Integrated Reporting

RSM GC is pleased to release report on Integrated Reporting <IR>. The report should  answer common queries – such as why is <IR> necessary and how to do <IR>.

Some of the highlights from the report

  • The value of intangible assets grew from 17% in 1975 to over 84% of total market value in 2015, for S&P 500 companies.

Are you capturing value of your intangible assets?

  • To conform to SEBI circular of 6th February 2017, should company provide IR information in the annual report separately OR incorporate in Management Discussion & Analysis OR Provide in a separate report.

 

  • “Despite an increase in the volume and frequency of information made available by companies, access to more data for public equity investors has not necessarily translated into more comprehensive insight into companies”- A Manifesto for Sustainable Capitalism.

Are you disclosing adequate and relevant non-financial information required by your investors?

  • Organizational journey towards Integrated Reporting would differ from entity to entity depending upon its strategic clarity, processes and systems which are already in place. Organizations with experience in sustainability or non-financial reporting for significant number of years or with robust internal management accounting, business excellence or balance score card deployment, may find Step Ahead is their First step or in some cases whatever they are already doing may require recast to become the leader

 

  • One step at a time- Four steps: phased, pragmatic customized <IR> adoption framework; Lead and Harness <IR> advantage in three years

 

  • Conduct strategy mapping and fill in Value creation worksheet; collate indicators to measure/assess state of value creation factors and deployment of strategy for the relevant <IR> capitals

Please download report at link below.

Integrated reporting – why about &amp; how to Guide-RSM GC

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Indo Thai Synthetics SR 2016-17

ITS is Thailand’s leading synthetic yarn spinner and the largest exporter of synthetic yarn from Thailand. ITS is the preferred customer to the world’s leading fibre manufacturers.ITS has manufacturing unit set-up in Bang pa-in, Ayutthaya, Thailand with corporate office in Bangkok, Thailand.

This is our third annual sustainability report.

http://oneabgtextiles-sustainability.com/its/

ITS SR 16-17 – Final

PT. Elegant Textiles SR 2016-17

PT. Elegant Textile Industry (PTE) was established in the year 1973. The plant
is located at Purwakarta, about 125 kms from Jakarta. PTE, a part of Overseas
Spinning Business of Aditya Birla Group is their first venture in Indonesia.

Today the capacity stands at 174,240 spindles. PTE has MVS technology.
We run 100% viscose, poly/viscose blends, linen blends and 100% polyester. MVS Yarn has special features, like low hairiness and low pilling properties, which results in extra shine, increased brightness, extended durability and a softer feel.

This is PTE’s third sustainability report with RSM GC.

PTE SR 16-17 Final

JST Sustainability Report 2016

Jaya Shree Textiles (JST), a unit of Aditya Birla Nuvo Ltd. (a listed company*), is a part of the Domestic Textiles Business of the US $ 41 billion Aditya Birla Group. It was incorporated in 1949 and has its only manufacturing unit at Rishra in Hooghly district, West Bengal, India.
JST has the largest integrated linen manufacturing plant in India, with 22,552 spindles and 10.1 million meters fabric manufacturing capacity. It has state-of-the-art facilities and is equipped with the latest spinning, weaving, and finishing systems from Switzerland, Germany, China, Russia, France, Belgium, and Italy.

This is JST’s 3rd successive report with RSM GC.

JST SR 16-17 SR Final

PTS SR 2016-17

PT Sunrise Bumi Textiles is pleased to release its third Sustainability Report, for 2016-17. The report is prepared in consultation with RSM GC Advisory Services Pvt. Ltd.

PTS SR 16-17 Fin2

ILT SR 2016-17

PT. Indo Liberty Textiles (ILT) is pleased to release its 3rd sustainability report for 2016-17.

The report is developed in consultation with RSM GC Advisory Services, for the third consecutive year.

ILT SR 2016-17 Rev

Energy Saving Certificates: Look what the market is discovering

Price of Energy Saving Certificates from PAT cycle 1 shows no sign of stabilization. After 7th round of trading the EScert price seems to be on an eternal nosedive. Every trading session after the second trading session has been discovering new low.

The first trading session saw the clearing price of EScerts stand at Rs.1200 per EScert. After holding on to that price in the second weekly trading session, the clearing price fell to Rs1000 in the third session.

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The clearing price of Rs.350 per EScert in the 7th trading session implies that the EScert price is now about 30% of the price discovered in first trading session. The weighted average price per EScert till date is about Rs.819.

The total volume of EScerts traded thus far is 1,88,590.  Clearly there are many more EScerts to be purchased to cover shortfall of PAT cycle 1. However, the no of purchase bids has significantly declined in the most recent trading session. This could be due to g2

buyers holding back their purchase to leverage the declining price trend and reduce their compliance cost. With about one and half month to go before the time to comply through EScerts ends – how long buyers will withhold their buying decision is to be seen. And whether pushing purchase decisions to later trades leads to a demand spike pulling up the price is also a scenario that purchasers will factor in when deciding to trade.

The surplus savings which PAT has enabled works out to Rs0.03 per kwh as per the price discovered in the 7th and most recent trading session. So if one were to stand at the vantage point of the 7th trading session and look at energy savings which more capital intensive interventions can potentially unveil, then the upside provided by PAT’s flexible

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market mechanism is a meagre 3 paise per kwh. This is perhaps not enough to swing an unacceptable payback period to within an acceptable time horizon. The evolution of per kwh contribution of EScert price, as shown above has not been encouraging to those looking at PAT as a mechanism for incentivizing voluntary ambitious energy efficiency improving interventions enabled by additional earnings through EScerts.

EScerts trading started with a wide divergence (16.69%) between the maximum purchase bids which could have been theoretically cleared if there was perfect buyer and seller alignment. That divergence has been progressively reducing till the first 4 trading

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sessions. In the fourth trading session that divergence stood at only 0.10%. This is indicative of sellers reacting and quickly aligning their bids to catch the buyer in the face of the fact that supply of ESCerts was reported to be 2.7 times the ESCert demand. With divergence well below 0.5% in the recent trading sessions, the alignment reached at the 4th session seems to be prevailing for now.

So where is EScert price headed?  Sellers are hoping that the EScert’s clearing price increases and the buyers are eagerly waiting for further fall in price – as we advance to the next weekly trade. One wonders whether at this EScert price there is more merit in banking than selling. Buyers see the price trend as an ever increasing possibility of complying at even lower cost. As the sellers and buyers try to consolidate their positions, it will be interesting to see how the EScert price fares.

 

IPT Sustainability Report 2016-17

Indo Phil Textiles Mills (IPT) is the largest textile mill in the Philippines.

IPT Inc. together with its subsidiaries Indo Phil Acrylic Manufacturing Corp. and Indo Phil Cotton Mills Inc. today has a production capacity of 21,576 TPA and 66,500 spindles with its own captive power plant of 24.8 MW.

This is IPT’s third successive sustainability report with RSM GC.

IPT SR 2016-17 Final

Energy Saving Certificates Market Mechanism: How is it shaping up?

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20 October 2017

The trading of Energy Saving Certificates (ESCerts) is progressing as scheduled in one of the power exchanges in India. The ESCerts, which have originated from the first PAT (Perform, Achieve and Trade) cycle out of energy interventions carried out by designated industrial units in eight energy intensive sectors of the Indian economy, are now up for trading.

To participate in trading of ESCerts in the power exchange, designated industrial units have to complete a two stage registration process.  First an industrial unit needs to register with ESCerts registry as eligible entity and thereafter it needs to register with the power exchange. The trading rules allow those with issued ESCerts to participate as seller and those with verified shortfall (as compared to their assigned energy efficiency target in PAT cycle 1) to participate as buyer.

Trading sessions for ESCerts have been scheduled for every Tuesday.  We have thus far Chart 1witnessed four such trading sessions starting with the first session on 26th September 2017. The first trading session discovered a clearing price of Rs1200 per ESCert. The clearing price held on to that level in the second session before dropping to Rs.1000 in the third session. In the most recent trading session (4th session) ESCerts price dropped further to Rs.800 per ESCert.

It is worth noting that, in the run up to PAT and through the M&V phase, many speculated (and reasoned) that the price of ESCerts would be upwards of Rs. 10,000.  This stemmed from the belief that the price of ESCerts will be higher than the penalty payable per TOE of shortfall, if that shortfall is not mitigated by purchase of ESCerts. This opportunity cost (penalty price to be precise) prompted many units to peg their ESCert price at Rs.10000 or thereabout.  So the actual ESCert trade price, as we know now, is not good news for sellers. It is very encouraging though for buyers as they now see the possibility of complying at a cost much less than what they had budgeted for.

 Of course, how long this price band holds is yet to be seen. While buyers should be rushing in to purchase their ESCerts at reigning price range, sellers should be really looking at their projected energy efficiency status at the end of second PAT cycle and deciding whether it would be prudent for them to bank their ESCerts rather than sell now.  Sellers also need to take a hard look to see how much room they have to lower their asking price based on their individual circumstance in the face of supply glut and a very low price to start with.

Meanwhile, more and more industrial units are completing the first requirement for trading – registering for becoming eligible entity. There are about 200 designated consumers who have registered as eligible entity – so in the coming days many more Chart 2should be participating in ESCert trade. Till now, the participation in trading has been low. A very small fraction of the total number of designated consumers in PAT cycle 1 has participated thus far. This is perhaps partly because there were not too many units who had fulfilled the requirements of registering as eligible entities in time for participating in the first few trading sessions. To what extent, if at all, this is also due to subdued enthusiasm on account of firstly supply far outnumbering demand and secondly on account of lack of visible market upside is as yet unknown. For buyers the falling price trend till now may have also signalled the possibility of complying at an even lower price by postponing participation.

For a participant in ESCert trading session – successfully transacting would among other things imply that the aspirations of the participant and its insight into the market mood are aligned to the embedded market success requirement. Trading strategy embodiesChart 3 these. Perhaps one way to gauge how good was the trading strategy of participating units, is to look at the success of the bids which emanated from trading strategy and how it is evolving. The trading started with a wide divergence (16.69%) between the maximum purchase bids which could have been theoretically cleared if there was perfect buyer and seller alignment. That divergence has been progressively reducing through the trading sessions. In the fourth trading session that divergence stood at only 0.10%. This is indicative of sellers reacting and quickly aligning their bids to catch the buyer in the face of the fact that supply of ESCerts was reported to be 2.7 times the ESCert demand.

We have with us now the outcome of only four trading sessions. Assuming no repeat participation a maximum of only 150 odd participants has so far participated in the market mechanism. Already 200+ eligible entities have registered with ESCerts registry out of 450+ designated consumers in PAT cycle 1 and many more are on course for registering. There is a significant quantum of ESCert demand yet to be fulfilled through exchange trade.  So it will not be unreasonable to assume that many more will participate in the coming trading sessions. It will be interesting to see which way the ESCert market moves with increase in participants in trade against the backdrop of very low ESCert prices thus far.

Trading data source: ESCerts Market update by IEX published in https://www.iexindia.com/#horizontalTab11 

Source of data on eligible entities: https://beenet.gov.in/UI_Forms/General/Login.aspx.

Disclaimer: The content of this article does not constitute any trading advice.

You can download the pdf version of this article at this link:  ADP_EnergySavingsCertificateMarket

Vikram Woollens Sustainability Report 2016-17

Vikram Woollens Sustainability Report 2016-17

 

Vikram Woollens (VW), a unit of Grasim Industries Ltd., was established
in 1995 and has its manufacturing unit at Malanpur in Bhind district,
Madhya Pradesh, India.

This is our third consecutive report with the company.

VW SR 2016-17 – Final2