit Linked Fund

Gold Plus II– Investment Plan-

Platinum Plus - with Innovative highest NAV fund

Multiplier Fund launched

Aug 07

Sep 07

Oct07

Nov’07

Dec’07

Mar’08

Innovative product strategy helped BSLI improve market share in 2007-08 10

Key Highlights : 2007-08 : Outperforming Industry Growth Revenues (Rs. Cr.)

Strong momentum built Achieved first year weighted annualised premium of Rs. 2203 Cr. registering a growth of 131% over Rs. 953 Cr last year 2

nd

2,069

highest growth rate amongst top 7 players

Total revenues grew at a CAGR of 93% since FY 2003 New business premium income at Rs. 1,965 Cr. grew by 123% in FY07-08 over Rs. 882.7 Cr. in FY06-07 Renewal Premium up by 46% to Rs. 1,307.2 Cr. in FY07-08 AUM grew at a CAGR of 81% to Rs. 6,893 Cr. in FY07-08 with 40% share of equity AUM

1,399 956 545

FY04

FY05

FY06

New business

G CA

Tie-ups with new relationships and strengthened relationships with existing channel partners

Strong support from promoters : Aditya Birla Nuvo and Sun Life Financial infused Rs. 603 Cr. in FY07-08 to fund growth of the business

FY08

Renewals & other income 6,893

Focus on building alternate channels

Strong fund performance

FY07

AUM (Rs. Cr.)

Realigned organisation and sales structure to bring in higher focus, improve productivity and to cater to growth

Project for ‘capacity building for growth’ underway

4,012

1 R8

% 4,020

2,555 1,333 644 16%

40% 22%

29%

31%

Mar'04 Mar'05 Mar'06 Mar'07 Mar'08 Equity

Debt & Liquid

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Regaining Market Share 6th largest private player in India with 6.6% market share in FY07-08 up from 5.3% in FY06-07 Ranked 4th amongst private players in the month of March 2008 with 8.1% market share

#2 BSLI – Monthly Market Share trend amongst private players (%)

13.7%

#4 8.2% 7.5%

8.0% 8.2%

6.1% 6.5%

#9

8.1% 6.1% 6.1%

5.3%

5.1% 5.2% 3.7% 4.0%

2004-05 2005-06 2006-07 Apr-07

May-07

Jun-07

Jul-07

Aug-07 Sep-07

Oct-07

Nov-07 Dec-07

Jan-08

Feb-08

Mar-08

Source : IRDA

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Financial Results Rs. Cr. Branches (Nos.)

2007-08 339

2006-07 137

Change (%) 147%

Direct Selling Agents (Nos.)

115,153

56,603

103%

Assets Under Management

6,892.7

4,020.0

71%

New Business Premium Income Individual business Group business

1,965.0 1,741.0 224.0

882.7 742.9 139.8

First Year Premium Renewal Premium Single Premium Less : Reinsurance ceded and service tax Total Premium Income (Net)

1,926.0 1,307.2 39.0 (49.1) 3,223.1

832.3 894.0 50.4 (41.5) 1,735.2

131% 46% -23%

Revenues

4,012.1

2,068.8

94%

PAT Equity Share Capital Nuvo’s investment

(445.3)

123% 134% 60%

86%

(139.7)

-219%

1,274.5

671.5

90%

944.6

498.4

90%

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Our Enablers Customer Segmentation

Products

Identify Segments

Profitability

Fill existing gaps

Cater to needs

Value Creation Persistency

People Best Employer Organisation

To be amongst top 3 private players and superior value creation for Stakeholders

Multi Channel New branches for DSF Recruitment & productivity

Structures

Brand & Marketing

Distribution

Operations

Build Strong

Capacity Creation

Franchise

Building efficiencies

Leverage customer

Customer Service

bases in Group 14

Birla Sun Life Mutual Fund

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Focus To Achieve Leadership To be amongst top 3 players and superior value creation for stakeholders

Key Aspiration

AUM (Rs. Cr.) 45247

Scaling up infrastructure to support growth Distribution network more than doubled in last one year to reach 78 branches and 18K financial advisors Investor folios grew by 65% during the year to 1.9 million Multi Channel non-polarised distribution network

Superior fund performance – 69% of AUM is in top quartile of performance, based on one year returns Recognised and awarded “Mutual Fund House of the Year” by CNBC TV18-Crisil Awarded 5 CNBC TV18-Crisil Awards, 2 ICRA awards and 4 Lipper Awards for consistent fund performance across various asset classes Branches (Nos.)

78

FY08

Investor Folios (Mn)

18

8

32

FY07

Financial Advisors (‘000)

FY07

1.9 1.2

FY08

FY07

FY08

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Investment Performance Quartile Performance AUM Report – March 2008 March 08- AUM in various Quartiles 180 Days Return (%)

I Year Return (%)

3 Year Return (%)

0%

20% 50% 70%

69%

40%

60% 40%

3% 80%

14%

19%

14%

3% 9%

100%

6% 4%

% of Corpus in First Quartile

% of Corpus in Second Quartile

% of Corpus in Third Quartile

% of Corpus in Fourth Quartile

Report based on only Ranked AUM by Value Research

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Key Highlights : 2007-08 : Regaining Market Share 5th largest in India with 6.8% share in average domestic AUM in Mar’08 up from 5.8% share in end of period (EOP) AUM in Mar’07 Achieved 89% growth in last one year

Total AUM (EOP) (Rs. Cr.) 45247

2nd highest AUM growth amongst top 7 players R5 G CA

Only AMC to show positive month on month growth in average AUM in Mar’08

Equity AUM grew 5 times in 3 years to Rs. 10,838 Cr. in Apr’08 Offering 92 Mutual Fund schemes including 2 offshore funds Product portfolio strengthened through launch of new funds 4 equity NFOs launched collecting Rs. 2,700 Cr.

10838 20830

Total AUM (EOP) grew 4 times in 3 years to Rs. 45,247 Cr. in Apr’08 Includes offshore equity AUM of Rs. 2,543 Cr. in Apr’08

9%

16424 10915

6089

2193 8722

10335

Mar'05

Mar'06

34409

6536 14294 Mar'07

Debt & Liquid

Apr'08

Equity

Source : AMFI

Focus on high margin fixed income funds 18

Market Share / Competitor Highlights Rs. Cr.

Reliance

Mar-2008 Average AUM 90,938

Pru ICICI

54,322

10.3%

2

43%

37,870

11.6%

2

UTI

48,983

9.3%

3

38%

35,488

10.9%

3

HDFC

44,773

8.5%

4

58%

28,358

8.7%

4

Birla Sun Life

35,906

6.8%

5

89%

19,047

5.8%

6

SBI

29,179

5.5%

6

74%

16,807

5.1%

7

Franklin

26,842

5.1%

7

22%

22,019

6.7%

5

Others Total

196,763 527,706

37.3% 100.0%

63% 62%

120,492 326,388

36.9% 100.0%

MF Players

Market Share %

Rank

17.2%

1

Growth over PY %* 96%

Mar-2007 EOP AUM

Market Share %

Rank

46,307

14.2%

1

* Growth of Average AUM Mar-08 over EOP AUM Mar-07 Source:AMFI

BSLAMC moved one step up to Rank 5th during the year 19

Financial Results Rs. Cr. 2007-08 Branches (Nos.) Investors Folios (Nos. in Lacs) Assets under Management Domestic Offshore

Total Income PAT

2006-07 Change (%)

78

32

144%

18.9

11.5

65%

34,864 2,296 37,160

19,047 1,783 20,830

83% 29% 78%

135.0

95.5

41%

2.8

14.3

-81%

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Our Enablers Distribution ramp-up 20K Point of Sales to 50K Point of Sales

CRM Alternate channels Building offshore proposition PMS

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Birla Sun Life Distribution

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Key Highlights : 2007-08 : Creating New Highs Key Aspiration

To be amongst top 5 players in the wealth management space and to be a leading distributor of financial products

Lines of business Private Client Group Channel Partners Institutional Insurance Over 2,50,000 customers country-wide Nationwide presence with 36 branches (in 29 cities) and over 3800 channel partners Growth in staff strength Ranked 6th in terms of AUM under advice AUM under advise more than doubled to Rs. 12,242 Cr. in Mar’08 from Rs. 4,953 Cr. in Mar’07

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Financial Results Rs. Cr.

2007-08 Branches (Nos.) AUM (Rs. Cr.) Financials Revenues PAT

2006-07 Change (%)

36

13

177%

12,242

4,953

147%

37.5

21.0

78%

2.7

0.7

305%

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Our Enablers Expanding presence Across spectrum of financial products Across manufacturers Across markets Market and customer segmentation Matching our offerings, accordingly Technology

25

Birla Global Finance

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Key Highlights : 2007-08 : Creating New Highs

Key Aspiration

To be among Top 5 NBFCs, by balance sheet and profitability

Lines of business Loan against Securities IPO financing Corporate Finance Insurance advisory Overall Portfolio doubled to Rs. 10 billion in FY07-08 Highest ever Loan against Securities portfolio Highest rating of A1+ assigned by ICRA for short term debts Highest ever operating profit

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Financial Results

Rs. Cr.

2007-08 Revenues PBT Capital Employed

2006-07 Change (%)

112.8

84.3

34%

37.0

22.1

67%

225.5

98.4

129%

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Our Enablers Expanding presence Across asset product range Across manufacturers Across markets Market and customer segmentation Matching our offerings, accordingly Capital

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Aditya Birla Financial Services Group – Our Today and Tomorrow

Regained Momentum Building capacity for future growth Consolidation will give us synergy benefits Identified the enablers of success

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Q&A

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Cautionary Statement Statements in this “Presentation” describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the company conducts business and other factors such as litigation and labour negotiations. The Company assume no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent development, information or events, or otherwise.

Aditya Birla Nuvo Limited Regd. Office: Indian Rayon Compound, Junagadh-Veraval Road, Veraval – 362 266 (Gujarat) Corporate Office: 4th Floor ‘A’ Wing, Aditya Birla Center, S.K. Ahire Marg, Worli, Mumbai – 400 030 Website: www.adityabirla.com or www.adityabirlanuvo.com Email: [email protected]

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