Mar 31, 2015
Dear Shareholders,
The are pleased to present the 58th Annual Report together with the
Audited Financial Statements of your Company for the year ended 31st
March, 2015.
MACRO-ECONOMIC SCENARIO
India''s economy made a soft recovery in fiscal 2014-15, with an
estimated GDP growth at 7.4% compared to 6.9% in the previous year.
Many positive developments were witnessed. Among them were lowering of
fiscal and current account deficits, declining inflation and benign
global commodity prices. The moderation in inflation prompted the
Reserve Bank of India ("RBI") to cut interest rates to spur economic
growth. Structural reforms to boost investments remained high on the
Government''s agenda.
The World Bank and the International Monetary Fund have forecast
India''s GDP to grow at 7.5% in 2015, outpacing China to become the
world''s fastest growing economy. The Government''s continued focus on
policy reforms for encouraging infrastructure investments, improving
the ease of doing business, financial inclusion measures, and
initiatives like ''Make in India'' are expected to be vital contributors
towards achieving economic growth and advancement going forward.
CONSOLIDATED FINANCIAL PERFORMANCE
Your Company has posted sound earnings growth and improved performance
across most of the businesses. Consolidated revenue grew by 2% to Rs.
26,516 Crore. On a like-to-like basis, i.e., excluding IT-ITeS
business, which was divested w.e.f. 9th May, 2014, year-on-year revenue
growth was 14%. EBITDA surged by 18% to Rs. 5,798 Crore. Net Profit
rose by 24% to Rs. 1,416 Crore. Financial Services and Telecom
businesses were the major contributors to earnings growth, followed by
the Fashion & Lifestyle business.
Key Highlights:
- Aditya Birla Financial Services ("ABFS") is a significant non-bank
financial services player having a diversified portfolio with 10 lines
of businesses. Its funds under management grew year-on-year by 35% to
Rs. 164,940 Crore. The Lending book of the NBFC business expanded by
52% to Rs.17,550 Crore. ABFS is entering into strategic partnerships
and investing in promising sectors to tap sector growth opportunities.
It has commenced Housing Finance business operations in October 2014
and is planning to foray in the health insurance sector through a joint
venture with MMI holdings, a leading South African based financial
services group.
- The Fashion & Lifestyle business of your Company is India''s #1
branded menswear player through Madura Fashion & Lifestyle, and the # 1
branded womenswear retailer through Pantaloons. To fortify its market
leadership, the Fashion & Lifestyle business is scaling up its retail
stores as well as its online presence through TRENDIN.com. Trusted by
10.8 million loyalty customers, it has the widest fashion retail
presence in India, with 1869 exclusive brand outlets / stores spanning
4.8 million square feet and 6,000 additional points of sale.
- In the Telecom business, Idea Cellular continued its enviable track
record of being amongst the fastest growing large Indian mobile
operators. Its revenue market share improved year-on-year from 16.1% to
17.5%. In the spectrum auctions held in March 2015, Idea won 79.4 MHz
spectrum for about USD 5 billion, laying a solid foundation and
visibility for its business growth for the next 20 years. The strong
cash profit generation as well as funds raised during the year will
support Idea''s balance sheet and growth plans.
- Amongst the divisions, the Linen segment of Jaya Shree textiles
attained higher profitability, led by recent expansion. The business is
set to further tap the sector growth opportunity with proposed
expansion of its Linen yarn Capacity from 3,400 TPA to 6,200 MTPA. In
the Rayon business, the profitability of the VFY segment was off-set by
softening of ECU realisation and maintenance shut down in the power
plant in the chemicals segment. Agri business earnings improved sharply
year-on-year, led by enhanced energy efficiency. However, earnings
were lower than the normalised level due a shutdown of the urea plant
for 35 days. The Insulators business posted healthy earnings growth
despite 42 days disruption / suspension of plant operations due to
labour unrest.
STANDALONE FINANCIAL PERFORMANCE
Your Company''s standalone revenue grew by 11% to Rs. 8,938 Crore. In
the previous year, net profit was higher by Rs. 209 Crore on account of
(a) gain of Rs. 65 Crore on divestment of Carbon Black business
(including net tax credit of Rs. 41 Crore) and (b) gain of Rs. 144
Crore on buyback of equity shares by Birla Sun Life Insurance to
distribute its surplus funds to the shareholders. As a result, Net
Profit at Rs. 528 Crore is lower year-on-year vis-Ã -vis Rs. 674 Crore
reported in the previous year.
NEW INTIATIVES/MAJOR ACTIVITIES
Consolidation of Branded Apparels businesses
To capitalise on its large market presence in the branded fashion space
in India, your Company  Aditya Birla Nuvo Ltd. ("ABNL")  has
announced consolidation of its branded apparels businesses under its
listed subsidiary - Pantaloons Fashion & Retail Ltd. ("PFRL"), through
a composite scheme of arrangement ("Scheme") under Sections 391 to 394
of the Companies Act, 1956. As part of the Scheme, Madura Fashion, the
branded apparel retailing division of ABNL and Madura Lifestyle, the
luxury branded apparel retailing division of Madura Garments Lifestyle
Retail Company Limited ("MGLRCL") Â a subsidiary of ABNL, will be
demerged from the respective companies into PFRL. Pursuant to the
demerger, new shares will be issued by PFRL to the respective
shareholders of the transferor companies directly.
This consolidation will create India''s largest pure play branded
apparels company by bringing India''s #1 branded menswear players and
- 1 branded womenswear retailer together. The move will unlock value
for the shareholders and give them an opportunity to participate
directly in the promising fashion space.
The Boards of above companies have approved the following swap ratio
which has been recommended by the independent valuers:- - Shareholders
of ABNL will get 26 new equity shares of PFRL for every 5 equity shares
held in ABNL pursuant to the demerger of Madura Fashion,
- Shareholders of MGLRCL will get 7 new equity shares of PFRL for every
500 equity shares held in MGLRCL pursuant to the demerger of Madura
Lifestyle, and
- Preference shareholder of MGLRCL will get 1 new equity share of PFRL
The transaction is subject to the necessary statutory and regulatory
approvals including approvals of the respective High Courts, the Stock
Exchanges, SEBI, the respective Shareholders and lenders / creditors of
each of the companies. The appointed date of the Scheme will be 1st
April 2015. The transaction is expected to be completed in the next 6
to 9 months period.
Application for Payments Bank License
Your company has applied for obtaining a license to set up a "Payments
Bank", in accordance with the Guidelines for Licensing of Payments Bank
issued by RBI. Your Company will be the Promoter of the proposed
Payments Bank, holding 51% of its equity capital. Idea Cellular will
hold the balance 49% of equity capital in the proposed Payments Bank,
which may be increased up to 60%, subject to regulatory approvals, as
applicable.
FINANCIAL PERFORMANCE (Rs. in Crore)
Consolidated Standalone
2014-15 2013-14 2014-15 2013-14
Profit Before Depreciation
/ Amortization,
Interest and Tax 5,798.21 4,926.56 1,185.59 1,245.81
Depreciation and
Amortisation Expenses 1,702.75 1,608.86 189.36 199.02
Finance Costs 1,757.57 1,550.82 263.30 266.56
Profit Before Exceptional
Items and Tax 2,337.89 1,766.88 732.93 780.23
Exceptional Items (13.33) 5.42 - 24.06
Profit Before Tax 2,324.56 1,772.30 732.93 804.29
Tax Expenses 833.48 550.50 205.24 130.34
Net Profit Before
Minority Interest 1,491.08 1,221.80 527.69 673.95
Minority Interest 75.58 78.92 - -
Profit for the Year 11,415.50 1,142.88 527.69 673.95
Opening Balance as per
last audited financial
statement 778.59 312.79 222.56 167.34
Amount Transferred on
Stake Change/
Amalgamation of
Subsidiaries/ Joint
venture (81.57) (0.76) - -
Transfer from General
Reserve 13.45 - - -
Transitional Provision
of Schedule II Impact
(Net of Deferred Tax) (15.19) - - -
Share of Minority
Interest Transitional
Provision of Schedule
II impact 3.09 - - -
Profit available for
Appropriation 2,113.87 1,454.91 750.25 841.29
Appropriations :
Debenture Redemption
Reserve 24.91 24.63 22.50 20.98
Special Reserve 54.69 33.53 - -
General Reserve 201.76 501.40 200.00 500.00
Transfer to Capital
Redemption Reserve 0.10 - 0.10 -
Proposed Dividend on
Preference Share - 0.01 - 0.01
Proposed Dividend on
Equity Share 91.10 91.06 91.10 91.06
Equity Dividend relating
to Previous period 2.60 0.07 0.02 0.01
Interim Dividend on
Preference Share B - B -
Corporate Tax on
Proposed Dividend 30.13 22.03 18.55 6.67
Corporate Tax on
Interim Dividend 25.85 3.59 - -
Corporate Tax on
Interim Dividend on B - B -
Preference Shares
Corporate Tax on
Dividend relating to
previous year 0.44 - - -
Closing Balance of
Surplus in the
Statement of Profit
& Loss 1682.29 778.59 417.98 222.56
Note: Figures of Rs. 50,000 or less have been denoted by
Redemption of Preference Shares:
In accordance with the composite Scheme of Arrangement between Aditya
Birla Nuvo Limited and Madura Garments Exports Limited and MG Lifestyle
Clothing Company Private Limited and Peter England Fashion and Retail
Limited, 5000 - 6% Redeemable Cumulative Preference Shares of Rs. 100
each fully paid were issued to Infocyber India Private Limited and
Naman Finance & Investment Private Limited respectively on 1st January,
2010.
In terms of the issue of the Preference Shares, these Preference Shares
were ordinarily redeemable upon completion of five years from 1st
January 2010, at face value. However, the Company had the right to
redeem the Preference Shares at any time before the due date of
redemption by giving 30 days'' notice to the shareholders, subject to
appropriate approvals as may be necessary.
These Preference Shares were redeemed at face value on 29th September,
2014, out of the profits of the Company and dividend was paid thereon
for the said period.
DIVIDEND
For the financial year ended on 31st March, 2015, your Directors have
recommended for your consideration a dividend of:
i. Rs. 7 per Equity Share of Rs. 10 each (last year Rs. 7 per Equity
Share); and
ii. Dividend of Rs. 2.99 per Preference Share of Rs. 100 each paid on
29th September, 2014 pro-rata (last year Rs. 6 per Preference Share).
The dividend on the equity shares, if approved by the shareholders,
would involve cash outflow of Rs. 109.65 Crore (including Corporate
dividend Tax of Rs.18.55 Crore) compared to Rs. 97.73 Crore (including
Corporate Dividend Tax of Rs. 6.67 Crore) paid for the year 2013-14.
The equity shares as may be allotted upon the exercise of options
granted under the Employees Stock Option Schemes and out of the Share
Capital Suspense before the Book Closure for payment of dividend will
rank paripassu with the existing shares and shall also be entitled to
receive the aforesaid dividend.
TRANSFER TO RESERVES
We propose to transfer Rs. 200 Crore to general reserve. An amount of
Rs. 417.98 Crore is proposed to be retained in the profit and loss
account of the Company.
FINANCE
During the year 2014-15, your Company has:
- Raised long-term loans, aggregating to Rs. 37.42 Crore by way of
Rupee Term Loan (including Finance Lease Liability) and Rs. 300 Crore
by way of issue of Non Convertible Debentures (NCDs);
- Repaid term loans (including Foreign Currency Borrowings and Finance
Lease Liability) aggregating to Rs. 227.88 Crore;
- Refinanced foreign currency borrowings aggregating to Rs. 702.97
Crore to get the benefit of lower interest cost.
PUBLIC DEPOSITS
During the year under review, your Company has not accepted any
deposits from the public falling under Section 73 of the Act and the
Companies (Acceptance of Deposits) Rules, 2014 and as such no amount of
principal or interest was outstanding as on the balance sheet date.
CORPORATE GOVERNANCE
Your Company is committed to maintaining the highest standards of
Corporate Governance and adhering to the Corporate Governance
requirements set out by Securities and Exchange Board of India (SEBI).
During the year under review, your Company was in compliance with the
provisions of Clause 49 of the Listing Agreement with the Stock
Exchanges pertaining to the corporate governance compliances.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report. The Statutory
Auditors'' Certificate confirming compliance with Clause 49 of the
Listing Agreement with Stock Exchanges is given in Annexure I and the
same forms part of the Directors'' Report.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of the provisions of Clause 49 of the Listing Agreement, the
Management Discussion and Analysis is set out in this Annual Report.
SUBSIDIARIES, JOINT VENTURES, AND ASSOCIATE COMPANIES
Subsidiary Companies
During the year,the following changes have taken place in the
Subsidiary Companies:
- Aditya Birla Financial Services Private Limited, a holding company
for all financial services business of the Company except Birla Sun
Life Insurance Company Limited, which is held directly by the Company
due to regulatory reasons, has been converted into a Public Limited
Company viz. Aditya Birla Financial Services Limited on 4th December,
2014 for business expansion and future growth.
- Birla Sun Life Pension Management Limited, a wholly owned subsidiary
of Birla Sun Life Insurance Company Limited, has been incorporated on
9th January, 2015 for management of pension fund under National Pension
Scheme (NPS). The company is registered with Pension Fund Regulatory
and Development Authority.
- Birla Sun Life Asset Management Company Limited has acquired mutual
fund schemes and portfolio accounts from ING Investment Management
(India) Pvt. Ltd. in September 2014.
- Aditya Birla Customer Services Private Limited, which runs My
Universe, an online personal finance management portal, has been
converted into a Public Limited Company viz. Aditya Birla Customer
Services Limited on 7th January, 2015 for business expansion and future
growth.
- International Finance Corporation (IFC) has entered into an agreement
and acquired stake in Aditya Birla Customer Services Limited in
December 2014 for strategic financial investment in the company.
- Aditya Birla Housing Finance Limited commenced its housing finance
business in October 2014 and built a book size of Rs. 142 Crore as on
31st March 2015.
- Aditya Birla Finance Limited, a subsidiary of the Company, sold its
entire holding in Aditya Birla Securities Private Limited on 10th
September, 2014 to a promoter group Company. Consequently Aditya Birla
Securities Private Limited has ceased to be the subsidiary of the
Company.
- The Company had applied for winding up of Aditya Vikram Global
Trading House Limited (AVGTHL), its overseas subsidiary, registered in
Mauritius, and on 30th September, 2014
AVGTHL was liquidated and the entire funds available were distributed
to the shareholders.
Accordingly, the Company has received funds available with AVGTHL.
The Policy of determining material subsidiaries may be accessed on the
Company''s website at the link below:
http://adityabirlanuvo.com/pdf/policy_material _subsidiaries.pdf
JOINT VENTURE
IDEA Cellular Limited is the Joint Venture of the Company and continues
to be the Joint Venture, during the year under review.
ASSOCIATE COMPANIES
During the year, the Company has sold its stake in Birla Securities
Limited, an Associate Company.
A report on the performance and financial position of each of the
subsidiaries, associates and joint venture companies as per Section
129(3) of the Companies Act, 2013 ("the Act") and the Rules made there
under is provided as Annexure II of the Consolidated Financial
Statement and hence not repeated for the sake of brevity.
The audited financial statements of your Company''s subsidiaries and
related information have been placed on the website of your Company
viz. www.adityabirlanuvo.com. Any Member, who is interested in
obtaining a copy of audited financial statements of your Company''s
subsidiaries may write to the Company Secretary at the Registered
Office of your Company.
CONSOLDATED FINANCIAL RESULTS
The Consolidated Financial Statements have been prepared in accordance
with the provisions of the Section 129(3) of the Act, read with the
Companies (Accounts) Rules, 2014, applicable Accounting Standards and
the provisions of the Listing Agreement with the Stock Exchanges and
forms part of the Annual Report.
HUMAN RESOURCES
Your Company believes that human resources will play a critical role in
its future growth. With an unswerving focus on nurturing and retaining
talent, your Company provides avenues for learning and development
through functional, behavioural and leadership training programs,
knowledge exchange conferences, and providing communication channels
for information sharing, to name a few of the initiatives.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK- PLACE
PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
During the year under review, your Company has not received any
complaint under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
In compliance with the provisions of Section 177 (10) of the Act and
Clause 49 of the Listing Agreement, your Company has in place a vigil
mechanism for the directors and employees to report concerns about
unethical behaviour, and actual or suspected fraud or violation of your
Company''s Code of Conduct. Adequate safeguards are provided against
victimization to those who avail of the mechanism and access to the
Chairman of the Audit Committee in exceptional cases is provided to
them. The vigil mechanism is posted on the Company''s website at
www.adityabirlanuvo.com.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In accordance with the provisions of Section 197(12) of the Act read
with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the names and other particulars of employees
are to be set out in the Directors'' Report, as an addendum thereto.
However, having regard to the provisions of Section 136(1) of the Act,
the Annual Report excluding the aforesaid information about the
employees, is being sent to the Members of the Company. The said
information is available for inspection at the Registered Office of
your Company during the working hours. Any Member interested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company and the same will be furnished on
request.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
appended as Annexure to the Boards'' Report as Annexure III.
EXTRACT OF ANNUAL RETURN
In terms of the provisions of Section 92 (3) of the Act read with the
Companies (Management and
Administration) Rules, 2014, an extract of the Annual Return of your
Company for the financial year ended 31st March, 2015 in Form MGT-9 is
given in Annexure IV to this report.
BUSINESS RESPONSIBILITY REPORT
As per Clause 55 of the Listing Agreement with the Stock Exchanges, a
separate section on Business Responsibility Reporting forms part of
this Annual Report.
RELATED PARTY TRANSACTIONS
During the financial year, your Company has entered into related party
transactions which were on an arm''s length basis and in the ordinary
course of business. The Company has not entered into any transaction
with any related party which could be considered material in accordance
with the Listing Agreement and the Policy of the Company on materiality
of related party transactions. All related party transactions have been
approved by the Audit Committee of the Board of Directors of your
Company and the same are being reviewed by it on a periodic basis. The
Policy on the Related Party Transactions as approved by the Audit
Committee and the Board of your Company is posted on the Company''s
website viz. www.adityabirlanuvo.com.
The details of contracts and arrangement with related parties of your
Company for the financial year ended 31st March, 2015 is given in Note
No. 42 to the financial statements.
RISK MANAGEMENT
Your Directors have constituted a Risk Management Committee which has
been entrusted with the responsibility to review the risk management
plan / process of your Company. This Committee identifies the potential
risks, assesses their potential impact and takes timely actions to
mitigate the same. The Risk Management framework and the Risk
Management approach are covered in the Management Discussion and
Analysis forming part of this Annual Report.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
Your Company has in place adequate internal control systems
commensurate with the size of its operations. The internal control
systems, comprising of policies and procedures, are designed to ensure
sound management of your Company''s operations, safekeeping of its
assets, optimal utilization of resources, reliability of its financial
information and compliance. Clearly defined roles and responsibilities
have been institutionalized. Systems and procedures are periodically
reviewed to keep pace with the growing size and complexity of your
Company''s operations.
DIRECTOR''S RESPONSIBILITY STATEMENT
The audited accounts for the year under review are in conformity with
the requirements of the Act and the Accounting Standards. The financial
statements reflect fairly the form and substance of transactions
carried out during the year under review and reasonably present your
Company''s financial condition and results of operations.
Based on the information and explanations obtained by your Directors
from the management of your Company, your Directors state that:
i) in the preparation of the Annual Accounts for the financial year
ended 31st March, 2015, the applicable accounting standards have been
followed along with proper explanations relating to material
departures, if any;
ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31st March, 2015 and of the profit of the Company
for the year ended on that date;
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities;
iv) the Directors have prepared the Annual Accounts of the Company on a
going concern basis;
v) the Directors have laid down internal financial controls and that
such internal financial control are adequate and are operating
effectively; and
vi) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Act read with Companies (Meetings of
Board and its Powers) Rules, 2014 are given in the Note No. 42 to the
financial statements.
EMPLOYEE STOCK OPTION SCHEMES 2006 and 2013 (ESOS 2006 & ESOS 2013)
ESOS Â 2006
During the year 5,430 Stock Options have vested in eligible employees.
The Nomination and Remuneration Committee ("the Committee") allotted
52,221 equity shares of Rs. 10 each of your Company upon exercise of
Stock Options by the employees.
ESOS Â 2013
During the year, the Committee granted 35,060 Stock Options and 12,630
Restricted Stock Units to eligible employees of your Company subject to
the provisions of the Company''s Employee Stock Option Scheme ("Scheme Â
2013"). 12,559 Stock Options have vested in the option grantees in
terms of the provisions of the Scheme 2013. However, no Restricted
Stock Units have vested in the option grantees in terms of the
provisions of Scheme 2013.
The summary information on Options and Restricted Stock Units granted
under the above mentioned schemes are provided in Annexure V to this
Report.
A certificate received from the Statutory Auditors on the
implementation of your Company''s Employees Stock Option Scheme 2006 and
Employees Stock Option Scheme 2013 will be placed at the ensuing Annual
General Meeting for inspection by the Members.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information on conservation of energy, technology absorption, foreign
exchange earnings and out go, required to be disclosed pursuant to
provision of Section 134 of the Act read with the Companies (Accounts)
Rules, 2014 is given in Annexure VI to this Report.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions Section 135 of the Act read with Companies
(Corporate Social Responsibility Policy) Rules, 2014, the Board of
Directors of your Company has constituted a Corporate Social
Responsibility ("CSR") Committee which is chaired by Mrs. Rajashree
Birla. The other Members of the Committee are Ms. Tarjani Vakil, an
Independent Director and Mr. Lalit Naik, the Managing Director of your
Company. Dr. (Mrs.) Pragnya Ram, Group Executive President, Corporate
Communications & CSR, is a Permanent Invitee to the Committee. Your
Company also has in place a CSR Policy and the same is available on the
website of the Company at www.adityabirlanuvo.com.The Committee places
before the Board the details of the activities to be undertaken during
the year.
Your Company is a caring corporate citizen and lays significant
emphasis on the development of the host communities around which it
operates. With this intent, the Company has identified several
projects relating to Social Empowerment & Welfare, Infrastructure
Developments, Sustainable Livelihood, Health Care and Education during
the year and initiated various activities in neighbouring villages
around the plant locations.
The work on several CSR initiatives has gained momentum during the
year, resulting in a spend of Rs. 9.61 Crore (the same being 2.04% of
the average net profits of the last 3 years as defined for the purposes
of CSR). A detailed report is attached as Annexure VII forming part of
this report.
DIRECTORS
Changes in Board constitution Â
Mr. B. L. Shah, the Non-Executive Director of your Company, resigned
from the Board of your Company with effect from 25th September, 2014.
Dr. Rakesh Jain stepped down as the Company''s Managing Director and as
Director from the close of business hours on 30th June, 2014 due to his
personal commitments. The Board places on record its deep appreciation
for the services rendered by them during their tenure as the Members of
the Board. Mr. Lalit Naik, the Deputy Managing Director has been
appointed as the Managing Director w.e.f. 1st July, 2014.
Mr. Kumar Mangalam Birla and Mr. T. Chattopadhyay retire from office
by rotation and being eligible, have offered themselves for re-
appointment. The Directors recommend the said re-appointments. Items
seeking your approval on the above re-appointments are included in the
Notice convening the Annual General Meeting. Brief resumes of the
Directors seeking re- appointments form part of the Notice of the
ensuing Annual General Meeting.
Further details on the Board of Directors are provided in the Corporate
Governance Report forming part of this Annual Report.
Meetings of the Board Â
During the year, the Board of Directors of your Company met 5 times to
deliberate on various matters. The details of Board Meetings and the
meeting of Independent Directors held are given in the Corporate
Governance Report.
Composition of the Audit Committee Â
The Board has constituted the Audit Committee which comprises of Ms.
Tarjani Vakil, Mr. B. R. Gupta, Mr. G. P. Gupta, and Mr. P. Murari as
the members. Other details of the Audit Committee are listed in the
Corporate Governance Report. The Audit Committee met 7 times during the
year under review.
Independent Director''s Statement Â
The Independent Directors on your Company''s Board have given their
respective declarations that they meet the criteria of Independence as
provided in Section 149(6) of the Act and Clause 49 of the Listing
Agreement.
Policy on Appointment and Remuneration of Directors and Key Managerial
Personnel Â
The appointment and remuneration of Directors and KMPs is as per policy
of your Company.
Annual Evaluation Â
Pursuant to the provisions of the Act and Clause 49 of the Listing
Agreement, the Board assessed and evaluated the effectiveness of its
functioning and that of the Committees and of the individual Directors
by seeking their inputs on various aspects of the Board/Committee
Governance. The Nomination and Remuneration Committee (NRC) and the
Board have reviewed the performance of the individual directors and the
Chairman on the basis of criteria such as contributions at the
meetings, their preparedness, inputs, etc., on the issues to be
discussed.
The details of programme for familiarisation of the Independent
Directors of your Company is available on the Company''s website viz.
www.adityabirlanuvo.com.
Remuneration Policy -
The NRC has formulated the Remuneration policy of your Company which is
attached as Annexure VIII to this report. Details of policy are
available on the Company''s website viz.www.adityabirlanuvo.com.
KEY MANAGERIAL PERSONNEL
During the year, Mrs. Hutokshi Wadia, Company Secretary and Compliance
Officer, resigned from the services of the Company, w.e.f. 1st March,
2015, consequent to her movement to another group company. Your Board
has appointed Mr. Ashok Malu as the Company Secretary and Compliance
Officer of the Company effective 1st March, 2015.
AUDITORS
STATUTORY AUDITORS AND THEIR REPORT
M/s. Khimji Kunverji & Co., and S R B C & Co. LLP, Joint Statutory
Auditors of the Company, retire at the ensuing Annual General Meeting
and are eligible for re-appointment. The Auditors have given their
consent in writing and have furnished a certificate to the effect that
their re-appointment, if made, would be in accordance with the
provisions of Section 139 (1) of the Act and that they meet with the
criteria prescribed under Section 141 of the Act. Your Directors
recommend their re-appointment at the ensuing Annual General Meeting.
The Notes on financial statement referred to in the Auditors'' Report
are self-explanatory and do not call for any further comments. The
Auditors'' Report does not contain any qualification, reservation or
adverse remark.
COST AUDITOR AND COST AUDIT REPORT
In terms of the provisions of the Section 148 of the Act read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of
Directors of your Company have, on the recommendation of the Audit
Committee, appointed the following Cost Auditors for conducting the
audit of the cost records of the Company for the financial year 2015-16
at the remuneration as mentioned in the Notice convening the AGM:- i)
M/s. Ashwin Solanki & Associates, Cost Accountants Firm Registration
Number - 100392 - for Indian Rayon, Veraval  for Viscose Filament Yarn
and Chemicals
ii) M/s. K. G. Goyal & Associates, Cost Accountants Firm Registration
Number - 000024 - for Indo Gulf Fertilisers, Jagdishpur- for
Fertilisers
iii) M/s. R. Chakraborty & Associates, Cost Accountants Firm
Registration Number - 100481 - for Jaya Shree Textiles, Rishra  for
Textiles, and
iv) M/s. S. S. Puranik & Associates, Cost Accountants Firm Registration
Number - 100313 - for Insulators  Halol & Rishra.
As required under the Act, the remuneration payable to the cost auditor
is required to be placed before the Members at the general meeting for
their ratification. Accordingly, a Resolution seeking Member''s
ratification for the remuneration payable to Cost Auditors is included
in the notice convening the Annual General Meeting. The members are
requested to ratify the remuneration payable to the Cost Auditors for
2015-16.
Your Compay has filed the Cost Audit and Compliance Report for
Financial Year 2014 with the Government.
SECRETARIAL AUDITORS
In terms of the provision of the Section 204 of the Act read with
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, your Board has appointed M/s. BNP & Associates, Company
Secretaries, Mumbai as the Secretarial Auditor for conducting a
Secretarial Audit of your Company for the financial year ended 31st
March, 2015. The report of the Secretarial Auditors is attached as
Annexure IX. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
AWARDS AND RECOGNITION
- Indo Gulf Fertlisers:
i) Global CSR Excellence & Leadership Award for best use of CSR
Practice in Manufacturing awarded by World CSR Congress, World CSR Day
& World CSR Federation on 17th February, 2015
- Aditya Birla Insulators  Halol Division:
i) Greentech foundation "GOLD" Award for outstanding achievements in
Best Strategy in Human Resource received from Greentech Foundation for
Best Strategy in Human Resource, on 27th June, 2014
ii) Certificate of recognition for Occupational Health & Safety
Management System, received from the British Standards Institution
(BSI)for maintaining ISO Certifications.
- Madura Fashion & Lifestyle: Van Heusen
i) Marketing Campaign of the Year - Global Marketing Excellence Awards
ii) Retail Marketing Campaign of the Year - Asia Retail Congress
iii) Impactful Retail Design - Asia Retail Congress
iv) Social Media Campaign of the Year - Asia Retail Congress
v) Best use of LinkedIn - Asia Retail Congress
vi) Best use of Twitter - Asia Retail Congress
vii) Best Loyalty program of the year - AIMIA loyalty awards
viii) Best Design concept of the year - Images Fashion Awards
ix) Most Valuable Brand in the clothing category - WCRC
Allen Solly
i) Social Media Awards  (Best Use of Twitter Award) - Youth Marketing
Forum
ii) Best Menswear Brand  (Western wear)  Images Fashion Awards
OTHER DISCLOSURES
- Your Company has not issued:- - any shares with differential voting;
- any sweat equity shares
- There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and Company''s
operations in future.
- There were no material changes and commitments affecting the
financial position of your Company between end of the financial year
and the date of this report.
- There was no revision in the financial statements.
APPRECIATION
Your Directors take this opportunity to express their sincere
appreciation for the excellent support and co-operation extended by the
shareholders, customers, suppliers, bankers and other business
associates. Your Directors gratefully acknowledge the ongoing
cooperation and support provided by Central and State Governments and
all Regulatory bodies.
Your Directors place on record their deep appreciation for the
exemplary contribution made by the employees of the Company at all
levels. Their dedicated efforts and enthusiasm have been pivotal to
your Company''s growth.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
(DIN: 00012813)
Mumbai, 14th May, 2015
Mar 31, 2014
Dear Shareholders,
We are pleased to present the 57th Annual Report together with the
Audited Accounts of your Company for the financial year ended 31st
March, 2014.
MACRO-ECONOMIC SCENARIO
During the calendar year 2013, India''s GDP growth slipped to the
decade''s low of 4.4%. Inflation and interest rates remained at high
levels, hampering consumption demand and investments. During past few
months, India has taken substantive measures to narrow fiscal
imbalances, to tighten monetary policy and to move forward on
structural reforms. The pick-up in exports in recent months and
measures to curb gold imports have contributed to lowering the current
account deficit.
In the calendar year 2014, as projected by IMF, India''s GDP growth is
expected to improve to 5.4%. A stable government, strong global growth,
improved export competitiveness and implementation of recently approved
investment projects are expected to be the key contributing factors.
CONSOLIDATED FINANCIAL PERFORMANCE
Your Company has posted strong earnings growth and is competitively
well positioned in most of its businesses. Consolidated revenue grew by
2% to Rs. 25,893 Crore. EBITDA surged by 19% to Rs. 4,937 Crore. Net Profit
before one-off items rose by 16% to Rs. 1,226 Crore. Fashion & Lifestyle
and Telecom businesses were the major contributors.
Key highlights :
a) Funds under the management of Aditya Birla Financial Services grew
year on year by 14% to reach Rs. 122,362 Crore. Lending book in the NBFC
business expanded to Rs. 11,550 Crore, registering a growth of 44%. While
profitability in the Life Insurance business remained subdued, Asset
management and NBFC businesses contributed to the bottom-line. ROACE
remained strong at 25% per annum.
b) Fashion & Lifestyle business launched new stores at the run rate of
one store per day to expand its retail presence to 1,750 exclusive
brand outlets / stores spanning across 4.3 million square feet. Jaya
Shree Textiles expanded its linen capacities to tap the sector growth
while Pantaloons remained in the investment phase. The business has
posted a sound ROACE at 28% per annum.
c) For over 5 years now, Idea Cellular has remained the biggest revenue
market share gainer in India. Led by earnings growth and healthy cash
profits, its balance sheet stands strong and ROACE stands improved to
12% per annum.
d) In the manufacturing businesses, Rayon business posted its highest
ever profitability. While Agri business was impacted by the 41 days
maintenance shutdown in the urea plant, profitability in the Insulators
business improved. The urea plant resumed full operations from 8th
April, 2014.
STANDALONE FINANCIAL PERFORMANCE
Your Company''s standalone revenue de-grew by 18% to Rs. 8,020 Crore on
account of the divestment of the Carbon Black business and
discontinuance of trading in imported P&K fertilisers. EBITDA is up by
12% toRs. 1,246 Crore. Fashion & Lifestyle and the Rayon businesses were
the largest contributors. Profitability in the Agri business was
impacted due to the shutdown. The dividend income from Birla Sun Life
Insurance and Idea Cellular also added to the bottom-line. Net profit
surged by 59% from Rs. 423 Crore to Rs. 674 Crore.
NEW INTIATIVES/MAJOR ACTIVITIES
- Divestment of Carbon Black and IT-ITeS businesses
To ensure greater focus in its core businesses, your Company has
divested its Carbon Black business with effect from 1st April, 2013 and
its holding in IT-ITeS business with effect from 9th May, 2014. The
divestment proceeds have been and will be utilised to support the
balance sheet and the growth plans of your Company.
- Linen Capacity Expansion
To tap sector growth and strengthen its market leadership in the linen
segment, Jaya Shree Textiles has expanded its linen yarn capacity from
2,300 to 3,400 tons per annum and linen fabric processing capacity from
7.3 to 10.1 million metres per annum.
- Capital Infusion
The shareholders, at their meeting held on 25th April, 2012, approved
the issue of 16,500,000 warrants to the Promoters/ Promoter Group in
accordance with the SEBI Guidelines for an aggregate sum of about Rs.
1,500 Crore. A sum of Rs. 376 Crore was received as 25% application money
in May 2012, on allotment of the aforesaid warrants. In March 2013, a
sum of Rs. 456 Crore was received, being 75% amount
payable on the conversion of 6,680,000 warrants into equal number of
equity shares. In November 2013, Promoters further infused a sum of Rs.
671 Crore on conversion of the remaining 9,820,000 warrants. The
capital infusion has not only strengthened the financial position of
the Company but has also supported its growth plans.
FINANCIAL PERFORMANCE (Rs. in Crore)
Consolidated Standalone
2013-14 2012-13 2013-14 2012-13
Profit Before Depreciation
/ Amortisation,
Interest and Tax 4,937.07 4,142.32 1,245.81 1,116.07
Depreciation and
Amortisation Expenses 1,608.86 1,295.49 199.02 219.18
Finance Costs 1,561.33 1,321.16 266.56 360.00
Profit Before Exceptional
Items and Tax 1,766.88 1,525.67 780.23 536.89
Exceptional Items 5.42 - 24.06 -
Profit Before Tax 1,772.30 1,525.67 804.29 536.89
Tax Expenses 550.50 341.78 130.34 113.84
Net Profit Before Minority
Interest 1,221.80 1,183.89 673.95 423.05
Minority Interest 78.92 125.00 - -
Profit for the Year 1,142.88 1,058.89 673.95 423.05
Opening Balance as per
last audited financial
statement 312.79 (298.69) 167.34 51.33
Amount Transferred on
Stake Change/ Amalgamation
of Subsidiaries/Joint venture (0.76) (0.44) - -
Demerger Expenses - (8.98) - -
Minority Interest
Adjustment of
Demerger Expenses - 4.48 - -
Profit available for
Appropriation 1,454.91 755.26 841.29 474.38
Appropriations :
Debenture Redemption Reserve 24.63 44.70 20.98 28.89
Special Reserve 33.53 20.50 - -
General Reserve 501.40 249.65 500.00 200.00
Corporate Tax on Interim
Dividend 3.59 29.97 - -
Proposed Dividend on
Preference Share 0.01 0.01 0.01 0.01
Proposed Dividend on Equity
Share 91.06 78.14 91.06 78.14
Equity Dividend relating to
Previous period 0.07 - 0.01 -
Corporate Tax on
Proposed Dividend 22.03 19.50 6.67 -
Closing Balance of Surplus
in the Statement of Profit
& Loss 778.59 312.79 222.56 167.34
DIVIDEND
For the financial year ended on 31st March, 2014, the Directors of your
Company recommend for your consideration a dividend of:
i. Rs. 7.00 per Equity Share of Rs. 10/- each (last year Rs. 6.50 per Equity
Share); and
ii. Rs. 6.00 per Preference Share of Rs. 100/- each (last year Rs. 6.00 per
Preference Share).
The said dividend, if approved by the shareholders, would involve cash
outflow of Rs. 97.74 Crore (including dividend distribution tax of Rs. 6.67
Crore) compared to Rs. 78.15 Crore (including dividend distribution tax
of Rs. NIL) paid for the year 2012-13.
FINANCE
During the year 2013-14, your Company,
 Raised long-term loans, aggregating to Rs. 59 Crore by way of Rupee
Term Loan and Rs. 200 Crore by way of issue of Non- Convertible
Debentures (NCDs);
 Repaid term loans (including foreign currency borrowings) aggregating
to Rs. 280.89 Crore and NCDs of Rs. 200 Crore; and
 Refinanced foreign currency borrowings aggregating to Rs. 182.96 Crore
to get the benefit of lower interest cost.
HUMAN RESOURCES
Your Company strives to foster a culture for high performance. Ongoing
learning, aligning HR systems in line with global bench-marks, aligning
rewards and recognitions with performance have enabled your Company to
sustain its reputation of being a meritocratic organization.
The Group''s Corporate Human Resources function continues to play an
integral role in the Company''s talent management programme.
CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standards of
Corporate Governance and adhere to the Corporate Governance
requirements set out by the Securities and Exchange Board of India
(SEBI) and has complied with all mandatory provisions of Clause 49 of
the Listing Agreement with the Stock Exchanges.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report.
Statutory Auditors'' Certificate confirming compliance with Clause 49 of
the Listing Agreement is annexed (Annexure A) and forms part of the
Directors'' Report.
BUSINESS RESPONSIBILITY REPORT
SEBI, vide its circular CIR/CFD/DIL/8/2012 dated 13th August, 2012, has
mandated inclusion of Business Responsibility Report (BRR) as part of
the Annual Report for certain listed entities describing the
initiatives taken by the company from Environmental, Social and
Governance perspective. BRR is attached and forms part of the Annual
Report.
DIRECTORS RESPONSIBILITY STATEMENT
As required under section 217(2AA) of the Companies Act, 1956, the
Directors confirm that:
i) in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanations relating to
material departures if any;
ii) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that period;
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
iv) the Directors have prepared the Annual Accounts on a ''going concern
basis''.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL RESULTS
During the year, following changes have taken place in the Subsidiary
Companies:
¦ In the previous year ended 31st March, 2013, pursuant to the Scheme
of Arrangement (''the Scheme'') under sections 391 to 394 of the
Companies Act, 1956, the fashion retail business called the ''Pantaloons
Format'' of Pantaloon Retail (India) Limited (PRIL) has been transferred
by way of demerger to Pantaloons Fashion & Retail Limited (PFRL) on a
going concern basis w.e.f. 8th April, 2013. The Scheme was operative
from the Appointed Date, i.e. 1st July, 2012. Post demerger, the
holding of your Company, through its wholly owned subsidiary Indigold
Trade and Services Ltd. (ITSL) in PFRL became 50.09% Post -
implementation of the Scheme, ITSL has made an Open Offer to the public
shareholders of PFRL at a price of Rs. 175/- per share and acquired
additional 17.87% of the issued and paid up capital of PFRL. As a
result of this, your Company''s holding through ITSL in PFRL increased
to 67.95%.
¦ ABNL IT & ITES Limited, a wholly owned Subsidiary of the Company, on
receipt of requisite consents and approvals has divested its IT & ITeS
business to a group of financial investors led by CX Partners and
Capital Square Partners.
As a result of the above divestment, Aditya Birla Minacs Worldwide
Limited and its subsidiaries ceased to be subsidiaries of the Company
with effect from 9th May, 2014. Further, Aditya Birla Minacs BPO Pvt.
Limited has become a direct subsidiary of ABNL IT & ITES Limited.
Consolidated Financial Statements, pursuant to Clause 41 of the Listing
Agreement, entered into with the Stock Exchanges and prepared in
accordance with the Accounting Standards prescribed by the Institute of
Chartered Accountants of India, are attached for your reference.
In line with the General Exemption granted by Ministry of Corporate
Affairs vide, Circular 2/2011 dated 8th February, 2011, from attaching
the Balance Sheet of subsidiaries subject to certain conditions, the
Balance Sheet, the Statement of Profit and Loss, Report of the Board of
Directors and Report of the Auditors of the subsidiary companies have
not been attached to the Balance Sheet of the Company as at 31st March,
2014.
The annual accounts of the subsidiary companies and the related
detailed information are available to shareholders. The annual accounts
of the subsidiary companies are kept open for inspection by any
shareholder, at the Registered Office of the Company and of the
concerned subsidiary companies. Any shareholder, who desires to obtain
a copy of the said documents of any of the subsidiary companies, may
send a request in writing to the Company Secretary at the Registered
Office of the Company so that the needful can be done.
EMPLOYEE STOCK OPTION SCHEMES 2006 & 2013 (ESOS 2006 & ESOS 2013)
At the Annual General Meeting of the Company held on 6th September,
2013, the shareholders of your Company approved the formulation of ESOS
2013.
Details of the Stock Options issued under ESOS 2006 & ESOS 2013, up to
31st March, 2014, and the disclosures in compliance with Clause 12 of
the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set
out in the Annexure B to this Report.
A certificate from the Auditors of the Company, confirming that the
ESOS 2006 & ESOS 2013 have been implemented in accordance with the SEBI
Guidelines and the resolutions passed by the shareholders shall be
placed at the Annual General Meeting, for inspection by members.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
Information relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
Section 217(1)(e) of the Companies Act, 1956, is set out in a separate
statement attached to this Report (Annexure C) and forms part of it.
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are to be set out in the Directors'' Report, as
an addendum thereto. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report and accounts as
therein set out, are being sent to all shareholders of the Company
excluding the aforesaid information about the employees. Any member,
who is interested in obtaining such particulars about employees, may
write to the Company Secretary at the Registered Office of your
Company.
DIRECTORS
During the financial year 2014, there were no changes in directorship
of your Company.
Pursuant to the provisions of Section 149 of the Companies Act 2013
read with revised Clause 49 of the Listing Agreement (w.e.f. from
1st October, 2014) the Directors, have subject to the approval of
shareholders, appointed Ms. Tarjani Vakil, Mr. P. Murari, Mr. B. R.
Gupta, Mr. S. C. Bhargava and Mr. G. P. Gupta as Independent Directors.
Your Company has received declarations from the Independent Directors
confirming that they meet the criteria of independence as prescribed
under section 149(6) of the Companies Act, 2013 and under Clause 49 of
the Listing Agreement. In accordance with the provisions of section
149(4), section 160 and proviso to section 152(5) of the Companies Act,
2013, these Directors are being appointed as Independent Directors to
hold office as per their tenure of appointment mentioned in the Notice
of the ensuing Annual General Meeting of the Company. Your Directors
commend the resolutions for your approval.
The shareholders at the AGM held on 10th July, 2009 had appointed Dr.
Rakesh Jain as the Managing Director of the Company, w.e.f 1st July,
2009 for a period of 5 years ending on 30th June, 2014. Due to his
personal commitments, Dr. Jain has requested the Board to relieve him
from the office of Managing Director as well as Director of the
Company, effective from the close of business hours on 30th June, 2014
when his current term as Managing Director of the Company expires.
Based on the recommendations of the Nomination and Remuneration
Committee, the Board accepted the request of Dr. Jain to relieve him
from the office of Managing Director as well as the Director of the
Company, effective from close of business hours on 30th June, 2014. The
Directors have placed on record its deep appreciation for the valuable
services rendered by Dr. Rakesh Jain during his association with the
Company.
Subject to the approval of the shareholders, Mr. Lalit Naik, the Deputy
Managing Director of the Company has been appointed as the Managing
Director, w.e.f. 1st July, 2014. The resolution, seeking Mr. Lalit
Naik''s appointment has been included in the Notice of the ensuing
Annual General Meeting together with his brief details. Your Directors
commend the resolution for your approval.
In order to comply with the provisions of the Companies Act, 2013, read
with rules framed thereunder, it was proposed to make the term of each
of the Executive Directors of the Company, liable to retire by
rotation.
Mr. Sushil Agarwal was appointed as the Whole- time Director of the
Company at the Annual
General Meeting of the Company held on 28th September, 2011 and was not
liable to retire by rotation. As authorised by the shareholders at the
aforesaid Annual General Meeting, the Board of Directors approved
partial modification in the terms of appointment of Mr. Sushil Agarwal
to include him in the directors liable to retire by rotation. Since,
the term of appointment of Mr. Sushil Agarwal has been amended to make
it liable to retire by rotation, the resolution seeking Mr. Sushil
Agarwal''s appointment together with his brief details have been
included in the Notice of the ensuing Annual General Meeting. Your
Directors commend the resolution for your approval.
Mrs. Rajashree Birla and Mr. B. L. Shah, Directors of your Company
retire from the office by rotation and, being eligible, offer
themselves for re-appointment at the ensuing Annual General Meeting.
Resolutions seeking their appointment together with their brief profile
have been included in the Notice of ensuing Annual General Meeting.
Your Directors commend the resolutions for your approval.
AWARDS AND RECOGNITION
Your Company has been the proud recipient of the following awards and
recognitions:
- INDIAN RAYON DIVISION
i) 3rd Annual Greentech CSR Award-2013 in Chemical Sector, awarded by
Greentech Foundation, New Delhi.
- JAYA SHREE TEXTILES DIVISION
i) Performance Excellence Trophy  IMC Ramkrishna Bajaj National
Quality Award 2013.
ii) Trophy for significant improvement in productivity  CII Eastern
Region Productivity Awards 2013-2014.
iii) Bronze Award in the Chairman''s WCM Awards 2013 in the Business
Category.
- MADURA FASHION AND LIFESTYLE
Peter England:
i) India''s Second Most Trusted Brand  Brand Equity Study (2008-13).
ii) Most Desired Fashion Concept for PE-Oxygeans.
iii) Best Store Front & Best Signage  Retail Design Awards 2014.
Louis Philippe:
i) Best Apparel Brand  Textile Ministry.
ii) Champion CRM Program of the Year  Loyalty Summit 2013.
Van Heusen:
i) Most Popular Youth Brand  Women''s formal wear Award, from Youth
Marketing Forum.
Allen Solley:
i) Best Window Display 2013ÂVMRD Awards.
ii) Best Formal Brand  North East Consumer Forum.
Planet Fashion:
i) Awarded certificate for entering top 100 ranks for franchisee
opportunities for the year 2013.
- ADITYA BIRLA INSULATORS Â RISHRA DIVISION
i) Valued Customer Award by CPRI in Testing and Certification category.
ii) Special Export Award by CAPEXIL in Export category.
AUDITORS
M/s. Khimji Kunverji & Co., Joint Statutory Auditor of the Company,
retire and, being eligible, offer themselves for appointment, to hold
office from the conclusion of the ensuing Annual General Meeting till
the conclusion of the next Annual General Meeting.
S. R. Batliboi & Co. LLP, Joint Statutory Auditor of the Company have
expressed their unwillingness to continue as the Joint Statutory
Auditors of the Company and Branch Auditors of Indo Gulf Fertiliser
Division at Jagdishpur and Jaya Shree Textiles Division at Rishra, upon
the conclusion of the ensuing Annual General Meeting. S R B C & Co. LLP
have expressed their willingness to be appointed as Joint Statutory
Auditors of the Company and Branch Auditors as aforesaid at the ensuing
Annual General Meeting of the Company, to hold office till the
conclusion of the next Annual General Meeting. A special notice has
been received from a member holding five lakh shares in accordance with
provisions of Section 140(4)(i) of the Companies Act, 2013 proposing
appointment of S R B C & Co. LLP, as the Joint Statutory Auditors of
the Company and Branch Auditors as aforesaid.
Your Directors recommend the appointment of the Auditors as set out in
the accompanying Notice of the Annual General Meeting.
A Certificate from them confirming compliance of Section 115 of the
Companies Act, 2013, has also been received by the Company.
The observations made in the Auditors'' Report are self-explanatory and,
therefore, do not call for any further comments under Section 217(3) of
the Companies Act, 1956.
COST AUDITORS
The Company has appointed the following Cost Auditors for conducting
the audit of cost records of the Company for the financial year
2013-14: i) For Indian Rayon, Veraval - VFY & Chemicals - M/s. Ashwin
Solanki & Associates
iii) For Jaya Shree Textiles, Rishra - Textiles
M/s. R. Chakraborty & Co.
iv. For Indo Gulf Fertilisers, Jagdishpur - Fertilisers & Chemicals -
M/s. K. G. Goyal & Associates
v) For Madura Fashion and Life Style,
Bengaluru - Ready Made Garments -
M/s. G. N. V. & Associates vi) For Insulators - Halol & Rishra -
Insulators -
M/s. S. S. Puranik & Associates
The Audit Committee has received a Certificate from the Cost Auditors
certifying their independence and arm''s length relationship with your
Company. In accordance with the Company''s (Cost Audit Report) Rules,
2011, the due date for filing the Cost Audit Report in XBRL for the
financial year ended 31st March, 2013 was 30th September, 2013 and the
same was filed before the due date.
APPRECIATION
Directors take this opportunity to express their sincere appreciation
for the excellent support and co-operation extended by the
shareholders, customers, suppliers, bankers and other business
associates. The Directors gratefully acknowledge the ongoing
co-operation and support provided by Central and State Governments and
all Regulatory bodies.
The Directors place on record their deep appreciation for the exemplary
contribution made by employees at all levels, their dedicated efforts
and enthusiasm has been pivotal to the Company''s growth.
For and on behalf of the Board
Mumbai Kumar Mangalam Birla
26th June, 2014 Chairman
Mar 31, 2013
Dear Shareholders,
The are pleased to present the 56th Annual Report together with the
Audited Accounts of your Company for the financial year ended 31st
March, 2013.
MACRO-ECONOMIC SCENARIO
During the financial year 2012-13, India''s GDP growth slipped to the
decade''s low of 5%. High current account deficit (CAD), fiscal deficit
and persistently high inflation affected savings growth, domestic
consumption and investment cycle. Going forward, inflation and CAD are
expected to decline on account of falling prices of gold and
commodities. Government is also targeting reduction in fiscal deficit
through diesel price hikes and disinvestment plans. These developments
coupled with expected normal monsoon, signals an improvement in economy
as we progress ahead.
CONSOLIDATED FINANCIAL PERFORMANCE
During the year under review, your Company posted strong earnings
growth, despite some of the businesses being affected due to testing
macro-economic environment. Consolidated revenue grew by 17% to Rs.
25,490 Crore. EBITDA surged by 27% to Rs. 4,142 Crore. Net Profit rose
by 19% to Rs. 1,059 Crore. Financial Services businesses led the growth
in profitability, followed by Telecom and Fashion & Lifestyle
businesses.
Pursuant to the acquisition of controlling stake in ''Pantaloons
Fashion'' business, its financials have been consolidated w.e.f. the
Appointed Date, i.e., 1st July, 2012.
Key Highlights:
a) Aditya Birla Financial Services gained market share across most of
its businesses. Its assets under the management grew to USD 20 billion.
Lending book in the NBFC business expanded to more than Rs. 8,000
Crore. Birla Sun Life Insurance distributed interim dividend @ 10% to
its shareholders.
b) Since past 4 years, Idea Cellular has remained the biggest revenue
market share gainer in India. Having a strong balance sheet and free
cash flow generation, the Board of Directors of Idea has recommended
maiden dividend.
c) The Fashion & Lifestyle business is generating combined annualised
revenue of USD 1 billion. Its operating market size got enlarged with
the acquisition of Pantaloons. Its retail presence stands expanded to
1,443 exclusive brand outlets/stores spanning across 3.7 million square
feet.
d) IT-ITeS business reached Rs. 2,500 Crore revenue mark. It is
generating steady cash profit to fund its capital expenditure and
working capital requirements.
e) Having received the approval of the shareholders, your Company is in
the process of divesting its Carbon Black Business w.e.f. 1st April,
2013. The cash inflow from the divestment will reduce debt and
strengthen your Company''s balance sheet. This will support growth plans
of your Company and ensure greater focus on the other businesses.
f) EBITDA from manufacturing operations (Agri, Rayon and Insulators)
grew year on year by 10% to Rs. 446 Crore. New Viscose Filament Yarn
plant has been commissioned and it is currently under ramp up.
STANDALONE FINANCIAL PERFORMANCE
Revenue grew by 16% to Rs. 9,754 Crore and EBITDA grew by 6% to Rs.
1,116 Crore. While earnings in the Carbon Black and Insulators
businesses were constrained due to cheaper imports, volume growth and
higher realisation in the linen segment and in the Rayon business
supported the earnings growth. Profitability in the Agri-Business was
impacted due to planned maintenance shutdown for 20 days. Dividend
income of Rs. 146 Crore received from Birla Sun Life Insurance also
added to the bottom-line. Net profit surged by 22% to Rs. 423 Crore.
NEW INITIATIVES/MAJOR ACTIVITIES
- Brownfield Expansion
A. Viscose Filament Yarn (VFY)
Indian Rayon has commissioned its additional unit of Viscose Filament
Yarn using Spool technology imported from ENKA, Germany in the existing
premises at Veraval at a capex of about Rs. 270 Crore. This will help
Indian Rayon to manufacture premium quality yarn, especially in the
superfine segment.
B. Fertilisers
In January 2013, the Board of Directors of your Company approved
brownfield expansion of Urea capacity by 3,850 tons per day at the
existing fertiliser complex in Jagdishpur, U.P. Your Company is
awaiting requisite approvals from the Government.
- Preferential Allotment
The shareholders in their meeting, held on 25th April, 2012 approved
the issue of 16,500,000 warrants to the Promoters/ Promoter Group in
accordance with the relevant SEBI guidelines for an aggregate sum of
about Rs. 1,500 Crore. In terms of the relevant SEBI guidelines, 25% of
the aggregate amount, i.e., Rs. 376 Crore was received in May 2012 and
Rs. 456 Crore was received towards the balance 75% amount payable on
conversion of 6,680,000 warrants, in March 2013. Consequently,
6,680,000 warrants were converted into equal number of shares and were
allotted to the Promoters/ Promoter Group. In terms of the Issue, the
balance 9,820,000 warrants are to be converted on or before 9th
November, 2013. This equity infusion and remaining capital infusion of
about Rs. 671 Crore will not only strengthen the financial position of
your Company but also act as a seed capital for capturing the next
level of growth.
- Acquisition of Future Group''s Pantaloons Fashion Business
To meet your Company''s strategic intent to be on the top of the league
in the Country through an extension into the value segment, your
Company has acquired controlling stake in Future Group''s ''Pantaloons
Fashion'' business post its demerger from Pantaloon Retail (India) Ltd.
(PRIL), through its subsidiary Peter England Fashions and Retail
Limited [now name changed to Pantaloons Fashion & Retail Limited
(PFRL)]. This acquisition will not only expand your company''s operating
market size but will also strengthen its leadership position in the
branded apparels sector. Post approval of the shareholders of PRIL, the
Bombay High Court sanctioned the Scheme of Arrangement (Scheme) on 1st
March, 2013. On the Scheme becoming effective on 8th April, 2013, all
the net assets and operations pertaining to the ''Pantaloons Fashion''
business have been transferred, on a going-concern basis, along with
debt to PFRL. The Appointed Date of transfer is 1st July, 2012. Post
demerger, the holding of your Company, through its wholly owned
subsidiary Indigold Trade and Services Ltd. (ITSL), in PFRL became
50.09%. An open offer at a pre-determined price of Rs. 175/- per share
has been made by ITSL to the public shareholders of PFRL. On receipt of
necessary approvals, the equity shares of PFRL will be listed on the
National Stock Exchange of India Limited and BSE Ltd.
- Divestment of Carbon Black Business
Considering the Carbon Black Business scenario, both in the Indian and
the global context, your Company has, subject to the requisite
approvals, decided to divest your Company''s Carbon Black Business, on a
going- concern basis, by way of slump sale to SKI Carbon Black (India)
Private Limited, an Aditya Birla Group Company, for a lump sum
consideration of Rs. 1,451 Crore as an enterprise value, subject to the
adjustment for net working capital. Subsequent to the approval of the
shareholders, your Company is in the process of divesting the Carbon
Black Business.
FINANCIAL PERFORMANCE (Rs. Crore)
Consolidated Standalone
2012-13 2011-12 2012-13 2011-12
Profit Before Depreciation/
Amortisation, Interest
and Tax 4,142.32 3,259.46 1,116.07 1,050.06
Depreciation and
Amortisation Expenses 1,295.49 1,092.33 219.18 203.06
Finance Costs 1321.16 837.09 360.00 312.82
Profit Before Exceptional
Items and Tax 1,525.67 1,330.04 536.89 534.18
Exceptional Items - (103.88) - (103.88)
Profit Before Tax 1,525.67 1,226.16 536.89 430.30
Tax Expenses 341.78 216.01 113.84 84.91
Profit Before Minority
Interest 1,183.89 1,010.15 423.05 345.39
Minority Interest 125.00 120.02 - -
Profit for the Year 1,058.89 890.13 423.05 345.39
Opening Balance as per
last audited financial
statement (298.69) (839.33) 51.33 28.19
Amount Transferred
on Stake Change/
Amalgamation of
Subsidiaries/Joint Venture (0.44) (2.70) - -
Demerger Expenses (8.98) - - -
Minority Interest Adjustment
of Demerger Expenses 4.48 - - -
Profit available for
Appropriation 755.26 48.10 474.38 373.58
Appropriations:
Debenture Redemption Reserve 44.70 54.13 28.89 54.13
Special Reserve 20.50 11.63 - -
General Reserve 249.65 200.70 200.00 200.00
Capital Fund - 0.01 - -
Corporate Tax on Interim
Dividend 29.97 11.81 - -
Proposed Dividend on
Preference Shares 0.01 0.01 0.01 0.01
Proposed Dividend on
Equity Shares 78.14 68.11 78.14 68.11
Corporate Tax on
Proposed Dividend 19.50 0.39 - -
Surplus/(Deficit) in the
Statement of Profit and Loss 312.79 (298.69) 167.34 51.33
DIVIDEND
For the financial year ended on 31st March, 2013, your Directors
recommend for your consideration, a dividend of:
i. Rs. 6.50/- per Equity Share of Rs. 10/- each (last year Rs. 6/- per
Equity Share); and
ii. Rs. 6.00/- per Preference Share of Rs. 100/- each (last year Rs.
6/- per Preference Share).
The said dividend, if approved by the Members, would involve cash
outflow of Rs. 78.15 Crore (including Corporate Tax on Proposed
Dividend of Rs. NIL) compared to Rs. 68.12 Crore (including Corporate
Tax on Proposed Dividend of Rs. NIL) paid for the year 2011-12.
FINANCE
During the year 2012-13, your Company,
- Raised long-term loans, aggregating to Rs. 161.64 Crore by way of
foreign currency borrowings, Rs. 35 Crore by way of Rupee Term Loan and
Rs. 300 Crore by way of issue of Non-Convertible Debentures (NCD).
- Repaid term loans aggregating to Rs. 292.64 Crore and NCDs of Rs. 200
Crore.
HUMAN RESOURCE
Several innovative people focused initiatives have been instituted at
the Group level, and these are translated into action at all of the
Group Companies. Our basic objective is to ensure that a robust talent
pipeline and a high-performance culture, centred around accountability
is in place. We feel this is critical to enable us to retain our
competitive edge.
CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standards of
Corporate Governance and adhere to the Corporate Governance
requirements set out by Securities and Exchange Board of India (SEBI),
and has complied with all mandatory provisions of Clause 49 of the
Listing Agreement.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report.
Statutory Auditors'' Certificate, confirming compliance with Clause 49
of the Listing Agreement with Stock Exchanges, is annexed to (Annexure
A) and forms part of the Directors'' Report.
Business Responsibility Report
SEBI, vide its Circular CIR/CFD/DIL/8/2012 dated 13th August, 2012, has
mandated inclusion of Business Responsibility Report (BRR) as part of
the Annual Report for certain listed entities describing the initiates
taken by the Company from Environmental, Social and Governance
perspective. Accordingly, BRR is attached and forms part of the Annual
Report.
217(2AA) STATEMENT BY DIRECTORS
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanations relating to
material departures;
ii) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that period;
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
iv) the Directors have prepared the annual accounts on a ''going-concern
basis''.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL RESULTS
During the year, the following changes have taken place in the
Subsidiary Companies:
- Aditya Birla Financial Services Private Limited (ABFSPL), a
subsidiary company, has been classified as a "Core Investment
Company" instead of NBFC as hitherto, by the Reserve Bank of India
vide its approval, dated 11th April, 2012.
- As part of internal restructuring, Company transferred its majority
stake in :
- Peter England Fashions & Retail Limited to Indigold Trade &
Services Limited, a subsidiary company, on 1st June, 2012. On 23rd
April, 2013, the name of Peter England Fashions & Retail Limited was
changed to Pantaloons Fashion & Retail Limited.
- LIL Investment Limited to Aditya Birla Financial Services Private
Limited, a subsidiary company, on 31st December, 2012. On 10th January,
2013, the name of LIL Investment Limited was changed to Aditya Birla
Housing Finance Limited (ABHFL).
- Aditya Birla Minacs Worldwide Limited, a subsidiary company, to
ABNL IT & ITES Limited, a subsidiary company, on 25th March, 2013.
- The Company through its subsidiary, ABFSPL, acquired 1% stake each
in Birla Sun Life Asset Management Company Limited (BSLAMC) and Birla
Sun Life Trustee Company Private Limited (BSTCL) [earlier Joint Venture
Companies with Sun Life (India) AMC Investments Inc. ("Sun Life")] on
10th October, 2012, from Sun Life. Consequent to the said acquisition
BSLAMC and BSTCL have become subsidiaries of ABFSPL.
- In order to improve operational efficiency, Aditya Birla Minacs
Worldwide Limited, a subsidiary company, undertook re-structuring of
its holding in its subsidiaries. As a result, Aditya Birla Minacs BPO
Private Limited, earlier a subsidiary of Aditya Birla Minacs BPO
Limited, UK, is now a direct subsidiary of Aditya Birla Minacs
Worldwide Limited.
Consolidated Financial Statements, pursuant to Clause 41 of the Listing
Agreement, entered into with the Stock Exchanges and prepared in
accordance with the Accounting Standards prescribed by the Institute of
Chartered Accountants of India, are attached for your reference.
In line with the General Exemption granted by the Ministry of Corporate
Affairs, vide Circular 2/2011, dated 8th February, 2011, for not
attaching the Balance Sheet of subsidiaries subject to certain
conditions, the Balance Sheet, the Statement of Profit and Loss, Report
of the Board of Directors and Report of the Auditors of the subsidiary
companies have not been attached to the Balance Sheet of the Company as
at 31st March, 2013.
The annual accounts of the subsidiary companies and the related
detailed information are available to Shareholders of the Holding and
Subsidiary Companies. The annual accounts of the subsidiary companies
are kept open for inspection by any Shareholder, at the Registered
Office of the Company and of the concerned Subsidiary Companies. Any
Shareholder, who desires to obtain a copy of the said documents of any
of the Subsidiary Companies, may send a request in writing to the
Company Secretary at the Registered Office of the Company, so that the
needful can be done.
EMPLOYEE STOCK OPTIONS SCHEME (ESOS)-2006
Details of the stock options issued under ES0S-2006 up to 31st March,
2013, as also the disclosures in compliance with Clause 12 of the
Securities and Exchange Board of India (Employee Stock Options Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 (the "SEBI
Guidelines"), are set out in the Annexure B to this Report.
A certificate from the Auditors of the Company, confirming that the
Scheme has been implemented in accordance with the SEBI Guidelines and
the resolution passed by the shareholders, shall be placed at the
Annual General Meeting for inspection by members.
EMPLOYEE STOCK OPTIONS SCHEME (ESOS) - 2013 - ESOP
Your Directors appreciate the critical role of the employees in your
Company''s growth. To share the value created by employees and to
promote the culture of employee ownership in your Company, the
Directors have subject to the approval of the shareholders, introduced
the "Employee Stock Options Scheme-2013" (ES0S-2013). This is in
accordance with the provisions of Securities and Exchange Board of
India (Employee Stock Options Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999, as amended.
The resolution, seeking approval to the ES0S-2013, has been included in
the Notice of the ensuing Annual General Meeting together with brief
details of the Scheme. Your Directors commend the resolution for your
approval.
FIXED DEPOSITS
Your Company was accepting fixed deposits from the employees.
Acceptance of such fixed deposits had been discontinued from January
2009, onwards. As on 31st March, 2013, there are no outstanding fixed
deposits.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
The Information relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
Section 217(1)(e) of the Companies Act, 1956, is set out in a separate
statement attached to this Report (Annexure C) and forms part of it.
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are to be set out in the Directors'' Report, as
an addendum thereto. However, as per the provisions of Section 219(1
)(b)(iv) of the Companies Act, 1956, the Report and accounts as therein
set out are being sent to all members of the Company excluding the
aforesaid information about the employees. Any member, who is
interested in obtaining such particulars about employees, may write to
the Company Secretary at the Registered Office of the Company.
DIRECTORS
During the year, following were the changes in directorship of the
Company:
- Mr. Pranab Barua resigned as Whole-time Director of the Company in
May 2012.
- Subject to the approval of the Shareholders, Mr. Lalit Naik has
been appointed as Deputy Managing Director of the Company w.e.f. 1st
January, 2013. The resolution, seeking Mr. Naik''s appointment, has been
included in the Notice of the ensuing Annual General Meeting together
with his brief details. Your Directors commend the resolution for your
approval.
Following Directors of the Company retire from office by rotation and,
being eligible, offer themselves for re-appointment at the ensuing
Annual General Meeting:
- Mr. Kumar Mangalam Birla
- Mr. G.P. Gupta
- Mr. T. Chattopadhyay
Resolutions seeking their appointment have been included in the Notice
of the ensuing Annual General Meeting together with their brief
details.
AWARDS AND RECOGNITION
Your Company has been the proud recipient of the following awards and
recognitions:
- INDIAN RAYON DIVISION
- Environment Excellence Award-2012 in Chemical Sector, Awarded by
Greentech Foundation, New Delhi.
- 11th Greentech Safety Award-2012, Awarded by Greentech Foundation,
New Delhi.
- 2nd Annual Greentech CSR Award-2012 in Chemical Sector, Awarded by
Greentech Foundation, New Delhi.
- JAYA SHREE TEXTILE DIVISION
- CII (ER) Quality Award for most significant improvement in TQM
category.
- CII (ER) Productivity Award for Sustained Level of High Productivity
Category.
- Linen Fabric Division - IR & HRD, received the 3-Star Outstanding
Award in the International Convention of Quality Circle Concept held at
Kuala Lumpur, Malaysia, in October 2012.
- Wool Combing Division - IR & HRD, received the 3-Star Outstanding
Award in the International Convention of Quality Circle Concept held at
Kuala Lumpur, Malaysia, in October 2012.
- CARBON BLACK DIVISION, Gummidipoondi
- "Best Supplier - 2012" from Fenner India Ltd. (customer).
- CARBON BLACK DIVISION, Patalganga
- Patalganga Unit has been selected for Certificate of Appreciation for
CSR in Chemical Sector by Greentech Foundation, New Delhi.
- Certificate of Appreciation by Jan Shikshan Sanstha Raigad for Tribal
Livelihood of Tribes.
- MADURA FASHION AND LIFESTYLE
- Peter England - The winner of IAA Olive Crown Awards 2013 (GOLD)
Promoting Water Conservation through PE Oxygens.
- ADITYA BIRLA INSULATORS - RISHRA DIVISION
- Performance Excellence Trophy-2011 from IMC RAMKRISHNA BAJAJ NATIONAL
QUALITY AWARD.
AUDITORS
The observations made in the Auditors'' Report are self-explanatory and,
therefore, do not call for any further comments under Section 217(3) of
the Companies Act, 1956.
M/s. Khimji Kunverji & Co. and M/s. S. R. Batliboi & Co. LLP (earlier
known as M/s. S. R. Batliboi & Co.), Jt. Statutory Auditors of the
Company, retire and, being eligible, offer themselves for
re-appointment, to hold office from the conclusion of the ensuing
Annual General Meeting till the conclusion of the next Annual General
Meeting. Your Directors recommend their appointment, as set out in the
accompanying Notice of the Annual General Meeting. A Certificate from
them confirming compliance of Section 224(1B) of the Companies Act,
1956, has also been received by the Company.
APPRECIATION
Your Directors take this opportunity to express their sincere
appreciation for the excellent support and co-operation extended by the
shareholders, customers, suppliers, bankers and other business
associates. Your Directors gratefully acknowledge the on-going
co-operation and support provided by Central and State Governments and
all Regulatory bodies.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. Their dedicated
efforts and enthusiasm have been pivotal to your Company''s growth.
For and on behalf of the Board
Mumbai Kumar Mangalam Birla
29th May, 2013 Chairman
Mar 31, 2012
The are pleased to present the 55th Annual Report together with the
audited accounts of your Company for the financial year ended 31st
March, 2012.
MACRO ECONOMIC SCENARIO
Financial year 2011-12 was a challenging year for the economy with GDP
growth further slowing down to 6.1%, in the third quarter. Rupee
weakened against US dollar to historically low level of 54. High
inflation and resultant monetary measures continued to constrain
growth. However, with the much anticipated easing of inflation and
interest rates, domestic demand growth is expected to improve going
forward.
Amidst this testing macro-economic scenario, your Company posted strong
earnings.
CONSOLIDATED FINANCIAL PERFORMANCE
Consolidated revenue crossed Rs 21,000 Crore mark. It grew year on year
by 20%. While revenue growth of the Financial Services business
moderated, the Telecom business posted 26% growth in revenue driven by
MoU growth. The Fashion & Lifestyle and IT-ITeS businesses registered
24% and 23% revenue growth respectively. Manufacturing businesses
garnered 33% rise in revenue largely driven by the commencement of
trading in imported fertilisers. Increase in the realisation in Agri,
Carbon Black, Rayon and Textiles businesses, to partly pass on the rise
in production costs, also contributed.
Consolidated EBITDA rose by 21% to Rs 3,259 Crore - led by the Life
Insurance, Telecom and Fashion & Lifestyle businesses. With the strong
emergence of profit, Birla Sun Life Insurance Company Limited has
declared 5% maiden dividend. Strong growth in the minutes of usage
("MoU") in the Telecom business and sales growth in the Fashion &
Lifestyle business contributed to the profitable growth.
Net profit grew by 8% to Rs 890 Crore. Rise in depreciation and
interest costs primarily relating to 3G investments in the Telecom
business contained net profit growth.
STANDALONE FINANCIAL PERFORMANCE
Standalone revenue at Rs 8,433 Crore registered 31% growth. Agri
business touched Rs 2,100 Crore revenue mark supported by commencement
of trading in imported fertilisers. Textiles business crossed Rs 1,000
Crore revenue mark.
EBITDA rose by 9% to Rs 1,051 Crore - largely driven by the Fashion &
Lifestyle, Agri and Textiles businesses. Higher trading of imported
fertilisers in the Agri-business has augmented profitability, including
pricing gain due to favourable forex movement. Improved realisation in
the Rayon and the Textiles businesses also contributed. However,
dumping from China and rise in production costs strained profitability
in the Carbon Black and Insulators businesses.
Earnings before Tax and Exceptional Items grew by 8%. A provision of Rs
104 Crore has been made towards entry tax liability, largely related to
the earlier years; the matter is sub-judice.
As a result, net profit de-grew by 9% to Rs 345 Crore.
NEW INTIATIVES /MAJOR ACTIVITIES
* Brown Field Expansion
Indian Rayon is planning to expand its presence in fine and superfine
VFY segment using Spool Technology from ENKA, Germany at a capex of
about Rs 270 Crore. The new technology will help Indian Rayon to
manufacture premium segment quality yarn and cater to high margin
premium segment. A sum of Rs 76 Crore has already been spent.
* Restructuring of IT-ITeS Business
As a part of restructuring of IT-ITeS business, your Company has,
during the year under review, purchased 19,27,334 Equity Shares and
8,25,999 Equity Shares of Aditya Birla Minacs Worldwide Limited (ABMWL)
from RHCP TXW Investments Inc. and RHCP Fund Holdings (Cyprus) Ltd.
respectively. Further, as part of the above restructuring, Aditya Birla
Minacs IT Services Limited and Aditya Birla Minacs Technologies
Limited, subsidiaries of your Company, have been merged with ABMWL
through a scheme of amalgamation sanctioned by the Karnataka High Court
on 5th September, 2011. Consequently the shareholding of your Company
and its subsidiary in ABMWL has increased to 99.85% as on 31st March,
2012.
* Preferential Allotment
With a view to strengthen the balance sheet of your Company, your
Directors had been considering various proposals including capital
infusion. Accordingly, in their meeting held on 26th March, 2012, the
Board of Directors have decided to issue 1,65,00,000 warrants to the
Promoters/ Promoter grossup in accordance with relevant SEBI guidelines
for an aggregate sum of Rs 1,500 Crore. This was approved by the
shareholders in their meeting held on 25th April, 2012. Accordingly,
25% of the above issue i.e., Rs 325 Crore has been received by the
Company on 10th May, 2012 in terms of the relevant SEBI guidelines.
This equity infusion will not only strengthen the financial position of
your Company but also act as a seed capital for capturing the next
level of growth.
* Acquisition of Future Group's Pantaloon Retail Format Business
To meet your Company's strategic intent to be on the top of the league
and to be the largest integrated branded fashion player in the country
through an extension into the value segment, your Directors have
decided, in principle, on 30th April, 2012 to acquire, directly or
through its subsidiaries, a controlling stake in Pantaloon Format
business, a division of Pantaloon Retail (India) Limited by making an
investment of about Rs 800 Crore by way of optionally fully convertible
debentures, subject to necessary approvals.
This acquisition will catapult your Company to the pole position in the
branded fashion space in all the segments with a pan India presence.
The business-wise performance review, outlook and strategy have been
spelt out in depth in the Management Discussion and Analysis section,
which forms part of the Annual Report.
FINANCIAL PERFORMANCE
< Rs Crore)
Consolidated Standalone 2011-12 2010-11 2011-12 2010-11
Profit before Depreciation /
Amortisation,
Interest and Tax 3,259.10 2,685.41 1,050.50 959.94
Depreciation and
Amortisation Expenses 1,092.33 940.90 203.06 194.05
Finance cost 836.73 549.62 313.26 270.81
Profit before Exceptional
Items and Tax 1,330.04 1,194.89 534.18 495.08
Exceptional (Gain)/Loss 103.88 103.84 103.88 -
Profit before Tax 1,226.16 1,091.05 430.30 495.08
Tax Expenses 216.01 183.08 84.91 115.39
Net Profit before Minority
Interest 1,010.15 907.97 345.39 379.69
Share of Profit/(loss) of
Associates - (0.01)
Minority Interest 120.02 85.86
Profit for the year 890.13 822.10 345.39 379.69
Opening balance as per last
audited
financial statement (839.33) (1,284.96) 28.19 17.18
Amount transferred on
Stake Change/
Amalgamation of Subsidiaries
/ Joint venture (2.70) (0.09)
Profit available for
Appropriation 48.10 (462.95) 373.58 396.87
Appropriations :
Debenture redemption reserve 54.13 46.11 54.13 46.11
General Reserve 200.70 250.00 200.00 250.00
Special Reserve 11.63 7.70
Capital Fund 0.01 -
Proposed Dividend on
Preference Share 0.01 0.01 0.01 0.01
Proposed Dividend on
Equity Share 68.11 62.43 68.11 62.43
Corporate Tax on Dividend 12.20 10.13 10.13
Closing Balance of Surplus /
(Deficit) in the Statement of
Profit & Loss (298.69) (839.33) 51.33 28.19
DIVIDEND
For the financial year ended on 31st March, 2012, your Directors
recommend for your consideration a dividend of :-
i. Rs 6/- per Equity Share of Rs 10/- (last year Rs 5.50 per Equity
share) and
ii. Rs 6/- per Preference share of Rs 100/- each (last year Rs 6/- per
Preference share)
The said dividend, if approved by the Members, would involve cash
outflow of Rs 68.12 Crore (including Corporate dividend Tax of Rs NIL)
compared to Rs 72.57 Crore (including Corporate dividend Tax of Rs
10.13 Crore) paid for the year 2010-11.
FINANCE
During the year 2011-12, your Company,
- Raised long-term loan, aggregating to Rs 485 Crore by way of foreign
currency borrowings.
- Repaid term loans aggregating to Rs 389 Crore and NCDs of Rs 390
Crore.
HUMAN RESOURCES
The human resource philosophy and strategy of your Company is
structured to attract and retain the best talent that encourages
innovation and creates engaging and motivating workplace environment.
This strategy has, through strong alignment with your Company's vision,
successfully built and sustained your Company's standing as one of the
India's most admired and valuable corporations despite unrelenting
competitive pressures.
CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standards of
Corporate Governance and adhere to the Corporate Governance
requirements set out by SEBI and has complied with all mandatory
provisions of Clause 49 of the Listing Agreement.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report.
Statutory Auditors' Certificate confirming compliance with Clause 49 of
the Listing Agreement with Stock Exchanges is annexed to (Annexure A)
and forms part of the Directors' Report.
217(2AA) STATEMENT BY DIRECOTRS
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit or
loss of the Company for that period;
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
iv) the Directors have prepared the annual accounts on a 'going concern
basis'.
SUBSIDIARY COMPANIES & CONSOLDATED FINANCIAL RESULTS
During the year, following changes have taken place in subsidiary
companies:
As mentioned above, Aditya Birla Minacs IT Services Ltd. and Aditya
Birla Minacs Technologies Ltd., subsidiaries of the Company have merged
with Aditya Birla Minacs Worldwide Limited with effect from 1st April,
2010 and have therefore ceased to be subsidiaries of the Company.
As part of exercise to rationalize the operations and the costs,
Compass BPO Inc., USA and Transworks Inc., USA, both part of the IT,
ITeS business were closed.
Aditya Birla Financial Services Private Limited, a subsidiary of the
Company has been classified as a "Core Investment Company (CIC)" by
RBI in April 2012.
Consolidated Financial Statements pursuant to Clause 41 of the Listing
Agreement entered into with the Stock Exchanges and prepared in
accordance with the Accounting Standards prescribed by the Institute of
Chartered Accountants of India, are attached for your reference.
In line with the General Exemption granted by Ministry of Corporate
Affairs vide Circular 2/2011 dated 8th February, 2011 for not attaching
the Balance Sheet of subsidiaries and in compliance with the conditions
enlisted therein, the report and annual accounts of the subsidiary
companies for the financial year ended March 31, 2012 have not been
attached to the Company's Accounts.
The Annual accounts of the subsidiary companies and the related
detailed information are available to Shareholders of the Holding and
Subsidiary companies. The Annual accounts of the Subsidiary companies
are kept open for inspection by any shareholder(s) at the Registered
Office of the Company and of the concerned Subsidiary Company. Any
shareholder, who wishes to obtain a copy of the said documents of any
of the subsidiary companies, may send a request in writing to the
Company Secretary at the Registered Office of the Company so that the
needful can be done.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the year, under ESOS - 2006, ESOS Compensation Committee granted
3370 stock options under the Fifth Tranche to eligible employees of the
Company.
Details of the stock options issued under ESOS - 2006 upto March 31,
2012, as also the disclosures in compliance with Clause 12 of the
Securities and Exchange Board of India (Employees Stock Option Scheme
and Employees Stock Purchase Scheme) Guidelines 1999 are set out in the
Annexure B to this report.
A certificate from the Auditors of the Company, confirming that the
Scheme has been implemented in accordance with the SEBI Guidelines and
the resolution passed by the shareholders shall be placed at the Annual
General Meeting for inspection by members.
FIXED DEPOSITS
Your Company was accepting fixed deposits from the employees.
Acceptance of such fixed deposits has been discontinued from January,
2009 onwards. As on 31st March, 2012, there are no outstanding
deposits.
The erstwhile Birla Global Finance Limited (since amalgamated with the
Company) had accepted deposits from the public till May, 2005. Of the
total matured fixed deposits, as on 31st March, 2012, there was an
unclaimed fixed deposit of ' 15,000. This unclaimed deposit is kept in
a separate earmarked bank account.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
The Information relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
Section 217(1)(e) of the Companies Act, 1956, is set out in a separate
statement attached to this Report (Annexure C) and forms part of it.
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are to be set out in the Directors' Report, as
an addendum thereto. However, as per the provisions of Section 219(1
)(b)(iv) of the Companies Act, 1956, the Report and accounts as therein
set out, are being sent to all members of the Company excluding the
aforesaid information about the employees. Any member, who is
interested in obtaining such particulars about employees, may write to
the Company Secretary at the Registered Office of the Company.
DIRECTORS
During the year, following were the changes in directorship of the
Company:-
* Mr. Tapasendra Chattopadhyay has been nominated by Life Insurance
Corporation of India (LIC) as their nominee/representative in place of
Mr. S.C Bhargava with effect from 30th May, 2011.
* Mr. S. C. Bhargava, who was earlier nominee/ representative of LIC
has been appointed as an Independent Director of the Company.
* Mr. Sushil Agarwal, Chief Financial Officer of the Company has been
appointed as Whole Time Director of the Company w.e.f. 1st June, 2011.
* Mr. Pranab Barua has resigned as Whole Time Director of the Company
on 7th May, 2012, which was accepted by the Board of Directors of the
Company in its meeting held on 15th May, 2012.
Following Directors of the Company retire from office by rotation, and
being eligible, offer themselves for reappointment at the ensuing
Annual General Meeting:
* Mr. B. R. Gupta,
* Mr. B. L. Shah
* Ms. Tarjani Vakil
Resolutions seeking their appointment have been included in the notice
of ensuing Annual General Meeting together with their brief details.
AWARDS AND RECOGNITION
Your Company has been the proud recipient of the following awards and
recognitions -
* INDIAN RAYON DIVISION
- Environment Excellence Award - 2011 in Chemical Sector, Awarded by
Green Tech Foundation, New Delhi
* INDO GULF FERTILISERS DIVISIOIN
- Certification for ISO / IEC 27001:2005 Awarded by Bureau Veritas
Certification.
* JAYA SHREE TEXTILE DIVISIOIN
- Second position under 'Sustained' category in CII Eastern Region
Productivity Awards 2011-12.
* CARBON BLACK DIVISION, PATALGANGA
- 12th Annual Greentech Environment Silver Award 2011 in Chemical
Sector by Greentech Foundation, New Delhi.
* MADURA FASHION AND LIFESTYLE
- Peter England Fashion And Retail Limited was awarded Brand Equity
Award in The Economics Times.
- Van Heusen won A Power Band Award 2011 in Planman Marcom.
- Peter England Fashion And Retail Limited was awarded Bronze Award in
the Best Website in Retail category at BBC.com Campaign India Digital
Media Awards.
- Van Heusen won "Most Popular Western Wear Brand Award - Female" at
Images Fashion Awards 2011.
- Allen Solly received Best website/ microsite - Product for
spring/summer 2010 collection in Indian Digital Media Awards (IDMA)
2011.
- 3rd Global Youth Marketing Awards to Allen Solly, Van Heusen Woman
and Louis Philippe.
* ADITYA BIRLA INSULATORS- RISHRA DIVISION
- IMC RAMKRISHNA BAJAJ NATIONAL QUALITY AWARD - Performance Excellence
Trophy 2011 in Manufacturing Category.
* ADITYA BIRLA INSULATORS- HALOL
DIVISION
- CAPEXIL Special Award - Export Achievement in Porcelain Insulators.
AUDITORS
The observations made in the Auditors' Report are self-explanatory and
therefore, do not call for any further comments under section 217(3) of
the Companies Act, 1956.
M/s Khimji Kunverji & Co and M/s S. R. Batliboi & Co., Jt. Statutory
Auditors of the Company, retire, and being eligible, offer themselves
for appointment, to hold office from the conclusion of the ensuing
Annual General Meeting till the conclusion of the next Annual General
Meeting. Your Directors recommend their appointment, as set out in the
accompanying notice of the Annual General Meeting. A certificate from
them confirming compliance of section 224(1B) of the Companies Act,
1956 has also been received, by the Company.
APPRECIATION
Your Directors take this opportunity to express their sincere
appreciation for the excellent support and co-operation extended by the
shareholders, customers, suppliers, bankers and other business
associates. Your Directors gratefully acknowledge the ongoing
co-operation and support provided by Central and State Governments and
all Regulatory bodies.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. Their dedicated
efforts and enthusiasm have been pivotal to your Company's growth.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
Mumbai 15th May, 2012
Mar 31, 2011
Dear Shareholder,
We are pleased to present the 54th Annual Report together with the
Audited accounts of your Company for the financial year ended 31st
March, 2011.
MACRO ECONOMIC SCENARIO
With the GDP growth at 8.5% during fiscal 2010- 11, Indian economy
sustained growth after recovery in the previous year, supported by
strong rebound in agriculture sector and continued momentum in the
manufacturing and services sectors. During the year, high inflation
remained a key area of concern and the Reserve Bank of India pursued
monetary tightening measures throughout the year.
CONSOLIDATED FINANCIAL PERFORMANCE
Led by continuous pursuit of profitable growth across the businesses,
your Company has posted strong financial results during the year.
Consolidated revenue of your Company at Rs. 18,168 Crore crossed USD 4
billion mark registering year on year growth of 17%. Revenue growth was
contributed by all the businesses. Your Company posted its highest
ever Consolidated EBITDA at Rs. 2,702 Crore (~USD 600 million)
achieving a robust growth of 60% over previous year. Consolidated net
profit grew five times from Rs. 155 Crore to Rs. 822 Crore (~USD 183
million) - the highest ever. The earnings growth was driven by improved
profitability in the Financial Services, Fashion & Lifestyle and
IT-ITeS businesses.
During the year, Aditya Birla Financial Services
("ABFS") has strengthened itself as a large non- bank player and posted
a strong financial performance. Today, ABFS is managing assets worth
USD 20.5 billion with a customer base of about 5.5 million customers.
- Combined revenue grew from Rs. 5,871 Crore to Rs. 6,296 Crore (~ USD
1.4 billion).
- ABFS achieved a strong turnaround in profitability with EBITDA of Rs.
537 Crore vis- a-vis loss of Rs. 231 Crore in the previous year.
- AUM of Birla Sun Life Insurance ("BSLI") scaled up by 23% to Rs.
19,760 Crore (USD 4.5 billion). Fuelled by the growing size of in-
force book, lower new business strain and better expense management,
BSLI achieved
EBITDA of Rs. 352 Crore compared to loss of Rs. 378 Crore in the
previous year. No capital infusion was required during the year.
- The total average AUM (AAUM) of Birla Sun Life Asset Management stood
at Rs. 67,560 Crore (USD 15 billion). Its market share in terms of
domestic AAUM increased from 8.3% to 9.1%. Its maiden Real Estate
Onshore Fund collected Rs. 1,088 Crore.
- The NBFC business more than doubled its book size.
In the Telecom business, Idea Cellular Limited ("Idea") ranks among the
top 10 cellular operators in the world with more than 1 billion minutes
of usage per day. Idea is the 3rd largest cellular operator in India in
terms of revenue market share which stands enhanced from 12.6% to 13.6%
in past one year. Idea has launched 3G services in 19 service areas.
Post launch of Mobile Number Portability, Idea is leading net
subscribers gainers and it also has highest active subscribers ratio in
the industry, reflecting its strong brand equity. Revenue of Idea rose
by 25% to Rs. 15,438 Crore (~USD 3.5 billion) while EBITDA grew by 6%
to Rs. 3,853 Crore. The decline in average revenue per minute was
compensated by volume led cost efficiencies.
Madura Fashion & Lifestyle has posted a robust 45% growth in revenue at
Rs. 1,809 Crore (USD 400 million). It continues to leverage its brand
leadership and expanded retail presence to ride on the buoyant demand
in the domestic market. EBITDA shot up to Rs. 137 Crore vis-a-vis loss
of Rs. 4 Crore in the preceding year.
Revenue of Aditya Birla Minacs, the IT-ITeS business grew by 11% to Rs.
1,692 Crore (~USD 375 million). EBITDA rose by 75% from Rs. 105 Crore
to Rs. 183 Crore. Revenue growth and rationalised cost structure
spurred profitability.
Combined revenue of Manufacturing businesses grew by 26% to Rs. 4,689
Crore (USD 1 billion). EBITDA grew from Rs. 748 Crore to Rs. 781
Crore. They posted an operating margin of 16% and return on average
capital employed of 26%. The Greenfield Carbon Black project at
Patalganga with a capacity of 84,000 MTPA was completed in end May
2010, thereby taking the total capacity to 314,000 MTPA.
STANDALONE FINANCIAL PERFORMANCE
Standalone revenue soared by 33% to Rs. 6,445 Crore. Revenue growth was
driven by expansion in the Carbon Black business and strong volume
growth in Textiles business. Your Company posted its highest ever
Standalone EBITDA which grew by 16% from Rs. 835 Crore to Rs. 970 Crore
and highest ever Standalone Net profit which grew by 34% from Rs. 283
Crore to Rs. 380 Crore. Growth in profitability was contributed by
strong volume growth in the Fashion & Lifestyle, Textiles and
Insulators businesses, higher agri-input sales in the agri-business and
higher power sales in the Carbon Black business. Profitability in the
Rayon business was strained by a steep rise in the input and fuel cost.
Equity infusion by promoters strengthened balance sheet
The Promoter Group companies further infused Rs. 426 Crore on
conversion of remaining warrants into equity shares on 20th December,
2010. As a result, the paid up equity capital of your Company increased
from Rs. 103.01 Crore to Rs. 113.51 Crore on allotment of 10.5 million
equity shares.
Led by improved earnings coupled with equity infusion by promoters, the
standalone balance sheet has also been strengthened with Net Debt to
Equity improving from 0.74 to 0.58 and Net Debt to EBITDA from 4.1 to
3.2.
The business-wise performance review, outlook and strategy have been
spelt out in depth in the Management Discussion and Analysis section,
which forms part of the Annual Report.
FINANCIAL PERFORMANCE
(Rs. Crore)
Consolidated Standalone
2010-11 2009-10 2010-11 2009-10
Profit before Depreciation /
Amortisation,
Exceptional Items and Tax 2,135.54 1024.05 689.03 500.40
Depreciation and Amortisation 940.65 866.48 193.95 180.10
Profit before Exceptional
Items and Tax 1,194.89 157.57 495.08 320.30
Exceptional Items (103.84) - - -
Prof it before Tax 1,006.64 157.57 495.08 320.30
Provision for Taxation (Net) 183.08 114.00 115.39 36.90
Net Profit before Minority
Interest 907.97 43.57 379.69 283.40
Minority Interest (85.86) 111.03 - -
Share of Profit/(loss) of
Associate (0.01) (0.04) - -
Net Profit 822.10 154.56 379.69 283.40
Balance brought forward (1,284.96)(1,112.61) 17.18 86.03
Amount transferred on change
in stake in Subsidiaries/
Joint venture and Mergers - (105.20) - (139.60)
Profit available for
Appropriation (462.95) (1063.25) 396.87 229.83
Appropriations :
Proposed Dividend 62.44 53.26 62.44 51.51
Corporate Tax on Dividend 10.13 8.86 10.13 7.95
General Reserve 250.00 100.00 250.00 100.00
Debenture redemption reserve 46.11 53.19 46.11 53.19
Special Reserve 7.70 6.40 - -
Surplus / (Deficit) carried to
Balance Sheet (839.33) (1284.96) 28.19 17.18
(532.54) (1063.25) 396.87 229.83
DIVIDEND
For the financial year ended on 31st March, 2011, Your Directors
recommend for your consideration a dividend of :-
i. Rs. 5.50/- per Equity Share of Rs. 10/- (last year Rs. 5 per Equity
share) and
ii. Rs. 6/- per Preference share of Rs. 100/- each (last year Rs. 6
per Preference share)
The said dividend, if approved by the Members, would involve cash
outflow of Rs. 72.57 crore (including Corporate dividend Tax of
Rs.10.13 crore) compared to Rs. 59.46 crore (including Corporate
dividend Tax of Rs. 7.95 crore) paid for the year 2009-10.
FINANCE
Durng the year, your Company raised long-term loans aggregating to Rs.
94 crore by way of foreign currency borrowings and Rs. 200 Crore by way
of Non-Convertible Debentures (''NCDs'').
During the year, term loans aggregating to Rs. 698 Crore and NCDs of
Rs. 110 Crore were repaid during the year.
HUMAN RESOURCES
Your Company believes that Human Resources play a very critical role in
its growth. Your Directors' are pleased to inform you that the Aditya
Birla Group of which your Company is a part, has been declared as one
of the Best Employers in India by the Aon-Hewitt survey conducted
recently. The Group ranked second amongst two hundred other Indian
organizations which took part. The process entailed a rigorous six
months exercise involving HR Systems and processes audit, online survey
with several employees, face to face meetings with Leadership teams, HR
and a cross section of employees.
Going forward, attracting and retaining talent will be a key challenge.
Various initiatives have been launched to provide growth opportunities
to employees and stem attrition. Notable initiatives for the current
year include the rollout of the Employee Value Proposition and the
Career Portal Platform to provide visibility of career opportunity to
the employees.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI.
Your Company has complied with all mandatory provisions of Clause 49 of
the Listing Agreement.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report.
Your Company's Statutory Auditors' Certificate conferring compliance
with Clause 49 of the Listing Agreement with Stock Exchanges is annexed
to (Annexure A) and forms part of the Directors' Report.
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that period;
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
iv) the Directors have prepared the annual accounts on a 'going concern
basis'.
SUBSIDIARY COMPANIES & CONSOLIDATED FINANCIAL RESULTS
During the year, the following changes have taken place in subsidiary
companies :
Companies which became subsidiaries :
- Bureau of Collection Recovery, LLC,
- Bureau of Collection Recovery (BCR) Inc.,
- Indigold Trade & Services Limited
- Aditya Birla Securities Private Limited and
- Shaktiman Mega Food Park Private Limited
Company which ceased to be subsidiary :
- Compass BPO FZE, UAE.
Name changes:
To reflect group's strong parentage and commitment to its businesses,
as also to signify the nature of business, the names of following
subsidiary companies were changed:-
- Birla Insurance Advisory & Broking Services Limited to Aditya Birla
Insurance Brokers Limited
- Compass Business Process Outsourcing Private Limited to Aditya Birla
Minacs BPO Private Limited
- Compass Business Process Outsourcing Limited to Aditya Birla Minacs
BPO Limited., UK
Consolidated Financial Statements pursuant to Clause 41 of the Listing
Agreement entered into with the Stock Exchanges and prepared in
accordance with the Accounting Standards prescribed by the Institute of
Chartered Accountants of India, are attached for your reference.
In line with the General Exemption granted by Ministry of Corporate
Affairs vide Circular 2/2011 dated 8th February, 2011 for not attaching
the Balance Sheet of subsidiaries subject to certain conditions, the
Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and Report of the Auditors of the subsidiary companies have
not been attached to the Balance Sheet of the Company as at 31st March,
2011.
The Annual accounts of the subsidiary companies and the related
detailed information are available to Shareholders of the Holding and
Subsidiary companies at any point of time. The Annual accounts of the
Subsidiary companies are kept open for inspection by any shareholder(s)
at the Registered Office of the Company and of the concerned Subsidiary
Company. Any shareholder of subsidiary Company, who wishes to obtain a
copy of the said documents of any of the subsidiary companies, may send
a request in writing to the Company Secretary at the Registered Office
of the Company so that the needful can be done.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
During the year, ESOS compensation Committee granted 17,174 and 11,952
Stock Options under the Third and Fourth tranche respectively under
ESOS - 2006 to eligible employees of the Company.
During the year, after receiving approval from shareholders at the 53rd
Annual General Meeting held on August 6, 2010, ESOS Compensation
Committee re-priced the Stock options granted to employees under
Tranche I and Tranche II at Rs. 687/- per Stock Option.
Further on 7th June, 2011, the ESOS Compensation Committee approved
grant of 3,370 Stock Options under Fifth Tranche to an eligible
employee of the Company at an exercise price of Rs. 748/- per option.
Details of the options issued under ESOS - 2006 upto March 31, 2011, as
also the disclosures in compliance with Clause 12 of Securities and
Exchange Board of India (Employees Stock Option Scheme and Employees
Stock Purchase Scheme) Guidelines 1999 are set out in the Annexure B to
this report.
The Company has received a certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI
Guidelines and the resolution passed by the shareholders. The
Certificate shall be placed at the Annual General Meeting for
inspection by members.
FIXED DEPOSITS
Your Company was accepting fixed deposits from the employees.
Acceptance of such fixed deposits has been discontinued from January,
2009 onwards. As on 31st March, 2011, there are no outstanding
deposits.
The erstwhile Birla Global Finance Limited (since amalgamated with the
Company) had accepted deposits from the public till May, 2005. Of the
total matured fixed deposits, as on 31st March, 2011, there were
unclaimed fixed deposits of Rs. 68,000. These unclaimed deposits are
kept in a separate earmarked bank account.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
The Information relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
Section 217(1) (e) of the Companies Act, 1956, is set out in a separate
statement attached to this Report (Annexure C) and forms part of it.
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are to be set out in the Directors' Report, as
an addendum thereto. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report and accounts as
therein set out, are being sent to all members of the Company excluding
the aforesaid information about the employees. Any member, who is
interested in obtaining such particulars about employees, may write to
the Company Secretary at the Registered Office of the Company.
DIRECTORS
Mr. Tapasendra Chattopadhyay has been nominated by Life Insurance
Corporation of India (LIC) as a Director in place of Mr. S.C Bhargava
with effect from 30th May, 2011.
Considering his valuable contribution to the growth of the Company, Mr.
S. C. Bhargava has been appointed as an Independent Director of the
Company.
Mr. Sushil Agarwal, Chief Financial Officer of the Company has been
appointed as Whole Time Director of the Company w.e.f. 1st June, 2011.
Mr. Kumar Mangalam Birla, Mrs. Rajashree Birla and Mr. P Murari,
Directors of the Company retire from office by rotation, and being
eligible, offer themselves for reappointment at the ensuing Annual
General Meeting.
Resolutions seeking appointment of Mr. Kumar Mangalam Birla, Mrs.
Rajashree Birla, Mr. P Murari, Mr. S.C. Bhargava and Mr. Sushil Agarwal
have been included in the notice of ensuing Annual General Meeting
together with their brief details.
AWARDS AND RECOGNITION
Your Company has been the proud recipient of the following awards and
recognitions -
- INDIAN RAYON DIVISION
- Rajiv Gandhi Environment Award for Prevention of pollution from
Ministry of Environment & Forests, Government of India
- Environment Excellence Award -2010 in Chemical Sector Awarded by
Green Tech Foundation, New Delhi
- National Award for excellence in Energy Conservation and Management -
2009 awarded by Indian Chemical Council (ICC)
- Mumbai
- Server virtualization & thin client deployment awarded by IDG Group
(USA)
- Publishers of CIO Magazine
- Automation of batch scheduling jobs in Spinning Department awarded by
UBM GROUP- publishers of Dataquest PC World Magazine
- JAYA SHREE TEXTILES DIVISION
- IMC Ramakrishna Bajaj National Quality Award 2010 in the
manufacturing category.
- INDO GULF FERTILISERS DIVISIOIN
- Agriculture Leadership Today from National Agricultural Magazine for
Innovative Extension Model and the outstanding contribution in
agriculture extension and development through pioneering use &
application of Six Sigma Methodology
- MADURA FASHION & LIFESTYLE
- Van Heusen received "Best Loyalty Programme in the Retail Sector" at
4th Loyalty Summit.
- The Collective - won "Fashion Apparel- Speciality store" at In Store
Asia 2011- VMRD Retails Design Awards.
- The Collective - was recognized in the merit list for "Window
Display" at In Store Asia 2011- VMRD Retails Design Awards.
- The Collective- was recognized in the merit list for "Best Visual
Merchandising" at In Store Asia 2011- VMRD Retails Design Awards.
- Peter England was recognized as "2nd Most Trusted Brand in Apparel &
Textile Category" at Economic Times- Brand Equity Awards.
- Peter England was awarded as "Best Performing Brand in Retail Sector"
by Reliance Retail.
- Van Heusen won "Most popular Formalwear Brand Award- Female" at 3rd
Global Youth Marketing Awards.
- Madura Clothing was awarded with IMC RBNQA Award for Performance
Excellence by IMC RBNQUA.
- ADITYA BIRLA INSULATORS, RISHRA
- Quality Circle Team "AGNI" got "GOLD" level recognition (par
excellence) in chapter convention on Quality circle Competition (CCQC)
2010.
- Quality Circle Team "AGNI" got "DISTINGUISHED" level recognition in
National Convention on Quality circle Competition (NCQC) 2010.
- IMC RAMKRISHNA BAJAJ NATIONAL QUALITY AWARD 2010 in Quality Category
- ISO 9001:2008 certification awarded for The Design, Development,
Manufacture & Supply of Extra High, High & Low Voltage
Electro-porcelain Insulators by British Standards Institution (BSI)
- ISO14001:2004 certification awarded for The Design, Development,
Manufacture & Supply of Extra High, High & Low Voltage
Electro-porcelain Insulators by British Standards Institution (BSI)
- OHSAS 18001:2007 certification awarded for The Design, Development,
Manufacture & Supply of Extra High, High & Low Voltage
Electro-porcelain Insulators by British Standards Institution (BSI)
- Social Accountability 8000 : 2008 certificate for Manufacture of H.V
& L.V. Electro Porcelain Insulators by "Det Norske Veritas AS"
- ISO/IEC 17025:2005 certificate received for General Requirements for
the Competence of Testing & Calibration Laboratories in Chemical,
Mechanical & Electrical Testing Laboratories by "NABL"
AUDITORS
The observations made in the Auditors' Report are self-explanatory and
therefore, do not call for any further comments under section 217(3) of
the Companies Act, 1956.
Your Directors request you to appoint Auditors for the current year as
set out in the accompanying notice of the Annual General Meeting.
APPRECIATION
Your Directors take this opportunity to express their sincere
appreciation for the excellent support and co-operation extended by the
shareholders, customers, suppliers, bankers and other business
associates. Your Directors gratefully acknowledge the ongoing
co-operation and support provided by Central and State Governments and
all Regulatory bodies.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. Their dedicated
efforts and enthusiasm have been pivotal to your Company's growth.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
Mumbai
August 13, 2011
Mar 31, 2010
We are pleased to present the 53 Annual Report together with the
audited accounts of your Company for the financial year ended 31st
March, 2010.
With the GDP growth at 7.4% during 2009-10, India continued to remain
one of the fastest growing economies in the world. The strong recovery
in IIP growth, consumer spending, FII investments and capital inflows
through IPOs and private placements reflects improved confidence in the
Indian economy and signifies a positive outlook going forward.
CONSOLIDATED FINANCIAL PERFORMANCE
Driven by a strong focus on achieving profitable growth across the
businesses, your Company has posted excellent operating results during
the year. The consolidated net revenues of your Company has crossed Rs.
15,000 Crore mark. It has achieved highest ever consolidated EBITDA at
Rs.1,686 Crore which has almost doubled from Rs. 867 Crore attained in
the previous year. The earnings growth was driven by improved
profitability in the manufacturing businesses coupled with reduced
losses in the Life Insurance, IT-ITeS and Fashion & Lifestyle
businesses. As a result, your Company posted consolidated net profit of
Rs.155 Crore vis-ÃÂ -vis net loss of Rs. 436 Crore in the previous year Ã
registering a swing of about Rs. 600 Crore.
Led by improved earnings coupled with equity infusion by the promoters,
your companys s balance sheet has also been strengthened.
The Financial Services business was the major contributor to the
top-line as well as the bottom-line growth. With the launch of Private
Equity fund, Aditya Birla Financial Services (ABFS ) has now spread its
wings across a wide spectrum of financial services space.
- Combined together, revenues of Aditya Birla Financial Services grew
by 23% to Rs. 5,850 Crore. Combined Assets Under Management (AUM) grew
by 42% to Rs. 82,140 Crore. Net profit, excluding Life Insurance, has
more than doubled.
- The net loss and capital requirements of Birla Sun Life Insurance
Company Ltd., reduced considerably driven by better expense management
and growth in renewal premium. its AUM grew by 76% to Rs. 16,130
Crore.
- The average AUM of Birla Sun Life Asset Management Company Ltd.
crossed Rs. 65,000 Crore à achieving 34% growth over last year.
In the Telecom business, Idea Cellular Ltd. became pan India player by
launching remaining seven service areas. Idea ranks 3 in terms of
wireless revenue market share, which stands enhanced from 11.7% to
12.6% during 2009-10 amidst hyper- competition. Even after absorbing
the competitive pressure on realised rate per minute and launch of new
circles, net profit grew from Rs. 882 Crore to Rs. 954 Crore. In the
recently concluded 3G auction, Idea has won 3G spectrum for 11 service
areas which contribute 80% of its existing 2G revenues.
In the IT-ITeS business, Aditya Birla Minacs strengthened its business
solutions capabilities with the acquisition of U.K. based Compass BPO
Limited and U.S. based Bureau of Collection Recovery, LLC. Led by a
strong focus on cost rationalisation, the IT-ITeS and Fashion &
Lifestyle businesses achieved significant improvement in EBITDA to the
tune of Rs.100 Crore and Rs.150 Crore respectively over the previous
year.
Manufacturing businesses, combined together, have posted highest ever
EBITDA at Rs. 748 Crore. The Greenfield Carbon Black project at
Patalganga with a capacity of 85,000 MTPA was completed in end May
2010, thereby taking the total capacity to 315,000 MTPA.
STANDALONE FINANCIAL PERFORMANCE
The standalone net income from operations remained flat at Rs.4,827
Crore. This was largely because peak input and fuel prices prevailing
during the previous financial year led to higher subsidies in the
Agri-business in the last year. The standalone EBITDA grew from Rs.619
Crore to Rs.835 Crore supported by improved earnings in the Carbon
Black, Fashion & Lifestyle, Rayon and Textiles businesses. Net profit
grew from Rs.137 Crore to Rs.283 Crore.
Equity infusion through Preferential Allotment strengthened balance
sheet
Your Company issued and allotted 18.5 million warrants to the Promoter
Group Companies on a preferential basis in June 2009 on receipt of Rs.
250 Crore as 25% application money. The Promoter Group further infused
Rs. 325 Crore (being
balance 75% amount payable) on conversion of 8 million warrants into
equity shares on 30th October, 2009. As a result, the paid up capital
of your Company increased from Rs. 95 Crore to Rs. 103 Crore on
allotment of 8 million equity shares.
Restructuring of Fashion & Lifestyle business to derive operational
synergies
In order to achieve utmost synergy and efficiency of operations and
management, your Company strengthened its Fashion & Lifestyle business,
by merger of its subsidiaries Madura Garments Exports Ltd.Ã and ÃMG
Lifestyle Clothing Company Pvt. Ltd.Ã, into the Company. Further, the
domestic business of ÃPeter England Fashions and Retail Ltd.Ã has also
been demerged with your Company. On receipt of requisite approvals, the
composite scheme of merger/demerger has been made effective from 1st
January, 2010 (the ÃAppointed DateÃ).
The business-wise performance review, outlook and strategy have been
spelt out in depth in the Management Discussion and Analysis section,
which forms part of the Annual Report.
(Rs. Crore)
Consolidated Standalone
2009-10 2008-09 2009-10 2008-09
Profit before
Depreciation/
Amortisation and Tax 1024.05 146.37 500.40 328.26
Depreciation and
Amortisation 866.48 695.64 180.10 165.96
Profit/(Loss)
before Tax 157.57 (549.27) 320.30 162.30
Provision for
Taxation (Net) 114.00 81.05 36.90 24.87
Net Profit/(Loss)
before Minority
Interest 43.57 (630.32) 283.40 137.43
Minority Interest in
the loss of consolidated
subsidiaries (111.03) (194.59) -- --
Share of Profit/
(loss) of Associate (0.04) -- -- --
Net Profit/(Loss) 154.56 (435.73) 283.40 137.43
Balance brought
forward (1112.61) (642.48) 86.03 21.06
Amount transferred
on change in stake in
Subsidiaries/Joint
venture and Mergers (105.20) 50.37 (139.60) --
Profit available
for Appropriation (1063.25) (1027.84) 229.83 158.49
Appropriations :
Proposed/Interim
Dividend 53.26 41.01 51.51 38.00
Corporate Tax
on Dividend 8.86 7.18 7.95 4.43
General Reserve 100.00 13.75 100.00 13.75
Debenture
redemption reserve 53.19 16.28 53.19 16.28
Special Reserve 6.40 6.55 -- --
Surplus/(Deficit)
carried to Balance
Sheet (1284.96) (1112.61) 17.18 86.03
(1063.25) (1027.84) 229.83 158.49
DIVIDEND
Your Directors recommend for your consideration a dividend of Rs. 5/-
per Equity Share of Rs.10/- each and Rs 6/- per Preference share of Rs
100/- each issued on 10th March, 2010 on pro rata basis as the same
were issued during the year for the financial year ended 31st March,
2010.
The final outgo on dividend is as under Ã
(Rs. Crore)
2009-10 2008-09
On 1,03,009,542, fully
paid-up Equity Shares of
Rs.10/- each, @ Rs. 5.00/-
per share and
51.51 --
On 10,000, fully paid-up
Preference Shares of
Rs 100/- each, @ Rs 6.00/-
per share on pro-rata basis
(Previous Final dividend -- 38.00
on 95,009,290 fully
paid-up Equity Shares
of Rs.10/- each
@ Rs. 4.00/- per share)
Corporate Dividend Tax 7.95 4.43
FINANCE
Your Company raised long-term loan aggregating to Rs. 140 Crore by way
of foreign currency borrowings and Rs. 200 Crore by way of Non-
Convertible Debentures.
During the year, Term Loan aggregating to Rs. 428 Crore and Commercial
papers aggregating to Rs. 900 Crore (net) were repaid.
Standalone Net Debt to EBITDA reduced significantly from 5.9 times as
on 31st March, 2009 to 4.1 times on 31st March, 2010 resulting from
equity infusion by Promoters, improved profitability and debt
repayments.
HUMAN RESOURCES
Your Company continuously strives to foster a culture of high
performance. Your Management has infused a lot of rigor and intensity
in its people development processes and in honing skill sets. Its HR
processes are absolutely aligned to organizational goals.
The implementation of People Soft HRMS (Human Resource Management
System), the variable pay plan and job bands have been
institutionalized.
Ongoing learning, refreshing HR systems in line with global benchmarks,
aligning rewards and recognition with performance, have enabled your
Company sustain its reputation of a meritocratic organization.
The Group s Corporate Human Resources function has played and continues
to play an integral role in your Company s Talent Management Processes.
CONSOLDATED FINANCIAL RESULTS
Consolidated Financial Statements pursuant to Clause 41 of the Listing
Agreement entered into with the Stock Exchanges and prepared in
accordance with the Accounting Standards prescribed by the Institute of
Chartered Accountants of India, are attached for your reference.
CORPORATE GOVERNANCE
Your Directors reaffirm their commitment to good corporate governance
practices and adheres to all the major stipulations laid down by the
SEBI Corporate Governance Practices.
This Annual Report contains a section on Corporate Governance
highlighting adherence to the SEBI Code on Corporate Governance.
Your Company s Statutory Auditors Certificate confering compliance with
Clause 49 of the Listing Agreement with Stock Exchanges is annexed to
(Annexure A) and forms part of the Directors Report.
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that period;
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
iv) the Directors have prepared the annual accounts on a going concern
basis .
SUBSIDIARY COMPANIES
During the year, LIL Investment Ltd., Compass BPO Ltd., UK, Compass BPO
Inc., USA, Compass Business Process Outsourcing Ltd., India and Compass
BPO FZE, UAE became subsidiaries of the Company.
During the year, Madura Garments International Brands Company Ltd.,
Madura Garments Exports Ltd., (since merged with the Company), MG
Lifestyle Clothing Company Private Ltd., (since merged with the
Company) LIL Investment Limited ceased to be the subsidiaries of the
Company.
To reflect groups strong parentage and commitment to its businesses, as
also to signify the nature of business, the names of following
subsidiary companies were changed:-
The Annual Accounts of the subsidiary companies are open for inspection
by any investor at the Registered Office of the Company and of the
concerned subsidiary Company. Any shareholder / investor of subsidiary
Company, who wishes to obtain a copy of the said documents of any of
the subsidiary companies, may send a request in writing to the Company
Secretary at the Registered Office of the Company so that the needful
can be done.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
As mentioned last year, in terms of ESOS Ã 2006, the ESOS Compensation
Committee granted Stock Options to the Whole Time Directors and
employees of the Company, including 10,770 Options to some employees of
the Subsidiary Companies, in two tranches. Out of the total options
granted, 1,20,746 options have lapsed so far. As on 31st March, 2010,
2,08,627 options are outstanding which are convertible into shares on
exercise of option for conversion as per schedule of vesting.
Details of the options issued under ESOS - 2006, as also the
disclosures in compliance with Clause 12 of Securities and Exchange
Board of India (Employees Stock Option Scheme) Guidelines 1999 are set
out in the Annexure B to this report.
Sr. No Former name New name
1. Apollo Sindhoori Capital
Investments Ltd. Aditya Birla Money Ltd.
2. Apollo Sindhoori Commodities
Trading Ltd. Aditya Birla Commodities
Broking Ltd.
3. PSI Data Systems Ltd. Aditya Birla Minacs IT
Services Ltd.
4. Laxminarayan Investment Ltd. ABNL Investment Ltd.
5. Birla Sun Life Distribution
Company Ltd. Aditya Birla Money Mart Ltd.
6. Birla Global Finance Company Ltd. Aditya Birla Finance Ltd.
7. BSDL Insurance Advisory
Services Ltd. Aditya Birla Money Insurance
Advisory Services Ltd.
8. Birla Technologies Ltd. Aditya Birla Minacs Technologies
Ltd.
In line with the approval granted by the Central Government under
Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet,
Profit and Loss Account, Report of the Board of Directors and Report of
the Auditors of the subsidiary companies have not been attached to the
Balance Sheet of the Company as at 31st March, 2010.
FIXED DEPOSITS
Your Company was accepting fixed deposits from the employees.
Acceptance of such fixed deposits has been discontinued from January
2009 onwards. The total outstanding deposits are Rs. 0.80 Crore as at
31st March, 2010.
The erstwhile Birla Global Finance Ltd. (since amalgamated with the
Company) had accepted deposits from the public till May 2005. Of the
total matured fixed deposits, as on 31st March, 2010, there were
unclaimed fixed deposits of Rs. 4.66 lacs. These unclaimed deposits are
kept in a separate earmarked bank account.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
The Information relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
Section 217(1) (e) of the Companies Act, 1956, is set out in a separate
statement attached to this Report (Annexure C) and forms part of it.
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are to be set out in the Directors Report, as
an addendum thereto. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report and accounts as
therein set out, are being sent to all members of the Company excluding
the aforesaid information about the employees. Any member, who is
interested in obtaining such particulars about employees, may write to
the Company Secretary at the Registered Office of the Company.
DIRECTORS
Mr. Arun Maira, who was appointed as a Director on August 4, 2008,
resigned w.e.f. July 23, 2009 to join the Planning Commission of India
as its Member.
Mr. H. J. Vaidya, Director of the Company since 14th July, 1967,
expressed his inability to continue as Director of the Company on
account of ill-health and resigned w.e.f. 1st April 2010.
The Board places on record its sincere appreciation of the valuable
services rendered by Mr. Arun Maira and Mr. K. K. Maheshwari,
Whole-time Director of the Company resigned w.e.f. 20th May, 2010. Mr.
H. J. Vaidya during their tenure as directors of the Company.
Ms. Tarjani Vakil, Mr. G. P. Gupta and Mr. S. C. Bhargava Directors of
the Company retire from office by rotation, and being eligible, offer
themselves for reappointment at the ensuing Annual General Meeting.
Resolutions seeking appointment of Ms. Tarjani Vakil, Mr. G.P Gupta and
Mr. S. C. Bhargava have been included in the Notice of ensuing Annual
General Meeting together with their brief details.
AWARDS AND RECOGNITION
Your Company has been the proud recipient of the following awards and
recognitions Ã
- INDIAN RAYON DIVISION
- Gold Award in Chemical Sector for outstanding achievement in
Environment Management from Greentech Foundation, Kerala.
- Excellent Energy Efficient Unit Award under the National Energy
Management Award, 2009.
- Environment Excellence Award in Chemical Sector from Greentech
Foundation.
- National Award for Excellence in Energy Management 2009 from
Confederation of Indian Industry.
- ISO 9001:2000 Certification awarded for conforming to the Quality
Management System Standard by DET NORSKE VERITAS.
- OHSAS 18001:2007 Certificate awarded by DET NORSKE VERITAS for
conforming to the Occupational Health and Safety Management System
Standard.
- ISO 14001:2004 Certificate from UL DQS Inc. for implementation and
maintenance of à Environmental, Responsible Care & Health, Safety and
Security Management System.
- Social Accountability 8000:2008 Certification received from DET
NORSKE VERITAS for conforming to the Social Accountability Standard in
manufacturing category.
- JAYA SHREE TEXTILES DIVISION
- SHE Award for Best Entry (Small & Medium Scale) from Confederation on
Indian Industry.
- INDO GULF FERTILISERS DIVISION
- The FAI Runner-up Award for Best Production Performance of
Nitrogenous Fertiliser from Fertiliser Association of India.
- ISO 9001:2008 Certification from AFNOR Certification for meeting the
requirements of Quality Management System
- ISO 14004:2004 Certification from AFNOR Certification for meeting
requirements of Environment Management System
- OHSAS 18001:2007 from AFAQ-EAQA Limited for complying with the
requirements of Occupational Health & Safety Management System (OHSAS
18001:2007)
- ISO / IEC / 27001:2005 Certification from Bureau Veritas
Certification for Management of Information Security for all
operations.
- MADURA GARMENTS DIVISION
- Peter England was awarded Second Best
Brand Equity- Most Trusted Brands 2009 in Apparel segment.
- Louis Philippe received Partner s Choice Award in Mens Formal Wear
category, by Central Icons.
- ADITYA BIRLA INSULATORS DIVISION Ã RISHRA
- Certificate of Merit in IMC Ramakrishna Bajaj National Quality Awards
2009 in manufacturing category.
- Bronze-Level Recognition received by Quality Circle Team Kiran in
International Convention on Quality Circle held in Philippines.
- ADITYA BIRLA INSULATORS DIVISION Ã HALOL
- TOP Award in the category of Product covered by the Ceramic and
Allied Products including Refractories Panel received from Chemicals
and Allied Products Export Promotion Council.
- HI TECH CARBON DIVISION Ã RENUKOOT ÃExcellentÃ-level recognition
received by the Quality Circle Teams, ÃAsset & Dynamicà in the National
Level Competition, at Bangalore.
AUDITORS
The observations made in the Auditorsà Report are self-explanatory and
therefore, do not call for any further comments under Section 217(3) of
the Companies Act, 1956.
Your Directors request you to appoint Auditors for the current year as
set out in the accompanying notice of the Annual General Meeting.
APPRECIATION
Your Directors take this opportunity to express their sincere
appreciation for the excellent support and co-operation extended by the
shareholders, customers, suppliers, bankers and other business
associates. Your Directors gratefully acknowledge the ongoing
co-operation and support provided by Central and State Governments and
all Regulatory bodies.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. Their dedicated
efforts and enthusiasm have been pivotal to your CompanyÃs growth.
For and on behalf of the Board
Kumar Mangalam Birla
Chairman
Mumbai
3rd June, 2010
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