ADITY A BIRLA NUV O LIMITED ANNU AL REPOR T 201 4 -201 5

ADITY A BIRLA NUV O LIMITED ANNU AL REPOR T 201 4 -201 5

CMYK CMYK A D I T YA B I R L A N U V O L I M I T E D ANNUAL REPORT 2014 -2015 NUVO Aditya Birla Nuvo Limited Corporate Finance Division A-4, Aditya...

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CMYK

CMYK

A D I T YA B I R L A N U V O L I M I T E D ANNUAL REPORT 2014 -2015

NUVO Aditya Birla Nuvo Limited Corporate Finance Division A-4, Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai 400 030. Fax +91 22 66525821, 24995821 Telephone +91 22 66525000, 24995000 E-mail : [email protected], [email protected] Indian Rayon Compound, Veraval – 362 266, Gujarat Fax +91 2876 243220 Telephone +91 2876 245711, 248629/248495 E-mail : [email protected] Website : www.adityabirlanuvo.com, www.adityabirla.com

Thomson Press

Registered Office & Investor Service Centre

CMYK

NUVO ADITYA BIRLA NUVO LIMITED & ITS SUBSIDIARIES / JOINT VENTURES* ADITYA BIRLA NUVO LIMITED

I)

:

Fashion & Lifestyle, Manufacturing (Agri, Caustic Soda and Allied Chemicals, Insulators, Viscose Filament Yarn) Textile.

:

Life Insurance

:

Management of Pension Fund under NPS Scheme

FINANCIAL SERVICES Subsidiaries I

Birla Sun Life Insurance Company Limited [JV with Sun Life Financial Inc of Canada] G

I

Birla Sun Life Pension Management Limited

Aditya Birla Financial Services Limited (“ABFSL”) (formerly Aditya Birla Financial Services Private Limited)

:

Core Investment Company

G

Aditya Birla Capital Advisors Private Limited

:

Private Equity Investment, Advisory & Management Services

G

Aditya Birla Customer Services Limited (formerly Aditya Birla Customer Services Private Limited)

:

Financial & IT enabled services

G

Aditya Birla Finance Limited

:

NBFC/ Fund Based Lending

G

Aditya Birla Financial Shared Services Limited

:

Financial & IT enabled services

G

Aditya Birla Housing Finance Limited

:

Housing Finance

G

Aditya Birla Insurance Brokers Limited

:

Composite Non-life Insurance Advisory & Broking

G

Aditya Birla Money Limited

:

Equity Broking



Aditya Birla Commodities Broking Limited

:

Commodities Broking

G

Aditya Birla Trustee Company Private Limited

:

Trustee of Private Equity Fund

G

Aditya Birla Money Mart Limited

:

Wealth Management & Distribution



:

Life Insurance Advisory- Corporate Agent

G

Aditya Birla Money Insurance Advisory Services Limited

Birla Sun Life Asset Management Company Limited [JV with Sun Life Financial Inc of Canada] 

Birla Sun Life AMC (Mauritius) Limited



Aditya Birla Sun Life AMC Limited, Dubai



Aditya Birla Sun Life AMC Pte. Limited, Singapore

:

!



:

}

Birla Sun Life Trustee Company Private Limited [JV with Sun Life Financial Inc of Canada]

:

Trustee of Birla Sun Life Mutual Fund

Aditya Birla Health Insurance Limited (Proposed JV with MMI Holdings Limited, South Africa)

:

Health Insurance (Proposed)

:

Branded Apparel and Accessories

:

Telecommunication Services

G

I

International Opportunities Fund - SPC (formerly known as Aditya Birla Sun Life - SPC India Advantage Fund Limited

Asset Management

II) GARMENTS & OTHERS SUBSIDIARIES I I

Madura Garments Lifestyle Retail Company Limited Indigold Trade & Services Limited G

I I

Shaktiman Mega Food Park Pvt. Limited ABNL IT & ITES Limited G

I

Pantaloons Fashion and Retail Limited

Aditya Birla Minacs BPO Private Limited

ABNL Investment Limited

IV) TELECOM (JOINT VENTURE) I

Idea Cellular Ltd. th

* As on 14 May, 2015

CMYK

CMYK

THE CHAIRMAN’S LETTER TO SHAREHOLDERS

Dear Shareholder, The global scenario The year 2014-15 continued to be a challenging year. The global economy growth was 3.4%, unchanged over the previous year. The world’s largest economy, the US saw better growth, while the countries in the Euro zone registered marginal growth. There was a marked slowdown in China, and Japan witnessed near stagnation. The key factors that affected the global economy included a steep decline in oil and commodity prices, and monetary easing by central banks in the US, EU and Japan. The global financial markets experienced heightened volatility, largely due to expectations of a tightening of monetary policy by the US Federal Reserve. The impasse on resolving the debt crisis in Greece added to the uncertainty. Geopolitical risks compounded the situation. The IMF has projected economic growth at 3.3% in 2015, marginally lower than the growth recorded in 2014. The domestic scenario Among all the developing economies, India was a notable exception, with growth increasing to 7.3% in 2014. Agriculture recorded a growth of only 0.2%, given the subnormal monsoon. This was

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

THE CHAIRMAN’S LETTER TO SHAREHOLDERS

compensated by a more vigorous manufacturing sector, which grew at 7.1% in FY2014-15, compared to 5.3% in FY2013-14. Headline inflation fell sharply to 5%. On the external front, India’s vulnerability has reduced with the current account deficit contained at below 2% of GDP and a relatively stable currency. The monetary policy through the year was largely accommodative. A slew of initiatives reinforced the positive macro factors. One must particularly mention the deregulation of diesel prices, reforms in the coal and mineral sectors, measures to boost FDI, and faster environmental clearances. The buoyant investor sentiment was manifest in capital inflows of $73 billion. As infrastructure projects get off the ground, the prospects for a revival of the capital investment cycle seem very strong. Your Company’s performance Your Company attained a consolidated turnover of $ 4.4 billion (` 26,516 Crore) and an EBITDA of $ 966 million (` 5,798 Crore) a surge of 18%. I am pleased to inform you that your Company enjoys the edge in practically all of its businesses. Financial Services

Its Assets Under Management grew to $ 27.5 billion (` 165,000 Crore), representing a year-on-year growth of 35%. Its lending book extended year-on-year by 52% and closed at $ 3 billion approximately (` 17,550 Crore). Its revenues stand at $ 1.3 billion (` 7,926 Crore), representing a year-on-year growth of 19%, while EBIDTA recorded a growth of 17%, to reach USD 141 million (` 849 Crore).

Today, with a diversified portfolio of 10 businesses, our Aditya Birla Financial Services Group (ABFSG) is truly a significant nonbank financial services player.

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Today, with a diversified portfolio of 10 businesses, our Aditya Birla Financial Services Group (ABFSG) is truly a significant non-bank financial services player. It is among the top 5 fund managers in India (excluding LIC) and one of the largest participants in the debt market. Financial Services have delivered solid results across businesses.

CMYK

THE CHAIRMAN’S LETTER TO SHAREHOLDERS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

A slew of initiatives launched focus on –

A major development was our corporate restructuring plan merging Madura with Pantaloons. This has spawned India’s single largest pure play fashion apparel entity – Aditya Birla Fashion and Retail Limited.



Commencing the housing finance business



Entering the Health insurance and Wellness business towards which the business has signed a definitive Joint Venture agreement with MMI Holdings Ltd., a leading South African insurance based financial services group



Obtaining PFRDA approval for managing pension assets under the NPS scheme



Roping in IFC, Washington as its strategic investment partner in MyUniverse



Completing the acquisition of the mutual fund schemes and portfolio accounts of ING investment management.

Fashion & Lifestyle Our Company’s apparel retail businesses – Madura Fashion & Lifestyle (MFL), and Pantaloons Fashion & Retail Ltd. (PFRL) together have catapulted your Company to the number one branded apparel retail player in the country. A major development was our corporate restructuring plan merging Madura with Pantaloons. This has spawned India’s single largest pure play fashion apparel entity – Aditya Birla Fashion and Retail Limited. Moving on to the business performance, MFL stayed well ahead of the industry in terms of revenue growth of 16% to USD 622 million (` 3,735 Crore) with EBITDA up by 19% to USD 77 million (` 463 Crore). MFL’s largest brand, Louis Philippe crossed the ` 10 billion revenue mark, the first apparel brand in the country to reach this level. The business transformation begun at Pantaloons, after it came into our fold, has been completed. Pantaloons attained revenues of USD 308 million (` 1,851 Crore), up by 11% and its EBITDA soared by 96% on a year-on-year basis. The launch of six new brands bolstered Pantaloons portfolio of own brands. Collectively these account for 52% of the overall revenue and helped drive margin improvement. The settingup of 25 new stores accelerated its customer access, with the store count now at 104.

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CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

THE CHAIRMAN’S LETTER TO SHAREHOLDERS

Telecom In the telecom sector, Idea continues to make waves. It has maintained its enviable track record as the fastest growing Indian mobile operator. Its performance has been splendid. It delivered a 19% revenue growth at $ 5.3 billion (` 31,527 Crore) with a 32% rise in EBIDTA at $ 1.9 billion (` 11,281 Crore). As many of you know, India is on the cusp of a digital revolution. Internet is expected to pervade the lives of a billion Indians in the next decade from a current low penetration of 20% online. From commerce to banking to entertainment to health everything will go online. I believe, the mobile industry has the onerous task to build the Indian Internet infrastructure backbone. Idea is well poised to take advantage of this megatrend to further accelerate its profitable growth. During the last two spectrum auctions, Idea committed $ 6.8 billion (` 41,000 Crore) increasing its spectrum portfolio to 270.7 MHz. Today, Idea has the ability to offer 3G services to 80% of its own subscribers and 4G services to 60% of its 161 million subscribers base, besides offering Pan India 2G services. Divisions: Agri, Rayon, Linen and Insulators The divisions of your Company, comprising of the Agri, Rayon, Linen and Insulators businesses, have done well. These clocked a collective revenue of $ 901 million (` 5,405 Crore) and an EBIDTA at $ 102 million (` 615 Crore), a year-on-year growth of 9% and 11% respectively.

The VFY business performed in the face of poor demand from the textile sector, reaping the benefits from incremental revenue through the ENKA acquisition. It is today the largest player in the premium superfine denier market in India.

Idea is well poised to take advantage of this megatrend to further accelerate its profitable growth.

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In a year when the country was highly rain deficient in most regions, your Company’s Agri business registered a healthy growth of 90% over the last financial year, which is indeed applaudable. The business is now a ‘Total Agri Solutions Provider’, offering a bouquet of products from fertilisers to seeds to agrochemicals to specialities that fulfil every need of the farmer, from sowing to harvesting.

CMYK

THE CHAIRMAN’S LETTER TO SHAREHOLDERS

We have had a good year at the Group level. Our Group’s consolidated revenue crossed the ` 2.5 trillion mark, setting a new milestone.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

In the Textiles sector, the linen business continues to be on top of the league. It has created its own line of linen apparel and launched these under the brand name of ‘Linen Club’. In the four Southern states where it has set-up flagship stores, the response has been overwhelmingly positive. We will soon be doubling its linen yarn capacity to reach 6,200 tpa from current 3,400 tpa. On the Insulator business’ radar is an unrelenting focus on yield improvement and increasing its export sales. Outlook All of your Company’s businesses are poised for higher growth, given the upturn in the economy. Your Company’s balance sheet is strong. It will continue to play the role of a business incubator, nurture new businesses in sectors that offer promise, and alongside leverage opportunities across its current portfolio. To our teams I would like to acknowledge the contribution of our teams in India and across the world. I believe, it is our people, who underpin everything else. They are the ultimate reason why we meet with success, in the face of all odds, year after year. Their commitment and dedication is beyond words. The Aditya Birla Group: In perspective We have had a good year at the Group level. Our Group’s consolidated revenue crossed the ` 2.5 trillion mark, setting a new milestone. We are up 9% over the last year. In dollar terms as well, regardless of the ups and downs in foreign currency, we reported revenues of $ 41 billion, an 8% rise. Over 50% of our Group’s revenues flow in from our global operations. I believe, that the bottom line and the cash in the till is a greater parameter to gauge performance rather than simply revenues. On this score too, we have done well. Our EBIDTA in Rupee terms is an impressive ` 322 billion, again over 9% vis-à-vis FY14. In dollar terms, we achieved an EBIDTA of $ 5.25 billion, reflecting an 8% rise over that of the last year.

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CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

THE CHAIRMAN’S LETTER TO SHAREHOLDERS

I deeply believe that building our future can only be possible by building more leaders and through people development processes. Towards this, our endeavours continue to deliver results. Two of our programmes deserve a special mention. “Cutting Edge” – our leadership programme targeted at developing P&L leaders and “Turning Point” – aimed at building cost centre leaders and unit heads, have proved very promising. Over 70 talented managers have graduated from these programmes and have taken on leadership roles at senior levels. At the same time our senior leaders are being actively encouraged to take on cross business roles to gain multisectoral experience. We have a bench strength of over 250 youngsters who joined us 5 years ago as Group Management Trainees, and Leadership Associate Programme (Lead) and Leadership Programme for Experienced (Leap) members have demonstrated great potential and grown significantly. Some of them are already in key positions. I hope to see many of them occupy positions of critical importance in our businesses in the near future. As part of our globalisation agenda, we have also been recruiting both interns and Lead and Leap participants from renowned International Business Schools.

Our focus on gender diversity and creating enabling policies and programmes to ensure that we provide a conducive, encouraging and an equitable place for women to thrive and excel is gaining momentum. We have launched “Spring Board”, the accelerated women’s leadership development programme, designed for high calibre women managers. Currently, we have more than 150 women positioned at middle management and senior management levels. Gyanodaya, our in-house world-class university, has aligned with the best-in-class global business schools, professors and consultants among others. Many of our best talent is

Our focus on gender diversity and creating enabling policies and programmes to ensure that we provide a conducive, encouraging and an equitable place for women to thrive and excel is gaining momentum.

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Similarly, our GMLP – Global Manufacturing Leadership Programme, aimed at reinforcing our technical and manufacturing strength, is paying a rich dividend. The Aditya Birla Group is being increasingly viewed as the most aspirational place for manufacturing professionals in India.

CMYK

THE CHAIRMAN’S LETTER TO SHAREHOLDERS

We are humbled that for the third year running, our Group has been ranked No.1 in the Nielsen Corporate Image Monitor 2014-15. We have emerged as ‘Best in Class’ across most of the pillars.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

also enlisted for short-term courses at these institutions. Such a cross pollination and stoking of the intellect enables us move with the times and are continuously learning. Ranked No. 1 in the Nielsen Corporate Image Monitor We are humbled that for the third year running, our Group has been ranked No.1 in the Nielsen Corporate Image Monitor 2014-15. We have emerged as ‘Best in Class’ across most of the pillars. This is a remarkable vote of confidence by the stakeholder constituency in our leadership teams. It is a testament to our “Group brand, governance standards, transparency, customer primacy and CSR engagement. The six pillars of Corporate Image, on which organisations are engaged, comprise of Vision and Leadership, Product & Service quality, Workplace Management, Financial Performance, Operating style and Social responsibility”. Nielsen’s Corporate Image Monitor measures the reputation of the 42 leading companies in India across sectors (based on the Bombay Stock Exchange list and the Economic Times Ranked Top 50 Companies) and “the findings serve as an important indicator of the strength of the corporate brand”. In sum We are gearing to ensure that we have the right talent at the right time and at the right place for each of our businesses. Additionally, enhancing customer centricity and excellence capability by developing customer value propositions that are unmatched, stepping up the focus on R&D to increase the share of value-added products across businesses are our focus areas. The thrust on digitisation across our business processes and using analytics and big data continue. These are our steps towards accelerating top-line and bottom-line growth and enhancing stakeholder value. Yours sincerely,

Kumar Mangalam Birla

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CMYK CMYK

CMYK CMYK

CMYK

BOARD OF DIRECTORS

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CORPORATE INFORMATION

KEY MANAGERIAL PERSONNEL/ SENIOR MANAGEMENT TEAM MANAGING DIRECTOR Mr. Lalit Naik

TELECOM Mr. Himanshu Kapania Business Head MANUFACTURING: AGRI & INSULATORS Mr. Lalit Naik Business Director Mr. Raj Narayanan Chief Executive Officer

WHOLE-TIME DIRECTOR & CHIEF FINANCIAL OFFICER Mr. Sushil Agarwal [upto 30th June, 2015]

RAYON Mr. Lalit Naik Dr. Bir Kapoor

CHIEF FINANCIAL OFFICER Mrs. Pinky Mehta [w.e.f 1st July, 2015]

Business Director President

COMPANY SECRETARY Mr. Ashok Malu [w.e.f. 1st March, 2015]

FASHION & LIFESTYLE

ADITYA BIRLA FINANCIAL SERVICES Mr. Ajay Srinivasan Chief Executive Officer Mr. Pankaj Razdan Dy. Chief Executive Officer MD & CEO, Birla Sun Life Insurance Co. Ltd.

Mr. Thomas Varghese Business Head (Textiles)

Mr. Pranab Barua

Business Head (Branded Apparels)

Mr. Ashish Dikshit

Business Head (Madura Fashion & Lifestyle)

Mr. Shital Mehta

Chief Executive Officer (Pantaloons Fashion)

Mr. S. Krishnamoorthy President - Jaya Shree Textiles CORPORATE FINANCE DIVISION Mr. Shriram Jagetiya President AUDITORS Khimji Kunverji & Co. S R B C & Co. LLP

SOLICITORS Cyril Amarchand Mangaldas, Advocates & Solicitors Mulla & Mulla and Craigie, Blunt & Caroe

OTHER BRANCH AUDITORS K. S. Aiyar & Co. Deloitte Haskins & Sells Contents Aditya Birla Nuvo : A Snapshot ............................ 2

Shareholders’ Information ................................. 112

Financial Highlights ............................................... 8

Social Report – Towards Inclusive Growth ...... 120

Management Discussion and Analysis .............. 10 Directors’ Report .................................................. 43

Environment Report – Sustainable Development ................................. 123

Business Responsibility Report .......................... 88

Standalone Financial Statements ..................... 125

Corporate Governance Report ........................... 97

Consolidated Financial Statements .................. 187

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Registered Office: Indian Rayon Compound, Veraval - 362 266, Gujarat, India Telephone + 91 2876 245711, 248629/248495 E-mail : [email protected] CIN: L17199GJ1956PLC001107

CMYK

A SNAPSHOT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

A SNAPSHOT

VISION & MISSION Vision “To be a premium conglomerate building leadership in businesses and creating value for all the stakeholders”

Mission Investing in the promising sectors Building leadership in businesses A platform to drive synergy of resources Delivering best value to all the stakeholders To be a responsible corporate citizen

A USD 4.4 BILLION PREMIUM CONGLOMERATE

Telecom$ #

Financial services

(23.28%)

Madura*

Life Insurance^ (74%)@

Pantaloons^ # (72.62%)

Asset Management^ (51%)@

Jaya Shree*

Agri*

Insulators*

Private Equity (100%)^ Broking (75%)^ # Wealth Management (100%)^ General Insurance Advisory (50.01%)^ Online Money Management (100%)^ Leader

Divisions

Rayon*

NBFC (100%)^ Housing Finance (100%)^

Leadership position in India

Fashion & Lifestyle

Top 3

Top 6

^ $ @ # Represent Subsidiaries Represent Joint Ventures JV with Sun Life Financial, Canada Listed Note 1 : Percentage figures indicated above represent ABNL’s shareholding in its Subsidiaries / JV’s Note 2 : Madura Fashion (A division of ABNL) and Madura Lifestyle (A branded apparel retailing division of Madura Garments Lifestyle Retail Co. Ltd., a subsidiary of ABNL) are being demerged into Pantaloons Fashion & Retail Ltd., a listed subsidiary of ABNL, w.e.f. 1st April 2015, subject to statutory approvals. Refer page 30 for transaction details.

*Represent Divisions

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CMYK

A SNAPSHOT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Revenue

EBITDA

(` Crore)

(` Crore)

11% GR CA 25,490

25,892

26,516

GR CA

21,840

% 37

18,188 14,331

A SNAPSHOT

CONSOLIDATED FINANCIAL SNAPSHOT

5,798 4,927

4,137

15,523

3,247 2,687 1,686 867

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Net Profit (` Crore)

56% ) GR FY15 A C 10(FY

1,059

822

1,416 1,143

890

155 -436 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

CONSOLIDATED EARNINGS MIX - 2014-15 Segment Revenue1

Divisions 21%

Fashion & Lifestyle2 21%

Financial Services 30%

Segment EBIT1

Divisions 17% Fashion & Lifestyle2 9%

Telecom 28%

Financial Services 28%

Telecom 46%

Note1 : Revenue and EBIT Mix are excluding IT-ITeS business which was divested w.e.f. 9th May 2014

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Note2 : Madura Fashion (A division of ABNL) and Madura Lifestyle (A branded apparel retailing division of Madura Garments Lifestyle Retail Co. Ltd., a subsidiary of ABNL) are being demerged into Pantaloons Fashion & Retail Ltd., a listed subsidiary of ABNL, w.e.f. 1st April 2015, subject to statutory approvals. Refer page 30 for transaction details.

CMYK

A SNAPSHOT

A SNAPSHOT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

INVESTING IN THE PROMISING SECTORS • Entered Fashion business through acquisition of Madura

• Enhanced strategic stake in Telecom through Idea

• Forayed in Life Insurance business through JV with Sun Life, Canada • Entry into IT-ITeS business

• Expanded Financial Services portfolio by merger of Asset Management & NBFC businesses and entry in broking & private equity. • Augmented Fashion offerings through acquisition of Pantaloons, a top 3 big box apparel retailer  2015  2013

 2014

 2012  2005-2011  2000

 2003

 2001

 2005/06

• Created India’s largest online money management portal MyUniverse • Added New Superfine Yarn capacity in Rayon • Expanded Linen Yarn and Fabric Capacities • Commenced Housing Finance business • Applied for Payments Bank license in a 51:49 Joint Venture with Idea • Signed MOU with MMI Holdings Ltd. to enter health insurance sector

Invested about USD 2 billion over past 15 years

BUILDING LEADERSHIP POSITION ACROSS ITS BUSINESSES Financial Services



Among the top 5 fund managers in India



Diversified portfolio with 10 lines of businesses



Managing assets worth USD 27.5 billion



Lending book of USD 3 billion



Trusted by over 6 million customers

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Telecom

Fashion & Lifestyle

6 th largest cellular operator in the world in terms of subscriber base in a single country





3 rd largest telecom service provider in India in terms of revenue market share



Pantaloons is the # 1 branded womenswear retailer in India





Customer base of 157.8 million subscribers

A large 10.8 million loyalty customers base



Widest retail network in the fashion space



Madura Fashion & Lifestyle is the # 1 branded menswear player in India

Divisions



India’s largest linen yarn & fabric player.



8 th largest Urea manufacturer in India



Among the top 2 VFY manufacturers in India



India’s largest & world’s 4th largest manufacturer of insulators

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

A SNAPSHOT

A SNAPSHOT

A PLATFORM TO DRIVE SYNERGY OF RESOURCES Standalone Ratios

Standalone Net Debt (` Crore)

Net Debt/EBITDA

Net Debt/Equity

3,591

3,460

5.8

3,854

3,630

3,142

3,196

3,584 4.1 3.7

0.87

3.3

0.74

3.3

3.0

0.68 0.58

2.6 0.53 0.42

0.39 2008-09

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15



Standalone balance sheet has been the growth engine for ABNL & a platform to drive synergy of capital resources



Invested USD 1 billion to fund the growth capital requirements of its businesses over past six years



Driving strong growth across businesses while sustaining debt levels



Healthy financial position : Net Debt to EBITDA at 3.0x & Net Debt to Equity at 0.42x as on 31st March 2015



Contributed by strong cash flow from operations, dividend income, release of capital from divestment of sub-scale businesses and funding support from the promoters.

DELIVERING BEST VALUE TO ALL THE STAKEHOLDERS Exit from sub scale businesses to achieve greater focus on other businesses Business Divested

Effective Date

Enterprise Value

Outcome

Carbon Black

1st April 2013

USD 240 million

Strengthening of ABNL’s balance sheet & greater focus on core businesses

IT-ITeS

th

9 May 2014

USD 260 million

Consolidation of Branded Apparels Businesses to unlock value for the shareholders

Aditya Birla Fashion & Retail #1 Menswear player

#1 Womenswear retailer



Creating India’s largest pure-play fashion & lifestyle company



Presence across entire spectrum of fashion through India’s leading fashion brands



Unlocking value for shareholders by giving them direct holding in a best-in-class fashion powerhouse



Largest retail network in fashion space in India



Sound Balance sheet to act as a strong enabler for growth

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Refer page 30 for transaction details

CMYK

A SNAPSHOT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

A SNAPSHOT

ROBUST REVENUE GROWTH ACROSS THE BUSINESSES Revenue (` Crore)

1

Telecom2

Financial Services

31,527 26,432

7,926 6,637

6,542

22,407

6,378

6,304

19,489 15,438

2010-11 2011-12 2012-13 2013-14 2014-15

2010-11

2011-12

2012-13

2013-14 2014-15

3

Fashion & Lifestyle

4

Divisions 5,450

5,405

4,759 5,300

3,802

4,979

4,301 3,101

2,243 1,811

2010-11

2011-12

2012-13

2013-14

2014-15

2010-11 2011-12 2012-13 2013-14 2014-15

Note1 : Including full figures of Asset Management business. As per AS-27, Asset Management business has been proportionately consolidated at 50% in ABNL's financials, being a 50:50 Joint Venture till 9th October 2012. Thereafter, it is consolidated as a subsidiary since Aditya Birla Financial Services holds 51% w.e.f. 10th October 2012. Note2 : Full financial numbers of Idea Cellular. Being a Joint Venture, Idea Cellular has been consolidated at 27.02% from 12th August 2008 upto 1st March 2010, at ~ 25.3% till 10th June 2014, at 23.63% till 23rd July 2014 and at ~ 23.3% thereafter, as per AS-27. Note3 : Represents Branded Apparels & Accessories (Madura Fashion & Lifestyle and Pantaloons Fashion & Retail Ltd.). In 2012-13, nine months financials of Pantaloons are included pursuant to its acquisition, w.e.f. the appointed date 1st July 2012. Note4 : Represents Jaya Shree, Agri, Rayon and Insulators businesses.

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A SNAPSHOT

SOUND GROWTH IN PROFITABILITY ACROSS THE BUSINESSES EBITDA (` Crore) 2

1

Telecom

Financial Services

11,281

8,519 911 819 661

6,071 799

5,085

544

3,910

2010-11 2011-12 2012-13 2013-14 2014-15

2010-11

2011-12

Fashion & Lifestyle3

2012-13

2013-14

2014-15

Divisions4

532

615 600

401 3125

554

547 519

196 136

2010-11 2011-12 2012-13 2013-14 2014-15

2010-11 2011-12 2012-13 2013-14 2014-15

Note1 : Including full figures of Asset Management business. As per AS27, Asset Management business has been proportionately consolidated at 50% in ABNL's financials, being a 50:50 Joint Venture till 9th October 2012. Thereafter, it is consolidated as a subsidiary since Aditya Birla Financial Services holds 51% w.e.f. 10th October 2012. Interest cost of NBFC business, being an operating expense as per AS17, is deducted from EBITDA. Note2 : Full financial numbers of Idea Cellular. Being a Joint Venture, Idea Cellular has been consolidated at 27.02% from 12th August 2008 upto 1st March 2010, at ~ 25.3% till 10th June 2014, at 23.63% till 23rd July 2014 and at ~ 23.3% thereafter, as per AS-27. Note3 : Represents Branded Apparels & Accessories (Madura Fashion & Lifestyle and Pantaloons Fashion & Retail Ltd.). In 2012-13, nine months financials of Pantaloons are included pursuant to its acquisition, w.e.f. the appointed date 1st July 2012. Note4 : Represents Jaya Shree, Agri, Rayon and Insulators businesses.

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Note5 : Excluding one time investment income.

A SNAPSHOT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

FINANCIAL HIGHLIGHTS - CONSOLIDATED

FINANCIAL HIGHLIGHTS

PROFIT AND LOSS ACCOUNT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

2014-15 USD Million14 ` Crore

2013-14 ` Crore

2012-13 ` Crore

2011-12 ` Crore

2010-11 ` Crore

7,926 5,450 7,467 283 5,405 — (16) 26,516 5,798 1,703 4,095 1,105 652 2,338 (13) 833 1,491 76 1,416

6,637 4,759 6,669 2,898 4,979 — (50) 25,892 4,927 1,609 3,318 742 809 1,767 5 550 1,222 79 1,143

6,283 3,802 5,662 2,466 5,300 2,036 (58) 25,490 4,137 1,295 2,842 456 860 1,526 — 342 1,184 125 1,059

6,384 2,243 4,933 2,082 4,301 1,943 (46) 21,840 3,247 1,092 2,154 202 623 1,330 (104) 216 1,010 120 890

6,121 1,811 3,918 1,692 3,101 1,588 (43) 18,188 2,687 941 1,746 112 440 1,195 (104) 183 908 86 822

2014-15 USD Million14 ` Crore

2013-14 ` Crore

2012-13 ` Crore

2011-12 ` Crore

2010-11 ` Crore

13,045 4,982 24,764 410 11,550 1,089 730 56,569 11,189 23,557 10,893 9,647 778 504 56,569

10,677 4,825 22,929 354 8,000 2,415 1,773 50,974 9,384 21,576 11,778 6,867 940 428 50,974

9,354 3,177 21,110 319 3,425 1,518 1,497 40,399 7,517 19,964 9,328 2,973 301 317 40,399

8,840 3,042 19,760 289 1,850 1,261 451 35,493 6,678 18,977 7,763 1,538 278 259 35,493

2013-14 5.2 0.9 2.3 11.2 11.1

2012-13 4.3 1.0 2.5 11.9 12.5

2011-12 4.9 1.0 2.6 12.0 12.5

2010-11 5.9 1.0 2.5 11.8 13.5 77.6

Financial Services1 Fashion & Lifestyle2 Telecom3 IT-ITeS4 Divisions5 Carbon Black5 Inter-segment elimination Revenue EBITDA Less : Depreciation & Amortisation EBIT Less: Finance Costs related to NBFC Less : Other Finance Costs Earnings before Tax & Exceptional Items Add: Exceptional Gain / (Loss)6 Less : Tax Expenses Net Profit / (Loss) before Minority Interest Less : Minority Interest & share in (Profit) / Loss of associates Net Profit / (Loss)

BALANCE SHEET

1,321 908 1,245 47 901 — (3) 4,419 966 284 683 184 109 390 (2) 139 249 13 236

Net Fixed Assets (Including Capital Advances and CWIP) Goodwill Life Insurance Investments Long term Investments NBFC Lending Book (including Housing Finance) Cash Surplus & Current Investments7 Net Working Capital Total Funds Utilised Net Worth Life Insurance Policyholders’ Fund8 Total Debt NBFC borrowings (including Housing Finance) Minority Interest Deferred Tax Liabilities (Net) Total Funds Employed

RATIOS AND STATISTICS

2,057 662 5,025 68 2,950 708 28 11,497 2,145 4,806 1,883 2,448 134 81 11,497

12,342 3,973 30,147 408 17,700 4,246 165 68,981 12,871 28,839 11,299 14,686 802 485 68,981

Unit x x x % %

2014-15 7.2 0.5 1.5 12.2 11.8

Basic Earnings Per Share (Weighted Average)

`

108.8 (USD 1.8)

92.1

93.2

78.4

Book Value per Equity share

`

989 (USD 16.5)

860

781

662

586

No. of Equity Shareholders

Numbers

132,505

142,260

146,139

146,636

153,896

`

1,664 (USD 27.7)

Interest Cover (EBITDA9 / Finance Costs10) Net Debt to Equity (Net Debt11 / Net Worth) Net Debt to EBITDA (Net Debt11 / EBITDA9) ROACE (EBIT12 / Average Capital Employed13) ROAE (Net Profit / Average Net Worth)

Closing Price as on 31st March (NSE) Market Capitalisation (NSE) Note1:

Note2: Note3 : Note4 : Note5 : Note6 : Note7 : Note9 : Note11 : Note13 :

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` Crore 21,654 (USD 3.6 billion)

1,091

976

945

814

14,196

11,727

10,723

9,244

Financial Services include NBFC, Life Insurance, Asset Management, Housing Finance, Private Equity, Broking, Wealth Management, Online Money Management & th General Insurance Broking businesses. Asset Management business has been proportionately consolidated at 50% till 9 October 2012, being a 50:50 Joint Venture and th thereafter consolidated as subsidiary since Aditya Birla Financial Services holds 51% w.e.f. 10 October 2012. Represents Branded Apparels & Accessories business (Madura Fashion & Lifestyle and Pantaloons Fashion & Retail Limited). Represents ABNL’s share. Being a joint venture, Idea has been consolidated at 27.02% from 12th August 2008 upto 1st March 2010, at ~ 25.3% till 10th June 2014, at 23.63% till 23rd July 2014 and at ~ 23.3% thereafter as per AS 27. ABNL IT & ITES Ltd., a wholly owned subsidiary of ABNL, divested Aditya Birla Minacs w.e.f. 9th May 2014 Divisions include Jaya Shree, Agri, Rayon and Insulators. The Carbon Black division has been divested through slump sale w.e.f. 1st April 2013 Exceptional Gain / (Loss) in 2014-15 represents loss of ` 13 Crore pertaining to the divestment of Minacs Cash Surplus & Current Investments include cash & bank balances and fertilisers bonds Note8 : Including Fund for Future Appropriations EBITDA less finance costs related to NBFC Note10 : Excluding finance costs related to NBFC Total Debt (excluding NBFC borrowings) less Cash Surplus & Current Investments Note12 : EBIT less finance costs related to NBFC Capital Employed excluding Life Insurance Policyholders’ Fund and NBFC borrowings Note14 : 1 USD = ` 60; 10 Million = 1 Crore

CMYK

PROFIT AND LOSS ACCOUNT

2014-15 USD Million6 ` Crore

Revenue

2013-14 ` Crore

2012-13 ` Crore

2011-12 ` Crore

2010-11 ` Crore 6,447

1,490

8,938

8,021

9,754

8,433

198

1,186

1,246

1,116

1,050

960

44

263

267

360

313

271

EBITDA Less : Finance Costs Earnings before Depreciation and Tax Less : Depreciation and Amortisation Earnings before Tax and Exceptional Items 1

Add: Exceptional Gain/ (Loss)

154

922

979

756

737

689

32

189

199

219

203

194

122

733

780

537

534

495





24



(104)



Earnings before Tax

122

733

804

537

430

495

Less : Tax Expenses

34

205

130

114

85

115

Net Profit2

88

528

674

423

345

380

Less : Dividend (Including Corporate Tax on Dividend)

18

110

98

78

68

73

Retained Profit

70

418

576

345

277

307

2014-15 USD Million6 ` Crore

2013-14 ` Crore

2012-13 ` Crore

2011-12 ` Crore

2010-11 ` Crore

BALANCE SHEET Net Fixed Assets (Including Capital Advances and CWIP)

313

1,879

1,866

2,226

1,976

1,858

1,449

8,695

7,952

5,857

5,598

5,424

17

105

557

353

707

146

272

1,635

1,574

2,556

2,117

1,433

2,052

12,314

11,949

10,992

10,398

8,862

Share Capital

22

130

130

120

114

114

Share Warrants







224





1,398

8,389

7,978

6,510

5,565

5,287

Net Worth

1,420

8,519

8,108

6,854

5,679

5,401

Total Debt

615

3,688

3,753

3,983

4,561

3,287

18

106

88

155

158

174

2,052

12,314

11,949

10,992

10,398

8,862

Long term Investments Cash Surplus & Current Investments3 Net Working Capital Capital Employed

Reserves and Surplus

Deferred Tax Liabilities (Net) Capital Employed

RATIOS AND STATISTICS

Unit

2014-15

2013-14

2012-13

2011-12

2010-11

Interest Cover (EBITDA / Finance Costs)

x

4.5

4.7

3.1

3.4

3.5

ROACE (EBIT/ Average Capital Employed)

%

8.2

9.1

8.4

8.8

8.8

ROACE (Excluding Long Term Investments)

%

23.8

17.1

15.0

18.7

23.5

ROAE (Net Profit/ Average Net Worth)

%

6.3

9.0

6.8

6.2

7.5

Net Debt to Equity (Net Debt 5 / Net Worth)

x

0.42

0.39

0.53

0.68

0.58

Net Debt to EBITDA (Net Debt5 / EBITDA)

x

3.0

2.6

3.3

3.7

3.3

Dividend per Equity Share

`

7.0 (12 Cents)

7.0

6.5

6.0

5.5

Dividend Payout Including Tax (as % to Net Profit)

%

20.8

14.5

18.5

19.7

19.1

4

Basic Earnings Per Share (EPS) (Weighted Average)

`

40.6 (68 Cents)

54.3

37.2

30.4

35.8

Cash EPS (Weighted Average)

`

57.0 (USD 1.0)

64.9

56.3

47.0

53.7

Book Value per Equity share

`

655 (USD 10.9)

623

570

500

476

` Crore

223 (USD 37 million)

401

449

304

240

Capital Expenditure (Net)

Note1 : Book gain of ` 24 Crore has been recognized in 2013-14 w.r.t. the slump sale of the Carbon Black business w.e.f. 1st April 2013 Note2 : Net Profit in 2013-14 is higher by ` 209 Crore on account of one-off items being (a) book gain of ` 24 Crore and net tax credit of ` 41 Crore on divestment of the Carbon Black business and (b) gain of ` 144 Crore on buyback of equity shares by Life Insurance subsidiary. Note3 : Cash Surplus & Current Investments include cash & bank balances, fertilisers bonds and short term ICDs Note4 : (EBIT excluding Dividend Income) / (Average Capital Employed less Long Term Investments) Note5 : Total Debt less Cash Surplus & Current Investments

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Note6 : 1 USD = ` 60; 10 Million = 1 Crore

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS - STANDALONE

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS

Indian Economy: Promising Outlook India’s GDP is estimated to grow at 7.4% in fiscal 2014-15 vis-à-vis 6.9% recorded in the previous year. There was a noteworthy improvement across various parameters. Control on price rise continued and remarkable downfall in inflation was noted led by benign global commodity prices. WPI inflation, at -2.33% in March 2015, touched its lowest level since past nine years. CPI inflation eased to 5.17% in March 2015 after starting the year with 8.6% in April 2014. Year-on-year growth in Index of Industrial Production (IIP) was encouraging at 2.8% compared to negative growth in the previous year. The moderation in inflation prompted the RBI to cut interest rates to spur economic growth. The Consumer confidence index reported by Nielson touched its 4-year high level. It rose from 121 in the fourth quarter of 2013-14 to 129 in the third quarter of 2014-2015. Structural reforms to boost investments remained high on the Government’s agenda. It started with increasing FDI cap to 49% in defence production, to 100% in railway infrastructure and then raising FDI cap in insurance sector from 26% to 49%. The Government is expected to beat its fiscal deficit target of 4.1% of GDP, supported by the coal and spectrum auctions. The Indian Rupee remained relatively stable and the Current Account Deficit (CAD) contracted. With all the above positive indicators, the Indian economy is becoming a favourable destination for investment. Though the capex cycle and consumer spend on the ground is yet to pick up, the prospects of a stable macro-economic environment has boosted foreign equity inflows in the Country. Net equity inflows from Foreign Institutional Investors (FIIs) grew by 33% to USD 18 billion. Net equity inflows from mutual funds were USD 6.9 billion as compared to net outflow of USD 3.5 billion in the previous year. The World Bank and the International Monetary Fund forecast India’s GDP to grow at 7.5% in 2015 to become the world’s fastest growing economy, ahead of China. A stable government, RBI’s inflation focus and benign global commodity prices are expected to be the key contributing factors. Furthermore, new initiatives viz. ‘Make in India’, ‘Digital India’ along with a host of financial inclusion measures are expected to help accelerate India’s economic development.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Aditya Birla Nuvo Limited: Progressing in line with its vision and mission Aditya Birla Nuvo Limited (‘ABNL’ or ‘the Company’), is a USD 4.4 billion conglomerate having a leadership position across its Financial Services, Fashion & Lifestyle, Telecom, Linen and Manufacturing businesses. Guided by its vision “To be a premium conglomerate building leadership in businesses and creating value for all the stakeholders”, ABNL has transformed itself from a small manufacturing company in 2000 to become one of the largest conglomerates in India today. During this transformational journey, ABNL identified growth opportunities in the promising sectors and invested close to USD 2 billion to build and sustain its leadership position in these sectors. Well recognised for its market leadership and cost management in the industrial businesses till late nineties, the Aditya Birla Group today has a successful and marked presence in the consumer centric service sector space through ABNL. Having promoted and created more than 20 marquee brands, ABNL, touches the lives of more than 160 million Indians and meets their needs for life assurance, investment, financing, fashion, digital communication and agri products. During fiscal 2014-15, the Company continued to progress in line with its mission: •

Investing in the promising sectors



Building leadership position in businesses



A platform to drive synergy of resources



Delivering best value to all the stakeholders



To be a responsible corporate citizen

Investing in the promising sectors ABNL augmented its bouquet of offerings in the Financial Services business with commencement of Housing Finance business operations in October 2014 under Aditya Birla Housing Finance Limited. It has also signed an MoU in October 2014 with MMI Holdings Ltd., a leading South African Insurance based Financial Services Group, to enter the Health Insurance sector in India. ABNL has also made an application to the RBI for obtaining license for setting-up a “Payments Bank”,

Note: USD 1 = ` 60; 1 billion = 100 Crore Note: The financials in the Management Discussion and Analysis have been rounded off to the nearest ` 1 Crore

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CMYK

MANAGEMENT DISCUSSION AND ANALYSIS

in accordance with the Guidelines for ‘Licensing of Payments Bank’ issued by RBI on November 27, 2014. As per the proposed structure, ABNL will be the Promoter of the Payments Bank, holding 51% of its equity capital. Idea Cellular Limited (“Idea”), an Aditya Birla Group Company, where ABNL is the largest promoter shareholder, will be holding the balance 49% of equity capital in the proposed Payments Bank. The equity participation of Idea in the proposed Payments Bank may be increased up to 60%, subject to regulatory approvals, as applicable. Building leadership position in businesses The Company continued to invest in its businesses to fortify its leadership position. The business-wise highlights are as follows:



Madura is the # 1 branded menswear player in India and Pantaloons is the # 1 branded womenswear retailer in India.



Trusted by a large 10.8 million loyalty customer base.



Revenue at USD 910 million (` 5,450 Crore) grew year-on-year by 15% and EBITDA at USD 89 million (` 532 Crore) soared by 32%.



Largest retail network in the fashion space with 1,869 exclusive brand outlets / stores spanning 4.8 million square feet and 6,000+ additional points of sale.



Expanding market presence with addition of retail stores as well as scaling its own online presence through Trendin.com.

Aditya Birla Financial Services (‘ABFS’) •

A significant non-bank financial services player having a diversified portfolio with 10 lines of businesses, including planned foray in the health insurance sector.



Telecom (Idea Cellular) •

Idea is the 6 th largest mobile telecommunications company in the world (based on operations in a single country) in terms of the number of subscribers (Source : GSMA, December 2014)



Ranks among the top 5 fund managers in India, excluding LIC.



Funds under management at USD 27.5 billion1 (` 164,940 Crore), grew year-onyear by 35%.



Lending book in the NBFC business reached USD 3 billion (` 17,550 Crore) mark – registering a 52% year-on-year growth.

It ranks 3rd in India in terms of revenue market share which grew from 16.1% to 17.5%2 in the previous year.



Largest revenue market share gainer in India between 2009 and 2014



A large customer base of 157.8 million subscribers as on 31st March 2015.



Idea is a USD 11 billion company by market cap (` 66,200 Crore as on 31st March 2015)



Its consolidated revenue at USD 5.3 billion (` 31,527 Crore) grew year-on-year by 19% and EBITDA at USD 1.9 billion (` 11,281 Crore) surged by 32%.



Strong cash profit generation3 at USD 1.4 billion (` 8,482 Crore), 32% up year-on-year.



Idea has a strong balance sheet to support its growth plans, with standalone3 Net Debt to EBITDA at 1.31 times as on 31st March 2015.











Revenue at USD 1.3 billion (` 7,926 Crore) rose year-on-year by 19% and Earnings before Tax at USD 141 million (` 849 Crore) surged by 17%. Trusted by over 6 million customers and anchored by 11,000 committed employees, ABFS has a strong nationwide presence through more than 1,350 branches / touch points and over 140,000 agents / channel partners.

Fashion & Pantaloons) •

Lifestyle

(Madura

and

ABNL’s Fashion & Lifestyle business is the largest branded apparel player in India selling two branded apparels every second.

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Note 1 : Includes AUM of Life Insurance, Private Equity and quarterly average AUM of Asset Management business Note 2: Based on gross revenue for UAS & Mobile licenses only, for October–December 2014 as released by Telecom Regulatory Authority of India (“TRAI”). Note 3: Standalone Idea = Idea and its 100% subsidiaries

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS



Divisions (Jaya Shree, Agri, Rayon and Insulators): •

Combined revenue at USD 901 million (` 5,405 Crore) grew year-on-year by 9% and EBITDA at USD 102 million (` 615 Crore) increased by 11%.



Jaya Shree is a leading Linen Yarn and Fabric player in India. To tap sector growth opportunities, Jaya Shree is targeting to double its linen yarn capacity.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Delivering best value to all the stakeholders As a conglomerate, ABNL constantly evaluates its capital allocation strategy and reviews its business portfolio, with the objective of delivering the best value to all the stakeholders over the long run. Exit from sub-scale businesses to ensure greater focus on other businesses



Given the multiple growth opportunities and ensuing capital commitment of ABNL towards other businesses, your Company divested the IT-ITeS business with effect from 9th May 2014 at an Enterprise Value of USD 260 million subject to working capital adjustments.



The standalone balance sheet has been the growth engine for ABNL and a platform to drive synergy of capital resources.

Earlier in the previous year 2013-14, the Company had divested the Carbon Black business with effect from 1st April 2013 at an enterprise value of ` 1,451 Crore subject to working capital adjustments.



ABNL has invested about USD 1 billion to fund the growth capital requirements of its businesses over the past six years. Long term strategic investments account for more than 70% of ABNL’s standalone capital employed as on 31st March 2015.

The divestment proceeds have supported the growth plans of the Company, strengthened its balance sheet and enabled greater focus on the core businesses.

Consolidation of branded apparels businesses to unlock value for the shareholders

th



Indo-Gulf is the 8 largest and one of the most energy efficient urea plants in India.



Indian Rayon is among the top two manufacturers and the largest exporter of VFY.



Aditya Birla Insulators is India’s largest and world’s 4th largest manufacturer of insulators.

A platform to drive synergy of resources







Despite this, ABNL continues to command a healthy financial position, with standalone Net Debt to EBITDA at 3 times and Net Debt to Equity at 0.42 times as on 31st March 2015, led by steady cash flow from operations, dividend income and release of capital from divestment of sub-scale businesses.



For fiscal 2015-16, the standalone balance sheet will support investments to the tune of ` 600 Crore in the Financial Services businesses, largely to fund the growth capital requirements of the NBFC and Housing Finance businesses. The capital expenditure guidance for the standalone businesses stands at around ` 300 Crore.



While fulfilling these capital requirements, the Company is committed to keeping this growth engine healthy and future-ready.

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To capitalise on its large market presence in the branded fashion space in India, your Company has announced consolidation of its branded apparels businesses under its listed subsidiary – Pantaloons Fashion & Retail Ltd. (“PFRL”), through a composite scheme of arrangement (“Scheme”). 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”) – a subsidiary of ABNL, will be demerged from respective companies into PFRL. Pursuant to demerger, new shares will be issued by PFRL to the respective shareholders of the transferor companies directly.

CMYK







This consolidation will create India’s largest pure play branded apparels Company by bringing Madura – India’s #1 branded menswear player and Pantaloons – India’s #1 branded womenswear retailer, together. The move will unlock value for the shareholders by giving them an opportunity to participate in the promising fashion space directly. 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 combined entity will have the largest retail network in fashion space in the Country.



The consolidation will also enable tapping of operational synergies on various fronts such as sourcing, real estate and technology platforms.

MANAGEMENT DISCUSSION AND ANALYSIS

“Our values provide us with our roots and they provide us with our wings” — Chairman, Kumar Mangalam Birla

Driven by Power of Five Values Integrity Acting and taking decisions in a manner that is fair and honest. Following the highest standards of professionalism and being recognised for doing so. Integrity for us means not only financial and intellectual integrity, but encompasses all other forms as are generally understood. Commitment



The sound Balance Sheet of the combined entity will act as a strong enabler for future growth. Refer page 30 for transaction details.

On the foundation of Integrity, doing all that is needed to deliver value to all the stakeholders. In the process, being accountable for our own actions and decisions, those of our team and those in the part of the organisation for which we are responsible. Passion An energetic, intuitive zeal that arises from emotional engagement with the organisation that makes work joyful and inspires each one to give his or her best. A voluntary, spontaneous and relentless pursuit of goals and objectives with the highest level of energy and enthusiasm.

To be a responsible corporate citizen

Seamlessness

As a responsible corporate citizen, the vision of the Company is to contribute actively to the social and economic development of the communities, to build a better and sustainable way of life for the weaker sections of the society and to adopt best business practices for sustainable development; thereby balancing its economic growth with environmental and societal interests.

Thinking and working together across functional groups, hierarchies, businesses and geographies. Leveraging diverse competencies and perspectives to garner the benefits of synergy while promoting organisational unity through sharing and collaborative efforts.

Responding to internal and external customers with a sense of urgency. Continuously striving to finish before deadlines and choosing the best rhythm to optimise organisational efficiencies.

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The initiatives taken by the Company in these areas are spelt out in detail in the Social and Environment Report Section of the Annual Report.

Speed

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Consolidated Earnings EBITDA (USD 966 million)

Revenue (USD 4.4 billion)

(` Crore)

(` Crore)

5,798

MANAGEMENT DISCUSSION AND ANALYSIS

25,490

26,516

25,892

4,927 4,137 18%

2%

2012-13

2013-14

2014-15

2012-13

2013-14

2014-15

Net Profit (USD 236 million) (` Crore) 1,416

1,143 1,059 24%

2012-13

2013-14

Sound earnings growth The Company posted a strong growth in earnings during 2014-15. Most of the businesses are competitively well placed and are contributing to the earnings growth. • Posted consolidated revenue at ` 26,516 Crore (2%  y-o-y) and consolidated EBITDA at ` 5,798 Crore (18%  y-o-y). On a like-to-



2014-15

like basis, i.e., excluding IT-ITeS business which was divested w.e.f. 9 th May 2014, revenue and EBITDA growth was 14% and 25% respectively. Consolidated Net Profit surged year-on-year by 24% to ` 1,416 Crore. Excluding IT-ITeS business and before one-off items, like-to-like growth in net profit was 39%.

Consolidated Profit and Loss Account

Revenue EBITDA Less: Depreciation and Amortisation Earnings Before Interest and Tax (EBIT) Less: Finance Costs related to NBFC Less: Other Finance Costs Earnings Before Tax and Exceptional Items Add: Exceptional Gain/(Loss)1 Earnings Before Tax Less: Tax Expenses Less: Minority Interest and Share of (Profit)/Loss of associates Consolidated Net Profit Note1 :

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(` Crore) 2013-14

2014-15

25,892 4,927 1,609 3,318 742 809 1,767 5 1,772 550 79 1,143

26,516 5,798 1,703 4,095 1,105 652 2,338 (13) 2,325 833 76 1,416

In 2014-15, Exceptional loss of ` 13 Crore pertains to the divestment of Minacs, the IT-ITeS business, w.e.f. 9th May 2014. Exceptional items in 2013-14 include loss of ` 19 Crore on impairment of goodwill relating to investments in the broking & wealth management businesses and gain of ` 24 Crore on the divestment of the Carbon Black business

CMYK

MANAGEMENT DISCUSSION AND ANALYSIS

Consolidated Revenue - Segmental

(` Crore) 2014-15

2013-14 Financial Services

1

Fashion & Lifestyle Telecom IT-ITeS

2

3

4

Divisions

5

Inter-segment Elimination Consolidated Revenue Consolidated revenue of ABNL grew year-on-year to ` 26,516 Crore despite divestment of IT-ITeS business w.e.f. 9th May 2014. Revenue of the Financial Services business surged by 19% to ` 7,926 Crore led by the NBFC and the Life Insurance businesses. Revenue of NBFC business soared by 48% to ` 1,776 Crore driven by 52% year-onyear growth in its lending book. Revenue of Life Insurance business grew by 12% to ` 5,267 Crore led by the group new business and renewal premium growth.



Telecom IT-ITeS

2

4 5

Segment EBIT as per AS - 17 Add: Unallocated Income / (Expenses) (Net) Add: Finance Costs related to NBFC

6

Add: Consolidated Interest Income (Excluding Interest Income of NBFC) Consolidated EBIT 1

Note :

2

Note : 3

Note : 4

Note : 5

Note : 6

Note :

6,669

7,467

2,898

283

4,979

5,405

(50)

(16)

25,892

26,516

2013-14

3

Divisions

5,450

Fashion & Lifestyle business posted 15% growth in revenue at ` 5,450 Crore. Led by retail stores expansion and a 20% revenue growth in wholesale channel, Madura’s total revenue rose by 16% to ` 3,735 Crore. Revenue of Pantaloons Fashion & Retail Ltd. grew by 11% to ` 1,851 Crore. Retail stores expansion and like-to-like growth of 5.5% contributed.

1

Fashion & Lifestyle

4,759

Revenue of Asset Management business increased by 19% to ` 596 Crore on the back of growth in AUM.

Consolidated EBIT - Segmental Segment EBIT as per Accounting Standard (“AS”)-17 Financial Services

7,926

6

(` Crore) 2014-15

725

814

199

261

952

1,305

181

(16)

430

494

2,487

2,857

19

78

742

1,105

70

55

3,318

4,095

Financial Services include NBFC, Life Insurance, Asset Management, Housing Finance, Private Equity, Broking, Wealth Management, Online Money Management & General Insurance Broking businesses. In accordance with AS-17 on ‘Segment Reporting’, finance cost of NBFC business is reduced from Segment EBIT. Represents Branded Apparels & Accessories business (Madura Fashion & Lifestyle and Pantaloons Fashion & Retail Limited). Represents ABNL’s share in Idea Cellular’s earnings. Being a joint venture, Idea has been consolidated at ~25.3% till 10th June 2014, at 23.63% till 23rd July 2014 and at ~23.3% thereafter as per AS - 27. Divested w.e.f 9th May 2014 Divisions include Jaya Shree, Agri, Rayon and Insulators. In accordance with AS-17 on ‘Segment Reporting’, finance cost of NBFC business is reduced from segment EBIT, hence, added back to arrive at Consolidated EBIT. In accordance with AS-17, interest income (excluding interest income of NBFC business) is not included in segment EBIT, hence, added back-to-arrive at Consolidated EBIT.

15

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6,637

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS





In the Telecom business, Idea Cellular registered a 19% growth in the top-line at ` 31,527 Crore (ABNL’s share: ` 7,467 Crore). A strong 16% rise in total minutes of use, more than 100% growth in data volumes and a 3% higher average realisation per minute contributed. The combined revenue of the divisions grew by 9% to ` 5,405 Crore led by volume and realisation growth in the linen and the insulators businesses coupled with pass through of rise in natural gas prices in the Agri business.

Consolidated EBITDA rose by 18% from ` 4,927 Crore to ` 5,798 Crore. The Financial Services, Telecom and Fashion & Lifestyle businesses were the major contributors. Consolidated depreciation grew by 6% to ` 1,703 Crore, largely in Idea Cellular and Pantaloons. Idea’s depreciation was higher on account of network expansion and reduction in estimated useful life of core network equipments. Depreciation in Pantaloons was up by 68% due to accelerated depreciation charged on account of stores renovation and planned stores closures. Consolidated EBIT surged by 23% from ` 3,318 Crore to ` 4,095 Crore. •

Segment EBIT of Financial Services business grew by 12% to ` 814 Crore driven by the expansion of the lending book in the NBFC business and AUM growth in the Asset Management business.



Fashion & Lifestyle business registered a 31% rise in segment EBIT at ` 261 Crore. Madura posted 26% growth in EBIT led by top-line growth and margin expansion. Pantaloons recorded 180 basis points expansion in EBITDA margin, however, being in the investment phase, it reported a loss at segment EBIT level owing to accelerated depreciation.



In the Telecom business, segment EBIT surged by 46% to ` 5,508 Crore (ABNL’s

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16

Aditya Birla Nuvo Limited - Annual Report 2014-2015

share: ` 1,305 Crore) led by robust growth in voice and data usage, scale benefits and cost efficiency. •

Segment EBIT of Divisions, combined together, rose by 15% to ` 494 Crore. The linen segment of Jaya Shree Textiles posted higher profitability led by expansion. At IndoGulf, improved energy efficiency, higher fixed cost reimbursement as per the Government policy and increased sales of pesticides augmented earnings. At Indian Rayon, profitable growth in the VFY segment was offset by lower Caustic Soda volumes owing to maintenance shutdown in the power plant and the softening of ECU realisation. At Aditya Birla Insulators, higher volumes and an increase in realisation, mainly to pass on the rise in operating costs, contributed to the earnings growth.

Finance costs related to the NBFC business increased by 49% in line with the growth in the NBFC lending book. Other finance costs declined from ` 809 Crore to ` 652 Crore mainly due to divestment of the ITITeS business. In the previous year 2013-14, one-time interest cost of ` 88 Crore [mainly relating to earlier years and pertaining to compulsory convertible debentures (‘CCDs’) issued by Minacs, the IT-ITeS Subsidiary, in 2010] was charged to the Consolidated Profit & Loss Account on account of the redemption of the CCDs owing to the divestment of IT-ITeS business. Tax expenses increased mainly on account of improved profitability in the Telecom and the NBFC businesses. In the previous year 2013-14, tax expenses were net of ` 41 Crore tax credit recognized pursuant to the divestment of the Carbon Black business w.e.f. 1st April 2013. ABNL’s consolidated Net Profit expanded by 24% from ` 1,143 Crore to ` 1,416 Crore. On a normalised basis, consolidated Net Profit (excluding IT-ITeS business and before one-off items) surged by 39%.

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Consolidated balance sheet Net worth increased by ` 1,682 Crore to ` 12,871 Crore mainly on account of profit earned during the year. Total debt (excluding borrowings related to NBFC and Housing Finance businesses) increased from ` 10,893 Crore to ` 11,299 Crore mainly due to Pantaloons which raised debt during the year to fund its losses, capex and working capital requirements. Borrowings related to the NBFC and Housing Finance businesses grew to ` 14,686 Crore in line with the growth in lending book. Net fixed assets, Goodwill and Net Working Capital are lower year-on-year owing to the divestment of the IT-ITeS business.

MANAGEMENT DISCUSSION AND ANALYSIS

Lending book of the NBFC and Housing Finance businesses, combined together, has grown to ` 17,700 Crore. Housing Finance business, which commenced its operations in October 2014, has a lending book of ` 142 Crore as on 31st March 2015. Cash Surplus and Current Investments are higher on account of surplus funds with Idea Cellular. Idea raised debt funds for payment of upfront spectrum fee towards spectrum won in March 2015 auctions, however, major part of fee was paid in April 2015. A report on Business-wise performance and outlook follows.

Consolidated Balance Sheet

(` Crore) March 2014

March 2015

Net Worth

11,189

12,871

Total Debt

10,893

11,299

9,647

14,686

Minority Interest

778

802

Deferred Tax Liabilities (Net)

504

485

33,012

40,142

(Including Funds for Future Appropriation)

23,557

28,839

Total Funds Employed

56,569

68,981

Net Fixed Assets (including Capital Advances & CWIP)

13,045

12,342

4,982

3,973

410

408

24,764

30,147

Policyholders’ Investments

23,435

28,595

Shareholders’ Investments

1,329

1,552

11,550

17,700

730

165

1,089

4,246

56,569

68,981

860

989

Net Debt /EBITDA (x)

2.3

1.5

Net Debt2/Equity (x)

0.9

0.5

NBFC Borrowings (including Housing Finance)

Capital Employed

Goodwill Long term Investments Life Insurance Investments

NBFC Lending Book (including Housing Finance) Net Working Capital Cash Surplus & Current Investments1 Total Funds Utilised Book Value per Equity Share (`) 2

Note1:

Include cash, cheques in hand, remittances in transit, balances with banks, fertilisers bonds and current investments.

Note2:

Total Debt (excluding NBFC borrowings) less Cash Surplus & Current Investments.

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Life Insurance Policyholders’ Funds

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL SERVICES

India has a diversified financial services sector, which is undergoing rapid expansion. The sector comprises commercial banks, insurance companies, non-banking financial companies, cooperatives, pension funds, mutual funds and other smaller financial entities. The financial sector in India is predominantly a banking sector with commercial banks accounting for more than 60% of the total assets held by the financial system. India’s services sector has always served the country’s economy well, accounting for about 57% of the gross domestic product (GDP). At close to 30%, India has the 2nd highest savings rate as percentage of GDP among the top 10 largest economies in the world (Source: World Bank). However, over 95% per cent of household savings are invested in bank deposits and only 5% in other financial asset classes. Innovative and customised products are expected to shift bank deposits to these asset classes. Two-thirds of India’s population lives in rural areas where financial services have made few inroads so far. Rural India, however, has seen steady rise in incomes creating an increasingly significant market

for financial services. The Government of India has introduced reforms to liberalise, regulate and enhance the financial services sector. Financial inclusion drive from RBI has expanded the target market to semi-urban and rural areas. Credit, insurance and investment penetration is rising in rural areas. Jan Dhan Yojana launched by Prime Minister will be helpful in increasing the penetration of financial services in country. Besides this, favourable demographics viz., a large and growing youth population, an expanding middle class and rising per capita income, signal robust long term growth prospects for India’s financial services sector. Aditya Birla Financial Services (ABFS) In line with its vision, “To be a leader and role model in a broad based and integrated financial services business”, Aditya Birla Financial Services has transformed itself into a significant non-bank financial services player in India. ABFS has built a diversified portfolio with 10 lines of businesses including the planned foray in the health insurance business. ABFS, through its wide ranging bouquet of financial products and services, caters to the life assurance, investment, savings and financing needs of its customers across their lifecycles.

Aditya Birla Financial Services: Progressing as envisioned ●





● 1999



Foray in Mutual Fund business ●

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18

● 2011-12

● 2008

Consolidation of financial services business under Aditya Birla Nuvo Acquisition of Alliance mutual fund



Launched Private Equity Fund

...................... ● 2014

● ●





............................

● 2005

● 2001



Diversified with 10 lines of business AUM at USD 27.5 billion Lending book reaches USD 3 billion

● 2015

● 2010-11

..........................

● 1994

Entered retail broking business through acquisition of Apollo Sindhoori .....................

Acquisition of schemes of Apple mutual fund



..................

● 1991



....................

Foray in the NBFC business

..................



Foray in Life Insurance business through JV with Sun Life, Canada ...............................................



Launched India’s #1 online money management portal “MyUniverse” ...................................



..........................

MANAGEMENT DISCUSSION AND ANALYSIS

Sector Overview

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Foray in Housing Finance business Acquired mutual fund schemes & portfolio accounts from ING Investment Management IFC became strategic financial investor in MyUniverse Signed MoU with MMI Holdings Ltd. to enter health insurance business in India

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ABFS ranks among the top 5 fund managers in India, excluding LIC, having USD 27.5 billion worth of funds under management. It ranks among the top 6 private life insurers in India in terms of AUM and new business market share. Its Asset Management business is the 4th largest player in the country. It is a large player in the NBFC space having lending book of about USD 3 billion and growing at a fast pace. Anchored by about 11,000 employees and trusted by more than 6 million customers, ABFS has a nation-wide reach through more than 1,350 points of presence and over140,000 agents / channel partners. In fiscal 2014-15, the funds under management of ABFS surged by 35% to ` 164,940 Crore. Its consolidated revenue rose by 19% to ` 7,926 Crore led by the NBFC and the Life Insurance businesses. Earnings before tax soared by 17% from ` 727 Crore to ` 849 Crore driven by the NBFC and the Asset Management businesses. To fortify its market positioning and augment its portfolio, ABFS is entering into strategic partnerships, strengthening its existing businesses

MANAGEMENT DISCUSSION AND ANALYSIS

and investing in new lines of businesses. Major initiatives taken during 2014-15 are listed below: • Foray into Housing Finance business in October 2014. • Acquisition of mutual fund schemes and portfolio accounts from ING Investment Management in September 2014. • IFC became strategic financial investor in MyUniverse in December 2014. • Signed MoU with MMI Holdings Ltd. (a leading South African insurance-based financial services group) in October 2014 to enter into the health insurance and wellness business in India. Backed by a large customer base, strong parentage brand equity, a talented human resource pool, proven track record of product innovation, an integrated business operations model, customer centric approach and superior investment performance, Aditya Birla Financial Services is set to tap the huge growth opportunity offered by the highly under-penetrated Indian financial services sector. (` Crore)

1

Aditya Birla Financial Services

2013-14

2014-15

Aditya Birla Finance (NBFC)

1,201

1,776

Birla Sun Life Insurance

4,702

5,267

502

596

Aditya Birla Insurance Brokers

82

73

Aditya Birla Money (Broking)

75

119

Aditya Birla Money Mart (Wealth Management)

66

86

Aditya Birla Capital Advisors (Private Equity)

23

21

(14)

(13)

6,637

7,926

799

911

Earnings Before Tax

727

849

Net Profit

584

638

Revenue

Birla Sun Life Asset Management

Others / (Elimination) Total Revenue EBITDA

2

Note 1 : Above financials include full financial figures of partly owned subsidiaries, viz., Life Insurance, Asset Management, Broking and General Insurance Advisory.

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Note 2 : Finance cost of NBFC business, being an operating expense as per AS-17, is deducted from EBITDA.

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

MANAGEMENT DISCUSSION AND ANALYSIS

NBFC (Aditya Birla Finance Limited)

(` Crore)

Industry Overview

Aditya Birla Finance

Non-Banking Financial Companies (NBFC) have evolved as an important segment of the Indian financial system. The role of NBFCs as effective financial intermediaries has been well recognized owing to inherent ability to take quicker decisions, provide customised products and better services according to the needs of the clients. The share of NBFCs has steadily grown from 10.7% of banking assets in 2009 to 14.3% in 2014, thus gaining systemic importance. On the assets side, the share of NBFCs’ assets as a proportion of GDP at current market prices has increased steadily from 8.4% in 2006 to 12.5% in 2013.

Revenue Earnings before Tax Net Profit Net Worth Borrowings Leverage (times)

Due to subdued economic environment, the last two years have been challenging for the NBFC sector with moderation in rate of asset growth and rising delinquencies resulting in higher provisioning, thereby impacting profitability. During the year, the Reserve Bank of India (RBI) has tightened rules for NBFCs, by raising capital adequacy requirement and net owned fund limit, among other regulatory changes. In a major positive development for the industry, NBFC with the assets of ` 500 Crore and above have been allowed to use the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) to recover their NPAs without court intervention. SARFAESI would go a long way towards creating a level playing field for NBFCs. Reduction in lending rate by RBI will also be helpful for the industry. Aditya Birla Finance : Book Size (` Crore)

2013-14 2014-15 1,201 251 166 1,769 9,647 5.5

Performance Review Aditya Birla Finance Limited (ABFL) is one of India’s pioneers and most reputed NBFCs. ABFL offers specialized solutions in areas of Mortgages, Corporate Finance, Capital Market, Infrastructure Finance and Debt Syndication. The lending book of ABFL grew year-on-year by 52% to reach USD 3 billion (` 17,550 Crore) mark as on 31 st March 2015. The Mortgages and Infrastructure segments were the largest contributors to the growth, followed by Corporate Finance and Capital market segments. Mortgages book crossed ` 5,000 Crore, attaining a growth of 71% over the previous year. Lending book in Infrastructure Finance, Corporate finance and Capital market segments surged by 59%, 48% and 30% respectively to cross ` 4,000 Crore each. ABFL has built a well diversified portfolio for sustainable growth. The loan book has expanded at a robust CAGR of 75% over past 4 years. Revenue has grown by 74%, Net Profit by 64% and Net Worth by 51% during this period. Break-up of Lending book as on 31st March 2015

~17,550

%

5 R7

~11,550

Infra Financing 23%

Mortgages 29%

G

CA

~8,000

~3,425 ~1,850

March 2011 March 2012 March 2013 March 2014 March 2015

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20

1,776 411 271 2,585 14,594 5.6

Corporate Finance 23%

Others 1% Capital Market 24%

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

MANAGEMENT DISCUSSION AND ANALYSIS

ABFL : Key business Metrics Opex to Net Interest Income

Return on average Assets (ROA)

(%)

(%)

35%

31%

2010-11

2011-12

2012-13

2.00%

1.92%

36%

2013-14

MANAGEMENT DISCUSSION AND ANALYSIS

2.11%

39%

2.19% 1.85%

29%

2014-15

2010-11

2011-12

2012-13

2013-14

Gross NPA

Return on average Equity (ROAE)

2014-15

Net NPA

(%)

1.16% 14.3% 10.2%

1.23%

1.29%

14.6%

0.90%

13.1%

11.4%

0.84%

0.83% 0.58% 0.32%

2011-12

2012-13

2013-14

2014-15

The sound growth in loan book has been accompanied by strong credit appraisal and risk management practices. As on 31st March 2015, ABFL had a healthy loan book with Gross NPA (Non-Performing Asset) ratio of 0.90% (Previous Year: 1.29%) and Net NPA ratio of 0.32% (Previous Year: 0.58%). NPA provisioning norms at ABFL are more stringent than RBI norms for NBFCs. As on 31st March 2015, provision made by ABFL in excess of RBI norms was ` 49 Crore. The Mortgages book comprises of loan against property (43%), lease rental discounting (34%), construction finance (16%) and commercial purchases (7%). Commenced in 2011, it has become the largest component of ABFL’s loan book. Almost 100% of the loan book is secured with Nil NPA. ABFL is focusing on expanding its retail footprint to support future growth in this segment. Currently 30% of mortgage loan book is retail. The Capital Market book comprises of Promoter Funding (35%), Loan against Bonds (11%), Broker Funding (21%) and Retail Lending (33%). Securities based lending market size has doubled in 4 years. ABFL has improved its market ranking in this segment from #6 in 2011 to #1 in 2014 and has doubled its market share during this period.

2012-13

2013-14

2014-15

Corporate Finance solutions cater to the needs of SME’s, mid and large corporates through Term Loans (51%), Working Capital Demand Loans (23%), Vendor Financing (22%) and Bill Discounting (4%). The number of accounts in this segment has grown more than 4 times over the past four years. Infrastructure Finance provides project and structured funding to infrastructure and other emerging sectors. Commenced in 2011, the lending book in this segment has grown multi-fold into a well diversified portfolio across products and sectors; with project finance and corporate loans accounting for 50% and 28% of the segment loan book respectively. During 2014-15, revenue of ABFL soared by 48% from ` 1,201 Crore to ` 1,776 Crore, driven by strong growth in the lending book and fee based income. Its earnings before tax rose by 63% from ` 251 Crore to ` 411 Crore. Growth in lending book and improved opex ratio contributed. Net profit surged by 63% from ` 166 Crore to ` 271 Crore. Return on average Equity expanded by 150 basis points to 14.6% and Return on average Assets enhanced by 15 basis points to 2%.

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2010-11

2011-12

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MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS

With a focus on retail footprint expansion, ABFL has expanded its branch network from 18 cities to 21 cities. ABFL is targeting to expand its reach to 30 cities in next two years and deepen its penetration in current and new geographies with multi- locations. To create greater brand awareness, the business is planning balanced mix of tactical and above the line marketing. ABFL received a capital infusion of ` 545 Crore during the year (Previous Year: ` 525 Crore). This supported the growth while keeping leverage at optimum levels. Its net worth expanded year-onyear by 46% from ` 1,769 Crore to ` 2,585 Crore led by capital infusion and internal accruals. The business is growing at a good pace and will require further capital for future growth.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

A sum of ` 40 Crore was infused during the year to fund the growth capital requirement. ABHFL’s lending book as on 31st March 2015 was ` 142 Crore with 109 customers on board. Having footprint across 15 cities currently, ABHFL plans to extend its presence to 30 cities by next year. ABHFL has invested significantly in setting up key systems and processes for loan origination till onboarding and servicing. It also understands the importance of digital presence in this highly competitive market. An online customer acquisition platform has been setup to cater to this need. Outlook

ABFL’s borrowing profile continues to remain healthy with 73% of total borrowings being long term. During the year, the long term debt rating was upgraded to AA+. Its short term debt programme carries highest A1+ rating. Housing Finance (Aditya Birla Housing Finance Limited) Industry Overview The housing finance market has crossed ` 10 trillion mark, as of 31st December 2014. Banking sector accounts for 63% of the housing finance loan book and the balance 37% is contributed by housing finance companies (HFCs) and nonbanking financial companies (NBFCs). While the non-banking housing finance space continues to be dominated by HDFC, there has been an emergence of new entrants in the niche segments like affordable housing and selfemployed segment. Performance Review To expand its presence in the retail housing finance segment, ABFS forayed into Housing Finance business through a wholly owned subsidiary Aditya Birla Housing Finance Limited (ABHFL), which commenced operations in October 2014.

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Domestic credit provided by the financial sector as a percentage of GDP in India at 75% is very low compared to 170% to 375% in large economies like China, United Kingdom, Hong Kong, United States and Japan. This is lower compared to even few emerging markets like Brazil and Indonesia. (Source: The World Bank). Backed by the lower credit penetration and huge capital formation requirement of the country, the long term outlook for the NBFC sector remains attractive. The sector is expected to benefit from lowering of interest rates, growing capital markets, infrastructure and affordable housing focus of the government and projects like ‘Make in India’ and ‘Digital India’. An investment to the tune of USD 2 trillion is expected in the housing sector over the next decade, to achieve the Government’s vision of “Housing for All by 2022” and “Development of 100 smart cities”. ABFL aims at scaling up its book size in the existing segments and through an extension of its portfolio, while keeping risk under control. The strong parent brand and an experienced team, that has seen more than two decades of business cycles, will help ABFL progress towards its goal.

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Life Insurance (Birla Sun Life Insurance Company Limited) Industry Overview The Indian Life insurance industry currently comprises 23 private life insurers and one public sector life insurer – LIC. The top 7 out of 23 private players contributed to 75.4% of the private sector’s total new business premium 1 in 2014-15. In 2014-15, the life insurance industry’s new business premium1 declined by 9% to ` 53,593 Crore. While LIC declined by 24%, private sector players grew by 16%. Consequently, the share of private players in total new business increased significantly from 37% to 47%. In terms of Individual

MANAGEMENT DISCUSSION AND ANALYSIS

Life new business1, private life insurers grew by 16%, while LIC declined by 26%. (Source: IRDAI, www.irda.gov.in). The private sector’s new business growth was mainly driven by players having large private banks as bancassurance partners. Other factors leading to private sector growth were improvement in the economic environment leading to revival of appetite for savings in financial products, shift in product mix towards ULIPs leading to higher premium per policy, focus on productivity of sales force, increasing penetration of digital channels. However, the private sector continued to show decline in customer acquisition and growth in new business premium was largely driven through higher average premium per policy.

Birla Sun Life Insurance: Healthy Growth in AUM

Birla Sun Life Insurance: Premium Income

(` Crore)

(` Crore)

30,185 24,775 22,929 19,760

62%

21,110

Non Equity

5,677

5,216 2,080

47%

45%

41%

42%

38%

Equity

March 2011 March 2012 March 2013 March 2014 March 2015

5,885 1926 1837

3,597

3959

2010-11

2011-12

5,233

4,833 1697

1938

New Business Premium

Renewal Premium

3380

3136

3295

2012-13

2013-14

2014-15

( ` Crore) Birla Sun Life Insurance

2013-14

2014-15

Individual First Year Premium

879

761

Group First Year Premium

818

1,177

First Year Premium

1,697

1,938

Renewal Premium

3,136

3,295

Premium Income (Gross)

4,833

5,233

Less: Reinsurance Ceded and Service Tax

(307)

(267)

Premium Income (Net)

4,526

4,966

176

301

4,702

5,267

Earnings Before Tax

371

285

Net Profit

371

285

24,775

30,185

1,257

1,542

Other Operating Income Revenue

Assets Under Management (“AUM”) Net Worth

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Note1: Weighted new business premium = 100% of regular first year premium + 10% of single premium (Source: IRDAI, www.irda.gov.in)

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS

In a major positive development for the insurance industry, the Government of India has increased FDI limit in the insurance sector from 26% to 49%. This is expected to strengthen the financial standing of the industry and help in bringing foreign capital and global best-practices. Performance Review Birla Sun Life Insurance (“BSLI”) ranks 6th among private players with 7.6% market share in terms of new business premium1 for 2014-15 [Source: IRDAI, www.irda.gov.in]. As of 31st March 2015, BSLI’s nationwide reach encompassed 488 branches, an agency force of over 90,000 empanelled agents, tie-ups with around 150 non-bank corporate agents and brokers and 4 bancassurance partners. BSLI recorded gross premium income at ` 5,233 Crore, registering a growth of 8% over previous year. New business premium income was up by 14% at ` 1,938 Crore. While new business premium income from Group segment surged by 44%, individual life segment declined by 13%. Renewal premium at ` 3,295 Crore grew year-on-year by 5%. Net Profit decreased from ` 371 Crore to ` 285 Crore primarily due to decline in the individual new business and lower in-force book. BSLI continued to be # 1 amongst private players in terms of Group new business premium1 with 23% market share up from 18% share in the previous year. Assets under Management increased by 22% to ` 30,185 Crore. Equity and non-equity assets contributed to 38% and 62% of the total AUM respectively. BSLI continued to deliver superior investment returns to its policyholders, consistently beating benchmarks. BSLI has been focusing on disciplined expense management as a result of which other expenses and overheads reduced year-on-year by 5%. The Opex to Gross Premium ratio at 16.6% in 2014-15 has reduced year-on-year by 240 basis points. BSLI has taken number of initiatives for customer retention and for managing underwriting and claims effectively. The conservation ratio of the individual life segment improved from 70% to 82%. Surrenders as a percentage of average AUM reduced year-on-year by 165 basis points. No capital infusion has been required since past five years as the business is generating adequate internal accruals to fund its requirements. BSLI distributed final dividend of ` 70 Crore for fiscal

Aditya Birla Nuvo Limited - Annual Report 2014-2015

2013-14 @ 3.7% of paid up share capital. ABNL received ` 52 Crore for its 74% shareholding. BSLI has a balanced mix of ULIP, Non Par Traditional and Par Traditional Products to meet multiple customer needs across different segments. During the year under review, BSLI launched several new products to complete its product suite and capture new customer segments. Share of traditional non-ULIP products in individual new business sales grew from 60% to 62%. Within non-ULIPs, share of participating products grew from 31% to 42%. BSLI continues to follow a multi-channel strategy for its Individual Life Business. While the Agency channel continues to hold the major share, the other channels like Banacassurance, Corporate Agents & Brokers and Direct Marketing contributed more than 30% of Individual Life sales in 2014-15. BSLI continues to review its portfolio of distribution partners on an ongoing basis to drive long term quality business. Outlook Life Insurance density in 2014 measured in terms of premium per capita is meagre USD 44 in India compared to global average of USD 368. Besides huge under-penetration levels, India has several structural advantages in terms of favourable demographics and high rate of financial savings which signals bright prospects for the life insurance industry in the long run. Greater certainty of regulations, improving macroeconomic environment, increasing product offerings and evolving distribution channels will help to enhance growth and profitability of the industry. Birla Sun Life Insurance has identified the following key areas to strengthen its competitive and financial position going forward. • Strengthening of distribution channels and improving productivity. • Gaining market share through quality sales and maintaining leadership in Group business. • Enhancing profitability with focus on balanced product and channel mix and efficient expense management. • Thrust on quality of business and customer service including persistency, investment returns and claims management.

Note1: Weighted new business premium = 100% of regular first year premium + 10% of single premium (Source: IRDAI, www.irda.gov.in)

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Asset Management (Birla Sun Life Asset Management Company Limited) Industry Overview The Indian mutual fund industry comprises 43 asset management companies. The top 10 asset management companies continued their dominance, capturing 79% of the industry’s domestic average AUM (AAUM1). The AAUM1 of mutual fund industry grew year-on-year by 31% to reach its highest ever ` 1,195,000 Crore (USD 199 billion) mark. The growth was largely driven by equity assets which grew by 89% to USD 62 billion. Debt assets grew by 16% to USD 88 billion and Liquid assets by 13% to USD 47 billion. Share of equity AAUM in industry’s AAUM surged from 22% to 32%. [Source: Association of Mutual Funds in India (“AMFI”), www.amfiindia.com].

MANAGEMENT DISCUSSION AND ANALYSIS

offering wealth creation solutions to its customers. During the year, BSAMC outperformed the industry and registered 35% year-on-year growth in domestic AAUM1 – third highest among the top 10 players. BSAMC maintained its market positioning in India as the 4th largest asset management company, touching its highest ever market share at 10.09% up from 9.85% a year ago. Total AAUM 1 of BSAMC, including domestic assets, offshore AUM, real estate fund and PMS AUM, surged year-on-year by 39% to reach ` 133,634 Crore (USD 22.3 billion). Equity and offshore assets more than doubled year-on-year to USD 4.3 billion and USD 2 billion respectively. BSAMC is consistently gaining market share in industry’s equity assets as well. It ranks # 5 in the industry in terms of equity AAUM with equity market share rising from 5.78% to 6.92%.

Birla Sun Life Asset Management Company (“BSAMC”) completed 20 years of its journey towards

Besides scaling up its equity and offshore assets, BSAMC is also focusing on expanding its retail investor base. Monthly SIP book size expanded year-on-year by 84%.

Market Share in terms of quarterly average AUM (Q4 FY 2014-15)

Growth in BSAMC’s Total AAUM1 (` Crore) 133,634

Performance Review

DSP 3.2%

Others 21.2%

Kotak 3.5%

IDFC 4.4%

Franklin 5.9%

SBI 6.3% UTI 7.8%

HDFC 13.6% ICICI 12.5%

Reliance 11.5%

23%

Equity

77%

NonEquity

96,429 83,451 67,668

66,082

Birla Sun Life 10.1%

Q4 FY10-11

Q4 FY11-12

Q4 FY12-13

Q4 FY13-14

Source: AMFI www.amfiindia.com

Birla Sun Life Asset Management Average Assets under Management1 Equity Debt and Liquid

Q4 FY14-15

(` Crore) 2013-14

2014-15

11,550 77,586

25,904 94,128

Domestic Offshore Real Estate Onshore Fund PMS

89,136 5,921 1,061 312

120,032 12,006 999 597

Total

96,429

133,634

Revenue Earnings Before Tax Net Profit

502 140 95

596 182 123

Net Worth

453

576

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Note1: Average AUM for the quarter ended 31st March of the respective year.

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS

In October 2014, BSAMC acquired the mutual fund schemes and portfolio accounts from ING Investment Management. This acquisition added ` 659 Crore to its mutual fund assets and ` 172 Crore to the PMS assets. Led by strong growth in assets under management, BSAMC posted sound earnings growth. Revenue grew by 19% to ` 596 Crore. Earnings before tax rose by 29% to ` 182 Crore. Net profit surged by 30% to ` 123 Crore. BSAMC is serving its large investor base through a strong distribution network of 109 branches and over 41,000 financial advisors. The fund performance of BSAMC remained strong across the asset classes. As an acknowledgement of its investment performance, following awards and recognitions were conferred on BSAMC at various forums: • • •

‘Asset Management House of the Year’ by Money Today - FPCIL Awards 2015. ‘Best Fund House – Debt’ by Morningstar Awards 2015 Birla Sun Life MNC fund won ‘Best Small/Mid Cap Equity Fund’ – Morningstar 2014

Outlook Despite the renewed interest from retail investors, mutual fund penetration in India is abysmally low at 7-8% of GDP compared to the global average of 37%. In urban India, just 9% of the households invest in mutual funds. This underpenetration signifies a huge growth opportunity for the mutual fund industry. With a focus on profitable growth, BSAMC will continue to augment relationships across channels besides launching innovative products, optimising costs, building a strong retail customer franchise and enhancing brand loyalty through consistent returns as well as superior customer service. General Insurance Advisory (Aditya Birla Insurance Brokers Limited) Industry Overview Gross premium underwritten by the non-life insurers in India has grown by 9% from USD 12.9 billion (` 77,525 Crore) to USD 14.1 billion (` 84,802 Crore) (Source: GIC Council). Motor Insurance, Health Insurance and Fire Insurance remained the top 3 contributors to the industry premium with around 44%, 27% and 10% share.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

Performance Review Aditya Birla Insurance Brokers Ltd. (“ABIBL”) is one of the leading general insurance brokers in India. Outperforming the industry average, ABIBL’s premium placement surged by 26% from ` 898 Crore to ` 1,132 Crore driven by 31%, 23% and 14% growth in Motor, Fire and Health Insurance Segments. Its market share in non-life industry premium enhanced from 1.16% to 1.33%. In line with growth in its premium placement, ABIBL’s earnings before tax rose by 26% to ` 27 Crore and net profit surged by 26% to ` 18 Crore. Outlook Non-Life Insurance density in 2014 measured in terms of premium per capita is meagre USD 11 in India compared to global average of USD 294. The low general insurance penetration in India is likely to boost growth of general insurance industry. ABIBL will focus on reaching a larger customer base in a cost-effective way to grow the business. Private Equity (Aditya Birla Private Equity) Industry Overview The Private Equity (“PE”) industry after being lacklustre for a couple of years showed renewed interest in Calendar year (CY) 2014. After plunging to a four year low of USD 7.4 billion in 2013, PE investments in India (excluding real estate investments) bounced back in CY 2014 to touch USD 10.9 billion (across 436 deals), registering a year-on-year growth of 47%. The PE investments in CY 2014 are the second highest ever investments during any calendar year, behind only CY 2007. The surge was led by the e-commerce sector, which mopped up USD 4.1 billion or 38% share in total PE investments in CY 2014, compared to 11% in CY 2013. [Source: Venture Intelligence]. Performance Review Aditya Birla Private Equity (ABPE) is managing ` 1,121 Crore of net corpus under two sectoragnostic funds, i.e. Aditya Birla Private Equity – Fund I (providing growth capital to the established companies across sectors) and Aditya Birla Private Equity – Sunrise Fund (providing growth capital to emerging companies in sunrise sectors). ABPE-Fund I, is managing ` 831 Crore of net corpus and has deployed 99% of its deployable

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ABPE-Sunrise Fund, is managing ` 291 Crore of net corpus and has deployed 69% of its deployable corpus in SMS Paryavaran Ltd., Olive Bar and Kitchen Pvt. Ltd., Tree House Education and Accessories Ltd., Wonderla Holidays Ltd., City Union Bank, Manpasand Beverages Pvt. Ltd. and Monte Carlo Fashions Ltd. Aditya Birla Capital Advisors Private Limited (“ABCAP”) provides investment management and advisory services to Aditya Birla Private Equity Trust, a venture capital fund registered with SEBI. During 2014-15, ABCAP reported revenue of ` 21 Crore and posted net profit of ` 4 Crore. Outlook According to a study by Venture Intelligence, a leading research firm focused on Private Equity and Merger and Acquisition activities in India, PE and Venture Capital backed companies are growing significantly faster compared to nonbacked peers as well as market indices. PE backed funds have been observed to deliver much higher rates of revenue and operating profit growth in the years immediately following the funding compared to the non-backed peers. This underscores the importance and growth potential of PE industry in India. Backed by its strong investment management team and salient parentage brand, Aditya Birla Private Equity is well positioned to tap the opportunity offered by the private equity space. Broking (Aditya Birla Money Limited) Industry Overview The equity markets saw a significant surge in 2014-15, posting the highest year-on-year growth in equity market volume during past five years. Growth was observed across investor classes and product mix. Total equity market volumes rose year-on-year by 49%. Retail participation in total equity market volumes increased from 38% to 39%. In the cash equity segment, retail participation has moved up from 46% to 50%.

The product mix in equities market continued to favour the low yielding derivative segment. The share of derivatives in fiscal 2014-15 stood at around 91%. The daily cash volumes grew by 59% to ` 21,343 Crore, while the daily derivatives volumes grew by 48% to ` 229,077 Crore. The daily volumes in the cash segment stood at merely 9% of the total market volumes. This continuing trend also indicates speculative activities taking precedence over investment led activities in the capital market. The structural shift (from high yield cash delivery to low yield derivatives market) has resulted in prolonged earnings pressure on the broking industry. Performance Review Aditya Birla Money Ltd. (ABML) continued to focus on the retail investor segment, cost reduction and improving market share. Its market share grew from 1.37% to 2.48% in retail equity F&O segment, from 0.54% to 0.64% in the commodity broking segment and from 0.29% to 0.50% in the currency segment. However, in the retail cash equity segment, market share of ABML declined from 1.43% to 1.34%. Average daily brokerage of ABML surged yearon-year by 67%, thereby, driving earnings growth. Revenue of ABML rose by 58% to ` 119 Crore. ABML posted net profit of ` 6 Crore vis-à-vis net loss of ` 12 Crore reported last year. Outlook India is on the cusp of a structural bull market after a prolonged slowdown of three years. With the foundations for an economic recovery viz., lower commodity prices, reform oriented government, low inflation and low interest rates, in place, participation in the financial markets is likely to increase. Moreover, given the focus of the government in shifting savings into productive financial assets rather than unproductive physical assets, the equity broking industry is set for increased volumes in the coming years. ABML’s thrust is on increasing its market share by creating product and service differentiators across all the segments. ABML will continue to focus on technology (internet trading), driving client acquisition, increasing its business partner network, and providing efficient trading tools and value added research advice to its clients.

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MANAGEMENT DISCUSSION AND ANALYSIS

corpus in Anupam Industries, Bombay Stock Exchange, Credit Analysis and Research Ltd., GEI Industrial Systems, Alphion India Pvt. Ltd., Trimax IT Infrastructure & Services Ltd., Ratnakar Bank Ltd., Coffee Day Resorts Pvt. Ltd., City Union Bank Ltd., Indian Energy Exchange Ltd., CIBIL and Monte Carlo Fashions Ltd.

MANAGEMENT DISCUSSION AND ANALYSIS

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Wealth Management (Aditya Birla Money Mart Limited)

Online Money Management (MyUniverse)

MANAGEMENT DISCUSSION AND ANALYSIS

Industry Overview While there are a few large wealth management players in India; the mutual fund distribution industry is very fragmented. Advisory asset management and tax planning has one of the highest demand among wealth management services by High Net Worth Individuals (HNIs), followed by financial planning. Direct plans for investment in mutual funds introduced last year continued to impact assets under advisory across the industry during 2014-15. Performance Review Aditya Birla Money Mart Limited (ABMM) is one of the largest corporate distributors in terms of assets under advisor y. The Assets under Advisory (AUA) of ABMM stood at ` 9,000 Crore in March 2015. Average equity assets under advisory expanded year-on-year by 34%. In line with the increase in AUA, revenue of ABMM grew year-on-year by 30% from ` 66 Crore to ` 86 Crore. It posted a net profit of ` 5 Crore against a net loss of ` 6 Crore last year.

Within three years of its launch in June 2012, Aditya Birla Money MyUniverse has become India’s largest online personal finance management portal enjoying the trust of over 1.5 million registered users and is helping customers manage more than ` 15,400 Crore on its platform. MyUniverse is an innovative and unique brand agnostic online money management portal that enables customers to aggregate their various financial relationships in a highly secured environment. It provides customised and automated advice based on the financial management and helps customer managing all the four aspects of money i.e., income, expense, asset and liability, in a holistic manner. MyUniverse has several industry firsts to its credit: •

Personal Financial Management player with mobile apps on both Android and iOS platforms,



State-of-the-art ‘Learning Centre’, which hosts numerous articles on financial education and investment management, and



Paperless Investing

Outlook The capping of upfront commission at 1% on distribution of mutual funds w.e.f. 1st April 2015 will be a dampener in the short run. However, the long term outlook for the financial products and services distribution sector remains strong. HNIs population in India is expected to double and total holdings by HNIs is estimated to reach USD 3 trillion by 2020. This coupled with increasing preference towards financial investment with the help of professional advisors presents a considerable growth opportunity for the wealth management players. ABMM’s thrust will be on asset growth and quality customer addition by providing value added wealth management solutions to its client through product innovation and technology support.

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This unique digital platform has earned the title of ‘Product of the Year 2012’ and ‘Finnoviti 2012’ for path-breaking innovation in financial services. Continuing its trend of innovation in offerings, MyUniverse has launched ZipSip in 2015 – the smarter, easier and quicker way of doing SIP. In December 2014, International Finance Corporation (IFC) became a strategic financial investor in MyUniverse. Besides providing long term capital to the venture, partnership with IFC can also help MyUniverse to connect with financial markets as well as global level clients to evaluate further expansion of business opportunity.

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Fashion & Lifestyle (Branded Apparels & Accessories) ABNL’s Fashion & Lifestyle business is the largest branded apparel player in India, selling two branded apparels every second. It comprises of Madura Fashion (A division of ABNL), Madura Garments Lifestyle Retail Company Ltd. (A subsidiary of ABNL) and Pantaloons Fashion & Retail Ltd. (A listed subsidiary of ABNL). Trusted by a large 10.8 million loyalty customers’ base, it has the largest retail presence in the Fashion space through 1,869 exclusive brand outlets / stores spanning 4.8 million square feet. It has a bouquet of market leading brands across entire spectrum of Fashion space and includes product lines that range from affordable and massmarket to luxurious, high-end style and cater to every age group, from children and youth to men and women. It reported a combined turnover of ` 5,450 Crore in 2014-15, registering a 15% year-on-year growth. Its EBITDA at ` 532 Crore surged by 32%. Journey of the Fashion & Lifestyle business of ABNL can be summed up in three phases: Entry Phase (2000 – 2006): ABNL (erstwhile Indian Rayon & Industries Ltd.) acquired Madura, the readymade garments (` Crore) Fashion & Lifestyle

Revenue EBITDA 2013-14 2014-15 2013-14 2014-15

Madura

3,226

3,735

388

463

Pantaloons

1,661

1,851

39

75

Total (net of elimination)

4,759

5,450

401

532

MANAGEMENT DISCUSSION AND ANALYSIS

division of Madura Coats Limited, a subsidiary of Coats Viyella PLC, UK. Post acquisition, the business transitioned from a wholesale player to a retail player and started expanding its retail channel through opening up of exclusive brand outlets. Led by the retail expansion and popularity of its brands viz., Louis Philippe, Van Heusen, Allen Solly and Peter England, Madura became the leading branded menswear player in India. Expansion and Growth Phase (2007– 2013): To fill the gaps in its branded offerings, Madura augmented its portfolio through organic and inorganic route. In 2007, it launched ‘The Collective’ – India’s first luxury lifestyle concept store, through Madura Garments Lifestyle Retail Co. Ltd. (“MGLRCL”), a subsidiary of ABNL. It retails super premium and luxury international brands like Armani Collezioni, Hugo Boss, Versace Collection and many more under one roof. Madura also launched ‘People’ – a family store offering international and fusion styles for men, women and kids. It has also launched British men’s luxury clothing and accessories brand Hackett. To make an entry in the online space, Madura launched Trendin.com, a one-stop shopping destination for the style conscious. In 2012, ABNL acquired Pantaloons to expand its operating market size in the fashion space through extension into womenswear and kidswear categories and fast fashion segment. Pantaloons started investing extensively in people, processes, expansion of customer reach, productivity of the existing stores and strengthening of the brand portfolio.

Brand Positioning

Fashion & Lifestyle : Retail Stores Network Carpet Area (Million Sq Ft)

EBOs / Stores

Luxury

4.8

Super Premium Premium Sub Premium

1.6

3.6

1.3

4.2

1,869

1,648 1,129

1,367

895

Fast Fashion March 2011 March 2012

March 2013

March 2014

March 2015

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS

Unlocking full potential (2014 onwards):

2

The business transformation begun at Pantaloons, after it came into the Aditya Birla Group’s fold, has nearly completed. Today Pantaloons is India’s #1 branded womenswear retailer and Madura is #1 branded menswear player. In a bid to capitalise on its large market presence in the branded fashion space in India, ABNL on 3rd May, 2015, announced consolidation of its branded apparels businesses under its listed subsidiary - Pantaloons Fashion & Retail Limited (“PFRL”) through a composite scheme of arrangement (“Scheme”). To reflect the enhanced scope of the operations post consolidation, PFRL will be renamed as ‘Aditya Birla Fashion & Retail Limited’ (“ABFRL”) This consolidation will create India’s largest pure play Fashion & Lifestyle Company, with a strong bouquet of leading fashion brands and retail formats, bringing India’s #1 branded menswear and womenswear players together. The consolidation will unlock value for the shareholders by giving them an opportunity to participate in the promising fashion space directly through ABFRL. The consolidation will also enable tapping of operational synergies on various fronts such as sourcing, real estate and technology platforms. Following businesses will be demerged from the respective companies into PFRL: Madura Fashion, a branded apparel retailing division of ABNL, and

1

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Madura Lifestyle, a luxury branded apparel retailing division of MGLRCL.

The Boards have approved the following swap ratio 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 its division 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 its division Madura Lifestyle,



Preference shareholder of MGLRCL will get 1 new equity share of PFRL.

On completion of the transaction and issuance of new shares, the existing base of 9.28 Crore equity shares of PFRL will go up to 77.28 Crore equity shares. The new shares will be issued directly to the respective shareholders of the transferor companies. An existing shareholder holding 100 equity shares in ABNL will continue to hold 100 equity shares of ABNL and in addition, will get 520 equity shares 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.

Post Transaction

Pre Transaction Public 58.3%

ABNL 1

58.3%

41.7%

51.1%

PFRL/ABFRL

ABNL 9.06%$

100%$

MGLRCL 2 Madura Lifestyle

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30

72.62%$

27.38%

PFRL

Madura Lifestyle

41.7%

Public

39.84% $ Including indirect holding

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

Industry Overview

Madura Fashion & Lifestyle: Retail Channel

Within the organized apparel market, the men’s category continues to be largest with about 52% share. Menswear will continue to dominate the market in the years to come. However, womenswear and kidswear segments are expected to grow faster and increase their share in the overall pie. (Source – Industry Research Reports) The competitive landscape of organised retail in India has been further intensified with entry of large number of E-Commerce players with deep pockets and several global retailers. The other significant change is notification of Goods and Service Tax in the next financial year. It is expected to reduce the complexities of doing business in India. The first half of 2014-15, witnessed a positive change in consumer spending after nearly 18 months of slow growth. However, in the latter half of the fiscal year, consumer spending witnessed a sharp downturn, particularly in the festive period. This period also coincided with a large scale disruption by the E-Commerce players through unprecedented discounts and heavy promotions. Performance Review Madura Fashion & Lifestyle1 Madura Fashion & Lifestyle (“Madura”) is the largest premium branded menswear player in India and powerhouse of India’s leading fashion brands – Louis Philippe, Van Heusen, Allen Solly and Peter England. Louis Philippe and Van Heusen are the (` Crore) 2013-14 3,226 388 299 457 64%

2014-15 3,735 463 377 591 72%

Carpet Area (Million Sq Ft)

Number of EBOs

2.5 1.6

1.9

1.3

2.2

1,735

1,541 1,129

1,272

895

March 2011 March 2012

March 2013

March 2014

March 2015

best selling apparel brands in India, with Louis Philippe being the only brand in the country to cross ` 1,000 Crore in Net Sales Value. Madura also retails international luxury brands under ‘The Collective’ and British men’s luxury brand Hackett through its mono brand stores. Its online shopping portal www.TRENDIN.com, is a one stop online shopping destination for Madura as well as Pantaloons brands catering to both Men and Women. Its retail channel, which comprises of 1,735 Exclusive Brand Outlets (EBOs) spanning 2.5 million square feet, accounts for 44% of Madura’s revenue and reaches out to 6.3 million loyalty customers base. Besides these EBOs, Madura is reaching customers through 6,000+ additional points of sales including Multi Brand Outlets (MBOs) and Department Stores. Madura posted all round growth in top-line and profitability despite weak customer footfalls and higher promotions/ discounting across the industry. Its revenue surged by 16% to ` 3,735 Crore. Its retail channel posted a 14% sales growth driven by stores expansion. Its like-to-like stores sales growth was flat. Sales from the wholesale channel (MBOs and Department Stores) grew by 20%. During the year, Madura added 194 EBOs on a net basis. Driven by the strong sales growth across the brands and channels, EBITDA rose by 19% from ` 388 Crore to ` 463 Crore and EBITDA margin expanded by 40 basis points to 12.4%. Led by sound profitable growth and improved working capital management, return on capital employed surged from 64% to 72%. Capex guidance for 2015-16 stands at `160 Crore for new store launches and renovation of existing stores.

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Note 1 : Includes Madura Fashion, a division of ABNL and Madura Garments Lifestyle Retail Company Ltd., a subsidiary of ABNL. Madura Fashion owns and retails India’s leading apparel brands such as Louis Philippe, Van Heusen, Allen Solly, Peter England & People. Madura Garments Lifestyle Retail Company Ltd. retails international luxury brands under the retail format ‘The Collective’ and also retails Madura Fashion brands under the retail format ‘Planet Fashion’.

MANAGEMENT DISCUSSION AND ANALYSIS

Clothing and fashion retailing is the second largest contributor to the Indian retail market with a share of just under 10%. In the organized retailing market, clothing and fashion retailing is the largest and the most penetrated segment. It accounts for roughly one-third of the organized retailing market.

Madura Fashion & Lifestyle Revenue EBITDA Segment EBIT Capital Employed ROACE (%)

MANAGEMENT DISCUSSION AND ANALYSIS

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

Pantaloons Fashion & Retail Limited (PFRL)

MANAGEMENT DISCUSSION AND ANALYSIS

Pantaloons: Customer Reach

Following the acquisition of the Pantaloons Fashion business in 2012, significant investments were made focused on stores expansion, portfolio enrichment, brand building and organisation processes to lay the foundation for growth in the future.

Number of Stores (including factory outlets)

Carpet Area (Million Sq Ft) 2.3 2.0

1.6

1.7

134

107

Pantaloons launched 39 new stores (25 in 2014-15) during past two years on a base of 69 stores. With an objective of improving customer footfalls, in the existing stores, Pantaloons renovated 43 stores (22 in 2014-15) and accomplished 100% store relayouts. To strengthen the high margin private labels portfolio, Pantaloons launched 7 new exclusive brands (Four in 2014-15) viz., SF Jeans and Byford in menswear, Candies and Jamini in womenswear, Alto Moda in plus-size category, Poppers for kids and Chirpie Pie for infants. It also started retailing 15 new external brands including Madura’s brands. These strategic initiatives taken since acquisition are yielding results. Customer reach has been scaled to 104 Stores and 30 factory outlets spanning 2.3 million square feet. Share of exclusive brands has enhanced year-on-year from 48% to 52%. Pantaloons was voted amongst India’s topmost trusted retailer brands in “Brand Equity Survey 2014”. The average interest cost of the debt portfolio has been reduced from 10.4% to 10.17%. Pantaloons has a diversified customer base with Men, Women, Kids and Non-Apparels contributing to 35%, 42%, 9% and 14% share respectively. Driven by stores expansion and like-to-like stores sales growth of 5.5%, revenue of PFRL grew by

Pantaloons Fashion & Retail Ltd.

(` Crore) 2013-14 2014-15

Revenue EBITDA Segment EBIT

1,661 39 (75)

1,851 75 (110)

Goodwill Net Fixed Assets Cash & Current Investments Net Working Capital

1,168 496 17 (50)

1,168 422 7 60

Capital Employed Net Worth Debt

1,630 579 1,050

1,656 346 1,311

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95 90

June 2012

March 2013

March 2014

March 2015

11% to `1,851 Crore. Led by portfolio enrichment, gross margin has increased by 340 basis points to 45%. PFRL nearly doubled its EBITDA from ` 39 Crore to ` 75 Crore. EBITDA margin improved from 2.3% to 4.1%. Higher accelerated depreciation on account of stores renovation and planned stores closures impacted the bottom-line. Capex guidance for 2015-16 stands at `125 Crore for launch of new 30-35 stores and renovation of existing stores. Outlook Indian apparel industry is in the midst of a major transition as it will soon comprise of large global brands, big Indian business houses and a few E-Commerce players. It is going to witness a substantially higher scale of investments and competition, fuelling faster growth in the industry. With inflation projected to stabilise at lower levels and an expected improvement in GDP growth going forward, consumer spending is set to improve over the medium term. The long term outlook for the domestic apparel industry remains positive on the back of favourable demographics viz., rising disposable incomes, a large young and working population and shift towards branded apparels. Going forward, the thrust of Fashion & Lifestyle business will be on driving profitable expansion by tapping emerging markets in tier 2 / 3 cities, entering new product categories, enriching product portfolio and focusing on omni-channel strategy to fortify its leadership position. Post consolidation, the strengthening of PFRL’s balance sheet, driven by free cash flows of Madura, will accelerate the growth of these businesses and will help exploit emerging opportunities presented by the rapidly growing Indian apparel market.

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Telecom (Idea Cellular Limited) Industry Overview The mobile telecommunications industry in India is divided into 22 Service Areas. Total wireless subscribers base in India increased year-on-year by 7% from 905 million to 970 million as of 31st March, 2015. While urban wireless subscribers grew by 4%, rural subscribers attained 11% growth. About 65% of new wireless subscribers came from rural areas. Rural wireless subscribers account for 43% of the total wireless subscribers with tele-density at 48% compared to 77% and 143% tele-density for total and urban wireless subscribers respectively, signaling large growth opportunity in rural India. During calendar year (CY) 2014, gross revenue1 of Indian wireless sector grew year-on-year by 10.6% to USD 29.8 billion. Idea Cellular outperformed the industry by registering 19% growth, garnered 28% incremental revenue market share1 (RMS) and improved its RMS from 16.0% in CY 2013 to 17.1% in CY 2014 (Source: TRAI). Performance Review Idea Cellular is the 6th largest cellular operator in the world in terms of number of subscribers and based on operations in a single country (Source: GSMA, December 2014). Carrying 2.06 billion minutes of usage every day, Idea is serving a large customer base of 157.8 million subscribers spread across about 7,500 census towns and more than 357,000 villages as on 31st March 2015. This large base of subscribers provides a great platform to Idea for upgrading the pure voice customers, to wireless data services in future. In the past few years Idea has consolidated its position from being a ‘# 3 operator’ to ‘Among the Indian Wireless Sector: Revenue Market Share1 (January-December 2014)

MANAGEMENT DISCUSSION AND ANALYSIS

top 3 operators’ in India. Idea’s Pan India revenue market share 1 during the quarter ended 31st December rose year-on-year from 16.1% in 2013 to 17.5% in 2014. Idea Cellular has been the biggest revenue market share gainer in India between 2009 and 2014. Mirroring the brand popularity and quality service experience of its customers, Idea’s active subscribers’ ratio at 102.3% (Industry average 88.9%) as on 31st March 2015, is the highest in the industry. Idea is the leading net subscribers’ gainer in the Mobile Number Portability program, a strong indicator of the popularity of Idea’s mobile services. Having a market capitalisation of USD 11 billion (` 66,200 Crore as on 31st March, 2015), Idea is listed on NSE and BSE. In the recent spectrum auction, which was concluded in March 2015, Idea won 79.4 MHz spectrum across 14 circles for a total bid value of ` 30,138 Crore. Idea has successfully secured spectrum for the nine licenses which are due to expire in December 2015 / April 2016. It has opted for DoT’s deferred payment option and made upfront spectrum fee payment of ` 7,734 Crore in Idea Cellular: Growth Trend Minutes on Network (billion)

Subscribes (million) 157.8 135.8

112.7

121.6

89.5 683

453

532

588

363

2010-11

2011-12

2012-13

2013-14

Idea Cellular: Revenue Market Share1

Airtel 30.7% Others 3.7%

17.5% 16.1%

Vodafone 23.3%

Aircel 5.6%

2014-15

13.3%

14.4%

14.8%

BSNL & MTNL 5.8% Tata 7.0%

Reliance 6.7%

(Source: TRAI, www.trai.gov.in)

Idea Cellular 17.1%

Q3 FY2010-11 Q3 FY2011-12 Q3 FY2012-13 Q3 FY2013-14 Q3 FY2014-15 Source: TRAI, www.trai.gov.in

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Note1: Based on gross revenue for UAS & Mobile licenses only, as released by Telecom Regulatory Authority of India (“TRAI”)

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS

March-April 2015. Idea has built a competitive spectrum profile laying strong foundation for business growth for the next 20 years. Post allocation of spectrum won in March 2015 auction, Idea will have 87.6% of total spectrum holding of 270.7 MHz as spectrum acquired through auction which provides flexibility to offer any service (2G, 3G or 4G), based on the consumer demand and development of eco-system. In 2014-15, Idea generated 683 billion minutes of usage (MoU), registering a strong 16% year-onyear growth. Average realisation per minute (ARPM) rose by 3%. Data volumes more than doubled to 172.5 billion megabytes. Led by strong growth in MoU and data volumes, top-line of Idea rose by 19% to ` 31,527 Crore – growing at 1.8 times the wireless industry growth rate in the calendar year 2014. EBITDA surged by 32% to ` 11,281 Crore. EBITDA margin improved by about 350 bps. Net profit rose by 62% from ` 1,968 Crore to ` 3,193 Crore. Idea generated a strong post tax standalone1 cash profit of ` 8,482 Crore – recording a 32% growth over the previous year. ROACE improved from 11.7% per annum to 14.3% per annum. During the year, Idea raised equity capital of ` 3,000 Crore through QIP and ` 750 Crore through preferential allotment to its telecom partner – Axiata Investments 2 (India) Limited, an affiliate of Axiata Group. Post the capital raising, ABNL’s shareholding in Idea has reduced from 25.23% in March 2014 to 23.28% in March 2015. In 2014-15, Idea incurred a capex of ` 40.5 billion. (` Crore) Idea Cellular

2013-14

2014-15

Revenue EBITDA Segment EBIT Net Profit

26,432 8,519 3,773 1,968

31,527 11,281 5,508 3,193

Cash Surplus Net Worth Total Debt Capital Employed ABNL’s Investment ABNL’s shareholding in Idea at the year end (%)

404 16,527 20,635 37,162 2,356

13,080 23,029 26,859 49,888 2,356

25.23%

23.28%

Note1: Standalone = Idea Cellular and its wholly owned subsidiaries

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

Led by capital infusion and strong cash profit generation, Idea’s standalone1 Net Debt to EBITDA stands comfortable at 1.31 times and well positioned to support its growth plans. Idea has proposed a equity dividend at 6% of share capital. Overall payout including dividend distribution tax will be ` 260 Crore. Outlook The regulatory environment continues to remain uncertain. Some of the recent changes in regulations like reduction in IUC charges and roaming charges cap are impacting the revenue of the industry. The auctions have resulted in large spectrum commitments, adversely impacting the financial health of most of the operators. This should lead towards consolidation in the Industry. The competition in the sector remains intense. Any irrational competition in the sector in future may impact the Industry health. Further, with the proliferation of number of OTT operators, the voice revenue cannibalization through data remains a large risk for the sector. But, as in the past, whenever the Industry has witnessed large periods of irrational competition, Idea Cellular has emerged competitively stronger. In the last two spectrum auctions, Idea has expanded its spectrum profile covering more than 87% of revenues with either 3G or 4G spectrum and also renewed some of its licenses for a period of next 20 years. As mobility market services expand, Indian telecom sector will offer exciting growth opportunities in mobile broadband and rural voice telephony. The data subscribers’ penetration in India is at around 26%. The wireless broadband services (3G) penetration is still at 6.8%. The ‘Digital India’ drive, data network expansion by strong operators and developments towards 4G LTE technology will certainly change the data growth outlook as envisaged today. Further less than 50% penetration in rural India indicates the growth opportunity for the voice business going forward. Brand Idea with increasing consumer affinity, strong cash flows, Pan India 2G presence, expanding 3G network footprint and planned 4G network launch is gearing itself to strengthen its market position and improve standing across existing and emerging opportunities.

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MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo has a strong market positioning in Linen, Urea, VFY and Insulators sectors through its divisions, viz. Jaya Shree, Indo-Gulf, Indian Rayon and Aditya Birla Insulators. All the divisions are among the leaders in their respective sectors in terms of size as well as profitability. • •





Jaya Shree Textiles is the largest linen yarn and linen fabric player in India. Indo Gulf is the 8th largest manufacturer of Urea and amongst the most energy efficient urea plants in India. Indian Rayon is among the top 2 producers and the largest exporter of Viscose Filament Yarn in India. Aditya Birla Insulators is India’s largest and the world’s fourth largest manufacturer of Insulators.

Combined together, the Divisions generated revenue of ` 5,405 Crore and EBITDA of ` 615 Crore in 2014-15, registering year-on-year growth of 9% and 11%, respectively. Jaya Shree Textiles Industry Overview Jaya Shree operates in two business segments viz., Linen and Wool. The Linen industry registered strong growth in demand, prompting many Indian business houses to actively consider setting up of capacities in Linen across both Fabric and Yarn. However, the wool industry witnessed sluggish demand worldwide due to highly volatile wool prices and currency rates coupled with the slowdown in Europe, which is one of the largest wool consumers. Performance Review A market leader in the domestic linen yarn and fabric segments, Jaya Shree has revolutionised the Indian textile market by popularising ‘linen’ in India across a wide customer base. It has driven the journey of linen from a commodity to a lifestyle symbol in India and expanded its market size by creating product / brand awareness and entering into new segments viz. blends, womenswear etc. It is also a leading manufacturer of wool tops and worsted yarn in India with a capacity of 8 carding machines and 26,356 spindles respectively. Share of linen segment in total revenue has jumped from 39% in 2010-11 to 53% in 2014-15 led by

Jaya Shree

2013-14

2014-15

1,300

1,435

Linen Segment

614

765

Wool Segment

687

671

EBITDA

172

175

Segment EBIT

141

146

Capital Employed

317

237

57%

53%

Revenue

ROACE (%)

expansion. Jaya Shree expanded its Linen Yarn capacity from 2,300 tons per annum (TPA) to 3,400 TPA and Linen Fabric Processing Capacity from 7.3 million meters per annum to 10.1 million meters per annum in 2013-14. It is further targeting an expansion of linen yarn capacity from 3,400 MTPA to 6,200 MTPA in order to tap sector growth. During 2014-15, revenue of Jaya Shree grew by 10% to ` 1,435 Crore. Revenue from Linen segment surged by 25%, driven by expansion. Revenue from Wool segment declined due to poor wool grease demand. EBITDA improved marginally from ` 172 Crore to `175 Crore as higher profitability in the linen segment was offset by lower wool combing volumes. Driven by a strong focus on efficient working capital management, Jaya Shree is operating at a sound ROACE of 53% per annum. Jaya Shree is focusing on retail expansion and brand promotion to fortify ‘Linen Club’ fabric brand. Jaya Shree launched its own apparel line through ‘Linen Club Studio’. It added 19 new ‘Linen Club Fabrics’ EBOs during the year taking the total to 115. Linen Club is also being retailed through more than 3,500 MBOs. Outlook Led by the rising popularity of Linen as a comfort and style fabric, its demand is expected to grow at a CAGR of 10% over next few years. Currently about 70% of linen yarn demand in India is met through imports reflecting expansion opportunity for domestic players. Being a leader, Jaya Shree will continue to invest in its strengths and capabilities. Jaya Shree is expanding its linen yarn capacity to fortify its market positioning and tap sector growth opportunity.

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MANAGEMENT DISCUSSION AND ANALYSIS

(` Crore)

DIVISIONS

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

Agri (Indo-Gulf Fertilisers)

MANAGEMENT DISCUSSION AND ANALYSIS

Industry Overview Urea consumption in India grew marginally from 30.4 million metric tons (MT) in 2013-14 to 30.8 million MT in 2014-15. India is heavily dependent on urea imports for meeting domestic consumption requirements. Urea imports have surged in past few years leading to a rising subsidy burden on the exchequer. In 2014-15, urea imports at about 8.7 million MT accounted for 28% of total demand in India. No new urea capacity has come up in past 15 years and the gap between indigenous production and demand continues to widen. To reduce the mounting urea subsidy bill, the Government of India notified the New Investment Policy (NIP) for Urea on 2nd January, 2013. The objective of the policy is to reduce urea imports by promoting indigenous capacity expansion. The industry is awaiting approval from the Department of Fertilisers for brown field projects under the new investment policy. During 2014-15, the industry witnessed slower recovery of fertiliser subsidy from the Government due to inadequate budgetary provision. This affected the profitability of the industry due to a steep rise in working capital. Due to government policy for urea production beyond 100% quantity as permissible under Pricing mechanism, few urea manufacturers had to take urea plant shutdown during the last quarter of 2014-15. In a welcome move, the government has allowed 100% production of neem coated urea and announced gas price pooling policy aiming

Aditya Birla Nuvo Limited - Annual Report 2014-2015

to improve plant efficiency and reduce subsidy outgo. Performance Review Indo Gulf Fertilisers is the 8 th largest urea manufacturer in India. The goal of the business is to serve as a ‘total agri solutions provider’ offering a full range of agri inputs – fertilizers, seeds, agrochemicals and specialties from sowing to harvesting. Birla Shaktiman Urea – Neem coated and Gold continued to remain the farmers’ product of first choice, in the core markets of Uttar Pradesh, Bihar, Jharkhand and West Bengal, through excellent product quality and customer servicing. Even in the states of Punjab, Haryana and Uttarakhand, the farmer and trade response has been very encouraging. Indo-Gulf’s customized fertiliser – ‘Birla Shaktiman Vardaan’ - which was launched in 2013–14 in Uttar Pradesh, has been well received by the farmers. Sales of manufactured urea at 1.02 million MT was flat year-on-year. Indo-Gulf had to take urea plant shutdown for 35 days starting 27th February 2015, thereby, pulling down earnings from normalised level. The plant resumed operations on 2nd April 2015. During previous year too, urea plant shutdown was taken for 41 days. Revenue grew year-on-year by 11% to ` 2,558 Crore. Revenue from manufacturing operations grew by 13% to ` 2,248 Crore due to pass through of the rise in natural gas prices. Trading revenue declined marginally. (` Crore)

Agri

2013-14

2014-15

Revamped Capacity (MTPA)

1,072,500

1,072,500

Urea Production (MT)

1,033,184

1,021,447

Manufactured Urea Sales (MT)

1,034,135

1,024,970

2,313 1,995 318

2,558 2,248 310

EBITDA

77

148

Segment EBIT

56

116

1,616

1,641

3%

7%

Revenue Manufacturing (Urea, Customised Fertilisers) Trading (Fertilisers, Seeds, Agro-Chemicals)

Capital Employed ROACE (%)

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Outstanding subsidy and receivables stood at ` 1,207 Crore compared to ` 1,176 Crore in the previous year. Outlook The Government continues to give a huge thrust on inclusive growth, agriculture and self-sufficiency in food production. The focus is on enhancing farmer income through improved agricultural practices to give a sustainable growth in productivity. This can be achieved with the adoption of new technology in farming – in soil science, irrigation, plant breeding and genetics and crop protection. This is opening up new business opportunities for value added products and services. The proposed gas price pooling policy will be beneficial for the sector as it aims to improve the efficiency of plants and thus reduce subsidy outgo. Indo Gulf Fertilisers, with its strong farmer connect and customer centric approach is well positioned to take advantage of these opportunities. Its location at Jagdishpur – in the middle of the agricultural heartland of the Indo-Gangetic plains, gives it access to a large and growing market.

of recent capacity additions. Due to stagnant demand and buyers becoming cautious of falling commodity prices, imports from China have decreased. Chlor alkali market is broadly categorized into three products, namely Caustic Soda, Chlorine and Soda Ash. Caustic Soda finds major application in diverse industries, such as soap & detergents, pulp & paper and textile processing among others. Chlorine is produced as a by-product during caustic soda production and is widely used in PVC manufacturing, drinking water disinfection and pharmaceutical production. Chlor-alkali Industry is concentrated in Western part of India with more than 50% of production coming from the state of Gujarat due to good demand of chlor-alkali products and availability of raw material like salt and power. Performance Review Indian Rayon is among the top 2 manufacturers of VFY in India with a 43% production share. It remained the largest Indian exporter of VFY for the tenth consecutive year with a 55% share in VFY exports from India. In 2014-15, Indian Rayon’s revenue from the VFY segment grew by 6% to ` 699 Crore despite an industry slowdown. Higher VFY volumes driven by the new superfine yarn capacity contributed to this growth. Revenue from the Chemicals segment declined by 18% to ` 166 Crore owing to softening of ECU realisation and lower caustic volumes due to a maintenance shutdown in power plant. (` Crore)

Rayon (Indian Rayon)

Rayon

Industry Overview Indian Rayon, a unit of ABNL, manufactures and sells viscose filament yarn, caustic soda and allied chemicals. Viscose filament yarn (“VFY”) is a manmade natural filament yarn having comfort of cotton and the lustre of silk. It is used in georgette and crepe fabrics, home textiles, embroidery etc. During 2014-15, domestic consumption of VFY declined by 5% to 54,014 MT. As a result, domestic VFY production remained almost stagnant at 44,348 MT, while imports declined by 21%. VFY exports at 5,810 MT were marginally lower year-on-year. The VFY Yarn production in the Indian market continues to move towards fine / superfine denier for realisation improvement. Wood pulp prices remained soft due to oversupply on account

2013-14

2014-15

VFY Capacity (MTPA) Production (MT) Manufactured VFY Sales (MT) Revenue (Including allied chemicals)

19,800 17,962 17,423 659

19,800 19,182 18,839 699

Chemicals Caustic Soda Capacity (MTPA) Caustic Soda Production (MT) Caustic Soda Sales (MT) Chemicals Revenue

91,250 86,771 86,758 202

91,250 79,687 80,162 166

Total Revenue EBITDA Segment EBIT

860 222 172

865 197 156

Capital Employed ROACE (%)

759 24%

757 21%

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MANAGEMENT DISCUSSION AND ANALYSIS

Post implementation of energy savings scheme towards the end of the previous year, energy efficiency has improved notably. Led by improved energy efficiency, higher fixed cost reimbursement as per Government policy and higher sales of pesticides, EBITDA surged by 90% from ` 77 Crore to ` 148 Crore.

MANAGEMENT DISCUSSION AND ANALYSIS

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS

Total revenue remained flat at ` 865 Crore and EBITDA at ` 197 Crore was lower by 11% as profitable growth in the VFY segment was offset by lower caustic volumes and ECU realisation. The business is operating at an ROACE of 21% per annum Outlook Growth in the superfine and finer deniers in the domestic VFY market is likely to remain stable. With the ramp up of the superfine yarn unit and the leveraging of the Enka Trade Mark, Indian Rayon is well positioned to improve its market share and earnings. However declining domestic demand and exchange rates volatility may adversely affect the yarn prices in India. According to Chlor Alkali Market Forecast, the market for chlor alkali in India is projected to exhibit a CAGR of around 7% during 2014-19. Chlorine demand is also expected to remain firm subject to increase in Chlorine production in the west which may affect the demand and supply balance.

Industry Overview The power generation, transmission and distribution sector is the key growth driver for the insulators industry. Over the past few years, India’s power sector has been affected by several factors, viz., liquidity crunch, environment clearances and fuel linkages resulting in lack of new projects and delay in execution of ongoing projects. Cheaper Chinese imports have also adversely impacted domestic manufacturers, both on market size and pricing pressures. The industry had appealed for anti-dumping duty. The Ministry of Finance, on 16th September 2014, (` Crore) Capacity (MTPA) Production (MT) Sales Volumes (MT) Revenue EBITDA Segment EBIT Capital Employed ROACE (%)

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imposed an interim anti-dumping duty on imports of insulators from China and on 11th April 2015, extended the duty for 5 years till 15th September 2019 to create a level playing field for the domestic manufacturers. While the current government is working to implement reforms in the power sector, it will take some time before ground improvement materializes and gives a fillip to demand. The challenge of improving financial health of State Electricity Boards continues. Imports from China reduced year-on-year by 15% from 46,973 MT to 39,976 MT post imposition of anti-dumping duty. However, it still constituted 31% of the total domestic demand in the year 2014-2015. During April 2014 – January 2015, the domestic sales volume of the insulators industry declined by 12% owing to accelerated imports in the previous year in anticipation of duty. Performance Review Aditya Birla Insulators is India’s largest and the world’s fourth largest manufacturer of porcelain insulators (Source : IEEMA).

Insulators (Aditya Birla Insulators)

Insulators

Aditya Birla Nuvo Limited - Annual Report 2014-2015

2013-14

2014-15

45,260 36,317 36,913

45,260 38,401 38,581

505 83 61

548 95 76

430 15%

455 17%

Sales volume of Aditya Birla Insulators grew yearon-year by 5%. Revenue is up by 8% at ` 548 Crore. Volumes and earnings growth could have been higher but were contained due to 42 days disruption / suspension of Rishra plant operations due to labour unrest, pending long term wage settlement. EBITDA rose by 14% to ` 95 Crore. Higher volumes and an increase in realisation in the substation segment, mainly due to pass on the rise in operating costs, contributed to the earnings growth. ROACE improved from 15% to 17% per annum. Outlook With mission of “Power for All by 2019” and “Make in India” campaign, power sector is expected to witness encouraging medium to long term growth opportunities. Aditya Birla Insulators will continue to focus on yield improvement and cost rationalisation to enhance its cost competitiveness besides exploring new geographies in the exports market.

CMYK

Financial Review and Analysis – Standalone Financials Standalone revenue grew year-on-year by 11% to ` 8,938 Crore, while Standalone EBITDA de-grew by 5% to ` 1,186 Crore. Excluding dividend and other income, operating EBITDA has grown by 16%. The Fashion & Lifestyle and Agri businesses were the largest contributors to the earnings growth. Finance costs remained almost flat at ` 263 Crore. Depreciation reduced from ` 199 Crore to ` 189 Crore owing to the change in the useful lives of fixed assets as provided in Schedule II to the Companies Act, 2013 or as re-assessed by the Company. Had there been no such change, depreciation for 2014-15 would have been higher by ` 19 Crore. Standalone tax at ` 205 Crore was higher as in the previous year net tax credit of ` 41 Crore was recognised w.r.t. the slump sale of the Carbon Black business. Standalone Profit and Loss Account

MANAGEMENT DISCUSSION AND ANALYSIS

Standalone Net profit de-grew by 22% from ` 674 Crore to ` 528 Crore. Excluding exceptional gain / (loss) and one-off items, Standalone Net Profit grew by 10%. Net Profit in 2013-14 was higher by ` 209 Crore on account of one-off items being (a) book gain of ` 24 Crore and net tax credit of ` 41 Crore on divestment of the Carbon Black business and (b) gain of ` 144 Crore on buyback of equity shares by Life Insurance Subsidiary. The Board of Directors of the Company has recommended a final equity dividend of 70% (` 7 per equity share) for the financial year 2014-15 entailing a total outgo of ` 109.6 Crore including dividend distribution tax. The standalone balance sheet supported an investment and capex outlay of about ` 950 Crore during the year. Led by strong cash flow from operations, standalone Net Debt to EBITDA at 3 times and Net Debt to Equity at 0.42 times remained healthy. (` Crore) 2013-14 2014-15

Revenue EBITDA Less: Finance Costs Earnings before Depreciation and Tax Less: Depreciation and Amortisation Earnings before Tax and Exceptional Items Add: Exceptional Gain/(Loss)1 Less: Tax Expenses Net Profit Standalone Balance Sheet Net Worth Total Debt Deferred Tax Liabilities (Net) Capital Employed Net Fixed Assets (Including Capital Advances & CWIP) Long-term Investments Net Working Capital Cash Surplus & Current Investments2 Book Value per Equity Share (`) Net Debt3/EBITDA (x) Net Debt3/Equity (x)

8,021 1,246 267 979 199 780 24 130 674

8,938 1,186 263 922 189 733 — 205 528

March 2014 8,108 3,753 88 11,949 1,866 7,952 1,574 557 623 2.6 0.39

March 2015 8,519 3,688 106 12,314 1,879 8,695 1,635 105 655 3.0 0.42

Note1: Exceptional Gain during 2013-14 represents gain of ` 24 Crore w.r.t. the slump sale of Carbon Black business.

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Note2: Include cash, cheques in hand, remittances in transit, balances with banks, fertilisers bonds, short term ICDs and current investments. Note3: Total Debt less Cash Surplus & Current Investments.

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

Standalone Cash Flow Analysis

Investments

Net Cash from Operating Activities

ABNL invested a sum of ` 681 Crore in its wholly owned subsidiary Aditya Birla Financial Services Ltd. to fund the growth capital requirement of the NBFC business (including Housing Finance business) and online money management portal MyUniverse.

Cash Flow from Operations

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Net cash flow from operations stood at ` 877 Crore. The Fashion & Lifestyle business was the largest contributor followed by the Rayon and Textiles businesses. Working Capital Net working capital increased by ` 89 Crore. Inventory has increased by ` 143 Crore and receivables are higher by ` 213 Crore mainly in Fashion & Lifestyle business in line with business growth. Trade Payables are higher by ` 202 Crore largely in the Textiles business. Net Cash from/(used in) Investing Activities Capital Expenditure Capex of ` 223 Crore was spent during the year. Project capex includes scaling up of retail channel in the Fashion & Lifestyle business through opening up of exclusive brand outlets and energy savings and de-bottlenecking project in the Agri business. The balance capital expenditure was incurred on upgradation, modernisation and maintenance of plants across the manufacturing businesses.

ABNL also invested ` 62 Crore in Indigold Trade and Services Ltd., mainly towards acquisition of additional 4.67% stake in Pantaloons Fashion & Retail Ltd. Net Cash from / (used in) Financing Activities Proceeds from / Repayment of borrowings ABNL raised term loans aggregating to ` 37 Crore by way of Rupee Term Loans towards capital expenditure commitments. ABNL also raised Non Convertible Debentures (NCDs) worth ` 300 Crore. Commercial paper and other short term debt of ` 178 Crore (net) were repaid during the year. Term Loans aggregating to ` 228 Crore were repaid during the year. Pursuant to demerger of Madura Fashion (A division of ABNL) into Pantaloons Fashion & Retail Ltd. (PFRL), debt amounting to ` 456 Crore will be transferred to PFRL. (` Crore) 2014-15

Standalone Cash Flow Cash Flow from Operations (Net of Tax)

877

(Increase)/Decrease in Net Working Capital

(89)

Net Cash from Operating Activities

788

Capital Expenditure (Net)

(223)

Investments in Subsidiaries / Joint Ventures / Associates (Net)

(724)

(Increase) / Decrease in Inter-Corporate Deposits to Subsidiaries (Net)

5

Interest / Dividend Received and Profit on Sale of Current Investments

128

Net Cash from / (used in) Investing Activities

(815)

Proceeds from / (Repayment of) Borrowings (Net)

(68)

Proceeds from Issue of Shares

3

Dividend Paid

(98)

Interest Paid

(263)

Net Cash from / (Used in) Financing Activities

(426)

Increase / (Decrease) in Cash Surplus & Current Investments Add : Opening Cash Surplus & Current Investments Closing Cash Surplus & Current Investments1 1

1

(453) 557 105

Note : Include cash, cheques in hand, remittances in transit, balances with banks, fertilisers bonds, current investments and short term ICDs

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MANAGEMENT DISCUSSION AND ANALYSIS

Risk Management

Business Risks

Governance, Risk Management and Compliance processes form an integral part of the Company’s planning and review mechanism. The Company’s risk management framework establishes risk management processes at each business, helping in identifying, assessing and mitigating risks that could materially impact the Company’s performance in achieving its stated objectives. The components of risk management are different for different businesses and are defined by various factors including the business model, business strategy, organisational structure, risk appetite and available dedicated resources.

Business risks are classified into Strategic, Operations, Financial and Knowledge risks, which are further drilled down to market structure, process, systems, legal compliance, corporate governance and people culture.

Since the Company is a diversified conglomerate, the risk events are identified, assessed, mitigated and monitored for each business separately. The risk management approach comprises three key components: (1) Risk identification: External and internal risk events which could affect the profitability, competitiveness, brand value, reputation and/ or image of the Company are identified in the context of the strategy and specific objectives of each individual business. (2) Risk assessment and mitigation: The indentified risks are further evaluated by the senior management team of the respective business to assess the potential severity of their impact and the probability of occurrence. Based on the assessment, they develop and deploy mitigation strategies. (3) Risk monitoring and assurance: The Risk Management Committee (“RMC”) is the apex body taking all the decisions regarding risk management activities. The overall role of RMC is to review risk management process and implementation and effectiveness of risk mitigation plans. The committee comprises of three independent directors, the whole time directors and the business heads. The proceedings of meetings of RMC are discussed at the meetings of the Board of Directors from time to time.

Apart from the internal business risks, the Company is exposed to external risks on account of interest rate, foreign exchange, commodity pricing and regulatory changes. The Company has well defined policies / mechanism to mitigate foreign exchange and interest rate risks. The Company reviews these policies / mechanism periodically to align with the changes in market practices and regulations. Environment, Health and Safety (“EHS”) The Company is conscious of its strong corporate reputation and the positive role it can play by focusing on EHS issues. Towards this, the Company has set very exacting standards in EHS management. The Company recognises the importance of EHS issues in its operations and has established comprehensive indicators to track performance in these areas. The Company values the safety of its employees and constantly raises the bar in ensuring a safe work place. Internal Control System The Company has adequate internal control systems for business processes across various profit and cost centres, with regard to efficiency of operations, financial reporting, compliance with applicable laws and regulations, etc. The internal control system is supplemented by extensive audits conducted by the Corporate Audit Cell. Clearly defined roles and responsibilities for all managerial positions have been institutionalised. Regular internal audits and checks ensure that responsibilities are executed effectively. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements. The Management Information System is the backbone of the Company’s control mechanism. All operating parameters are monitored and controlled regularly. Any material change in the business outlook is reported to the Board of Directors. Material deviations from the annual 41

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The Company’s structured Risk Management process provides confidence to the stakeholders that the Company’s risks are known and well managed. The risk management framework ensures compliance with the requirements of amended clause 49 of Listing Agreement.

External Risks

MANAGEMENT DISCUSSION AND ANALYSIS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT DISCUSSION AND ANALYSIS

planning and budgeting, if any, are reported on a quarterly basis to the Board of Directors. An effective budgetary control on all capital expenditure ensures that actual spending is in line with the capital budget. Human Resource Management The Company had about 21,700 employees on its rolls as on 31 st March 2015. Including its subsidiaries and joint ventures, the manpower strength is about 54,000 employees. This intellectual resource is integral to the Company’s ongoing operations and enables it to deliver superior performance year after year. Human Resource processes of the Company have been covered in depth in the Directors’ Report.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

To Sum up Aditya Birla Nuvo has posted robust earnings growth and is well positioned in each of its businessess. With a leadership position across its businesses that mirrors the growing sectors of the Indian Economy, ABNL is a uniquely positioned conglomerate. ABNL remains focused to capture opportunities across the businesses to achieve the next level of growth. A strong balance sheet, an experienced and focused management team, salient brand equity, leadership positions across businesses and a talented human asset are the key drivers which will support future growth of ABNL and create value for all the stakeholders.

Disclaimer Certain statements in this “Management Discussion and Analysis” may not be based on historical information or facts and may be “forward looking statements” within the meaning of applicable securities laws and regulations, including, but not limited to, those relating to general business plans & strategy of the Company, its future outlook & growth prospects, future developments in its businesses, its competitive & regulatory environment and management’s current views & assumptions which may not remain constant due to risks and uncertainties. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include global and Indian demand-supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company’s principal markets, changes in Government regulations, tax regimes, competitors actions, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any statement, on the basis of any subsequent development, information or events, or otherwise. This “Management Discussion and Analysis” does not constitute a prospectus, offering circular or offering memorandum or an offer to acquire any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of the Company’s shares. The financial figures have been rounded off to the nearest Rupee one Crore. For currency conversion, one USD is considered to be equal to ` 60.

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Dear Shareholders,

having a diversified portfolio with 10 lines of businesses. Its funds under management grew year-on-year by 35% to ` 164,940 Crore. The Lending book of the NBFC business expanded by 52% to `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.

We are pleased to present the 58 th 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.



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

CONSOLIDATED FINANCIAL PERFORMANCE Your Company has posted sound earnings growth and improved performance across most of the businesses. Consolidated revenue grew by 2% to ` 26,516 Crore. On a like-to-like basis, i.e., excluding IT-ITeS business, which was divested w.e.f. 9 th May, 2014, year-on-year revenue growth was 14%. EBITDA surged by 18% to ` 5,798 Crore. Net Profit rose by 24% to ` 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

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DIRECTORS’ REPORT TO THE SHAREHOLDERS

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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DIRECTORS’ REPORT TO THE SHAREHOLDERS

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.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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

STANDALONE FINANCIAL PERFORMANCE Your Company’s standalone revenue grew by 11% to ` 8,938 Crore. In the previous year, net profit was higher by ` 209 Crore on account of (a) gain of ` 65 Crore on divestment of Carbon Black business (including net tax credit of ` 41 Crore) and (b) gain of ` 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 ` 528 Crore is lower year-on-year vis-à-vis ` 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”) – 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.

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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.

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DIRECTORS’ REPORT TO THE SHAREHOLDERS

FINANCIAL PERFORMANCE

(` 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

833.48

550.50

205.24

130.34

1,491.08

1,221.80

527.69

673.95

75.58

78.92





1,415.50

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)





13.45







(15.19)







3.09







2,113.87

1,454.91

750.25

841.29

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

91.10

91.06

91.10

91.06

2.60

0.07

0.02

0.01

Interim Dividend on Preference Share

ß



ß



Corporate Tax on Proposed Dividend

30.13

22.03

18.55

6.67

Corporate Tax on Interim Dividend

25.85

3.59





ß



ß



0.44







1682.29

778.59

417.98

222.56

Tax Expenses Net Profit Before Minority Interest Minority Interest Profit for the Year

Transfer from General Reserve Transitional Provision of Schedule II Impact (Net of Deferred Tax) Share of Minority Interest Transitional Provision of Schedule II impact Profit available for Appropriation Appropriations :

Proposed Dividend on Equity Share Equity Dividend relating to Previous period

Corporate Tax on Interim Dividend on Preference Shares Corporate Tax on Dividend relating to previous year Closing Balance of Surplus in the Statement of Profit & Loss

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Note: Figures of ` 50,000 or less have been denoted by ß.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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DIRECTORS’ REPORT

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 ` 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.

` 7 per Equity Share of ` 10 each (last year ` 7 per Equity Share); and

ii.

Dividend of ` 2.99 per Preference Share of ` 100 each paid on 29th September, 2014 pro-rata (last year ` 6 per Preference Share).

The dividend on the equity shares, if approved by the shareholders, would involve cash outflow of ` 109.65 Crore (including Corporate dividend Tax of `18.55 Crore) compared to ` 97.73 Crore (including Corporate Dividend Tax of ` 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.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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 ` 37.42 Crore by way of Rupee Term Loan (including Finance Lease Liability) and ` 300 Crore by way of issue of Non Convertible Debentures (NCDs);

-

Repaid term loans (including Foreign Currency Borrowings and Finance Lease Liability) aggregating to ` 227.88 Crore;

-

Refinanced foreign currency borrowings aggregating to ` 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.

TRANSFER TO RESERVES

SUBSIDIARIES, JOINT VENTURES, AND ASSOCIATE COMPANIES Subsidiary Companies

We propose to transfer ` 200 Crore to general reserve. An amount of ` 417.98 Crore is proposed

During the year,the following changes have taken place in the Subsidiary Companies:

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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 9 th 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 7 th 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 ` 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 47

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DIRECTORS’ REPORT TO THE SHAREHOLDERS

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communication channels for information sharing, to name a few of the initiatives. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE 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

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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

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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 – 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 ` 10 each of your Company upon exercise of Stock Options by the employees. ESOS – 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 – 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

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DIRECTORS’ REPORT

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.

DIRECTORS’ REPORT TO THE SHAREHOLDERS

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DIRECTORS’ REPORT TO THE SHAREHOLDERS

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 ` 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 – 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 reappointment. 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 reappointments form part of the Notice of the ensuing Annual General Meeting.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

Further details on the Board of Directors are provided in the Corporate Governance Report forming part of this Annual Report. Meetings of the Board – 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 – 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 – 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 – The appointment and remuneration of Directors and KMPs is as per policy of your Company. Annual Evaluation – 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

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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, Jagdishpurfor 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 100133 - 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.

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to this report. Details of policy are available on the Company’s website viz.www.adityabirlanuvo.com.

DIRECTORS’ REPORT TO THE SHAREHOLDERS

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DIRECTORS’ REPORT TO THE SHAREHOLDERS

DIRECTORS’ REPORT



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

Aditya Birla Nuvo Limited - Annual Report 2014-2015



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

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.

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52

Kumar Mangalam Birla Chairman (DIN: 00012813) th

Mumbai, 14 May, 2015

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

DIRECTORS’ REPORT - ANNEXURE I

AUDITORS’ CERTIFICATE To, The Members of Aditya Birla Nuvo Limited

The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For and of behalf of S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E

per Shivji Vikamsey Partner Membership Number: 2242

per Vijay Maniar Partner Membership Number: 36738

Mumbai Date: May 14, 2015

Mumbai Date: May 14, 2015

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For and of behalf of Khimji Kunverji & Co. Chartered Accountants ICAI Firm Registration Number: 105146W

DIRECTORS’ REPORT

We have examined the compliance of conditions of Corporate Governance by Aditya Birla Nuvo Limited, for the year ended on March 31, 2015, as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges.

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54

Exchange Rate as on 31 March 2015

st

Percentage Holding as on 31 March 2015

st

Proposed/Interim Dividend (including Dividend Tax) (including on Preference Share)

Profit/(Loss) for the Year

Tax Expenses

Profit/(Loss) before Tax

Revenue from Operations

N.A

100.00%

-

(48.56)

-

(48.56)

4.41

2,158.76

31.70

2,191.90

245.58

N.A

100.00%

-

4.44

1.71

6.15

20.91

26.81

3.99

30.43

22.94

3.50

` in Crore

` in Crore 1,914.62

Aditya Birla Capital Advisors Private Limited

Aditya Birla Financial Services Limited

N.A

100.00%

-

(61.35)

-

(61.35)

2.65

17.49

29.66

32.34

(19.18)

21.86

` in Crore

Aditya Birla Customer Services Limited

N.A

100.00%

-

0.04

0.01

0.05

0.07

0.23

ß

0.23

0.18

0.05

` in Crore

Aditya Birla Trustee Company Private Limited

N.A

75.00%

-

7.08

(0.29)

6.79

112.01

5.26

176.49

212.46

20.43

15.54

` in Crore

N.A

75.00%

-

(1.18)

-

(1.18)

7.07

0.00

20.26

21.14

(4.37)

5.25

` in Crore

Aditya Aditya Birla Birla Money Commodities Limited Broking Limited

N.A

100.00%

-

0.07

0.01

0.08

-

0.01

8.78

8.98

0.15

0.05

` in Crore

Aditya Birla Financial Shared Services Limited

N.A

100.00%

0.07

270.68

140.17

410.85

1,776.17

507.52

15,372.03

17,956.86

1,534.47

1,050.36

` in Crore

Aditya Birla Finance Limited

N.A

100.00%

-

(0.25)

-

(0.25)

-

0.51

0.03

0.59

(0.20)

0.76

` in Crore

Aditya Birla Miancs BPO Pvt. Limited

N.A

50.01%

15.82

17.59

9.12

26.71

73.01

4.77

30.47

62.74

29.57

2.70

` in Crore

Aditya Birla Insurance Brokers Limited

N.A

100.00%

-

10.76

1.13

11.89

83.43

4.27

57.60

46.14

(131.46)

120.00

` in Crore

Aditya Birla Money Mart Limited

DIRECTORS’ REPORT - ANNEXURE II

Investments

Total Liabilities (Non-Current Liabilities + Current Liabilities)

Total Assets (Non-Current Assets + Current Assets)

Reserves and Surplus

Share Capital (Equity and Preference)

Particulars

Part - A - Subsidiary Companies

AOC-1 Statement pursuant to first proviso to sub-section (3) of section 129 of the Companies Act 2013, read with rule 5 of Companies (Accounts) Rules, 2014 in the prescribed Form AOC-1 relating to subsidiary companies

DIRECTORS’ REPORT

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

55

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Exchange Rate as on 31st March, 2015

Percentage Holding as on 31 March, 2015

st

Proposed/Interim Dividend (including Dividend Tax) (including on Preference Share)

Profit/(Loss) for the Year

N.A

100.00%

-

(5.98)

-

(5.98)

2.51

-

27.08

3.07

(24.50)

0.49

N.A

100.00%

-

(5.13)

(0.02)

(5.15)

2.67

-

100.18

145.96

(4.27)

50.05

` in Crore

` in Crore

N.A

51.00%

-

126.34

58.16

184.50

574.35

491.45

114.66

735.33

602.67

18.00

` in Crore

Aditya Birla Sun Birla Life Asset Housing Management Finance Company Limited Limited

Aditya Birla Money Insurance Advisory Services Limited

USD = ` 62.59

2.29

5.00

0.15

5.15

5.98

-

0.19

4.33

3.86

0.28

-

-

-

-

-

-

-

0.01

-

0.01

USD = ` 63.33

51.00%

-

-

-

-

-

-

-

0.01

-

0.01

(31.12.2014)

` in Crore

India Advantage Fund Limited

` in Crore US$ in Lakh

51.00%

0.38

0.82

0.02

0.84

0.98

-

0.02

0.69

0.62

0.05

US $ in Mn.

Birla Sun Life AMC (Mauritius) Limited

DIRECTORS’ REPORT

51.00%

-

(0.36)

-

(0.36)

3.81

-

1.13

6.98

(13.71)

19.56

` in Crore

USD = ` 62.59

-

(0.06)

-

(0.06)

0.62

-

0.18

1.12

(2.19)

3.13

US $ in Mn.

51.00%

-

(5.46)

-

(5.46)

16.60

0.00

6.10

9.17

(43.34)

46.41

` in Crore

Aditya Birla Sun Life AMC Limited, Dubai

SGD = ` 45.50

-

(1.15)

-

(1.15)

3.50

0.00

1.34

2.01

(9.53)

10.20

SGD in Mn

Aditya Birla Sun Life AMC Pte. Limited, Singapore

(` in Crore)

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Tax Expenses

Profit/(Loss) before Tax

Revenue from Operations

Investments

Total Liabilities (Non-Current Liabilities + Current Liabilities)

Total Assets (Non-Current Assets + Current Assets)

Reserves and Surplus

Share Capital (Equity and Preference)

Particulars

Part - A - Subsidiary Companies

CMYK

DIRECTORS’ REPORT - ANNEXURE II

L

56 -

-

Revenue from Operations

Profit/(Loss) before Tax

Tax Expenses

Profit/(Loss) for the Year

Proposed/Interim Dividend (including Dividend Tax) (including on Preference Share)

USD = Rs. 63.33

*w.e.f. 9th May 2014

Notes: During the year, following entities have ceased to be subsidiaries Name of Subsidiaries Aditya Birla Minacs Worldwide Limited* AV TransWorks Limited* Aditya Birla Minacs BPO Limited* The Minacs Group (USA) Inc. * Bureau of Collections Recovery (ceased w.e.f. 9th May 2014) Minacs Worldwide GmbH* Aditya Birla Securities Private Limited (w.e.f. 10th September 2014)

Exchange Rate as on 31 March 2015

st

Percentage Holding as on 31 March 2015

51.00%

-

Investments

-

-

-

-

-

-

-

ß

-

N.A

100.00%

-

2.47

0.54

3.01

1.29

21.68

1.56

41.86

19.30

21.00

N.A

100.00%

-

(0.35)

-

(0.35)

-

-

0.01

0.01

(0.43)

0.43

` in Crore

N.A

74.00%

-

285.40

-

285.40

5,267.28

5,683.49

29,548.61

31,090.50

(359.32)

1,901.21

` in Crore

N.A

74.00%

-

(0.37)

-

(0.37)

-

-

0.37

0.05

(0.37)

0.05

` in Crore

Birla Birla Sun Life Sun Life Insurance Pension Company Management Limited

N.A

100.00%

-

(2.56)

(0.00)

(2.56)

-

1,150.68

0.06

1,150.74

1,077.54

73.14

` in Crore

Indigold Trade and Services limited

Aditya Birla Minacs Philippines Inc.* Aditya Birla Minacs Worldwide Inc.* Minacs Worldwide SA de CV* Bureau of Collection Recovery, LLC* Minacs Limited* Minacs Kft.* Aditya Vikram Global Trading House Limited (w.e.f 29th September 2014)

N.A.

50.85%

-

0.08

0.02

0.10

0.05

0.46

0.01

0.47

0.44

0.02

` in Crore

ABNL Shaktiman Investment Mega Food Limited Park Private Limited

N.A

100.00%

-

(29.65)

8.03

(21.62)

-

389.64

4.55

419.93

389.35

26.03

` in Crore

N.A

100.00%

-

(25.98)

-

(25.98)

323.62

425.00

479.25

557.19

(30.95)

108.89

` in Crore

ABNL IT & Madura ITES Garments Limited Lifestyle and Retail Company Limited

N.A

72.62%

-

(228.14)

-

(228.14)

1,850.73

-

1,793.28

2,138.85

252.27

93.30

` in Crore

Pantaloons Fashions and Retail Limited

(` in Crore)

DIRECTORS’ REPORT - ANNEXURE II

st

-

0.01

-

0.01

ß

` in Crore

` in Crore

US $ (31.12.2014)

Birla Sun Life Trustee Company Private Limited

International Opportunities Fund SPC

Total Liabilities (Non-Current Liabilities + Current Liabilities)

Total Assets (Non-Current Assets + Current Assets)

Reserves and Surplus

Share Capital (Equity and Preference)

Particulars

Part - A - Subsidiary Companies

DIRECTORS’ REPORT

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

DIRECTORS’ REPORT - ANNEXURE II

Statement pursuant to Section 129 (3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 related to Associate Companies and Joint Ventures in the prescribed Form AOC-1 Part ‘‘B’’ : Joint venture Name of the Joint Venture

1

Latest audited balance sheet date

2

Shares of Joint Ventures held by the Company on the year end i)

Number

ii) Amount of Investment in Joint Venture (` Crore) iii) Extend of Holding %

Idea Cellular Limited 31st March, 2015

83,75,26,221 2,355.81 23.28%

3

Description of how there is significant influence

N.A.

4

Reason why the joint venture is not consolidated

N.A.

5

Net worth attributable to shareholding as per latest audited Balance Sheet (` Crore)

6

Profit for the year i)

Considered in Consolidation

ii) Not considered in Consolidation

4,928.17

755.68 N.A.

Notes: During the year, Birla Securities Limited, has ceased to be an associate

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1

DIRECTORS’ REPORT

Sr.No.

CMYK

DIRECTORS’ REPORT - ANNEXURE III

Aditya Birla Nuvo Limited - Annual Report 2014-2015

The information required under Section 197 of the Companies, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration) Rules, 2014 are given below:

DIRECTORS’ REPORT

i)

The ratio of the remuneration to each Director to the median remuneration of the employees of the Company for the financial year: Sr. No.

Name of Director/ Key Managerial Personnel (KMP)

Designation

1

Mr. Kumar Mangalam Birla

Chairman & NonExecutive Director

Remuneration % increase in Ratio of Comparison of the for the financial Remuneration remuneration of remuneration of year 2014-15 in the financial each Director to the KMP against (` in Lakh) year 2014-15 median of the the performance Company remuneration of employees 410.60

1.38%

190.10

Not Applicable Not Applicable

2

Mrs. Rajashree Birla

Non-Executive Director

15.25

-5.22%

7.06

3

Mr. B. L. Shah1

Non-Executive Director

1.40

-35.19%

0.65

Not Applicable

4

Mr. P. Murari

Independent Director

2.70

8.00%

1.25

Not Applicable

5

Mr. B. R. Gupta

Independent Director

4.70

-17.83%

2.18

Not Applicable

6

Ms. Tarjani Vakil

Independent Director

5.55

-6.72%

2.57

Not Applicable

7

Mr. S. C. Bhargava

Independent Director

4.80

54.84%

2.22

Not Applicable

8

Mr. G. P. Gupta

Independent Director

3.15

-60.53%

1.46

Not Applicable

1.85

22.52%

9

Mr. T. Chattopadhyay

Non-Executive Director

0.86

Not Applicable

10

Dr. Rakesh Jain2

Managing Director

672.42 Not Applicable Not Applicable

Standalone Operating Profit before Interest, Depreciation and Tax (excluding Other Income) has increased by 16% in FY 2014-15

3

11

Mr. Lalit Naik #

Managing Director

330.39

2.55%

152.97

12

Mr. Sushil Agarwal#

Whole- time Director

249.77

16.61%

115.44

13

Ms. Hutokshi Wadia4

Company Secretary

47.11

- Not Applicable

14

Mr Ashok Malu5

Company Secretary

7.30

- Not Applicable

Notes: •

Remuneration includes commission payable to Non Executive and Independent Directors for the financial year ended 31st March, 2015 which is within the overall ceiling approved by the Members of the Company.



Sitting fees paid to Non-Executive and Independent Directors are excluded.



Stock options exercised by Managing Director(s) and Whole-time Director are excluded.



The remuneration paid to the Key Managerial Personnel includes variable pay for the financial year ended 31st March, 2014 which were paid during the financial year 2014-15.

#

One time incentive payment made in financial year 2014-15 to Mr Lalit Naik (` 190.10 Lakh) and Mr Sushil Agarwal ( ` 50.00 Lakh) has been excluded for calculation of increase in remuneration.

1.

Mr. B L Shah ceased to be the Director of the Company with effect from 25th September, 2014 and hence remuneration paid is not comparable.

2.

Remuneration paid to Dr. Rakesh Jain during the financial year under review 2014-15 was not for full financial year since he was Managing Director upto 30th June, 2014 and hence is not comparable. Details of % increase in remuneration and Ratio of median to median employees remuneration are not provided since he was a Director only for part of the financial year 201415.

3.

Mr Lalit Naik who was appointed as a Managing Director with effect from 1st July, 2014 and the remuneration paid to him during the previous financial year 2013-14 and the financial year under review 2014-15 is not comparable.

4.

Remuneration paid to Ms. Hutokshi Wadia during the previous financial year 2013-14 and the financial year under review 2014-15 was/were not for full financial year (1st August 2013 being her date of appointment and 28th February 2015 being date of cessation as a Company Secretary) and hence remuneration is not comparable.

5.

Mr. Ashok Malu was appointed as a Company Secretary with effect from 1st March, 2015 and remuneration paid was not for full financial year and hence remuneration is not comparable.

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CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

DIRECTORS’ REPORT - ANNEXURE III

The median remuneration of employees of the Company for the financial year 2014-15 was ` 2.16 lakh. During the financial year under review, there was an increase of 10.02% in the median remuneration of employees. The calculation of percentage increase in median remuneration is done based on comparable employees. iv. There were 18,052 permanent employees on the rolls of Company as on 31st March, 2015. v. Relationship between average increase in remuneration and Company performance:Standalone Operating Profit before Interest, Depreciation and Tax (excluding other income) for the financial year ended 31st March, 2015 increased by 16%. The average increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2014-15 was 12.69%. The increase in average remuneration of the employees of the Company was in line with the Human Resource Philosophy & Performance of the Company and was in line with the market trends. vi. Comparison of the Remuneration of the Key Managerial Personnel(s) against the performance of the Company: The details of the same is provided in point no. (i) above. vii a. Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year: Particulars Market Capitalisation (` in Crore) Price Earnings Ratio based on consolidated earnings

31st March 2015

31st March 2014

% Change

21,654

14,196

52.50%

15.29

11.85

29.03%

Percent increase over/decrease in the market quotations of the shares of the Company as compared to the rate at which the Company came out with the last public offer. The last offer of shares to the public was made in 2006-2007 which was Rights Issue of 98,26,638 Equity shares of `10 each at a premium of `783 per equity share as against this, the closing price of the Company’s equity shares on the National Stock Exchange of India Limited (NSE) as at 31st March, 2015 was ` 1663.90, an increase of 109.82%. viii. During the financial year under review, the average percentage increase made in the salaries of employees other than the managerial personnel was 12.69% and the increase in the managerial remuneration was 8.16%, based on the performance of the Company for the financial year ended 31st March, 2014. ix The key parameters for the variable component of remuneration availed by the directors: Based on the recommendations of the Nomination, and Remuneration Committee as per the Remuneration Philosophy / Policy of the Company. x. During the year none of the employees of the Company received remuneration higher than the Directors of the Company. xi. It is hereby affirmed that the remuneration paid is as per the Remuneration Philosophy/Policy of the Company.

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b.

DIRECTORS’ REPORT

ii. iii.

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Form No. MGT – 9 EXTRACT OF ANNUAL RETURN as on the financial year ended on 31st March, 2015 Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 REGISTRATION AND OTHER DETAILS

DIRECTORS’ REPORT

I.

i)

CIN

L17199GJ1956PLC001107

ii)

Registration Date

26-09-1956

iii) Name of the Company

Aditya Birla Nuvo Limited

iv) Category / Sub-Category of the Company Public Limited Company / Limited by Shares v)

II.

Address of the Registered office and contact details

Indian Rayon Compound, Veraval - 362 266, Gujarat. Tel No. - 91-2876-245711 Fax No. - 91-2876-243220

vi) Whether Listed company

Yes

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any.

In-House RTA Activity

PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company are given below:

Sl. No.

Name and Description of main products/services

NIC Code of the Product/ service

% to total turnover of the Company

1

Branded Apparels and Accessories

1410

39.63%

2

Textiles

1311

16.03%

3

Agri - business (Fertilisers, Agro-Chemicals and Seeds)

201 & 202

28.57%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Sl. No.

Name of the Subsidiary Company

Address of the Company

CIN /GLN

Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

1

Aditya Birla Financial Services Limited (ABFSL) (Formerly known as Aditya Birla Financial Services Private Limited)

Indian Rayon Compound, Veraval, Gujarat-362266

U67120GJ2007PLC058890

Subsidiary

100.00%

2(87)(ii)

2

Aditya Birla Capital Advisors Private Limited (ABCAPL) (Subsidiary of ABFSL)

One Indiabulls Centre, Tower 1, 18th Floor, Jupiter,Mill Compound, 841, S. B. Marg, Elphinstone Rd. Mumbai-400013

U74140MH2008PTC179360

Subsidiary

100.00%

2(87)(ii)

3

Aditya Birla Customer Services Limited (ABCSL) (Formerly known as Aditya Birla Customer Services Private Limited)

Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai-400030

U93000MH2008PLC186669

Subsidiary

100.00%

2(87)(ii)

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CMYK

Sl. Name of the No. Subsidiary Company

DIRECTORS’ REPORT - ANNEXURE IV

Address of the Company

CIN /GLN

Holding/ % of shares Applicable Subsidiary/ held Section Associate

Aditya Birla Trustee Company Private Limited (ABTCPL) (Subsidiary of ABFSL)

Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai-400030

U74999MH2008PTC186670

Subsidiary

100.00%

2(87)(ii)

5

Aditya Birla Money Limited (ABML) (Subsidiary of ABFSL)

Indian Rayon Compound Veraval, Gujarat-362266

L65993GJ1995PLC064810

Subsidiary

75.00%

2(87)(ii)

6

Aditya Birla Commodities Broking Limited (ABCBL) (100% Subsidiary of ABML)

Indian Rayon Compound, Veraval, Gujarat-362266

U51501GJ2003PLC065196

Subsidiary

75.00%

2(87)(ii)

7

Aditya Birla Financial Shared Services Limited (ABFSSL) (Subsidiary of ABFSL)

One Indiabulls Centre, Tower 1, 18th Floor, Jupiter, Mill Compound, 841, S. B. Marg, Elphinstone Rd. Mumbai-400013

U65999MH2008PLC183695

Subsidiary

100.00%

2(87)(ii)

8

Aditya Birla Finance Limited (ABFL) Indian Rayon Compound, (Subsidiary of ABFSL) Veraval, Gujarat-362266

U65990GJ1991PLC064603

Subsidiary

100.00%

2(87)(ii)

9

Aditya Birla Securities Private Limited (ABSPL) (Subsidiary of ABFL) (ceased to be subsidiary w.e.f. 10th September 2014)

Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai-400030

U67190MH2008PTC179283

Subsidiary

100.00%

2(87)(ii)

10

Aditya Birla Insurance Brokers Limited (ABIBL) (Subsidiary of ABFSL)

Indian Rayon Compound, Veraval, Gujarat-362266

U99999GJ2001PLC062239

Subsidiary

50.01%

2(87)(ii)

11

Aditya Birla Money Mart Limited (ABMML) (Subsidiary of ABFSL)

Indian Rayon Compound, Veraval, Gujarat-362266

U61190GJ1997PLC062406

Subsidiary

100.00%

2(87)(ii)

12

Aditya Birla Money Insurance Advisory Services Limited (Subsidiary of ABMML)

Indian Rayon Compound, Veraval, Gujarat-362266

U66030GJ2001PLC062240

Subsidiary

100.00%

2(87)(ii)

13

Birla Sun Life Asset Management Company Limited (BSAMC) (Subsidiary of ABFSL)

One Indiabulls ,Tower 1, 17th Floor, Jupiter, Mill, 841, S. B. Marg, Elphinstone Rd. Mumbai-400013

U65991MH1994PLC080811

Subsidiary

51.00%

2(87)(ii)

14

Birla Sun Life AMC (Mauritius) Ltd. (100% Subsidiary of BSAMC)

IFS Court, Twenty Eight, Cybercity Ebene Mauritius

Foreign Company

Subsidiary

51.00%

2(87)(ii)

15

Aditya Birla Sun Life AMC Ltd., Unit 05, Floor-7, Currency Dubai (100% Subsidiary of BSAMC) House - Building 1, Dubai International Financial Centre, Dubai, 482027, United Arab Emirates

Foreign Company

Subsidiary

51.00%

2(87)(ii)

16

Aditya Birla Sun Life AMC Pte. Ltd., Singapore (100% Subsidiary of BSAMC)

1 Marina Boulevard #28-00, One Marina Boulevard, 018989, Singapore

Foreign Company

Subsidiary

51.00%

2(87)(ii)

17

India Advantage Fund Limited (Subsidiary of BSAMC)

IFS Court, Twenty Eight Cybercity Ebene Mauritius

Foreign Company

Subsidiary

51.00%

2(87)(ii)

18

International Opportunities Fund SPC(IOF) (Subsidiary of BSAMC)

3rd Floor, Queens gate House, 113 South Church Street, Grand Cayman, KY 1-1002

Foreign Company

Subsidiary

51.00%

2(87)(ii)

61

L

4

DIRECTORS’ REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

DIRECTORS’ REPORT

Sl. Name of the No. Subsidiary Company

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Address of the Company

CIN /GLN

Holding/ % of shares Applicable Subsidiary/ held Section Associate

19

Birla Sun Life Trustee Company Private Limited (BSTPL) (Subsidiary of ABFSL)

One Indiabulls ,Tower 1, 17th Floor, Jupiter,Mill, 841, S. B. Marg, Elphinstone Rd. Mumbai-400013

U74899MH1994PTC166755

Subsidiary

50.85%

2(87)(ii)

20

Aditya Birla Housing Finance Limited (Subsidiary of ABFSL)

Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai-400030

U65922MH2009PLC194378

Subsidiary

100.00%

2(87)(ii)

21

ABNL IT & ITES Ltd. (ABNLIT)

Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai-400030

U72300MH2013PLC240678

Subsidiary

100.00%

2(87)(ii)

22

Aditya Birla Minacs Worldwide Limited (ABMWL) (Subsidiary of ABNLIT)*

3rd Floor, Millennium Towers, ITPL Road, Brookefields, Bangalore– 560 037

Foreign Company

Subsidiary

99.85%

2(87)(ii)

23

Aditya Birla Minacs Philippines Inc. (ABMPI) (100 % Subsidiary of ABMWL)*

1800 Eastwood Ave Building, 10/F East Wood City, Cyber Park 188E Rodrguez JR Ave, Bagumbaya, QC Philippines

Foreign Company

Subsidiary

99.85%

2(87)(ii)

24

AV TransWorks Limited (AVTL) (100 % Subsidiary of ABMWL)*

1189 Colonel Sam Drive, Oshawa ON L1H 8W8

Foreign Company

Subsidiary

99.85%

2(87)(ii)

25

Aditya Birla Minacs Worldwide Inc. 1189 Colonel Sam Drive, (ABMWI) (100% Subsidiary of AVTL)* Oshawa ON L1H 8W8

Foreign Company

Subsidiary

99.85%

2(87)(ii)

26

Aditya Birla Minacs BPO Ltd, U.K. (ABMBL) (100 % Subsidiary of ABMWI)*

Fairfax House, 15 Fulwood Place, London, WCIV 6AY

Foreign Company

Subsidiary

99.85%

2(87)(ii)

27

Aditya Birla Minacs BPO Private Limited (ABMBPL) (Subsidiary of ABNLIT w.e.f. January 24, 2014, earlier subsidiary of ABMWL)

Unit no. 801, 802, 8th Floor, Symphony IT Park,Chandivali Farm Road, Andheri (East), Mumbai-400072

U72400MH1998PTC117241

Subsidiary

100.00%

2(87)(ii)

28

Minacs Worldwide SA de CV (MWSC) (100 % Subsidiary of ABMWI)*

Avenida Moctezuma 3515, Esq. López Mateos Sur Edificio Astral Plaza, Guadalajara, Mexico

Foreign Company

Subsidiary

99.85%

2(87)(ii)

29

The Minacs Group (USA) Inc.(MGI) (100% Subsidiary of ABMWI)*

34115 Twelve Mile Road, Farmington Hills, Michigan 48331

Foreign Company

Subsidiary

99.85%

2(87)(ii)

30

Bureau of Collection Recovery, LLC (BCR) (100% Subsidiary of MGI)*

7575 ,Corporate Way, Eden Prairie, Minnesota 55344

Foreign Company

Subsidiary

99.85%

2(87)(ii)

31

Minacs Limited, U.K. (ML) (100% Subsidiary of ABMWI)*

Chartered House, 75 London Road,Headington, Oxford, OX3 9BB

Foreign Company

Subsidiary

99.85%

2(87)(ii)

32

Minacs Worldwide GmbH (MWGH), Germany (100 % Subsidiary of ML)*

Im Eichsfeld 6, 65428 Rüsselsheim

Foreign Company

Subsidiary

99.85%

2(87)(ii)

33

Minacs Kft., Hungary (100% Subsidiary of MWGH)*

1114 Budapest, Ulászló street 27, Hungary

Foreign Company

Subsidiary

99.85%

2(87)(ii)

L

62

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

Sl. Name of the No. Subsidiary Company

Address of the Company

CIN /GLN

Holding/ % of shares Applicable Subsidiary/ held Section Associate

34

Aditya Vikram Global Trading House Limited (AVGTHL) (ceased to be subsidiary w.e.f. 29th September 2014)

IFS Court, Twetny Eight Cybercity, EBENE

Foreign Company

Subsidiary

100.00%

2(87)(ii)

35

Birla Sun Life Insurance Company Limited (BSLICL)

One Indiabulls Centre, Tower 1, 16th Floor, Jupiter, Mill Compound, 841, S. B. Marg, Elphinstone Rd. Mumbai-400013

U99999MH2000PLC128110

Subsidiary

74.00%

2(87)(ii)

36

Birla Sun Life Pension Management Limited (Subsidiary of BSLICL) (BSLPML)

One Indiabulls Centre, Tower 1, 16th Floor, Jupiter,Mill Compound, 841, S. B. Marg, Elphinstone Rd. Mumbai-400013

U66000MH2015PLC260801

Subsidiary

74.00%

2(87)(ii)

37

ABNL Investment Limited (ABNLIL)

Indian Rayon Compound, Junagadh Veraval Road, Gujarat-362266

U65910GJ1994PLC022685

Subsidiary

100.00%

2(87)(ii)

38

Shaktiman Mega Food Park Private Limited (SMFP) (Ownership interest upto 15th January, 2015, 94.00%)

Survey No. 1507,Indian Rayon Compound, Junagadh Veraval Road, Gujarat-362266

U45209GJ2010PTC063113

Subsidiary

100.00%

2(87)(ii)

39

Madura Garments Lifestyle Retail Company Limited (MGLRCL)

Indian Rayon Compound, Junagadh Veraval Road, Gujarat-362266

U18101GJ2007PLC058604

Subsidiary

100.00%

2(87)(ii)

40

Indigold Trade and Services Limited Indian Rayon Compound, (ITSL) Junagadh Veraval Road, Gujarat-362266

U18101GJ2007PLC078595

Subsidiary

100.00%

2(87)(ii)

41

Pantaloons Fashions and Retail 701-704, 7TH FLOOR, Limited. (PFRL) (Subsidiary of ITSL) SKYLINE ICON BUSINESS (Ownership interest upto PARK, 86-92 OFF 29th September 2014, 67.95%) A. K. ROAD, MAROL VILLAGE, ANDHERI EAST,MUMBAI, Maharashtra-400059

L18101MH2007PLC233901

Subsidiary

72.62%

2(87)(ii)

Joint Venture

23.28%

2(6)

Associate

50.00%

2(6)

JOINT VENTURES 1

1

IDEA Cellular Limited

SUMAN TOWER, L32100GJ1996PLC030976 PLOT NO.18, SECTOR-11, GANDHINAGAR, Gujarat- 382011

ASSOCIATES Birla Securities Limited. (BSL) (ceased to be an associate w.e.f. 15th November 2014)

Apeejay, 2nd Floor, Shahid Bhagat Singh Road, Fort, Mumbai - 400 001

U65990MH1994PLC078597

63

L

* (ceased to be subsidiary w.e.f. 9th May, 2014)

DIRECTORS’ REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

Aditya Birla Nuvo Limited - Annual Report 2014-2015

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) (i) Category-wise Share Holding Category of shareholders

No. of Shares held at the beginning of the year (As on 01.04.2014) Demat

No. of Shares held at the end of the year (As on 31.03.2015)

Physical

Total

% of Total shares

Demat

Physical

Total

% Change

% of Total shares

during the year

A. Promoters 1 Indian

DIRECTORS’ REPORT

(a) Individual/HUF

136,203

-

136,203

0.10

136,203

-

136,203

0.10

-

(b) Central Govt

-

-

-

-

-

-

-

-

-

(c) State Govt (s)

-

-

-

-

-

-

-

-

-

- 74,308,494

57.10

-0.03

-

-

(d) Bodies Corporate 74,308,494

- 74,308,494

(e) Banks/Financial Institution

-

-

-

-

(f) Any Other…. Sub-total (A)(1)

74,444,697

- 74,444,697

57.12 74,308,494 -

-

-

-

57.23 74,444,697

-

-

-

-

-

-

- 74,444,697

57.20

-0.03

2 Foreign (a) NRIs- Individuals

-

-

-

-

-

-

-

-

-

(b) Other-Individuals

-

-

-

-

-

-

-

-

-

(c) Bodies corp

-

-

-

-

-

-

-

-

-

(d) Banks/Financial Institution

-

-

-

-

-

-

-

-

-

(e) Any Other—Sub-total (A)(2): Total holding of Promoter and Promoter Group (A)=(A)(1)+(A)(2)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

- 74,444,697

57.20

-0.03

74,444,697

- 74,444,697

57.23 74,444,697

B. Public Shareholding I. Institutions (a) Mutual Funds

5,731,662

26,282

5,757,944

4.43

5,592,805

26,059

5,618,864

4.32

-0.11

(b) Banks/FI

8,361,561

12,977

8,374,538

6.44

7,445,695

12,767

7,458,462

5.73

-0.71

(c) Central Govt

-

-

-

-

-

-

-

-

-

(d) State Govt(s)

-

-

-

-

-

-

-

-

-

(e) Venture Capital Funds

-

-

-

-

-

-

-

-

-

25

1,503,031

1.16

1,469,147

25

1,469,172

1.13

-0.03

3,695 20,385,224

15.66

0.25

(f) Insurance Companies (g) FIIs

1,503,006 20,051,176

3,761 20,054,937

15.42 20,381,529

(h) Foreign Venture Capital Funds

-

-

-

-

-

-

-

-

-

(i) Others (specify)

-

-

-

-

-

-

-

-

-

42,546 34,931,722

26.84

-0.59

Sub-total (B)(1): 35,647,405

43,045 35,690,450

27.44 34,889,176

2 Non-Institutions (a) Bodies Corp. (i) Indian (ii) Overseas

L

64

3,168,995

71,200

3,240,195

2.49

3,754,729

67,243

3,821,972

2.94

0.45

-

-

-

-

-

-

-

-

-

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

Aditya Birla Nuvo Limited - Annual Report 2014-2015

i)

Category-wise Share Holding (Continued)

Category of shareholders

No. of Shares held at the beginning of the year (As on 01.04.2014) Demat

Physical

No. of Shares held at the end of the year (As on 31.03.2015)

Total

% of Total shares

Demat

Physical

2,313,464 12,040,430

9.26

9,666,871

Total

% Change

% of Total shares

during the year

i) Individual shareholders holding nominal share capital upto Rs. 1 lakh ii) Individual shareholders holding nominal share capital in excess of Rs.1lakh Qualified Foreign Investor

9,726,966

2,028,526 11,695,397

8.99

-0.27

394,996

24,144

419,140

0.32

1,053,406

34,990

1,088,396

0.84

0.51

-

-

-

-

-

-

-

-

-

486,473

369,461

855,934

0.66

465,851

309,063

774,914

0.60

-0.06

151,647

30,647

182,294

0.14

170,966

18,235

189,201

0.15

0.01

14,737

8,767 -

8,767 14,737

0.01 0.01

14,737

1,441 -

1,441 14,737

0.01

-0.01 -

3,811

6,276

-

2,465

3,792

c) Others (specify) Non-Resident (REP) Non-Resident (Non-REP) Non-Domestic Cos/OCB Foreign National Foreign Financial Banks

6,257

-

-

Sub-total (B)(2): 13,946,279

2,465

2,821,494 16,767,773

12.89 15,129,025

2,463,290 17,592,315

13.52

0.63

Total Public Shareholding (B)=(B)(1)+(B)(2) 49,593,684

2,864,539 52,458,223

40.33 50,018,201

2,505,836 52,524,037

40.36

0.03

TOTAL (A)+(B)

2,864,539 126,902,920

97.55 124,462,898

2,505,836 126,968,734

97.57

0.01

124,038,381

C. Shares held by Custodian for GDRs & ADRs 1,425,000

-

1,425,000

1.10

1,425,000

-

1,425,000

1.09

-

Public

1,756,381

671

1,757,052

1.35

1,742,788

671

1,743,459

1.34

-0.01

2,506,507 130,137,193

100.00

-

Grand Total (A+B+C)

127,219,762

2,865,210 130,084,972

100.00 127,630,686

65

L

Promoter and Promoter Group

DIRECTORS’ REPORT

(b) Individuals

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

IV. (ii)

SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) Shareholding of Promoters

Sr. Shareholder’s name No.

DIRECTORS’ REPORT

1

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Shareholding at the beginning of the year (As on 01.04.2014) No. of shares % of total %of Shares Shares of the Pledged / company encumbered to total shares

Mr. Aditya Vikram Kumar Mangalam Birla HUF

2

Mr. Kumar Mangalam Birla

3

Mrs. Rajashree Birla

4

150

0.00

0.00

Share holding at the end of the year (As on 31.03.2015) No. of shares % of total %of Shares Shares of the Pledged / company encumbered to total shares

150

0.00

0.00

% Change in shareholding during the year

0.00

4,609

0.00

0.00

4,609

0.00

0.00

0.00

127,634

0.10

0.00

127,634

0.10

0.00

0.00

Mrs. Neerja Birla

1,975

0.00

0.00

1,975

0.00

0.00

0.00

1,835

0.00

0.00

1,835

0.00

0.00

0.00

3,610,300

2.78

0.00

3,610,300

2.77

0.00

0.00

5

Mrs. Vasavadatta Bajaj

6

Birla Group Holdings Pvt.Ltd.

7

TGS Investment and Trade Pvt. Ltd.

13,506,736

10.38

0.00

13,506,736

10.38

0.00

0.00

8

Trapti Trading & Investments Pvt. Ltd.

9,423,935

7.24

0.00

9,423,935

7.24

0.00

0.00

9

Turquoise Investments & Finance Pvt. Ltd.

6,441,092

4.95

0.00

6,441,092

4.95

0.00

0.00

10 Birla Consultants Ltd.

28,655

0.02

0.00

28,655

0.02

0.00

0.00

11 Birla Industrial Finance (India) Ltd.

27,790

0.02

0.00

27,790

0.02

0.00

0.00

12 Birla Industrial Investments (India) Ltd.

5,955

0.00

0.00

5,955

0.00

0.00

0.00

119,163

0.09

0.00

119,163

0.09

0.00

0.00

14 Grasim Industries Limited

3,345,816

2.57

0.00

3,345,816

2.57

0.00

0.00

15 Hindalco Industries Limited

8,650,412

6.65

0.00

8,650,412

6.65

0.00

0.00

16 IGH Holdings Private Limited

16,352,102

12.57

0.00

16,352,102

12.57

0.00

-0.01

17 Manav Investment & Trading Co. Ltd.

114,675

0.09

0.00

114,675

0.09

0.00

0.00

18 Pilani Investment & Industries Corporation Ltd.

187,098

0.14

0.00

187,098

0.14

0.00

0.00

13 ECE Industries Limited

19 Umang Commercial Company Limited TOTAL

12,494,765

9.61

0.00

12,494,765

9.60

0.00

0.00

74,444,697

57.23

0.00

74,444,697

57.20

0.00

-0.02

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) (iii) Change in Promoters’ Shareholding (please specify, if there is no change) Particulars Shareholding at the beginning of the year (as on 01.04.2014) No. of shares

At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): At the end of the year (as on 31.03.2015)

74,444,697

Cumulative Shareholding during the year

% of total No. of shares % of total shares of the shares of the company company 57.23

74,444,697

57.23

0

-0.03

0

-0.03

74,444,697

57.20

74,444,697

57.20

Note: (i) There is no change in total shareholding of promoters during 01.04.2014 and 31.03.2015. (ii) The decrease in % of total promoter holding in the Company from 57.23% to 57.20% is due to increase in total no. of shares of the Company pursuant to allotment of 52,221 shares against exercise of Options.

L

66

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) Shareholding pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) Shareholding at the beginning of the year (as on 01.04.2014) No. of shares at the beginning (01.04.2014) / end of the year (31.03.2015)

% of total shares of the company

6.37

1

LIFE INSURANCE CORPORATION OF INDIA (INCLUDING SHARES HELD UNDER VARIOUS SCHEMES/FUNDS)

8,286,305

7,276,236

5.59

2

HSBC GLOBAL INVESTMENT FUNDS A/C HSBC GIF MAURITIUS LTD.

2,221,276

1.71

3

RELIANCE CAPITAL TRUSTEE CO. LTD. A/C RELIANCE GROWTH FUND

4

MORGAN STANLEY ASIA (SINGAPORE) PTE.

Date

Increase / Decrease in shareholding

Reason

Cumultive Shareholding during the year No. of shares

% of total shares of the company

01.04.2014 04.04.2014 30.04.2014 31.07.2014 14.08.2014 19.09.2014 30.09.2014 17.10.2014 24.10.2014 31.10.2014 07.11.2014 14.11.2014 21.11.2014 28.11.2014 05.12.2014 12.12.2014 19.12.2014 30.01.2015 07.02.2015 13.02.2015 20.02.2015 27.02.2015 13.03.2015 20.03.2015 31.03.2015

50,000 -42,460 85,702 63,934 -20,000 -5,935 -104,095 -53,016 -148,396 -390,756 -117,545 -31,920 -52,475 -43,394 -27,462 84,669 -45,141 -44,701 -5,477 -77,391 -5,141 -20,000 -10,000 -49,069

Purchase Sell Purchase Purchase Sell Sell Sell Sell Sell Sell Sell Sell Sell Sell Sell Purchase Sell Sell Sell Sell Sell Sell Sell Sell

8,286,305 8,336,305 8,293,845 8,379,547 8,443,481 8,423,481 8,417,546 8,313,451 8,260,435 8,112,039 7,721,283 7,603,738 7,571,818 7,519,343 7,475,949 7,448,487 7,533,156 7,488,015 7,443,314 7,437,837 7,360,446 7,355,305 7,335,305 7,325,305 7,276,236

6.37 6.41 6.38 6.44 6.49 6.47 6.47 6.39 6.35 6.23 5.93 5.84 5.82 5.78 5.75 5.72 5.79 5.75 5.72 5.72 5.66 5.65 5.64 5.63 5.59

-18,021 -66,148 -4,066 -31,559 -1,710 -11,931 -26,894 -28,748 -35,280 -

Sell Sell Sell Sell Sell Sell Sell Sell Sell

2,221,276 2,203,255 2,137,107 2,133,041 2,101,482 2,099,772 2,087,841 2,060,947 2,032,199 1,996,919 1,996,919

1.71 1.69 1.64 1.64 1.61 1.61 1.60 1.58 1.56 1.53 1.53

1,996,919

1.53

01.04.2014 13.06.2014 20.06.2014 04.07.2014 04.07.2014 29.08.2014 12.09.2014 19.09.2014 30.09.2014 28.11.2014 31.03.2015

1,442,366 1,442,366

1.11 1.11

01.04.2014 31.03.2015

-

No change

1,442,366 1,442,366

1.11 1.11

989,158

0.76

01.04.2014 18.04.2014 25.04.2014 02.05.2014 09.05.2014 23.05.2014 31.05.2014 20.06.2014 30.06.2014 11.07.2014 18.07.2014 25.07.2014 08.08.2014 29.09.2014 17.10.2014 07.11.2014 14.11.2014

-9,500 -7,750 -68,626 -2,000 -20,251 -44,035 -1,500 -890 -57,750 -3,750 250 25,000 31,421 92,595 17,500 376

Sell Sell Sell Sell Sell Sell Sell Sell Sell Sell Purchase Purchase Purchase Purchase Purchase Purchase

989,158 979,658 971,908 903,282 901,282 881,031 836,996 835,496 834,606 776,856 773,106 773,356 798,356 829,777 922,372 939,872 940,248

0.76 0.75 0.75 0.69 0.69 0.68 0.64 0.64 0.64 0.60 0.59 0.59 0.61 0.64 0.71 0.72 0.72

67

DIRECTORS’ REPORT

Sl. Name of the Shareholder No.

L

IV. iv.

DIRECTORS’ REPORT - ANNEXURE IV

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

Aditya Birla Nuvo Limited - Annual Report 2014-2015

DIRECTORS’ REPORT

iv. Shareholding pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) (continued) Sl. Name of the Shareholder Shareholding at the beginning Date Increase / Reason Cumultive Shareholding No. of the year (as on 01.04.2014) Decrease in during the year shareholding No. of shares % of total No. of % of total at the beginning shares of the shares shares of the (01.04.2014) / end company company of the year (31.03.2015)

950,381

0.73

953,880

0.73

5

GENERAL INSURANCE CORPORATION OF INDIA

930,021

0.71

6

T. ROWE PRICE NEW ASIA FUND

950,976

0.73

-

0.00

7

ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY FUND

875,907

0.67

-

0.00

8

GOVERNMENT PENSION FUND GLOBAL

860,857

0.66

258,280

0.20

9

DSP BLACKROCK TOP 100 EQUITY FUND

751,639

0.58

-

0.00

L

68

21.11.2014 28.11.2014 05.12.2014 31.12.2014 09.01.2015 16.01.2015 23.01.2015 30.01.2015 06.02.2015 13.02.2015 20.02.2015 28.02.2015 06.03.2015 13.03.2015 20.03.2015 31.03.2015

1,750 25,311 -376 46,418 -2,250 6,250 -250 -9,750 23,000 -4,000 -1,692 5,223 31,750 -65,357 -11,399 -34,495

Purchase Purchase Sell Purchase Sell Purchase Sell Sell Purchase Sell Sell Purchase Purchase Sell Sell Sell

941,998 967,309 966,933 1,013,351 1,011,101 1,017,351 1,017,101 1,007,351 1,030,351 1,026,351 1,024,659 1,029,882 1,061,632 996,275 984,876 950,381

0.72 0.74 0.74 0.78 0.78 0.78 0.78 0.77 0.79 0.79 0.79 0.79 0.82 0.77 0.76 0.73

01.04.2014 05.12.2014 12.12.2014 19.12.2014 31.03.2015

-20,785 -4,215 1,141 -

Sell Sell Purchase -

953,880 933,095 928,880 930,021 930,021

0.73 0.72 0.71 0.71 0.71

01.04.2014 18.04.2014 23.05.2014 31.05.2014 29.08.2014 05.09.2014 12.09.2014 31.03.2015

13,579 52,993 16,794 -362,520 -281,916 -389,906 -

Purchase Purchase Purchase Sell Sell Sell -

950,976 964,555 1,017,548 1,034,342 671,822 389,906 -

0.73 0.74 0.78 0.80 0.52 0.30 0.00 0.00

01.04.2014 04.04.2014 11.04.2014 20.06.2014 30.06.2014 25.07.2014 31.07.2014 31.03.2015

-139,719 -54,805 -28,282 -987 -163,876 -488,238 -

Sell Sell Sell Sell Sell Sell -

875,907 736,188 681,383 653,101 652,114 488,238 -

0.67 0.57 0.52 0.50 0.50 0.38 0.00 0.00

01.04.2014 11.04.2014 18.04.2014 25.04.2014 02.05.2014 09.05.2014 23.05.2014 31.05.2014 06.06.2014 13.06.2014 20.06.2014 30.06.2014 25.07.2014 25.07.2014 31.03.2015

-30,481 -25,014 -33,365 -33,717 -34,974 -6,702 -13,254 -58,761 -47,595 -52,781 -52,244 -152,740 -60,949 -

Sell Sell Sell Sell Sell Sell Sell Sell Sell Sell Sell Sell Sell -

860,857 830,376 805,362 771,997 738,280 703,306 696,604 683,350 624,589 576,994 524,213 471,969 319,229 258,280 258,280

0.66 0.64 0.62 0.59 0.57 0.54 0.54 0.53 0.48 0.44 0.40 0.36 0.25 0.20 0.20

01.04.2014 23.05.2014 06.06.2014 13.06.2014 31.03.2015

-539,443 -69,785 -142,411 -

Sell Sell Sell -

751,639 212,196 142,411 -

0.58 0.16 0.11 0.00 0.00

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Shareholding pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) (continued)

10

11

Shareholding at the beginning of the year (as on 01.04.2014)

No. of shares at the beginning (01.04.2014) / end of the year (31.03.2015) GOVERNMENT OF SINGAPORE 711,025

% of total shares of the company

722,715

0.56

620,942

0.48

802,697

0.62

DIMENSIONAL EMERGING MARKETS VALUE FUND (w.e.f. 13/06/2014)

0.55

Date

Increase / Decrease in shareholding

Reason

Cumultive Shareholding during the year No. of shares

% of total shares of the company

01.04.2014 04.04.2014 11.04.2014 18.04.2014 31.05.2014 06.06.2014 20.06.2014 30.06.2014 04.07.2014 11.07.2014 31.07.2014 29.08.2014 05.09.2014 12.09.2014 19.09.2014 17.10.2014 24.10.2014 31.10.2014 07.11.2014 21.11.2014 28.11.2014 05.12.2014 12.12.2014 19.12.2014 31.12.2014 16.01.2015 13.02.2015 20.02.2015 06.03.2015 31.03.2015

20,417 -13,108 -13,520 -10,762 -10,553 -1,872 -3,856 -1,355 -373 -18,092 32,551 -5,030 26,971 135,890 7,080 -304 8,224 16,351 -499 -1,226 -2,636 1,236 -175,723 -3,378 11,651 10,660 -501 641 2,806

Purchase Sell Sell Sell Sell Sell Sell Sell Sell Sell Purchase Sell Purchase Purchase Purchase Sell Purchase Purchase Sell Sell Sell Purchase Sell Sell Purchase Purchase Sell Purchase Purchase

711,025 731,442 718,334 704,814 694,052 683,499 681,627 677,771 676,416 676,043 657,951 690,502 685,472 712,443 848,333 855,413 855,109 863,333 879,684 879,185 877,959 875,323 876,559 700,836 697,458 709,109 719,769 719,268 719,909 722,715

0.55 0.56 0.55 0.54 0.53 0.53 0.52 0.52 0.52 0.52 0.51 0.53 0.53 0.55 0.65 0.66 0.66 0.66 0.68 0.68 0.67 0.67 0.67 0.54 0.54 0.54 0.55 0.55 0.55 0.56

01.04.2014 09.05.2014 23.05.2014 31.05.2014 06.06.2014 13.06.2014 20.06.2014 30.06.2014 04.07.2014 11.07.2014 18.07.2014 31.07.2014 14.08.2014 22.08.2014 29.08.2014 05.09.2014 12.09.2014 19.09.2014 30.09.2014 17.10.2014 28.02.2015 06.03.2015 13.03.2015 20.03.2015 31.03.2015

4,033 16,141 2,052 5,509 5,040 6,771 2,239 3,201 1,531 1,985 624 2,760 4,379 13,173 18,148 9,278 11,681 7,547 2,084 6,605 22,508 10,918 12,429 11,119

Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase

620,942 624,975 641,116 643,168 648,677 653,717 660,488 662,727 665,928 667,459 669,444 670,068 672,828 677,207 690,380 708,528 717,806 729,487 737,034 739,118 745,723 768,231 779,149 791,578 802,697

0.48 0.48 0.49 0.49 0.50 0.50 0.51 0.51 0.51 0.51 0.51 0.52 0.52 0.52 0.53 0.54 0.55 0.56 0.57 0.57 0.57 0.59 0.60 0.61 0.62

69

DIRECTORS’ REPORT

Sl. Name of the Shareholder No.

L

iv.

DIRECTORS’ REPORT - ANNEXURE IV

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

iv.

Shareholding pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) (continued)

DIRECTORS’ REPORT

Sl. Name of the Shareholder No.

12

FRANKLIN TEMPLETON INVESTMENT FUNDS (w.e.f. 13/06/2014)

13

ROBECO CAPITAL GROWTH FUNDS (w.e.f. 05/09/2014)

14

EASTSPRING INVESTMENTS INDIA EQUITY OPEN LIMITED (w.e.f. 05/12/2014)

IV. v.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Shareholding at the beginning of the year (as on 01.04.2014)

Date

No. of shares at the beginning (01.04.2014) / end of the year (31.03.2015) -

% of total shares of the company

1,072,470

0.82

525,308

0.40

739,022

0.57

-

-

750,758

0.58

-

Increase / Decrease in shareholding

Reason

Cumultive Shareholding during the year No. of shares

% of total shares of the company

02.05.2014 09.05.2014 23.05.2014 13.06.2014 29.09.2014 14.11.2014 19.12.2014 23.01.2015 06.03.2015 31.03.2015

98,870 301,130 170,000 170,000 110,000 170,000 180,000 72,470 -200,000 -

Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sell -

98,870 400,000 570,000 740,000 850,000 1,020,000 1,200,000 1,272,470 1,072,470 1,072,470

0.08 0.31 0.44 0.57 0.65 0.78 0.92 0.98 0.82 0.82

01.04.2014 05.09.2014 20.02.2015 28.02.2015 31.03.2015

93,000 25,000 47,485 5,537

Purchase Purchase Purchase Purchase

568,000 661,000 686,000 733,485 739,022

0.44 0.51 0.53 0.56 0.57

22.08.2014 29.08.2014 05.09.2014 12.09.2014 19.09.2014 17.10.2014 05.12.2014 12.12.2014 31.03.2015

72,250 319,052 89,566 94,660 47,225 38,061 32,838 57,106 -

Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase -

72,250 391,302 480,868 575,528 622,753 660,814 693,652 750,758 750,758

0.06 0.30 0.37 0.44 0.48 0.51 0.53 0.58 0.58

SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) Shareholding of Directors and Key Managerial Personnel

Sl. For Each of the Directors No. and KMP Name

1

Mr. Kumar Mangalam Birla

2

Mrs. Rajashree Birla

3

Ms. Tarjani Vakil

4

Mr. G.P. Gupta

5

Mr. Sushil Agarwal

6

Mr. S C Bhargava

7

Dr. Rakesh Jain (upto 30.06.2014)

8

Mr. Ashok Malu (Joined as a Jt. President & Company Secretary w.e.f. : 01.03.2015)

Shareholding at the beginning of the year (as on 01.04.2014)

Date

No. of shares at the beginning (01.04.2014) / end of the year (31.03.2015) 4,609 4,609 127,634 127,634 177 177 339 339 1,657

% of total shares of the company

0.10 0.10 -

01.04.2014 31.03.2015 01.04.2014 31.03.2015 01.04.2014 31.03.2015 01.04.2014 31.03.2015 01.04.2014 12.08.2015

2,667 233 233 3,368

-

31.03.2015 01.04.2014 31.03.2015 01.04.2014 12.08.2015

18,517

L

70

468

Reason

Cumultive Shareholding during the year No. of shares

31.03.2015

-

Increase / Decrease in shareholding

-

No Change

-

No Change

-

No Change

-

No Change

Allotment of 1010 Shares against exercise of Options No Change

% of total shares of the company

4,609

-

127,634

0.10

177

-

339

-

2,667 2,667

-

233 Allotment of 15149 Shares against exercise of Options

-

18,517

0.01

No Change

468

-

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

Aditya Birla Nuvo Limited - Annual Report 2014-2015

V.

INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment.

(Rs. in Crore)

Secured Loans excluding deposits

Unsecured Loans

Deposits

Total

1,779

1,974

-

3,753

-

-

-

-

7

25

-

32

1,787

1,999

-

3,785

Indebtedness i)

Principal Amount

ii)

Interest due but not paid

iii)

Interest accrued but not due

Total (i+ii+iii) Change in Indebtedness during the financial year • Addition • Reduction Net Change

37

635

-

620

118

-

-582

517

-

65

1,197

2,492

-

3,688

-

-

-

6

26

-

32

1,203

2,518

-

3,720

Indebtedness at the end of the financial year i)

Principal Amount

ii)

Interest due but not paid

iii)

Interest accrued but not due

Total (i+ii+iii) VI.

REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A.

Remuneration to Managing Director, Whole-time Directors and/or Manager:

Sl no.

Name of MD/WTD/ Manager

Gross salary

Stock Option

Sweat Equity

(Rs. in Lakh)

Commission

(a) Salary (b) Value of (c) Profits in as per perquisites lieu of salary provisions u/s 17(2) under contained Income-tax section 17(3) in section Act, 1961 Income-tax 17(1) of the Act, 1961 Income-tax Act, 1961

As % of profit

Others, specify

Others, please specify

Total in (A)

Ceiling as per the Act*

Dr. Rakesh Jain Managing Director (Upto 30.06.2014)

614.75

57.67

-

-

-

-

-

-

672.42

*

2

Mr. Lalit Naik - w.e.f 01.07.2014 Managing Director

517.15

3.34

-

28.15

-

-

-

-

548.64

*

3

Mr. Sushil Agarwal Wholetime Director and CFO

292.74

7.03

-

94.64

-

-

-

-

394.41

*

1424.64

68.04

-

122.79

-

-

-

-

1615.47

TOTAL

71

L

1

DIRECTORS’ REPORT

Indebtedness at the beginning of the financial year

CMYK

DIRECTORS’ REPORT - ANNEXURE IV

Aditya Birla Nuvo Limited - Annual Report 2014-2015

VI.

REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

B.

Remuneration to other Directors:

(Rs. in Lakh) Particulars of Remuneration (Rs.)

(1) Independent Directors

DIRECTORS’ REPORT

Name of Directors

1

Fee for Commission attending board/ Committee Meetings

Total (B) Total Overall = (1+2) Manag- ceiling

(2) Other Non-Executive Directors

Others, please specify

Total (1)

Fee for Commission Others, attending please board/ specify Committee Meetings

erial as per Total (2)

Remun- the eration Act ** ***

Mr. Kumar Mangalam Birla

NA

-

-

-

0.80

410.60

-

411.40

411.40

**

***

2

Mrs. Rajashree Birla

NA

-

-

-

1.80

15.25

-

17.05

17.05

**

***

3

Mr. Bihari Lal Shah (ceased to be a Director w.e.f. 25.09.2014)

NA

-

-

-

0.60

1.40

-

2.00

2.00

**

***

4

Mr. Pejavar Murari

2.10

2.70

-

4.80

-

-

-

-

4.80

**

***

5

Mr. Baldev Raj Gupta

3.70

4.70

-

8.40

-

-

-

-

8.40

**

***

6

Ms. Tarjani Vakil

4.70

5.55

-

10.25

-

-

-

-

10.25

**

***

7

Mr. Gian Prakash Gupta

2.30

4.80

-

7.10

-

-

-

-

7.10

**

***

8

Mr. Subhash Chandra Bhargava

2.40

3.15

-

5.55

-

-

-

-

5.55

**

***

9

Mr. Tapasendra Chattopadhyay (Nominee Director)

-

-

-

-

1,10

1.85

-

2.95

2.95

**

***

15.20

20.90

-

36.10

4.30

429.10

-

433.40

469.50

**

***

Total

* Overall ceiling as per the Act (being 10% of the net profit as worked out as per Section 198 of the Companies Act, 2013) is Rs. 7,262 lakh. ** Total Managerial Remuneration A + B = Rs. 2,084.97 Lakh *** Overall ceiling as per the Act (being 11% of the net profit as worked out as per Section 198 of the Companies Act, 2013) is Rs. 7,994 lakh. VI.

REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

C.

Remuneration to Key Managerial Personnel other than MD /Manager/ WTD

Sl no.

Name of Key Managerial Personnel other than MD/Manager/ WTD

1

Mr. Ashok Malu, Company Secretary (w.e.f. 01.03.2015)

2

Mrs. Hutokshi Wadia, Company Secretary (upto 28.02.2015)

Gross salary* (Rs.)

Stock Option

7.30

NIL

NIL

47.11

NIL

NIL

(Rs. in Lakh)

Sweat Commission Equity As % of profit Others, specify.

Others, please specify

Total

NIL

NIL

7.30

NIL

NIL

47.11

* (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 VII. THERE WERE NO PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES FOR YEAR ENDED 31ST MARCH, 2015

L

72

iii) Identified employees who were granted options during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. k) i) Weighted-average exercise prices and weightedaverage fair values of options whose exercise price equals the market price of the stock. ii) Weighted-average exercise prices and weighted-average fair values of options whose exercise price is less than the market price of the stock. iii) Weighted-average exercise prices and weightedaverage fair values of options whose exercise price exceeds the market price of the stock. l) A description of the method and significant assumptions used during the year to estimate the fair values of options, including Weighted-average exercise price: ` 687 Weighted-average fair value per option : ` 366.54

Weighted-average exercise price: ` 687 Weighted-average fair value per option : ` 355.12

Weighted-average exercise price: ` 687 Weighted-average fair value per option : ` 471.44

NIL

Weighted-average exercise price: ` 697 Weighted-average fair value per option : ` 486.82

NIL

Weighted-average exercise price: ` 748 Weighted-average fair value per option : ` 443.49

NIL

Dr. Bir Kapoor: 3,370

NIL

Mr. Rahul Mohnot: 4,044 Mr. J. C. Laddha: 5,050 Mr. S. Visvanathan: 4,040 Mr. Surendra Goyal: 4,040

Mr. Ashish Dikshit: 23,861 Mr. Vishak Kumar*: 17,354 Mr. Satyajit R.: 17,354 Mr. Shital Mehta:17,354

NIL

NIL NIL NIL NIL 3,370 NIL

2,527 NIL

3,370 The exercise price was determined by averaging the closing price of the Company’s equity shares, for the immediately preceding 7 days from the date of issue and discounting it by 15%. Exercise Price: ` 748 per option

Tranche 5 (7 June, 2011) th

5,047 1,683 NIL 3,517,759 5,222 Dr. Rakesh Jain*: 6,730 Mr. Sushil Agarwal: 5,222

10,269 5,047

11,952 The exercise price was determined by averaging the closing price of the Company’s equity shares, for the immediately preceding 7 days from the date of issue and discounting it by 15%. Exercise Price: ` 697 per option.

Tranche 4 (8 September, 2010) th

7,071 3,033 NIL 4,857,777 7,070 NIL

14,141 7,071

17,174 The exercise price was determined by averaging the closing price of the Company’s equity shares, for the immediately preceding 7 days from the date of issue, and discounting it by 15%. Exercise Price: ` 687 per option.

Tranche 3 (20 August, 2010) th

26,290 111,738 NIL 18,061,230 28,065 Mr. Vikram Rao*: 43,400 Mr. K.K.Maheshwari*: 43,400

NIL

87,454 57,222 NIL 60,080,898 18,604 Mr. K.K. Maheshwari*: 20,200 Dr. Bharat K. Singh*: 20,200 Mr. Adesh Gupta*: 8,420 Mr. Vikram Rao*: 20,200 Dr. Rakesh Jain*: 13,470 Mr. Sushil Agarwal: 4,040 ii) Any other employee who received a grant in NIL any one year of option amounting to 5% or more of options granted during that year.

54,355 26,290

1,66,093 The exercise price was the closing market price,prior to the date of grant.In accordance with the approval of the Board of Directors and the Shareholders of the Company, the ESOS Compensation Committee had re-priced the options from ` 1,802 to ` 687 per option on 20th August, 2010

Trance 2 (25 January, 2008) th

ESOS - 2006 Details of Employee Stock Options as on March 31, 2015

NA

Black - Scholes Merton Formula

NA

Weighted-average exercise price: ` 1,239.80 Weighted-average fair value of options: ` 509.65

NIL

NIL

8,498 56,916 NIL NIL 47,356 Mr. Sushil Agarwal : 26,230 Dr. Rakesh Jain*: 52,459 Mr. Raj Narayanan : 10,944

8,498 NIL

1,04,272 The exercise price was the closing market price of the equity shares of the Company 1 day prior to the date of grant.(on 6 th Dec, 13) (at N.S.E.) being ` 1239.80 per option.

Tranche 1 (7 December, 2013) th

ESOS - 2013

NIL NIL NIL NIL 35,060 Mr. Lalit Naik : 32,766

NIL NIL

35,060 The exercise price was the closing market price of the equity shares of the Company 1 day prior to the date of grant. (on 11th Nov, 14) (at N.S.E.) being ` 1726.95 per option.

NIL

Weighted-average exercise Weighted-average exercise price: ` 1,726.95 price: ` 10 Weighted-average fair value Weighted-average fair value of options : ` 694.22 of RSUs: ` 1,195.33

NIL

DIRECTORS’ REPORT

Weighted-average exercise price: ` 1,053.85 Weighted-average fair value of options : ` 428.05

NIL

NIL

NIL 18,887 NIL NIL 82,844 Mr. Sushil Agarwal : 9,443 Dr. Rakesh Jain* : 18,887 Mr. Pranab Barua : 16,997 Mr. Ashish Dikshit : 7,012

NIL NIL

1,01,731 RSUs be granted at an exercise price of ` 10/- each (i.e. at the face value of the Equity Shares of the Company on the date of Grant of RSUs) (“the RSU Exercise Price”).

NIL NIL NIL NIL 12,630 Mr. Lalit Naik : 11,804

NIL NIL

12,630 RSUs be granted at an exercise price of ` 10/- each (i.e. at the face value of the Equity Shares of the Company on the date of Grant of RSUs) (“the RSU Exercise Price”).

Tranche 3 (12th November, 2014)

Weighted-average exercise price: ` 10 Weighted-average fair value of RSUs: ` 1,008.87

NIL

Weighted-average exercise price: ` 10 Weighted-average fair value of RSUs: ` 1,684.01

NIL

Mr. Shriram Jagetiya : 1,247 Mr. Sanjeev Sachdev : 2,294 Mr. Rajesh Shah : 1,039 Ms. Meena Jagtiyani : 2,243 Mr. Vardharjan Venkatesan : 661 Mr. Jasvinder Kataria : 661 Mr. Shashank Pareek : 642 Mr. Yogendra Raghuvanshi : 642 Mr. Shailendra Pandey : 642

NIL NIL NIL NIL 9,567 Dr. Bir Kapoor : 1,790

NIL NIL

9,567 RSUs be granted at an exercise price of ` 10/- each (i.e. at the face value of the Equity Shares of the Company on the date of Grant of RSUs) (“the RSU Exercise Price”).

Tranche 2 (29th January, 2014)

Details of Restricted Stock Units as on March 31, 2015

Tranche 3 Tranche 1 (12 November, 2014) (7th December, 2013) th

Mr. Shriram Jagetiya : 3,460 NIL Mr. Rajesh Shah : 2,883 Ms. Meena Jagtiyani : 6,226 Mr. Vardharjan Venkatesan : 1,835 Mr. Jasvinder Kataria : 1,835

4,061 NIL NIL NIL 16,239 NIL

4,061 NIL

16,239 The exercise price was the closing market price of the equity shares of the Company 1 day prior to the date of grant. (on 28th Jan, 14) (at N.S.E.) being ` 1053.85 per option.

Tranche 2 (29 January, 2014) th

Details of Employee Stock Options as on March 31, 2015

Aditya Birla Nuvo Limited - Annual Report 2014-2015

73

L

1,20,111 87,454

c) Options Vested d) Options Exercised e) The total number of shares arising as a result of exercise of options f) Options forfeited/cancelled/lapse g) Variation in terms of options h) Money raised by exercise of options i) Total number of options in force j) Employee-wise details of options granted

b) The pricing formula

1,63,280 The exercise price was determined by averaging the daily closing price of the companies equity shares during 7 days immediately preceding the date of grant and discounting it by 10%. In accordance with the approval of the Board of Directors and the Shareholders of the Company, the ESOS Compensation Committee had re-priced the options from ` 1,180 to ` 687 per option on 20th August, 2010

Tranche 1 (23 August, 2007) rd

a) Number of Stock Options Granted

Particulars

Disclosure in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 read with erstwhile SEBI (Employees Stock Options Scheme and Employees Stock Purchase Scheme) Guidelines, 1999

CMYK

DIRECTORS’ REPORT - ANNEXURE V

L

74 8.09 5 54.04 0.36 816.85

On the Date of Re-pricing (i) Risk-Free Interest Rate (%) (ii) Expected Life (No. of Years) (iii) Expected Volatility (%) (iv) Dividend Yield (%) (v) The Price of the underlying share in market at the time of Re-pricing of options (`)

8.09 5 34.05 0.57 905.10

Tranche 5 (7 June, 2011) th

8.88 5 30.02 0.61 1,239.80

Tranche 1 (7 December, 2013) th

8.87 5 29.97 0.73 1,053.85

Tranche 2 (29 January, 2014) th

The impact of this difference on profits and on EPS of the Company

7.91 5 30.45 0.42 1,726.95

40.56 40.36

As reported As adjusted

40.29

40.49

Diluted

Basic

Earning per Share (`)

7.85 525.10

Adjusted Net Income

5.26

527.69

2014-15 (` in Crs)

7.91 5.50 30.45 0.70 1726.95

Less: Compensation cost as per Fair Value

8.87 5.50 29.97 1.23 1053.85

Tranche 3 (12th November, 2014)

DIRECTORS’ REPORT - ANNEXURE V

Add: Compensation cost as per Intrinsic Value

Net Profit

Particulars

8.88 5.50 30.02 0.62 1239.80

Tranche 2 (29th January, 2014)

Details of Restricted Stock Units as on March 31, 2015

ESOS - 2013 Tranche 3 Tranche 1 (12 November, 2014) (7th December, 2013) th

The effect of adopting the fair value on the net income and earnings per share for 2014-15 is as presented below:

` 2.59 Crore

8.09 5 53.88 0.86 839.80

Tranche 4 (8 September, 2010) th

` 40.49

8.09 5 54.04 0.86 816.85

Tranche 3 (20 August, 2010) th

Details of Employee Stock Options as on March 31, 2015

Diluted earnings per share

8.09 5 54.04 0.50 816.85

7.78 5 38 0.52 1,948.70

Trance 2 (25 January, 2008) th

ESOS - 2006 Details of Employee Stock Options as on March 31, 2015

Differences between the employee compensation cost, computed using intrinsic value of the stock options, and the employee compensation cost that shall have been recognized if the fair value of the options was used.

* Ceased to be in employment of the Company

7.78 5 38 0.52 1,283

Tranche 1 (23 August, 2007) rd

On the Date of Grant (i) Risk Free Interest Rate (%) (ii) Expected Life (No of years) (iii) Expected Volatility (%) (iv) Dividend Yield (%) (v) The price of the underlying share in market at the time of grant of options

Particulars

Disclosure in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 read with erstwhile SEBI (Employees Stock Options Scheme and Employees Stock Purchase Scheme) Guidelines, 1999

DIRECTORS’ REPORT

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

DIRECTORS’ REPORT - ANNEXURE VI

I. •











• •







RAYON DIVISION Installation of energy efficient pumps in Engineer Room Cooling Tower Unit saving 65670 KWH/Annum. Installations of Variable frequency drive on Strong caustic transferring pump 128/ 5 Unit saving 14326 KWH/Annum. Installation of China filter/CSY 2 return line in Spin bath Unit saving 36500 KWH/ Annum. Label Print applicator on Corrugated Boxes in place of 2 nos. 0.5 HP Motors 2 Nos. 0.5 HP MOTORS bath Unit saving 2072 KWH/ Annum. Power saving by using control system on ETP pump in CSY Unit saving 11793 KWH/Annum. Power saving through Gule tank agitator stop in CSY 3 (7 Machine) Unit saving 900 KWH/Annum. Additional Ripening inverter room AHU stopped Unit saving 14016 KWH/ Annum. Reduced power consumption for instrument air by stopping one padding air compressor. (750 KWH/Day) Reduced power consumption by Replacing Electrolyzer D with Generation Vb-40 (40 KWH/T) Reduced power consumption by Remembraning of Electrolyzer F (5.0 KWH/ T of Caustic) Reduced power consumption by

















Remembraning of Electrolyzer G (6.0 KWH/ T of Caustic) Reduced Power consumption by Replacement of Old Low efficiency Motors by Latest available IE-3 motors for various application (160 KWH/Day) Reduced power consumption for instrument air by stopping one padding air compressor. (750 KWH/Day) (270000 KWH/Annum) Reduced power consumption by Replacing Electrolyzer D with Generation Vb-40 (40 KWH/T) (3480840 KWH/Annum) Reduced power consumption by Remembraning of Electrolyzer F (5.0 kWh/ T of Caustic (204892 KWH/Annum) Reduced power consumption by Remembraning of Electrolyzer G (6.0 kWh/ T of Caustic (288876 KWH/Annum) Reduced Power consumption by Replacement of Old Low efficiency Motors by Latest available IE-3 motors for various application (160 KWH/Day,) (57600 KWH/Annum) The energy conservations measures taken in Rayon Division have resulted/will result in energy saving and consequent decrease in the cost of production The energy saved in terms of – ® Number of units - 145277 KWH/Annum. ® Rupees 7,26,385 ® As a percentage of total energy consumed by the Unit- 2.16%

II. MADURA DIVISION • Demand reduction by migrating to energy efficient lighting in factories, warehouses and offices • This was implemented in FY 14-15. Remaining facilities are lined up for this transformation in FY 16-17 • Adapting LED lighting with lesser wattage requirement & higher lumen output has enabled us to reduce the total power consumption • The energy saved in terms of – ® The annualized savings so far stands at 8.57 lakh units KWH/Annum.

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A. CONSERVATION OF ENERGY: i Steps taken or impact on conservation of energy In line with the Company’s declared commitment towards conservation of natural resources, all business divisions have continued with their efforts to improve energy usage efficiencies. The Company is engaged in the continuous process of energy conservation through improved operational and maintenance practices. Steps taken by various divisions of the Company in the direction are as under:

DIRECTORS’ REPORT

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO AS PRESCRIBED UNDER RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014.

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DIRECTORS’ REPORT - ANNEXURE VI

® ®

This has resulted in an annualized cost saving of Rupees 86 lakh The savings accrued so far is 3% of total energy consumed by the business

DIRECTORS’ REPORT

III. FERTILIZERS DIVISION • The Unit has a strong technical team to continuously monitor & conserve energy in the Complex. • Performance evaluations for Turbines, Compressor, Heat Exchangers, Boilers etc. are carried out to ensure optimum utilization of energy. • The Unit implemented energy saving schemes which are techno – economically viable in FY 2014-15. • Energy Saving Scheme (ESS) Project in Ammonia Plant is implemented in FY 2014-15, which reduced the energy consumption significantly. The key contributors are reduction of steam consumption by upgradation of Synthesis Gas compressor with modified internals and up gradation of CO2 removal section. Further implementation of this resulted in additional reduction of CO2 emission by about 30,000 Te/ Annum. • Replacement of 250 watt HPSV lights with 90 Watt LED Light fittings in Plant area. • Replacement of 2X40 watt Tube lights with 20 Watt LED Light fittings in Plant area. • Replacement of 250 Watts Flood Light Fittings with LED Flood Light Fittings of 90 Watts in Town ship and Farm house. • New capacitor banks with detune filters to reduce the power loses in distribution system in phase manner. • Installation of Power Factor improvement panel at 11KV substation of UPPCL power supply. • The impact of above Energy savings scheme will be as below: ® Number of units saved-153647 MKCL ® Rupees 45,26,85,594 ® As a percentage of total energy consumed by the Unit-3% IV. INSULATOR DIVISION a. Halol • Insulation of Assembly booths & hot air ducts has been done to minimize the

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

wastage of heat. It reduced the electricity consumption in heaters which are being operated to heat the air for the heating of cement after metal cap assembly of solid core insulators. • Kiln cycles are modified in terms of cycle time which reduced the Electricity consumption of the air blower motors in kilns. • The energy saved in terms of Power & Fuel are as follows:(in Crore) No. of Units Savings Percentage (%) Power 6,30,560 ` 0.47 Crore 3.3% of Total KWH per annum Thermopac Consumption Fuel

2,40,000 SCM/annum

` 0.89 Crore 3% of Total per month Thermopac consumption

b. Rishra • Use of PD blower of gas mixing has been stopped • SK oil saving is being done by cycle adjustment. • Gas mixing process has been eliminated as a result of LPG saving(K-5). • New channel dryer gas burner has been eliminated. • The energy saved in terms of – ® Number of units - 4373078 KWH ® Rupees 1,83,20,601 ® As a percentage of total energy consumed by the Unit - 0.12% ii. Steps taken by the Company for utilizing alternate sources of energy Madura Division • Our Unit at Madura is attempting to power up the facilities in Bangalore as a pilot to start with. The Karnataka Govt. policies are suited for offsite generation and wheeling. Both Capex & Opex models are being verified for feasibility. There is an intervention required at the policy level to treat our facilities as a single business user due to the small, granular & fragmented way our facilities are spread within the same city due to the nature of our retail business. • This will not save energy but will reduce our dependency on grid power. • The projected advantages with renewable energy for Bangalore is around 150 lakh units (KWH) and can be sourced through

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a. Rayon Division • Installation of 50 KW Solar Power plant as Roof Top Solar Power Plant. • Sun Light harvesting through Pipe Technology for Sun Light Harvesting through Sun Pipe (Lighting) • These projects will be implemented in FY 2016 • The total cost of implementation of the proposal is ` 52 Lakh • The energy saved in terms of – Rupees 57,300 (Rate Difference Grid/ Solar) b. Madura Division • An amount of ` 1.5 Crore is proposed for FY 16 as transformation Capex for energy efficient lighting which result in Energy Efficient Lighting with higher lumen output and that will reduce the power consumption by 45% and it is proven from past experience that the Capex spent is with a ROI of maximum 2.5 years. • ` 1.17 Crore to install capacitor banks in retail stores to improve power factor that resulted in Improving power factor wherever found low during the Pan India survey and that will reduce the consumption and the penalty that we currently pay to power distribution companies for lower PF. • ` 2 Crore to install remote energy monitoring in all facilities that resulted in setting up of centralized remote energy monitoring system which will bring accuracy to the data and the analytical tools will spot operational efficiency opportunities. This will enable a further reduction of 3% of the consumption. • These projects will be implemented in FY 2016. • The total cost of implementation of the proposal is ` 4.67 Crore. • The energy saved in terms of – ® The projected savings on consumption with these three initiatives is 9 lakh units (KWH) Annum. ® The projected savings on power costs with these three initiatives is ` 91 lakh Annum.

®

The savings projected is 3% of total energy consumed by the business. We project a cumulative savings of 6% by the end of FY 2016 with the addition of the proposed initiatives for FY 2016.

III. FERTILIZERS DIVISION • Replacement of Tube Lights with LED lights in Plant Area (all control rooms & other Area) • Replacement of existing cooling tower fans with energy efficient fans based of CFD analysis of fan blades • Replacement of tube lights with LED light in Township (Hospital, Guest House, Cooperative, School, Club, CVR & Yamuna House) • Replacement of underwater light in Township Central park Fountain by LED light. • The cost of implementation of above proposals will be ` 98 lakh. • The impact of above Energy savings scheme will be as below: ®

Number of units saved-3675 MKCL

®

Rupees- 1,28,94,324

®

As a percentage of total energy consumed by the Unit-0.06%

IV. INSULATORS DIVISION a. Halol • An amount of ` 1.11 Crore is proposed for Thermopac which will be used for generating Steam in Assembly & Curing chamber has been stopped and replaced with water spraying process, thereby saving in energy. • These projects will be implemented in 6 months. • The water Spray system ensured the required product quality instead of Steam curing process, which enabled the stopping of the Thermopac unless there is emergency. • The energy saved in terms of – ® Number of units 21600 KWH for 6 months ® Rupees - 21.21 lakh for 6 months. ® As a percentage of total energy consumed by the Unit by 3%. 77

DIRECTORS’ REPORT

RE thus reducing the dependency on grid power. iii.The capital investment on energy conservation equipments

DIRECTORS’ REPORT - ANNEXURE VI

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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DIRECTORS’ REPORT

DIRECTORS’ REPORT - ANNEXURE VI

B. TECHNOLOGY ABSORPTION: i. Efforts made towards technology absorption. a. Rayon Division • Developed an In-house the spool technology Spinning machine • Joint projects with ABSTCL carried out for improving yarn quality. • Various other initiatives taken by the Unit are as follows: a) Increase in productivity by increasing spinning m/c speed in super fine denier b) Successful in establishing Beam sizing at Surat unit c) Establishment of Mist condensers in Spin bath area d) Installation of china filter in spin bath area e) Establishment of linear speed SSM make winding machine in textile department for uniform winding tension and pressure f) Twisters has been developed for 1.8 kg and 2.7 kg SSY packages g) Installation of premix (Japan) for better dyed yarn quality • Development of new shades for customers in premium segment. • Joint projects with customers carried out for CSY yarn operational efficiency improvement. • Outsource coning activities relocated at one place near customer location to reduce the cost. • Developed specialty yarn for sizing segment (60/24 SHG) in CSY. • Enhance dye yarn quality by adopting dye mixer from Japan • Develop the alternate soft finish to improve the BI, WI & YI of PSY yarn • Strengthen the washing process to capture the “Jari” yarn segment for Japan customer • Benchmarking studies carried out with key competitors yarn to identify the improving area • Optimize the glue recipe in CSY super fine denier. b. Fertilisers Division • Continuous efforts are made to prepare steam, power and material balances and

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Aditya Birla Nuvo Limited - Annual Report 2014-2015



• •

III. a. •









to check on the actual performance against design. These measures have helped in increasing the productivity and reduction in overall energy consumption. Efforts are being made along with technology suppliers and technological institutes etc. for exploring the possibility of recovering low grade heat. This would lead to reduction in energy consumption and consequently reduction in CO2 gas emissions, a green house gas, thus abating global warming. The thrust areas for R&D are in new product and process improvement. Development of process and product for customized fertilizers and specialty fertilizers and Organic Zyme. Insulator Division Halol For energy conservation in kilns and dryers, consultancy has been engaged from Germany and a study has been carried out. Consultant from USA has been engaged for process improvement and reduction of technical rejections at drying and firing stages which resulted in: ® Innovation: 100% reuse of ETP sludge in-house for natural resource conservation ® Technology: storage and conditioning of filter cakes ® Shuttle kilns automation for fuel conservation. Effluent Treatment Plant (ETP): The output of ETP is ceramic sludge and treated water. The sludge comes under Hazardous waste class as per GPCB. Extensive R & D has been carried out to recycle and re-use 100%, incorporated the sludge in our body formulation and pilot trial carried and compared the results and found encouraging and now rolled out in commercial production. ETP treated water is discharged after confirming the GPCB norms is being recycled and used in the plant for washing and gardening thereby reduction in input water consumption by about 20%. It is observed more green and fired rejection in high end 765 KV solid core insulators, based on the R & D efforts, the drying and firing cycle profiles have

CMYK

b. •

• •

ii. Benefits derived as a result of above efforts a. Rayon Division • Improvement in process and productive capacity. • There has been value addition in existing product. • There has been significant improvement resulted in dyed yarn quality. • Better quality and marketability of product. • There has been improvement in the customer operational efficiency. • Enhancement of Product Range b. Fertilizers Division • In the year 2014-15, Unit produced 4.55 Lacs MT of value added product “Neem Coated Urea” for the farmers under the brand name “KRISHIDEV”. The process patent has been obtained for the in-house developed technology. In a very short time, Unit has established a leadership position in the field of Neem coated Urea and it has become the preferred choice by the farmer. The Ministry of Fertilisers has allowed the 100% production as Neem Coated Urea. • Customized Fertilizer after the initial gestation period has become the preferred choice of the fertilizer. The farmers have experienced 12-15% enhanced crop yield for Wheat and Paddy and >20% yield for potato and sugarcane. Thus the foundation for a new concept and a strong product line has been established. This will give increasing

commercial benefits in near future. In the year 2014-15, Company achieved production of 0.15 Lakh MT. ii. Insulator Division a. Halol • Due to the reuse and consumption of ETP sludge, the consumption of fresh material has come down and there by the cost impact is about ` 1.75 Crore per annum. • Due to re-use of treated water, the consumption of normal water has come down by 20%. • Due to the development of new product designs for ABB, Alstom and Siemens the market segment has been increased for hollow insulators. b. Rishra • Reduction of curing time from 5 days to 1 day. • Simultaneously assembling of Pins and Caps. • Reduction in curing time and man power. • Creation of space. • Reduction in handling rejection. • Creation of new market and new business opportunities. iv. In case of imported technology (imported during the last three years reckoned from the beginning of the Financial year) – Technology imported: a) Spool Spun yarn Technology from ENKA, Germany - 2011-12; b) Cake Dyeing, Japan-2014-15 The year of import : 2011-12 & 2014-15 Has technology been fully absorbed: Yes v. Expenditure incurred on on Research & Development (R&D) The Company spent ` 2.73 crore for Research & Development work during the year, which was approximately 0.03% of the total revenue. C. FOREIGN EXCHANGE EARNINGS AND OUTGO: The information on foreign exchange earnings and outgo is contained in Notes to accounts as Note Nos. 27, 28 and 31. 79

DIRECTORS’ REPORT



been reviewed and modified and found significant reduction in rejections which has resulted in timely delivery of our product to Powergrid. New products for high end segments – 245 KV hollow insulators have been developed for Alstom, ABB and Siemens to meet new requirements for Circuit breakers, CT and CVT. Rishra Development of Faster curing Cement to reduce Assembly cycle time and Improve productivity. LAPP-USA product development. Development of 210 KN and 420 KN HVDC product.

DIRECTORS’ REPORT - ANNEXURE VI

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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DIRECTORS’ REPORT - ANNEXURE VII

Aditya Birla Nuvo Limited - Annual Report 2014-2015

ANNUAL REPORT ON CSR ACTIVITIES FOR THE FINANCIAL YEAR 2014 – 2015

DIRECTORS’ REPORT

1

A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web link to the CSR policy and projects or programs

:

To actively contribute to the social and economic development of the communities in which we operate. In so doing build a better, sustainable way of life for the weaker sections of society, to contribute effectively towards inclusive growth and raise the country’s human development index. Our projects focus on – education, healthcare, sustainable livelihood, infrastructure development and social reform, epitomizing a holistic approach to inclusive growth. The Company’s CSR Policy can be accessed on: www.adityabirlanuvo.com

2

Composition of the CSR Committee

:

Mrs. Rajashree Birla, Chairperson Ms. Tarjani Vakil, Member Mr. Lalit Naik, Member Dr. (Mrs.) Pragnya Ram- Group Executive President– Corporate Communications and CSR as a Permanent Invitee

3

Average net profit of the company for last three financial years

:

Rs. 470.42 Crore

4

Prescribed CSR Expenditure (two percent of the amount as in Item 3 above)

:

Rs. 9.41 Crore

5

Details of CSR spent during the financial year: Total amount to be spent for the financial year

:

Rs. 9.61 Crore

Amount unspent, if any

:

NIL

Manner in which the amount spent during the financial year APRIL 2014 – March 2015

:

Details given below

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(2)

(3)

Sr. No

CSR Projects/Activity identified

1.

1. Preschool education Education Veraval, Dist. Gir Project Somnath, Gujarat; Balwadies/play schools/ Jagdishpur, Amethi crèches; Strengthening Dist, UP; Rishra, North Anganwadis 24 Parganas, WB 2. School Education Program Jamo, Jagdishpur, Enrolment awareness Shukul Bazar, programmes/events; Formal Singhpur, Tiloi of schools; Education Material Amethi District, UP; (Study materials, Uniform, Anekal Takua and Books etc.); Scholarship Ramnagar District, (Merit and Need based Bengaluru, assistance) Karnataka; KGBV School competitions /Best schools, Krishanagiri teacher award; Cultural Dist:, Tamil Nadu; events Veraval City Dist. Quality of Education Gir Somnath, Gujarat; (support teachers, Improve Rishra, Barasat, 24 education methods); Parganas, West Bengal Specialised Coaching; Exposure visits/awareness Formal schools inside campus(Company Schools) Support to Midday Meal Project 3. Education support Jamo, Jagdishpur, programs: Shukul Bazar, Knowledge Centre/Library; Singhpur, Tiloi of Amethi Adult/Non Formal Education; District, UP; Anekal Celebration of National days; Takua and Ramnagar Computer education; District, Bengaluru, Reducing drop out and KA.; KGBV schools, Continuing Education; Krishanagiri Dist:, TN Kastuba Gandhi Balika Adri; Veraval City Vidyalaya; Career Dist. Gir Somnath, counselling Gujarat; Rishra, Barasat, 24 Parganas, West Bengal 4. Vocational and Technical Anekal, Bengaluru, Education: Karnataka; Rishra & Strengthening ITI’s; Skill Barasat, West Bengal; Based Individual training Jagdishpur, Amethi Programmes Dist, UP; Veraval, Gir Somnath, Gujarat; 5. School Infrastructure: KGBV schools, New School Building Krishanagiri Dist:, TN; Construction; Renovation Schools from Anekal & and Maintenance of School Ramnagar Taluk, buildings; School Sanitation Karnataka; Veraval, & drinking Water; School Gir Somnath, Gujarat; Furniture & Fixtures. Jagdishpur, Amethi Dist, UP 1. Preventive Health Care: Health Jamo, Jagdishpur, Immunization; Pulse Polio Shukul Bazar, Programme; Health Check Singhpur, Tiloi of up camps; Mobile Amethi District, UP;

2.

Sector in which project is covered

(4) Project / Programs Local Area /others Specify the State / District where the Project undertaken

(5)

(6)

Amount Outlay (Budget) Project or Program wise (` in Lakh)

Amount Spent on the Project / Programs Subheads: (1) Direct expenditure on project/ programs (2) Overheads (` in Lakh)

0.12

1.20

93.69

85.69

47.38

48.03

21.71

26.31

92.92

61.85

11.68

7.25

(7)

(8)

Cumulative Expenditure up to reporting period (` in Lakh)

Amount Spent: Direct / through implementation agency*

223.08

All expenses incurred directly by company

518.16

All expenses incurred directly by company

81

DIRECTORS’ REPORT

(1)

DIRECTORS’ REPORT - ANNEXURE VII

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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DIRECTORS’ REPORT - ANNEXURE VII

(1) Sr. No

(2) CSR Projects/Activity identified

(3) Sector in which project is covered

DIRECTORS’ REPORT

Dispensary; Malaria/ Diarrhoea Control Program; School Health Checkups; Yoga and fitness classes

3.

2. Curative Health Care program: Hospitals/ Dispensaries/ Clinics; General Health Check up camps; Specialised Health Camps; Eye Camps; Surgical Camps; Tuberculosis, Skin care and Leprosy care centre 3. Reproductive and Child Health: Mother and Child Care; Adolescent Health Care; Infant and Child Health; Support to Family Planning programmes; Nutritional Programmes for mother and Child 4. Quality / Support Program: Referral services; Treatment of BPL, Old age and Needy patients; HIV-AIDS Awareness; RTI/STD Awareness; Support to differently abled; Ambulance Services; Blood Donations / Grouping 5. Health Infrastructure: Renovation of Health centres; Village / Community Sanitations; Individual Toilets; Repair and installation of new drinking water sources; Water purifications. 1. Agriculture and Farm EnvironBased: ment and Agriculture and Horticulture Livelihood trainings; Transfer of technology; Support to Demonstration Plots; Agricultural implements and inputs; Exposure Visits; Integrated Agriculture / Horticulture programmes;

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(4) Project / Programs Local Area /others Specify the State / District where the Project undertaken

Anekal Takua and Ramnagar District, Bengaluru, Karnataka; KGBV schools, Krishanagiri Dist, Tamil Nadu; Veraval City Dist. Gir Somnath, Gujarat; Rishra, Barasat, 24 Parganas, West Bengal Jagdishpur, Amethi District, UP; Anekal Takua and Ramnagar District, Bengaluru, KA; Veraval, Dist. Gir Somnath, Gujarat; Rishra, Barasat, 24 Parganas, West Bengal

(5)

(6)

Amount Outlay (Budget) Project or Program wise (` in Lakh)

Amount Spent on the Project / Programs Subheads: (1) Direct expenditure on project/ programs (2) Overheads (` in Lakh)

49.64

40.25

Veraval, Dist. Gir Somnath, Gujarat.

1.00

1.03

Jagdishpur, Amethi District, UP; Veraval, Dist. Gir Somnath, Gujarat; Rishra, Barasat, 24 Parganas, West Bengal

2.80

1.75

Jagdishpur, Amethi District, UP; Veraval, Dist. Gir Somnath, Gujarat; Rishra, Barasat, 24 Parganas, West Bengal; Marsur, Anekal taluk, Bengaluru, Karnataka Jamo, Jagdishpur, Shukul Bazar, Singhpur, Tiloi of Amethi District, UP; Veraval Block Dist. Gir Somnath, Gujarat.

949.39

467.88

13.40

9.09

(7) Cumulative Expenditure up to reporting period (` in Lakh)

75.78

(8) Amount Spent: Direct / through implementation agency*

All expenses incurred directly by company

CMYK

Sr. No

(2) CSR Projects/Activity identified

(3) Sector in which project is covered

Soil Health and Organic farming. 2. Animal Husbandry: Animal Vaccination and Treatment; Breed improvement; Milk productivity improvement programmes and Trainings 3. Non-farm & Skills Based Income generation Program: Capacity Building Programmes; Rural enterprise Development and Income Generation programme(IGP) support; Support to SHGs for IGP

4.

5.

4. Natural Resource conservation programs & Non-conventional Energy: Bio gas support Programme; Solar Energy Support; Other energy efficient supports; Plantations; Soil Conservation; Land development; Water Conservation and harvesting structures; Development of Common pasture land; 5. Livelihood Infrastructure: Construction of Check Dams; Lift Irrigation Rural Infrastructure development: Construction and Repair of Health Education/ livelihood projects:

(4) Project / Programs Local Area /others Specify the State / District where the Project undertaken

Jamo, Jagdishpur, Shukul Bazar, Singhpur, Tiloi of Amethi District, UP; Veraval Block, Dist. Gir Somnath, Gujarat Jamo, Jagdishpur, Shukul Bazar, Singhpur, Tiloi of Amethi District, UP; Anekal Talka and Ramnagar District, Bengaluru, Karnataka; Veraval Block Gir Somnath, Gujarat; Rishra, Barasat, 24 Parganas, West Bengal Jamo, Jagdishpur, Shukul Bazar, Singhpur, Tiloi of Amethi District, UP; Veraval Block, Dist. Gir Somnath, Gujarat.

(5)

(6)

Amount Outlay (Budget) Project or Program wise (` in Lakh)

Amount Spent on the Project / Programs Subheads: (1) Direct expenditure on project/ programs (2) Overheads (` in Lakh)

0.60

2.74

78.86

61.42

9.74

2.53

(7) Cumulative Expenditure up to reporting period (` in Lakh)

(8) Amount Spent: Direct / through implementation agency*

0.60 Rural Development projects

Jagdishpur, Jamo, Amethi Dist, UP; Rishra and Barasat, 24 Paragna, West Bengal; Veraval Block, Gir Somnath Dist Gujarat 1. Institutional building & Social Jamo, Jagdishpur, strengthening: Empower- Shukul Bazar, Strengthening and Formation ment Singhpur, Tiloi of of Community Based Amethi District, UP; Organisations/ SHGs Veraval Block, Dist. Gir Somnath, Gujarat; Rishra, Barasat, 24 Parganas, West Bengal 2. Support to development Anekal Takua and organizations: Ramnagar District, Support to Old age Homes; Bengaluru, Karnataka; Orphanages etc. Rishra, Barasat, 24 Parganas, West Bengal

23.24

25.64

25.64

All expenses incurred directly by company

5.22

20.45

30.15

All expenses incurred directly by company

1.80

2.52

83

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DIRECTORS’ REPORT - ANNEXURE VII

DIRECTORS’ REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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DIRECTORS’ REPORT - ANNEXURE VII

(1)

DIRECTORS’ REPORT

Sr. No

(2) CSR Projects/Activity identified

3. Awareness programmes: Community Awareness programmes/ Campaign against social abuse, early marriages, HIV prevention etc. 4. Social Events to minimise causes of poverty: Support to mass marriages, widow remarriages; National days celebrations; Support with basic amenities;

5.

6.

Promotion of heritage/ culture/Sports: Support to rural cultural programmes, Festivals & Melas. Disaster Relief Programs:

Overheads Total (Rs. in Lakh)

(3) Sector in which project is covered

Aditya Birla Nuvo Limited - Annual Report 2014-2015

(4) Project / Programs Local Area /others Specify the State / District where the Project undertaken

(5)

(6)

Amount Outlay (Budget) Project or Program wise (` in Lakh)

Amount Spent on the Project / Programs Subheads: (1) Direct expenditure on project/ programs (2) Overheads (` in Lakh)

Veraval City Dist. Gir Somnath, Gujarat; Rishra, Barasat, 24 Parganas, West Bengal

0.20

0.11

Jamo, Jagdishpur, Shukul Bazar, Singhpur, Tiloi of Amethi District, UP; Anekal Takua and Ramnagar District, Bengaluru, KA; KGBV schools, Krishanagiri Dist:, TN; Adri, Veraval City Dist. Gir Somnath, Gujarat; Rishra, Barasat, 24 Parganas, West Bengal Veraval City Dist. Gir Somnath, Gujarat

2.40

3.63

1.87

1.32

Jamo, Jagdishpur, Shukul Bazar, Singhpur, Tiloi of Amethi District, UP; Veraval City Dist. Gir Somnath, Gujarat; Rishra, Barasat, 24 Parganas, West Bengal

0.20

2.12

(7) Cumulative Expenditure up to reporting period (` in Lakh)

(8) Amount Spent: Direct / through implementation agency*

All expenses incurred directly by company All expenses incurred directly by company

88.45

89.07

1496.61

961.88

6. Reason for not spending two percent of the average net profit of the last three financial years on CSR: In fact, Company has spent more than the 2% average net profit of the last 3 years as it has spent Rs 9.61 Crore as against prescribed expenditure of Rs 9.41 Crore RESPONSIBILITY STATEMENT The Responsibility Statement of the Corporate Social Responsibility Committee of the Board of Directors of the Company is reproduced below: ‘The implementation and monitoring of CSR Policy is in compliance with CSR objectives and policy of the Company.

Lalit Naik Managing Director (DIN: 02943588) 14th May, 2015

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Rajashree Birla Chairperson, CSR Committee (DIN: 00022995)

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

DIRECTORS’ REPORT - ANNEXURE VIII

At the Aditya Birla Group, we expect our executive team to foster a culture of growth and entrepreneurial risk-taking. Our Executive Remuneration Philosophy/Policy supports the design of programs that align executive rewards – including incentive programs, retirement benefit programs, promotion and advancement opportunities – with the long-term success of our stakeholders.

I.

II.

Objectives of the Executive Remuneration Program Our executive remuneration program is designed to attract, retain, and reward talented executives who will contribute to our long-term success and thereby build value for our shareholders. Our executive remuneration program is intended to: 1. Provide for monetary and non-monetary remuneration elements to our executives on a holistic basis 2. Emphasize “Pay for Performance” by aligning incentives with business strategies to reward executives who achieve or exceed Group, business and individual goals. Executives Our Executive Remuneration Philosophy/Policy applies to the following: 1. Directors of the Company 2. Key Managerial Personnel: Chief Executive Officer and equivalent (e.g.: Deputy Managing Director), Chief Financial Officer and Company Secretary. 3. Senior Management

III. Business and Talent Competitors We benchmark our executive pay practices and levels against peer companies in similar industries, geographies and of similar size. In addition, we look at secondary reference (internal and external) benchmarks in order to

IV. Executive Pay Positioning We aim to provide competitive remuneration opportunities to our executives by positioning target total remuneration (including perks and benefits, annual incentive pay-outs, long term incentive pay-outs at target performance) and target total cash compensation (including annual incentive pay-outs) at target performance directionally between median and top quartile of the primary talent market. We recognize the size and scope of the role and the market standing, skills and experience of incumbents while positioning our executives. We use secondary market data only as a reference point for determining the types and amount of remuneration while principally believing that target total remuneration packages should reflect the typical cost of comparable executive talent available in the sector. V.

Executive Pay-Mix Our executive pay-mix aims to strike the appropriate balance between key components: (i) Fixed Cash compensation (Basic Salary + Allowances) (ii) Annual Incentive Plan (iii) Long-Term Incentives (iv) Perks and Benefits Annual Incentive Plan: We tie annual incentive plan pay-outs of our executives to relevant financial and operational metrics achievement and their individual performance. We annually align the financial and operational metrics with priorities/ focus areas for the business. Long-Term Incentive: Our Long-term incentive plans incentivize stretch performance, link executive 85

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Our business and organizational model Our Group is a conglomerate and organized in a manner such that there is sharing of resources and infrastructure. This results in uniformity of business processes and systems thereby promoting synergies and exemplary customer experiences.

ensure that pay policies and levels across the Group are broadly equitable and support the Group’s global mobility objectives for executive talent. Secondary reference points bring to the table, the executive pay practices and pay levels in other markets and industries, to appreciate the differences in levels and medium of pay and build in as appropriate for decision making.

DIRECTORS’ REPORT

Aditya Birla Group: Executive Remuneration Philosophy/Policy

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DIRECTORS’ REPORT - ANNEXURE VIII

DIRECTORS’ REPORT

remuneration to sustained long term growth and act as a retention and reward tool. We use stock options as the primary long-term incentive vehicles for our executives as we believe that they best align executive incentives with stockholder interests. We grant restricted stock units as a secondary long term incentive vehicles, to motivate and retain our executives. VI. Performance Goal Setting We aim to ensure that for both annual incentive plans and long term incentive plans, the target performance goals shall be achievable and realistic. Threshold performance (the point at which incentive plans are paid out at their minimum, but non-zero, level) shall reflect a base-line level of performance, reflecting an estimated 90% probability of achievement. Target performance is the expected level of performance at the beginning of the performance cycle, taking into account all known relevant facts likely to impact measured performance. Maximum performance (the point at which the maximum plan payout is made) shall be based on an exceptional level of achievement, reflecting no more than an estimated 10% probability of achievement. VII. Executive Benefits and Perquisites Our executives are eligible to participate in our broad-based retirement, health and welfare, and other employee benefit plans. In addition to these broad-based plans, they are eligible for perquisites and benefits plans commensurate with their roles. These benefits are designed to encourage long-term careers with the Group.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

Other Remuneration Elements Each of our executives is subject to an employment agreement. Each such agreement generally provides for a total remuneration package for our executives including continuity of service across the Group Companies. We limit other remuneration elements, for e.g. Change in Control (CIC) agreements, severance agreements, to instances of compelling business need or competitive rationale and generally do not provide for any tax gross-ups for our executives. Risk and Compliance We aim to ensure that the Group’s remuneration programs do not encourage excessive risk taking. We review our remuneration programs for factors such as, remuneration mix overly weighted towards annual incentives, uncapped pay-outs, unreasonable goals or thresholds, steep pay-out cliffs at certain performance levels that may encourage short-term decisions to meet pay-out thresholds. Claw back Clause: In an incident of restatement of financial statements, due to fraud or non-compliance with any requirement of the Companies Act 2013 and the rules made thereafter, we shall recover from our executives, the remuneration received in excess, of what would be payable to him/her as per restatement of financial statements, pertaining to the relevant performance year. Implementation The Group and Business Centre of Expertise teams will assist the Nomination & Remuneration Committee in adopting, interpreting and implementing the Executive Remuneration Philosophy/Policy. These services will be established through “arm’s length”, agreements entered into as needs arise in the normal course of business.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

DIRECTORS’ REPORT - ANNEXURE IX

SECRETARIAL AUDIT REPORT For the financial year ended 31st March, 2015

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; We have also examined compliance with the applicable clauses of the Listing Agreements entered into by the Company with the Stock Exchanges. During the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines etc. mentioned above. During the period under review, provisions of the following regulations were not applicable to the Company: (i) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (ii) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (iii) Secretarial Standards issued by The Institute of Company Secretaries of India (since not approved by the Central Government). We further report that The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, NonExecutive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all Directors to schedule the Board meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Decisions at the meetings of the Board of Directors of the Company were carried through on the basis of majority. There were no dissenting views by any member of the Board of Directors during the period under review. We further report that– There are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines referred to above. We further report that during the audit period there was no specific event/action having a major bearing on the Company’ s affairs in pursuance to the above referred laws, rules, regulations, guidelines, etc referred to above.

Place: Mumbai Date:14th May, 2015

For BNP & Associates Company Secretaries Keyoor Bakshi Partner FCS 1844 / CP No.2720

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To The Members ADITYA BIRLA NUVO LIMITED INDIAN RAYON COMPOUND, VERAVAL - 362266, GUJARAT We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to corporate practices by ADITYA BIRLA NUVO LIMITED (hereinafter called ‘the Company’) for the audit period covering the financial year ended on 31st March, 2015. Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit; we hereby report that in our opinion, the Company has, during the audit period generally complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter. We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2015 according to the provisions of: (i) The Companies Act, 2013 (‘the Act’) and the Rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the Rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (iv) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Overseas Direct Investment and External Commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) : (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

DIRECTORS’ REPORT

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Personnel) Rules, 2014]

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BUSINESS RESPONSIBILITY REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

BUSINESS RESPONSIBILITY REPORT

Section A: General Information about the Company 1.

Corporate Identity Number (CIN) of the Company

L17199GJ1956PLC001107

2.

Name of the Company

Aditya Birla Nuvo Limited

3.

Registered Address

Indian Rayon Compound, Veraval, Gujarat – 362 266, India.

4.

Website

www.adityabirlanuvo.com

5.

E-mail ID

[email protected]

6.

Financial Year Reported

1st April, 2014 to 31st March, 2015.

7.

Sector(s) that the Company is engaged in (industrial activity code-wise)

Name of the Sector Rayon Textiles Fertilisers (Agri Business)

8.

List three key products/services that the Company manufactures/provides (as in the Balance Sheet)

9.

Total number of locations where business activity is undertaken by the Company

10. Markets Served by the Company

Code 540341 0105 Urea – 31021000 Liquid Argon 28042100 Liquid Anhydrous Ammonia – 28141000 Customized Fertilizers – 31052000 Organic Manure – 31010099 Bentonite Sulphur – 25030010 Insulators (Power & Energy) 8546 Garments (Fashion & Lifestyle) 0199 (i) Branded Apparels and Accessories (ii) Textiles (iii)Agri Business (Fertiliser, Agro Chemicals and Seeds) i. Number of International Locations (Provide details of major 5): On a standalone basis, Aditya Birla Nuvo Limited does not have any manufacturing Unit outside India. ii. Number of National Locations: 6 National

Section B: Financial Details of the Company 1. 2. 3. 4.

Paid-up Capital (INR) Total Turnover (INR) Total Profit After Tax (INR) Total Spending on Corporate Social Responsibility (CSR) as percentage of Profit After Tax (%)

5.

List of Activities in which expenditure in 4 above has been incurred

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` 13,014 lakhs ` 8,93,826 lakhs ` 52,769 lakhs The total spending on Corporate Social Responsibility (CSR) is 2.04% of the average Net Profit of the Company for the previous three financial years. Education, Medical Relief, Rural Development, Healthcare, Sustainable Livelihood, Women Empowerment, Social Causes and Infrastructure Development.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

BUSINESS RESPONSIBILITY REPORT

1.

Does the Company have any Subsidiary Company/Companies? Yes.

2.

Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s): The Business Responsibility initiatives of the Parent Company apply to its subsidiaries. The Company encourages its subsidiary companies to participate in the community projects/programmes carried out under the aegis of the Aditya Birla Centre for Community Initiatives and Rural Development.

3.

Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%]: The Company does not mandate its suppliers/distributors to participate in the Company’s BR initiatives. However, they are encouraged to adopt such practices and follow the concept of being a responsible business.

Section D: BR Information Details of Director/Directors responsible for BR a)

b)

Details of the Director/Directors responsible for implementation of the BR Policy/Policies DIN Number

:

02943588

Name

:

Mr. Lalit Naik

Designation

:

Managing Director

Details of the BR Head

Sr. Particulars No.

Details

1.

DIN Number (if applicable)

2.

Units

Indian Rayon, Veraval

Jaya Shree Textiles, Rishra

Madura Fashion & Lifestyle

Insulators (Halol and Rishra) & Fertilizers, Jagdishpur

Name

Mr. Bir Kapoor

Mr. S. Krishnamoorthy

Mr. Ashish Dikshit

Mr. Raj Narayanan

3.

Designation

Unit Head

Unit Head

Business Head

Business Head

4.

Telephone number

02876-248401

033-26001200

0806-7271600/2600

Fertilizer, Jagdishpur05361-270032/39 Insulator Halol 02676-221002 Insulator Rishra 033-26723535

5.

e-mail ID

[email protected] adityabirla.com

[email protected] adityabirla.com

[email protected] [email protected] adityabirla.com adityabirla.com

NA

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BUSINESS RESPONSIBILITY REPORT

Section C: Other Details

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2.

Principle-wise (as per NVGs) BR Policy/Policies (Reply in Y/N) The National Voluntary Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business released by the Ministry of Corporate Affairs has adopted nine areas of Business Responsibility. These briefly are as follows: P1 P2

BUSINESS RESPONSIBILITY REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

P3 P4 P5 P6 P7 P8 P9

Businesses should conduct and govern themselves with Ethics, Transparency and Accountability. Businesses should provide goods and services that are safe and contribute to sustainability through their life cycle. Businesses should promote the wellbeing of all employees. Businesses should respect the interests of and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized. Businesses should respect and promote human rights. Businesses should respect, protect and make efforts to restore the environment. Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner. Businesses should support inclusive growth and equitable development. Businesses should engage with and provide value to their customers and consumers in a responsible manner.

Sr.No. Questions

P1

P2

P3

P4

P5

P6

P7

P8

P9

1. 2.

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

3.

4.

5.

6. 7.

8.

9.

10.

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Do you have policy/policies for… Has the policy been formulated in consultation with the relevant stakeholders? Does the policy conform to any National/International Standards? If yes, specify? (50 Words). Has the policy been approved by the Board? If yes, has it been signed by MD / Owner / CEO / Appropriate Board Director? Does the Company have a specified Committee of the Board/Director/ Official to oversee the implementation of the policy? Indicate the link for the policy to be viewed online? Has the policy been formally communicated to all relevant internal and external stakeholders? Does the Company have in-house structure to implement the policy/ policies? Does the Company have a grievance redressal mechanism related to the policy/policies to address stakeholders’ grievances related to the policy/policies? Has the Company carried out independent audit/evaluation of the working of this policy by an internal or external agency?

__

Yes

Y

Y

Y

Y

Y

www.adityabirlanuvo.com . View restricted to employees . The policies are communicated to key internal stakeholders and it is an ongoing process.

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Internal Auditors of the Company from time to time review implementation of these Policies.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

2a. If answer to Sr. No.1 against any principle, is ‘No’, please explain why: (Tick up to 2 options)

2.

3.

4. 5. 6. 3.

P2

The company has not understood the Principles The company is not at a stage where it finds itself in a position to formulate and implement the policies on specified Principles The company does not have financial or manpower resources available for the task It is planned to be done within next 6 months It is planned to be done within the next 1 year Any other reason (please specify)

Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year

Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published? Business Responsibility Report, Social Report on Inclusive Growth and Synergizing Growth with Responsibility (Sustainable Development) are part of the Annual Report. It is published every year. It is also available on the Company’s website www.adityabirlanuvo.com.

Section E: Principle – wise performance Aditya Birla Nuvo Limited (ABNL) is a part of the Aditya Birla Group, which has long standing policies on various aspects of doing business and managing its external interfaces. Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability. 1.

Does the policy relating to ethics, bribery and corruption cover only the Company?

P5

P6

P7

P8

P9

Yes/No. Does it extend to the Group/ Joint Venture/ Suppliers/ Contractors/ NGOs/ Others? The Company’s governance structure guides the organization keeping in mind the core values of Integrity, Commitment, Passion, Seamlessness and Speed. The Corporate Principles and Code of Conduct cover the Company and all its Subsidiaries and are applicable to all the employees of the Company and its subsidiaries.

By the Business CSR Committee on a periodical basis, •

P4

Not Applicable

Governance related to BR •

P3

2.

How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof in about 50 words or so. No stakeholder complaint was received during the year.

Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle. 1.

List upto 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities. The Company is a responsible corporate citizen and is committed to sustainable development and looks at ways to preserve the environment and manage resources responsibly. Being aware of its obligations relating to social and environmental concerns, and risks, the Company’s Customized 91

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1.

P1

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Sr.No. Questions

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

the environmental norms.

Fertilizers Plant is designed for zero effluent. At various stages, emission control measures have been incorporated to keep environmental emission below the environmental norms.

BUSINESS RESPONSIBILITY REPORT

i.

ii.

iii.

2.

IGF has taken several initiatives to reduce consumption of energy and water during its uses. It has implemented ESS project to bring down Energy consumption. Today IGF is the best fertilizer plant amongst the vintage plants in India and second best amongst all fertilizer plants.

Customized fertilizers have been launched to improve the nutrient level efficiency and reduce environmental losses. Indo Gulf Fertilizers Unit (‘the Unit’) has developed and manufactured neem coated urea which promotes slow release of nitrogen and consequential reduction in emission of Green House gases and simultaneously enhancing the growth of farmers. The Unit also produces organic manure for improving organic content of the soil.

IGF has taken several initiatives to reduce consumption of water during its use. It has inbuilt processes to treat process condensate generated in manufacturing and condensate generated, is recycled / reused. Besides this, about 55 % of the total treated effluent water is utilized for irrigation purpose.

To stop any accident due to speed or to avoid any environmental release in the atmosphere, Indian Rayon Unit has installed GPS (Global Positioning System) in the trucks carrying hazardous gases.

Madura Fashion & Lifestyle Unit has introduced a special range in denims called “Oxygeans” which requires very less water for its manufacturing and 80 Ltrs of water is saved on production of every denim trouser.

Madura Fashions & Lifestyle Unit at Bangalore has eliminated the use of Poly Bag and undertakes to recycle plastics, medical waste and water

Jaya Shree Textile Unit has reduced its coal consumption by 13% in last 5 years

For each such product, provide following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional):

(ii) Reduction during usage by consumers (energy, water) has been achieved since the previous year? At Madura Fashion & Lifestyle Unit, Louis Philippe has manufactures perma press range which is procured as non iron shirts. Consumers can iron the garments with less heat which actually saves the power/ energy and also enhances the life of the garment.

At Indo Gulf Fertilizers (IGF) Plant, customised fertilisers have been launched to improve the nutrient level efficiency and reduce environmental losses. IGF has developed and are manufacturing neem coated Urea which promotes slow release of Nitrogen, consequential reduction in emission of Green House Gases and simultaneously enhances growth of farmers. Organic manure is also produced to improve organic content of the soil. The main products at IGF, whose design has incorporated social or environmental concerns, risk and opportunities are Ammonia, Urea, Argon and Customised Fertiliser / Value added product. (i)

Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain? Customised Fertiliser plant is designed for zero effluent. At various stages emission control measures have been incorporated to keep the environmental emission below

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At Indo Gulf Fertilizers Unit, Customised Fertilisers improves agricultural productivity by 10-15 % and reduces environmental losses and Neem Coated Urea improves productivity due to higher nutrient efficiency. 3.

Does the company have procedures in place for sustainable sourcing (including transportation)? (i)

If yes, what percentage of your inputs was sourced sustainably? Also provide details thereof, in about 50 words or so. The Company has built up highly integrated horizontal and vertical integration processes in its operation. All

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BUSINESS RESPONSIBILITY REPORT

the major input under the Company’s control are sourced sustainably.

At Indo Gulf Fertilizers Unit, HDPE bags are procured from local vendors. Local service contractors are employed for providing transport, civil, engineering, manpower supply, and other related services. IGF team visits these plants with the objective of cost optimization by (i) reducing losses during manufacturing stage and (ii) improving efficient use of energy. With the help of the bag suppliers IGF has taken new developmental initiatives. 5.

Madura Fashion & Lifestyle Unit the use of paper carry bags is continued and encouraged over plastic carry bags. Use of plastic hangers of trousers have been completely removed from formal trousers. 4.

The Company has taken various initiatives towards waste management and continuously monitors with a view to ensure reduction in waste generation. Company believes in 3-R Principles (Reduce, Recycle and Reuse). Ammonia / Urea manufacturing processed at Indo Gulf Fertilizers Unit (IGF) is based on total recycling process and adequate measures are incorporated since design stage to recycle 100% of the unfinished/ unconverted components back to process. Besides this, IGF has installed system to reuse treated effluent for irrigation purpose thus reducing quantity of effluent discharge. IGF has constructed a ‘Recharge Pit’ to store rain water for recharging underground water table.

Has the company taken any steps to procure goods and services from local &small producers, including communities surrounding their place of work? If yes, what steps have been taken to improve their capacity and capability of local and small vendors? To ensure a positive impact of sourcing of raw materials and other resources, as well as product distribution and to create employment for the populace, the Company gives priority to procure goods and services from local suppliers and service providers over outside suppliers. At Aditya Birla Insulators Halol, Rishra and Rayon Unit, goods and services are sourced from local suppliers so as to strengthen them financially and with the objective of development of vendors within the vicinity of the Company and getting timely supplies besides the cost advantage in such sourcing. Research & Development team has jointly worked with local vendors for supply of Cap/ Pin/Security clips/ GI Spindles etc. for enhancing their capability. This also reduces pipeline inventory due to reduced transportation. Trainings are provided to workmen and need based visits are in place. At Madura, as a part of CSR promotional activity, MFL is in the process of getting the

Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also provide details thereof in 50 words or so.

At Madura Fashion & Lifestyle Unit, 100% of Sewage Treatment Plant water is utilized for gardening purpose. Improved corrugated cartons have been recycled in MFL for movement of packed shirts from factory locations to central warehouse. At Insulators Rishra, around 5 – 10 % of water is getting recycled and rejects are taken back for recycle. Principle 3 - Businesses should promote the well being of all employees. 1.

Please indicate the Total number of employees (permanent). 18,052 93

BUSINESS RESPONSIBILITY REPORT

At Indo Gulf Fertilizers Unit, Natural Gas is used as major raw material for Ammonia / Urea manufacturing. This gas is supplied by gas pipeline network of Gas Authority of India (GAIL). IGF has signed a Gas Sales & Purchase Agreement and Gas Transport Agreement with GAIL. 100 % of the Natural Gas is sourced on sustainable basis. These agreements lay down various guidelines for the purpose of gas procurement, usage, billing, etc. IGF is having dedicated pipeline for water supply from Gomti river to the plant. As a fall back arrangement, IGF is also having 6 boilers to sustain water supply.

suit cover samples from the orphanage home. If the quality is accepted, some percentage of the suit cover requirement would be procured.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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2.

Please indicate the Total number of employees hired on temporary /contractual/ casual basis. 7,131

3.

Please indicate the Number of permanent women employees.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

* 100% safety training is imparted at the time of joining

Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized. 1.

BUSINESS RESPONSIBILITY REPORT

7,742 4.

Please indicate the Number of permanent employees with disabilities.

Yes. 2.

180 5.

Do you have an employee association that is recognized by management? Yes.

6.

3.

What percentage of your permanent employees is members of this recognized employee association?

No. of complaints No. of complaints filed during the pending as at financial year end of the financial year

1. Child labour / forced Labour / involuntary labour 2. Sexual harassment 3. Discriminatory employment 8.

NIL

NIL

NIL

NIL

NIL

1. Permanent Employees 2. Permanent Women Employees 3. Casual/Temporary/ Contractual Employees 4. Employees with Disabilities

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Tailoring Training Classes for the rural women in co-ordination with IGNOU and Local NGO.



A private school in the vicinity of Rishra has been adopted where the students of underprivileged segment study.



Jute production cum training center for the underprivileged women is undertaken at Jaya Shree Textiles Rishra, to support their regular income generation and the training and market linkage of the product is prepared by them.



We advocate and support the needy people in the society through supporting Old Age, Orphanage centres.



Education Aid support like Uniforms, Notebooks, desk etc. and Skill development programs (computer education), special coaching classes support (Spoken English) to the Rural Govt. Schools students at Madura unit.

NIL

What percentage of your under mentioned employees were given safety & skill upgradation training in the last year?

Sr. Category of Employees No.

Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders. If so, provide details thereof in 50 words or so. The Company endeavors to bring in inclusive growth and the same are channelized through the Aditya Birla Centre for Community Initiatives and Rural Development. Several initiatives for differently-abled people in local communities at various plant locations include:

Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year.

Sr. Category No.

Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders? Yes.

Practically all the non-supervisory permanent employees at manufacturing locations are members of recognized employee association. 7.

Has the company mapped its internal and external stakeholders? Yes/No

Safety Skill Up Training* gradation

100%

84.25%

100%

82.60%

100% 100%

81.79% 74%

Principle 5: Businesses should respect and promote human rights. 1.

Does the policy of the Company on Human Rights cover only the Company or extends to the Group/Joint Ventures /Suppliers / Contractors/NGOs/others?

MK

The Company has in place a Human Rights Policy which extends to Units and Subsidiaries of the Company.

initiatives. The same is also available on the Company’s website www.adityabirlanuvo.com 6.

How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?

Yes, the Emissions/Waste generated by the Company are within the permissible limits given by CPCB/SPCB, and are reported.

No complaints were received during the year. Principle 6: Businesses should respect, protect, and make efforts to restore the environment. 1.

2.

7.

Does the policy related to Principle 6 cover only the company or extends to the Group/ Joint Ventures /Suppliers / Contractors/ NGOs/others? Company’s Safety Health and Environment Policy cover its Units and Subsidiaries. Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc? Y/N. If yes, please give hyperlink for webpage etc.

Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. No show cause/ legal notices received from CPCB/SPCB.

Principle 7: Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner. 1.

Yes, the Company is committed to address issues of global warming and reduction of emission. Please refer to Environment Report of the Annual Report for environmental initiatives taken. The same is also available on the Company’s website www.adityabirlanuvo.com 3.

Are the Emissions/Waste generated by the Company within the permissible limits given by CPCB/SPCB for the financial year being reported?

Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with: The Company is a Member of Association several associations viz. •

Associated Chambers of Commerce & Industry of India



Indian Merchant Chamber



Federation of Indian Chamber of Commerce & Industry



Fertilisers Association of India (FAI)



PHD Chamber of Commerce and Industry of Uttar Pradesh



Associated Chambers of Commerce & Industry of Uttar Pradesh



Confederation of Indian Industry



Federation of Organisation

Has the Company undertaken any other initiatives on – clean technology, energy efficiency, renewable energy, etc. Y/N. If yes, please give hyperlink for web page etc.



Retailer Association of India



National Safety Council



Indian Woolen Mills Federation

The Company has taken several initiatives on clean technology, energy efficiency and renewable energy. Please refer to Annexure VI of the Directors Report of the Annual Report FY 2014 -2015 for energy conservation



Bombay Textiles Research Associations

Does the company identify and assess potential environmental risks? Y/N Yes.

4.

Does the company have any project related to Clean Development Mechanism? If so, provide details thereof in, about 50 words or so. If Yes, whether any environmental compliance report is filed? Yes. Since the projects undertaken by Indo Gulf Fertilizers Unit are monitored by United Nations Framework Convention on Climate Change no Compliance report is submitted.

5.

2.

Indian

Exporters

Have you advocated/lobbied through above associations for the advancement or improvement of public good? Yes/No; if yes specify the broad areas (drop box: 95

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2.

BUSINESS RESPONSIBILITY REPORT

BUSINESS RESPONSIBILITY REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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BUSINESS RESPONSIBILITY REPORT

Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy security, Water, Food Security, Sustainable Business Principles, Others)

Aditya Birla Nuvo Limited - Annual Report 2014-2015

5.

Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words, or so.

Yes, the broad areas are Water, Food, Economic reforms, Environment and Energy issues and sustainable business. The platform has been used to highlight and seek redressal on issues impacting domestic industry survival

Yes, the Company has taken steps to ensure that the Community Initiatives benefit the Community. Projects evolve out of the felt needs of the communities and they are engaged intensely in all of these.

Principle 8: Businesses should support inclusive growth and equitable development.

Principle 9: Businesses should engage with and provide value to their customers and consumers in a responsible manner.

1.

Does the company have specified programmes/initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof. Yes, the Company has formulated a well – defined CSR Policy which focuses on Health, Education, Women Empowerment, Sustainable Livelihood Development, Infrastructure Support and Social Reforms etc.

2.

Are the programmes / projects undertaken through in-house team / own foundation / external NGO /government structures/any other organization? The programmes/projects are undertaken through in-house teams/our foundation as well as in partnership with Non Governmental Organizations (NGOs) and governmental institutions to serve areas of community growth and sustainable development.

3.

Have you done any impact assessment of your initiative? Yes.

4.

What is your Company’s direct contribution to community development projectsAmount in INR and the details of the projects undertaken? Company has spent an amount of Rs. 9.61 Crore on CSR activities on Education, Healthcare, Sustainable Livelihood, Women Empowerment and Infrastructure Development.

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1.

What percentage of customer complaints/ consumer cases are pending as on the end of financial year. The Company has a well-defined system of addressing customer complaints. All complaints are appropriately addressed and resolved.

2.

Does the company display product information on the product label, over and above what is mandated as per local laws? Yes/No/N.A. /Remarks (additional information) The Company displays product information as mandated as per local laws.

3.

Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behavior during the last five years and pending as on end of financial year. If so, provide details thereof, in about 50 words or so. NIL

4.

Did your Company carry out any consumer survey/ consumer satisfaction trends? Yes, Consumer Satisfaction Surveys are being conducted periodically to assess the consumer satisfaction.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

Aditya Birla Nuvo Limited is committed to adoption of best governance practices and its adherence in the true spirit, at all times. Our governance practices are a product of self-desire, reflecting the culture of trusteeship that is deeply ingrained in our value system and reflected in our strategic thought process. At a macro level, our governance philosophy rests on five basic tenets, viz., Board accountability to the Company and shareholders, strategic guidance and effective monitoring by the Board, protection of minority interests and rights, equitable treatment of all shareholders as well as superior transparency and timely disclosures. In line with this philosophy, your Company, a flagship company of the Aditya Birla Group, is striving for excellence through adoption of best

governance and disclosure practices. The Company, as a continuous process, strengthens the quality of disclosures, on the Board composition and its functioning, remuneration paid and level of compliance with various Corporate Governance Codes. Your Company continuously strives to achieve excellence in corporate governance through its values – Integrity, Commitment, Passion, Seamlessness and Speed. Compliance with Corporate Governance Guidelines In terms of Clause 49 of the Listing Agreement entered into with the Stock Exchanges, the details of compliance for the year ended 31st March, 2015 are as follows:

BOARD OF DIRECTORS Composition of the Board As on 31st March, 2015, your Company’s Board comprises of 10 (Ten) Directors, which include 5 Independent Directors, 3 Non-Executive Directors (including a Nominee of LIC) and 2 Executive Directors. The composition of your Board is in conformity with the requirements of Clause 49 of the Listing Agreement as well as the Companies Act, 2013 (“the Act”). Your Directors on the Board are experienced, competent and highly renowned persons in their respective fields. All the Directors are liable to retire by rotation except the Independent Directors whose term of 5 consecutive years was approved by the shareholders of the Company in the Annual General Meeting held on 11th September, 2014. The details of the Directors with regards to their other directorships and positions held in the Committees are as follows:

Mr. Kumar Mangalam Birla (DIN:00012813) Mrs. Rajashree Birla (DIN:00022995) Mr. B. L. Shah4 (DIN: 00017357) Mr. P. Murari (DIN:00020437)

Executive/ Non-Executive/ Independent1

No. of Outside Directorship(s) in other Indian Public Companies2

Outside Committee Positions Held3 Member

Chairman/ Chairperson

Non-Executive

8





Non-Executive

5





Non-Executive

2





Independent

8

4

1

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Name of the Director

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Governance Philosophy

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Name of the Director

Mr. B. R. Gupta (DIN:00020066) Ms. Tarjani Vakil (DIN:00009603) Mr. S. C. Bhargava (DIN:00020021) Mr. G. P. Gupta (DIN:00017639) Dr. Rakesh Jain5 (DIN:00020425) Mr. Lalit Naik6 (DIN:02943588) Mr. Sushil Agarwal (DIN:00060017) Mr. T. Chattopadhyay (DIN:00041581)

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Executive/ Non-Executive/ Independent1

No. of Outside Directorship(s) in other Indian Public Companies2

Outside Committee Positions Held3 Member

Chairman/ Chairperson

Independent

8

4

4

Independent

8

8

4

Independent

10

5

1

Independent

4

3

1

Managing Director

6

2



Managing Director

3





Whole- time Director

5

2



Non Executive

1

1



Notes: 1. Independent Director means a Director as defined under Clause 49 of the Listing Agreement and in Section 149 of the Act. 2. Excluding Directorships held in foreign companies and companies under Section 8 of the Act, 2013. 3. Only two committees viz. the Audit Committee and the Stakeholder Relationship Committee of all public limited companies have been considered. 4. Mr. B.L. Shah ceased to be the Director of the Company with effect from 25th September, 2014. 5. Dr. Rakesh Jain has ceased to be the Managing Director & Director of the Company w.e.f. 1st July, 2014. 6. Mr. Lalit Naik has been appointed as the Managing Director of the Company w.e.f. 1st July, 2014. 7. No Director is related to any other Director on Board, except Mr. Kumar Mangalam Birla and Mrs. Rajashree Birla, who are related as son and mother, respectively. Non-Executive Directors’ Compensation and Disclosure Sitting fees for attending the meetings of the Board/ Committees and Commission paid to the NonExecutive Directors and the Independent Directors have been recommended by the Nomination and Remuneration Committee of the Board and approved by the Board of Directors. The Commission paid is within the overall limits as approved by the shareholders. Details of the Sitting fees / Commission paid to such Directors are given separately in this Report. Board’s Functioning and Procedure The Company’s Board of Directors plays a primary

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role in ensuring good governance and functioning of the Company. The Board’s role, functions, responsibilities and accountabilities are well defined. All relevant information is regularly placed before the Board. The Board reviews compliance reports of all laws as applicable to the Company, as well as steps taken by the Company to rectify instances of non-compliances, if any. The members of the Board have complete freedom to express their opinion and decisions are taken after detailed discussions. The Board meets at least once every quarter to review the quarterly results and other items on the agenda and additional meetings are held as and when necessary.

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Five Board meetings were held during the year ended 31st March, 2015. The details of the Board meetings held during the year under review, dates on which held and number of Directors present are as follows: Date of Board Meeting 20th May, 2014

Board No. of Directors Strength Present 12

10

th

12

10

th

11

9

th

10

9

th

10

8

26 June, 2014 12 August, 2014 12 November, 2014 10 February, 2015

Your Company’s Board plays a pivotal role in ensuring good governance and functioning of your Company. The Directors are professionals, have expertise in their respective functional areas and bring a wide range of skills and experience to the Board.

CORPORATE GOVERNANCE REPORT

The Board has unfettered and complete access to any information within your Company. Members of the Board have complete freedom to express their views on agenda items and can discuss any matter at the meeting with the permission of the Chairman. The Board periodically reviews all the relevant information, which is required to be placed before it pursuant to Annexure X to Clause 49 of the Listing Agreement with the stock exchanges and in particular reviews and approves corporate strategies, business plans, annual budgets, projects and capital expenditure, etc. The Board provides direction and exercises appropriate control to ensure that your Company is managed in a manner that fulfils stakeholder’s aspirations and societal expectations. In addition to the quarterly meetings, the Board also meets to address specific needs and business requirements of your Company.

The details of attendance of each Director at the Board meetings and at the last Annual General Meeting (AGM) are as follows: Name of Director

Category

No. of Board Meetings Held

Attended

Attended Last [email protected]

Mr. Kumar Mangalam Birla

Non-Executive

5

3

No

Mrs. Rajashree Birla

Non-Executive

5

4

No

Mr. B. L. Shah*

Non-Executive

3

3

No

Mr. P. Murari

Independent

5

3

No

Mr. B. R. Gupta

Independent

5

5

Yes

Ms. Tarjani Vakil

Independent

5

5

Yes

Mr. S. C. Bhargava

Independent

5

5

No

Mr. G. P. Gupta

Independent

5

2

No

Dr. Rakesh Jain#

Managing Director

2

2

No

Mr. Lalit Naik

Managing Director

5

5

Yes

Mr. Sushil Agarwal

Whole- time Director

5

5

Yes

Mr. T. Chattopadhyay

Non Executive

5

4

No

@ AGM held on 11th September 2014 at the registered office of the Company-Indian Rayon Compound, Veraval * Mr. B.L. Shah ceased to be the Director of the Company with effect from 25th September, 2014.

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# Dr Rakesh Jain ceased to be the Director of the Company with effect from 30th June 2014.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

Code of Conduct

Prevention of Insider Trading

In compliance with Clause 49 of the Listing Agreement, the Company has adopted a Code of Conduct for the Board Members and Senior Management Personnel (the “Code”). The Code is applicable to all the Board Members and Senior Management of the Company. All the Board Members and Senior Management Personnel have confirmed compliance with the Code. A declaration by Managing Director affirming the compliance of the Code of Conduct for Board Members and Senior Management is annexed at the end of the Report. The Code is available on the Company’s website.

In terms of the provisions of the Securities and Exchange Board of India (Prevention of Insider Trading) Regulation, 1992 your Company has adopted the Code of Conduct for Dealing in Listed Securities of Group Companies (“the Code”). The Code aims at preserving and preventing misuse of unpublished price sensitive information. All the Directors and Designated Employees of your Company have been covered under the Code. The said Code also provides for periodical disclosures from Directors and Designated Employees of your Company.

Board training and Induction

COMMITTEES OF BOARD

A formal letter of appointment together with an induction kit is provided to the Independent Directors at the time of their appointment stating out their roles, functions, duties and responsibilities. The Independent Directors are familiarised with your Company’s businesses and its operations. Interactions are held between the Independent Directors and senior management of your Company.

Your Board has constituted the Committees with specific terms of reference as per the requirements of Clause 49 and the Act. There are 6 such Committees of the Board as elaborated under and the said Committees meet at such frequency as is required to discharge the functions assigned to them.

Performance evaluation of Board A formal evaluation mechanism has been adopted by the Board for evaluating its performance as well as performance of its Committees and the individual directors of the Company. Performance of all directors of the Company has been carried out by way of structured evaluation process and after seeking inputs from all the Directors. Criteria for evaluation included attendance at the meetings, contribution at the meetings, preparedness for meetings, effective decisions making ability, etc. Independent Directors meeting In accordance with the provisions of Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a meeting of the Independent Directors of your Company was held on 10th February, 2015 without the presence of the Non-Independent Directors and the members of the management. The Independent Directors discussed the matters interalia including, the performance/functioning of the Company, flow of information to the Board & Board Committees, etc.

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1) AUDIT COMMITTEE Qualified Independent Audit Committee The Company has an Audit Committee at the Board level with powers and role that are in accordance with Clause 49 of the Listing Agreement and the Act. Composition of Audit Committee, its meetings and attendance at meetings during the year and sitting fees paid The Audit Committee of the Board comprises four Independent Directors. As such, all the members of the Company’s Audit Committee are Independent Directors and are financially literate. The composition of the Audit Committee meets the requirements of Section 177 of the Act and Clause 49 of the Listing Agreement. During the year, the Audit Committee met 7 times to deliberate on various matters. The meetings were held on 21 st April 2014, 20th May 2014, 26th June 2014, 12th August 2014, 12th November 2014, 9th January 2015 and 10th February 2015.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

CORPORATE GOVERNANCE REPORT

The composition, attendance and sitting fees paid are as follows: Category

No. of meetings Held

Attended

Sitting fees paid (in `)

Ms. Tarjani Vakil (Chairperson)

Independent

7

7

150,000

Mr. P. Murari

Independent

7

4

90,000

Mr. B. R. Gupta

Independent

7

7

150,000

Mr. G. P. Gupta

Independent

7

3

70,000

Ms. Tarjani Vakil is the Chairperson of the Committee. Permanent Invitees

Role

Mr. Lalit Naik

1. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

Mr. Sushil Agarwal - Whole time Director & Chief Financial Officer The Statutory and Internal Auditors of your Company attend the Audit Committee meetings. The representatives of the Cost Auditors are invited to attend the Audit Committee meetings whenever matters relating to Cost Audit are considered. The Company Secretary acts as the Secretary to the Committee. The Committee acts as a link between the management, the statutory and internal auditors and the Board of Directors and oversees the financial reporting process. The Audit Committee monitors and supervises your Company’s financial reporting process with a view to provide accurate, timely and proper disclosure and maintain the integrity and quality of financial reporting. The Audit Committee also reviews from time to time, the audit and internal control procedures, the accounting policies of your Company, oversight of your Company’s financial reporting process so as to ensure that the financial statements are correct, sufficient and credible. Powers 1. To investigate any activity within its terms of reference. 2. To seek information from any employee. 3. To obtain outside legal or other professional advice. 4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

2. Recommendation for appointment, remuneration and terms of appointment of auditors of the company. 3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. 4. Reviewing, with the management, the annual financial statements and auditor’s report thereon before submission to the board for approval, with particular reference to: a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013; b. Changes, if any, in accounting policies and practices and reasons for the same; c. Major accounting entries involving estimates based on the exercise of judgment by management; d. Significant adjustments made in the financial statements arising out of audit findings; e. Compliance with listing and other legal requirements relating to financial statements; f.

Disclosure of any related party transactions;

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Name of Member

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g. Qualifications in the draft audit report; 5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval.

CORPORATE GOVERNANCE REPORT

6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. 7. Review and monitor the auditor’s independence and performance, and effectiveness of audit process. 8. Approval or any subsequent modification of transactions of the company with related parties. 9. Scrutiny of inter-corporate loans and investments. 10. Valuation of undertakings or assets of the company, wherever it is necessary.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

scope of audit as well as post-audit discussion to ascertain any area of concern. 17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. 18. To review the functioning of the Whistle Blower mechanism; 19. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate. 20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. Audit Committee reviews the following information 1. Management Discussion and Analysis of financial condition and results of operations;

11. Evaluation of internal financial controls and risk management systems.

2. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;

12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.

3. Management letters / letters of internal control weaknesses issued by the Statutory Auditors, if any;

13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. 14. Discussion with internal auditors of any significant findings and follow up there on. 15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. 16. Discussion with statutory auditors before the audit commences, about the nature and

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4. Internal audit reports and discussion with the Internal Auditors on any significant findings and follow-up thereon; 5. The appointment, removal and terms of remuneration of the Internal Auditor. During the year, the Audit Committee has reviewed the internal controls put in place to ensure that the accounts of your Company are properly maintained and that the accounting transactions are in accordance with prevailing laws and regulations. In conducting such reviews, the Committee found no material discrepancy or weakness in the internal control system of your Company. The Committee has also reviewed the procedures laid down by your Company for assessing and managing the risks.

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CORPORATE GOVERNANCE REPORT

2) NOMINATION AND REMUNERATION COMMITTEE (formerly known as ESOS Compensation Committee) Composition, meetings, attendance during the year and sitting fees paid In terms of the provisions of Section 178 of the Act, your Company has renamed its existing ESOS Compensation Committee as the

Nomination and Remuneration Committee. The Committee comprises of 2 (two) Independent Directors and 1 (one) Non executive Director. Ms. Tarjani Vakil, an Independent Director, is the Chairperson of the Committee. During the year, the Committee met thrice to deliberate on various matters. The meetings were held on 26th June 2014, 12th November 2014 and 10th February 2015 respectively.

The composition, attendance and sitting fees paid are as follows: Name of Member

Category

No. of meetings

Sitting fees paid (in `)

Held

Attended

Non Executive

3

1

20,000

Ms. Tarjani Vakil

Independent

3

3

60,000

Mr. B. R. Gupta

Independent

3

3

60,000

Mr. Kumar Mangalam Birla

Terms of reference of the Nomination and Remuneration Committee

Employee Stock Options Scheme – 2006 (“ESOS-2006”)

The Nomination Committee is authorised to:

During the year, 5,430 Stock Options were vested in the eligible employees, subject to the provisions of the Employee Stock Options Scheme – 2006, statutory provisions including Securities and Exchange Board of India (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as may be applicable from time to time and the rules and procedures set out by your Company in this regard. Further, the Committee allotted 52,221 equity shares of ` 10 each of your Company to Option Grantee pursuant to the exercise of Stock Options under the ESOS -2006.

-

set the level and composition of remuneration which is reasonable and sufficient to attract, retain and motivate directors and Senior Managers of the quality required to run the Company successfully;

-

set the relationship of remuneration to performance;

-

check whether the remuneration provided to directors and Senior Managers includes a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals;

-

formulate appropriate policies , institute processes which enable the identification of individuals who are qualified to become Directors and who may be appointed in senior management and recommend to the same to the Board;

Employee Stock Options Scheme – 2013 (“ESOS-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 – 2013”). 12,559 Stock Options have vested in the option grantees in terms of the provisions of the Scheme 2013.

review and implement succession and development plans for Managing Director Executive Directors and Senior Managers;

-

devise a policy on Board diversity;

Remuneration Policy

-

formulate the criteria for determining qualifications, positive attributes and independence of directors

Your Company has adopted Executive Remuneration Philosophy/Policy and follows the same.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

3) RISK MANAGEMENT COMMITTEE In terms of the provisions of the Listing Agreement, your Company has constituted the Risk Management Committee. The Risk Management Committee is mandated to review the risk management process of your Company.

CORPORATE GOVERNANCE REPORT

The objectives and scope of the Risk Management Committee broadly include: •

Identification of risk relating to business;



Assessment and classification of risk associated with the business;



Mitigation plans to minimize risk;



Monitoring various risk

The Management Discussion and Analysis Report sets out the risks identified and the mitigation plans thereof. The Risk Management Committee comprises of three Independent Director, two Executive Directors and three Business Executives. During the year, the Risk Management Committee met twice to deliberate on various matters. The meetings were held on 2 nd December, 2014 and 12th December, 2014.

The composition, attendance and sitting fees paid to the non-executive Directors are as follows: Name of Member

Category

No. of meetings Held

Attended

Sitting fees paid (in `)

Ms. Tarjani Vakil

Independent

2

2

40,000

Mr. S C Bhargava

Independent

2

2

40,000

Mr. G P Gupta

Independent

2

2

40,000

Mr. Lalit Naik

Managing Director

2

1

-

Mr. Sushil Agarwal

Whole time Director

2

1

-

4) Stakeholder Relationship Committee Composition, meeting, attendance and sitting fees paid during the year: In terms of the provisions of Section 178 of the Act and the Listing Agreement, your Company

has renamed its existing Share Transfer and Shareholder / Investor Grievance Committee as Stakeholder Relationship Committee. The Stakeholder Relationship Committee comprises of three Independent Director and two Executive Directors.

During the year the Stakeholder Relationship Committee met on 23rd March 2015. The composition, attendance and sitting fees paid are as follows: Name of Member

Category

No. of meetings Held

Attended

Sitting fees paid (in `)

Mr. G P Gupta

Independent

1

1

20,000

Mr. P Murari

Independent

1

-

-

Mr. S C Bhargava

Independent

1

1

20,000

Mr. Lalit Naik

Managing Director

1

1

-

Mr. Sushil Agarwal

Whole time Director

1

-

-

Mr. G. P. Gupta chaired the meeting of the Committee. The Company Secretary acts as Secretary to the Committee and is the Compliance Officer of the Company and also responsible for redressal of investor complaints.

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Your Company’s shares are compulsorily traded in the dematerialised form. To expedite transfers in the physical segment, necessary authority has been delegated by your Board to Director(s) and Officers of your Company to approve transfers / transmissions of shares / debentures. Details of share transfers / transmissions approved by the Directors and Officers are placed before the Board.

“Shareholder Information” section of this Annual Report. Details of non-compliance by the Company, penalties and strictures imposed on the Company by stock exchanges or SEBI or any other statutory authority, on any matter relating to capital markets, during the year There has been no instance of non-compliance by the Company on any matter related to capital markets during the year under review and hence no strictures /penalties have been imposed on the Company by the stock exchanges or the Securities and Exchange Board of India (SEBI) or any statutory authority.

Role The Committee looks into: -

issues relating to share / debenture holders including transfer/transmission of shares/ debentures;

-

issue of duplicate share/debenture certificates;

-

non-receipt of dividend;

-

non receipt of annual report;

-

non-receipt of share certificate after transfers;

-

delay in transfer of shares;

-

any other complaints of shareholders.

5) Corporate Social Responsibility Committee Composition, meeting, attendance and sitting fees paid during the year: In terms of the provisions of Section 135 of the Act and the Listing Agreement, your Company has constituted the Corporate Social Responsibility Committee at the Board level.

Number of shareholders’ complaint received so far / number not solved to the satisfaction of shareholders / number of pending complaints

The Corporate Social Responsibility Committee comprises of one Independent Director, one Non Executive Director and one Executive Director. Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR is a permanent invitee.

Details of complaints received, number of shares transferred during the year, time taken for effecting these transfers and the number of share transfers pending are furnished in the

During the year the Corporate Social Responsibility Committee met twice. The meetings were held on 17th June 2014 and th 17 February 2015.

The composition, attendance and sitting fees paid in respect of CSR Committee are as follows: Name of Member

Category

No. of meetings

Sitting fees paid (in `)

Held

Attended

Non Executive

2

2

40,000

Independent

2

2

40,000

Mr. Lalit Naik

Managing Director

2

1

-

Dr. Rakesh Jain*

Managing Director

1

1

-

Mrs. Rajashree Birla Ms. Tarjani Vakil

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*Dr. Rakesh Jain, ceased to be the Director of the Company w.e.f. 30th June 2014

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

Mrs. Rajashree Birla chaired the meetings of the Committee. The Company Secretary acts as Secretary to the Committee.

Mr. S.C. Bhargava, Mr. Lalit Naik and Mr. Sushil Agarwal as members. Ms. Tarjani Vakil chaired the meeting of the Committee. The Committee looks into the fund and non fund based limits for the business of the Company, authorised officers to undertake all types of foreign currency contracts for hedging its foreign currency liabilities/ transactions, authorised person to open/ operate/close any bank accounts, approve the grant and execution of Power of Attorneys to the employees of the Company, etc.

CORPORATE GOVERNANCE REPORT

The Committee recommends to the Board the activities to be undertaken during the year and amount to be spent on these activities. During the year, your Company has carried out various activities as part of its CSR initiative. The focus areas have been health care, education, sustainable livelihood, infrastructure and social reform. 6) Finance Committee

During the year under review, the Committee met once to deliberate on various matters Your Company has “Finance Committee” referred above. The meeting was held on comprising of Ms. Tarjani Vakil, Mr. P. Murari, 15th January 2015. The composition, attendance and sitting fees paid in respect of meeting of Finance Committee are as follows: Name of Member

Category

No. of meetings Held

Attended

Sitting fees paid (in `)

Mr. P. Murari

Independent

1

0

-

Ms. Tarjani Vakil

Independent

1

1

20,000

Mr. S. C. Bhargava

Independent

1

1

20,000

Mr. Lalit Naik

Managing Director

1

1

-

Mr. Sushil Agarwal

Whole-time Director

1

1

-

VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has in place a Vigil Mechanism under which a Committee has been appointed comprising of Directors and Senior Managers of the Company for attending the complaints received from the employees and to report concerns about the unethical behaviour, actual or suspected fraud and violation of the Code of Conduct or Ethics Policy by the Directors and the employees of the Company. The policy is in line with the Company’s Code of Conduct, Vision and Values and forms part of good Corporate Governance and is available to all the employees on the Aditya Birla Group intranet. SUBSIDIARY COMPANIES The Audit Committee reviews the consolidated financial statements of the Company and investments made by its unlisted subsidiary

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companies. The minutes of the board meetings along with a report on significant developments of the unlisted subsidiary companies are periodically placed before the Board of Directors of the Company. RELATED PARTY TRANSACTIONS During the financial year, your Company has entered into related party transactions which were on arm’s length basis and in the ordinary course of business. There are no material transactions with any related party as defined under Section 188 of the Act. All related party transactions have been approved by the Audit Committee of your Company. Particulars of related party transactions are listed out in Note 42 of the Accounts. The policy on Related Party Transactions as approved by the Audit Committee and the Board is available on your Company’s website viz. www.adityabirlanuvo.com.

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DISCLOSURES Disclosure of Accounting treatment Your Company has followed all relevant Accounting Standards while preparing the financial statements. Management: -

The Management Discussion and Analysis forms part of the Annual Report and are in accordance with the requirements laid out in Clause 49 of the Listing Agreement.

-

No material transaction has been entered into by the Company with the Promoters, Directors or the Management, their subsidiaries or relatives etc. that may have a potential conflict with interests of the Company.

-

Your Company has instituted a comprehensive Code of Conduct in compliance with the SEBI regulations on prevention of insider trading.

Proceeds from Public Issues, Right Issues, Preferential Issues etc.: The Company follows the practice of disclosing to the Audit Committee, the uses/applications of proceeds/funds raised, if any, from public issues, private placement of non- convertible debentures, preferential issue etc., as part of quarterly review of financial results. Remuneration of Directors: Based on the recommendation of the Nomination Committee, all decisions relating to the

CORPORATE GOVERNANCE REPORT

remuneration of the Directors are taken by the Board of Directors of your Company in accordance with the shareholder’s approval, wherever necessary. During the financial year 2014-15, the Board has revised the Sitting fees for attending the Board and Committee meetings from Rs 20,000 per meeting of the Board or Committee thereof to Rs. 50,000 per meeting of the Board; Rs. 25,000 per meeting of the Audit Committee and Rs. 20,000 per meeting for the other Committee of the Board. The Company also pays commission to the Non-Executive Directors of the Company. For the Financial year 2014-15, considering the financial performance of the Company, the Board has decided to pay commission of Rs. 4.50 Crore (Previous Year: Rs. 4.50 Crore) to the Non-Executive Directors of the Company, which is within the limit of 1% of the net profits of the Company, and pursuant to the authority given by the Shareholders at the Annual General Meeting of the Company held on 11 th September 2014. The amount of commission payable to the Non-Executive Directors is determined after assigning weightage to attendance, type and significance of meeting and preparations required, time spent, etc. Based on the performance evaluation of the Director and the remuneration policy, the amount of commission payable has been fixed by the Board. The Company also reimburses the out-of-pocket expenses incurred by the Directors for attending the meetings.

Details of remuneration paid to the Directors for attending the meetings in the financial year 2014-15 are as follows: Name of the Director

Commission Payable (` in lakh)

Sitting Fees Paid (` in lakh)

No of Shares [email protected]

410.60

0.80

4,609

15.25

1.80

127,634

Mr. B. L. Shah

1.40

0.60

-

Mr. P. Murari

2.70

2.10

-

Mr. B. R. Gupta

4.70

3.70

-

Ms. Tarjani Vakil

5.55

4.70

177

Mr. S. C. Bhargava

3.15

2.40

233

Mr. G. P. Gupta

4.80

2.30

339

Mr. T. Chattopadhyay

1.85

1.10

-

Mr. Kumar Mangalam Birla* Mrs. Rajashree Birla

* Excluding 150 shares held as Karta of H.U.F.

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@ Considered only shares held singly or as first shareholder.

CORPORATE GOVERNANCE REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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CORPORATE GOVERNANCE REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

The details of remuneration paid to the Managing Director/ Whole-time Director is as follows:

CORPORATE GOVERNANCE REPORT

Managing Director / Whole - time Director

No of Shares held

Remuneration during 2014-15 All elements of Performance Service remuneration linked, incentives contracts, package i.e. along with notice period, salary, benefits, performance severance fee pensions etc. criteria (a) (` in lakh) (` in lakh)

Mr. Lalit Naik

NIL

256.04

264.45

Dr. Rakesh Jain

18,517

557.35

115.07

Mr. Sushil Agarwal

2,667

174.59

124.73

See note (4)

Stock option details, if any

See note (6)

Notes: 1. No Director is related to any other Director on the Board, except for Mr. Kumar Mangalam Birla and Mrs. Rajashree Birla, who are son and mother, respectively. 2. The Company has a policy of not advancing any loans to its Directors except to Executive Directors in the course of normal employment. 3. The appointment of Executive Directors is subject to termination by three months’ notice in writing by either side. 4. No severance fees are paid to any Director of the Company. 5. Performance Review System is primarily based on competencies and values. The Company closely monitors growth and development of top talent in the Company to align personal aspiration with the organization’s purpose. 6. Details of Options and RSUs granted to the Executive Directors during the year are set out below as also in Annexure to the Directors’ Report.

A) Details of Stock Options granted to the Directors under Employee Stock Scheme – 2006 (ESOS - 2006) are as under: Name of the Director

Dr. Rakesh Jain^

Mr. Sushil Agarwal

Tranche 1 (Exercise Price - ` 687) No. of Options Granted

Vesting Date / %

Exercise No. of Period Options (within) Exercised / Date

13,470

23.08.08 (25%) 23.08.09 (25%)

22.08.13

23.08.10 (25%)

22.08.15

23.08.11 (25%) 4,040

No. of Options Granted

Vesting Date / %

Exercise No. of Period Options (within) Exercised / Date

6,730

08.09.11 25% 08.09.12 (25%)

07.09.16

3368 on 24.06.14

08.09.13 (25%)

07.09.18

1682 on 24.06.14

22.08.16

3367 on 24.06.14

-

-

-

23.08.08 (25%)

22.08.13

1,010 on 22.08.13

08.09.11 (25%)

07.09.16

-

23.08.09 (25%)

22.08.14

1010 on 11.08.14

08.09.12 25%

07.09.17

-

23.08.10 25%

22.08.15

-

08.09.13 25%

07.09.18

-

23.08.11 25%

22.08.16

-

08.09.14 25%

07.09.19

-

^Ceased to be in employment of the Company

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108

Tranche 4 (Exercise Price - ` 697)

22.08.14

3,368 on 28.06.13 3367 on 24.06.14

5,222

07.09.17

1682 on 24.06.14 1683 on 24.06.14

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

CORPORATE GOVERNANCE REPORT

B) Details of Stock Options / Restricted Stock Units granted to the Directors under Employee Stock Options Scheme- 2013 (ESOS – 2013)

Mr. Sushil Agarwal

Mr. Lalit Naik

Tranche No. of Stock Stock Options Tranche 1 Exercise Price `1239.80

Tranche 3 Exercise Price `1726.95

26,230

32,766

*Vesting Date/ %

07.12.2014 (25%) 07.12.2015 25% 07.12.2016 25% 07.12.2017 25% 12.11.15 (25%) 12.11.16 25% 12.11.17 25% 12.11.18 25%

Exercise No. of Period Restricted (within) Stock Units Granted 07.12.19

**Vesting Date/ %

Exercise period (within)

9,443

All RSUs All RSUs granted, will vested, shall vest, on 7th be exercised December, within 7th 2016 December, 2021

11,804

All RSUs All RSUs granted, will vested, shall vest on 7th be exercised December, within 7th 2017 December, 2022

07.12.20 07.12.21 07.12.22 12.11.20 12.11.21 12.11.22 12.11.23

*Subject to the performance Target as determined by Nomination & Remuneration Committee for each of the Vesting **Linked to continued employment with the Company All decisions relating to the remuneration of the Managing Director and the Whole time Director is taken by the Board based on the remuneration policy and in terms of the resolution passed / to be passed by the shareholders of your Company.

The Managing Director and the Chief Financial Officer of your Company have issued necessary certificate pursuant to the provisions of Clause 49 of the Listing Agreement and the same is attached and forms part of the Annual Report. REPORT ON CORPORATE GOVERNANCE The Corporate Governance Report forms part of the Annual Report. Your Company complies with the provisions of Clause 49 of the Listing Agreement with the stock exchanges. COMPLIANCE Certificate from the Statutory Auditors confirming compliance with all the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchanges forms part of the Annual Report. Details of new Directors and Directors seeking re-appointment: The Company has provided the details of new

Directors and Directors seeking re-appointment in the Notice of the Annual General Meeting. Quarterly Presentations on the Company results are available on the website of your Company (www.adityabirlanuvo.com / and the Aditya Birla Group website (www.adityabirla.com). The Company also sends results / press - release by email (wherever available) to shareholders immediately after the announcement of results. The hard and soft copies are also sent to the concerned Stock Exchanges simultaneously so as to enable them to put the results and press-release on their notice board/ website. General Body Meetings: Details of Annual General Meetings: During the preceding three years, the Company’s Annual General Meetings (AGMs) and also the Extra Ordinary General Meeting (EGM) were held at the Registered Office of the Company at Indian Rayon Compound, Veraval - 362 266, Gujarat.

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CEO/ CFO Certification:

CORPORATE GOVERNANCE REPORT

Name of the Director

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CORPORATE GOVERNANCE REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

The date and time of such meetings held during the last three years, and the special resolution(s) passed thereat, are as follows:

CORPORATE GOVERNANCE REPORT

Year

AGM/EGM

Date

Time

Special Resolution Passed

2011-12

EGM

25th April, 2012

11:30 A.M.

Yes1

2011-12

AGM

9th August, 2012

11:30 A.M.

Yes2

2012-13

AGM

6th September, 2013

11:30 A.M.

Yes3

2013-14

AGM

11th September, 2014

11:30 A.M.

Yes4

1

For the issue and allotment of Warrants to Promoter and /or Promoter Group on a preferential basis.

2

For payment of commission to Non-Executive Directors.

3

For approval of terms of Appointment and Remuneration of Whole-time Director(s) and approval of Employee Stock Options Scheme-2013 for the benefit of the employees of the Company and its Subsidiaries.

4

For approval of terms of Appointment of Whole-time Director(s) liable to retire by rotation and approval of payment of Remuneration to Non-Executive Directors and approval of the offer or invitation to subscribe to Non Convertible Debentures on a private placement basis. MEANS OF COMMUNCIATION Quarterly Results Newspaper in which normally financial results are published in: Newspaper

Cities of Publication

Business Standard

All editions

Economic Times

All editions (Snapshot)

Western Times

Gujarati (Ahmedabad)

Website, where displayed the information

: www.adityabirlanuvo.com

Whether it also displays official news releases

: Yes

Presentations made to investors/analysts

: Yes

Shareholders’ Information

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: Published as a separate section in this report.

Status of Compliance of Non-Mandatory Requirements: 1) The Company maintains a separate office for the Non-Executive Chairman. All necessary infrastructure and assistance are made available to enable him to discharge his responsibilities effectively. 2) During the year under review, there was no audit qualification in the company’s statutory financial statements. 3) The quarterly, half-yearly and annual financial results of the Company are furnished to the Stock Exchanges and published in the newspapers as per the requirements of the Listing Agreement and the same are also posted on the website of the Company. 4) The Internal Auditors of the Company make presentations to the Committee on the findings of their report.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

CORPORATE GOVERNANCE REPORT

CEO/CFO CERTIFICATION To, The Board of Directors Aditya Birla Nuvo Limited. We have reviewed the financial statements and the cash flow statement of Aditya Birla Nuvo Limited for the year ended 31st March, 2015 and to the best of our knowledge and belief: a)

these statements do not contain any materially untrue statement or omit any material fact or contain statement that might be misleading;

b)

these statements together present a true and fair view of the Company’s affairs and are in compliance with the existing accounting standards, applicable laws and regulations.

2.

To the best of our knowledge and belief, no transactions entered into by the Company during the year ended, are fraudulent, illegal or violative of the Company’s Code of Conduct.

3.

We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of the internal control systems of the Company pertaining to the financial reporting.

4.

We have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or proposed to be taken to rectify the deficiencies.

5.

We have indicated to the Auditors and the Audit committee:I.

significant changes in the Company’s internal control over financial reporting during the year;

II.

significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

III. instances of significant fraud of which we have become aware and involvement therein, if any, of the management or other employees having a significant role in the Company’s internal control system over financial reporting.

Place: Mumbai Date: 14th May, 2015

Lalit Naik Managing Director

Sushil Agarwal Whole-time Director & CFO

DECLARATION As provided under Clause 49 of the Listing Agreement with the Stock Exchange(s), I hereby declare that all the Directors and Senior Management personnel of the Company have affirmed the Compliance with the Code of Conduct for the year ended 31st March, 2015.

Lalit Naik Managing Director

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Place: Mumbai Date: 14th May, 2015

CORPORATE GOVERNANCE REPORT

1.

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SHAREHOLDERS’ INFORMATION

Aditya Birla Nuvo Limited - Annual Report 2014-2015

SHAREHOLDERS’ INFORMATION

1. Annual General Meeting Date and Time Venue

: :

15th September, 2015 at 11:30 a.m. Registered Office: Club Auditorium at Indian Rayon Compound Veraval - 362 266 Gujarat, India

2. Financial Calendar for Reporting Financial reporting for the quarter ending June 30, 2015 Financial reporting for the half year ending September 30, 2015 Financial reporting for the quarter ending December 31, 2015 Financial reporting for the year ending March 31, 2016 Annual General Meeting for the year ended March 31, 2016 3. Dates of Book Closure

:

August, 2015

: : : : :

4. Dividend Payment Date 5. Registered Office & Investor Service Centre

: :

November, 2015 February, 2016 May, 2016 August / September, 2016 4th September, 2015 to 15th September, 2015 (both days inclusive) On or after18th September, 2015 Indian Rayon Compound, Veraval - 362 266, Gujarat, India. Phone: (02876) 245711/248629 Fax: (02876) 243220 Email: [email protected] Web: www.adityabirlanuvo.com CIN: L17199GJ1956PLC0011007

6. (a) Listing Details: Equity Shares

Non-Convertible Debentures

Global Depository Receipts (GDRs)

1. BSE Limited (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 2. National Stock Exchange of India Ltd (NSE) Exchange Plaza, Plot No. C-1, G- Block, Bandra Kurla Complex, Bandra (East), Mumbai- 400 051

BSE Limited (BSE) Luxembourg Stock Phiroze Jeejeebhoy Towers, Exchange Dalal Street, Societe de la Bourse de Mumbai - 400 001 Luxembourg Postal Address: B.P. 165 L-2011 Luxembourg. Mailing Address: 35A, Boulevard Joseph II, L-1840, Luxembourg.

Note: Listing Fees for the year 2015-16 has been paid to the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). Listing fee for the GDRs has been paid to Luxembourg Stock Exchange (LSE) for the calendar year 2015. (b) Overseas Depository for GDRs

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Citibank N.A.,Depository Receipts 388 Greenwich Street,New York, NY – 10013, USA Phone:001-212-657-8782 Fax:001-212-825-5398

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(c) Domestic Custodian of GDRs

(d) Debt Securities (e) Debenture Trustees:

ICICI Bank Limited Securities Market Services F7/E7 1st Floor, Empire Complex 414, Senapati Bapat Marg, Lower Parel, Mumbai -400 013 Phone: (+91-22) 66672000 Fax: (+91-22) 66672779/40 The Wholesale Debt Market (WDM) segment of BSE. IDBI Trusteeship Services Limited (for 29th, 30th and 31st series Debentures) Asian building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai 400001 Tel: +91 22 40807000 Fax: +91 22 40807080 Email: [email protected]

7. Stock Code: Stock Code

Reuters

Bloomberg

Bombay Stock Exchange

500303

ABRL.BO

ABNL IB

National Stock Exchange

ABIRLANUVO

ABRL.NS

NABNL IN

IRYN.LU

IRIG LX

Global Depository Receipts (GDRs) ISIN No. of Equity Shares

INE069A01017

ISIN No. of GDRs

US0070271137

8. Stock Price Data:

Apr-14 May-14 Jun- 14 Jul- 14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15

BSE Limited High

Low

Close

1174.70 1416.45 1515.00 1486.45 1542.00 1738.00 1704.35 1912.85 1825.00 1872.00 1848.00 1780.00

(In `) 1061.35 1078.25 1299.45 1311.05 1392.70 1423.00 1580.00 1667.15 1551.00 1675.00 1680.00 1585.10

1107.05 1304.70 1382.85 1476.90 1446.90 1624.40 1681.90 1791.40 1689.10 1794.75 1719.10 1662.65

National Stock Exchange Av. Volume (In Nos.) 9,468 11,516 12,380 31,273 3,556 6,441 6,204 8,915 6,796 5,985 3,097 4,934

High

Low

Close

1,162.75 1,414.90 1,515.90 1,487.00 1,544.25 1,739.40 1,707.50 1,916.15 1,824.05 1,856.60 1,849.00 1,780.30

(In `) 1,060.00 1,075.50 1,293.55 1,310.05 1,390.00 1,422.35 1,580.00 1,669.10 1,550.00 1,675.00 1,680.05 1,586.00

1,107.05 1,303.10 1,380.30 1,476.30 1,453.80 1,620.50 1,682.60 1,794.95 1,689.15 1,797.55 1,720.95 1,663.90

Av. Volume (In Nos.) 173,817 215,534 182,025 177,395 168,804 282,509 139,860 227,474 139,114 138,801 111,418 220,886

Luxembourg Stock Exchange High Low Close (In US$) 19.13 17.74 23.81 18.12 24.38 22.37 24.39 22.00 25.26 22.93 28.53 23.83 27.71 25.76 29.81 27.28 29.18 25.11 30.02 26.48 29.44 27.39 28.55 25.31

18.36 22.06 23.02 24.39 23.91 26.13 27.40 28.80 26.70 29.03 27.90 26.53

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Year/Month

SHAREHOLDERS’ INFORMATION

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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SHAREHOLDERS’ INFORMATION

Aditya Birla Nuvo Limited - Annual Report 2014-2015

9. Stock Performance: 180 ABNL 170 SENSEX 160 NIFTY 150 140 130

110

31 -0 320 15

31 -0 120 15 28 -0 220 15

31 -1 220 14

30 -1 120 14

31 -1 020 14

30 -0 920 14

31 -0 820 14

31 -0 720 14

30 -0 620 14

31 -0 520 14

30 -0 420 14

100

31 -0 320 14

SHAREHOLDERS’ INFORMATION

120

10. Stock Performance and Returns over past few years: Absolute Returns (in %)

1 Year

3 Year

5 Year

Aditya Birla Nuvo Limited BSE Sensex NSE Nifty

52.47% 24.89% 26.65%

76.15% 60.64% 60.34%

83.59% 59.50% 61.76%

Annualized Returns (in %) Aditya Birla Nuvo Limited BSE Sensex NSE Nifty

1 Year

3 Year

5 Year

52.47% 24.89% 26.65%

20.77% 17.12% 17.04%

12.92% 9.79% 10.10%

(Source: www.bseindia.com;www.nseindia.com) 11. Registrar and Transfer Agents (For share transfers and other communication relating to share certificates, dividend and change of address etc.)

:

In-house Share Transfer Registered with SEBI as Category II-Share Transfer Agent (Registration No. INR 000001815)

Investor Service Centre: Indian Rayon Compound, Veraval - 362 266, Gujarat, India Phone: (02876) 245711, 248629 Fax: (02876) 243220 E-mail: [email protected] 12. Share Transfer System

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:

Share Transfer in physical form is registered normally within 15 days from the date of receipt, provided that the documents are complete in all respects. The Investor Service Centre of the Company attends all transfer requests for shares held in physical form.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

SHAREHOLDERS’ INFORMATION

Details of Share Transfer during the Financial Year 2014-15 Transfer Period (in Days)

No. of Transfers

No. of Shares

%

Cumulative

1-5

374

10,982

64.22

Total % 64.22

6 - 15

108

5,241

30.65

94.87

16 and above #

9

878

5.63

100.00

Total

491

17,101

100.00

# Relates to those cases where notice of lodgement were issued to the Registered Shareholder. 13. Investor Services: (a) The Investor and Secretarial services of the Company has been accredited with ISO 9001:2008 Certification for providing Investor and Secretarial Services by Intertek Systems Certifications, Ahmedabad. The certification has been further renewed with effect from 8th August, 2013, for a period of three years. (b) Complaints received during the year:Sr. No 1 2 3 4 5 6

Description

Opening

Non- receipt of Shares after transfer/ Corporate benefits Non- receipt of Dividend Non- receipt of Annual Report Non- receipt of rejected DRN/Demat Request Non- receipt of Shares after Duplicate/ Transmission / Transfer etc. Non receipt of Shares of ABNL on merger of IGFL/BGFL Total

Received Redressed

Pending

1 -

2 13 8

3 13 8

-

-

1

1

-

-

2

2

-

-

1 27

1 28

-

14. Distribution of Shareholding as on 31st March, 2015: No. of Equity Shares Held

No. of Shareholders

% of Shareholders

No. of Shares Held

% of Shareholding

105,913

79.93

2,657,792

2.04

101 - 200 201 - 500 501 - 1000 1001 - 5000 5001 - 10000 10001 and above Total

13,032 8,650 2,733 1,694 186 297 132,505

9.83 6.53 2.06 1.28 0.14 0.23 100.00

1,865,713 2,700,176 1,937,955 3,251,519 1,322,514 116,401,524 130,137,193

1.43 2.07 1.49 2.50 1.02 89.45 100.00

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SHAREHOLDERS’ INFORMATION

No transfer of shares was pending as on 31st March, 2015.

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SHAREHOLDERS’ INFORMATION

Aditya Birla Nuvo Limited - Annual Report 2014-2015

15. Categories of Shareholding as on 31st March, 2015:Category of Shareholders

No. of Shareholders

Promoters and Promoter Group

% of Shareholders

19

0.01

No. of Shares Held

% of Shareholding

74,444,697

57.20

Banks, Mutual Funds Financial Institutions and Insurance Companies UTI and other Mutual Funds

126

0.10

5,618,864

4.32

Banks, Financial Institutions and Insurance Companies

62

0.05

8,927,634

6.86

333

0.25

20,385,224

15.66

4,491

3.39

986,550

0.76

4

0.00

3,168,459

2.43

1,569

1.18

3,821,972

2.94

Others – Individuals/Trusts

125,901

95.02

12,783,793

9.83

Total

132,505

100.00

130,137,193

100.00

Foreign Investors

SHAREHOLDERS’ INFORMATION

FIIs NRIs/OCBs GDRs* Corporates

* GDR includes 14,25,000 GDRs held by Promoter/Promoter group Category-wise Equity Shareholders

Non-instuons 13.52%

GDR Holders 2.43%

Instuons 26.85%

Promoters 57.20%

16. Dematerialisation of Shares and Liquidity

: 98.07% of outstanding equity shares have been dematerialised as on 31st March, 2015. Trading in shares of your Company is permitted only in the dematerialised form.

17. Details on use of public funds obtained in the last three years

: No public funds have been obtained in last 3 years.

18. Outstanding GDRs/ADRs/Warrants or any Convertible instruments, Conversion date and likely impact on Equity

: Outstanding GDRs as on 31st March, 2015 are 3,168,459 amounting to 2.43% of outstanding paid-up Equity capital of the Company. Each GDR represents one underlying Equity share. There are no outstanding ADRs / Warrants or any convertible instruments as on 31st March, 2015.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

SHAREHOLDERS’ INFORMATION

19. Plant Locations:

Rayon Division: Indian Rayon Veraval - 362 266 Gujarat. Phone: (02876) 245711/248401 Fax: (02876) 243220 E-mail: [email protected] 20. Other useful information for the shareholders: 1. Non-Resident Shareholders: Non-resident members are requested to immediately notify the following to the Company in respect of shares held in physical form and to their DPs in respect of shares held in dematerialized form: • Indian address for sending all communications, if not provided earlier; • Email ID and Phone No. (s), if any. • Change in their residential status on return to India for permanent settlement; • Particulars of the Bank Account maintained with a bank in India, if not furnished earlier; (Please send a photocopy of cancelled cheque leaf) • RBI permission with date to facilitate prompt credit of dividend in their Bank Accounts. 2. Shareholders holding shares in physical form are requested to notify to the

Insulator Divisions: Aditya Birla Insulators, Halol P.O. Meghasar Taluka, Halol Dist. Panchmahal, Gujarat - 389 330. Phone: (02676) 221002 Fax: (02676) 223375 E-mail: [email protected] www.adityabirlainsulators.com

SHAREHOLDERS’ INFORMATION

Textile Division: Jaya Shree Textiles P.O. Prabhas Nagar, Rishra - 712 249 Dist. Hooghly, West Bengal. Phone: (033) 26001200 Fax: (033) 26721683/26722626 Website: www.jayashree-abnl.com www.linenclub.com

Fertiliser Division: Indo Gulf Fertilisers P.O. Jagdishpur Industrial Area Dist. Amethi - 227 817 Uttar Pradesh, India. Phone: (05361) 270032-38 Fax: (05361) 270165 and 270595 E-mail: [email protected] Website: www.birlashaktiman.in

Aditya Birla Insulators, Rishra P.O. Prabhas Nagar, Rishra Dist. Hoogly - 712 249, West Bengal. Phone: (033) 26723535 Fax: (033) 26722705 E-mail: [email protected] Website: www.adityabirlainsulators.com Company, change in their Address/Pin Code number with proof of address and Bank Account details promptly by written request. Beneficial Owners of shares in demat form are requested to send their instructions regarding change of name, bank details, nomination, power of attorney, etc., directly to their DP. 3. To prevent fraudulent encashment of dividend warrants, members are requested to provide their Bank Account details (if not provided earlier) to the Company (if shares are held in physical form) or to DP (if shares are held in demat form) as the case may be, for printing of the same on their dividend warrants. 4. In case of loss/misplacement of shares, investors should immediately lodge FIR/ Complaint with the Police and inform to the Company along with original or certified copy of the FIR/Acknowledged copy of Police complaint. 5. In accordance with the provisions of Section 56(1) of the Companies Act, 2013, shares are required to be lodged with a 117

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Garment Division: Madura Fashion & Lifestyle Plot No. 5B, Regent Gateway Doddanakundi Village KIADB Industrial Area ITPL Road Bangalore - 560 048. Phone: (080) 67271600 Fax: (080) 67272444 Website: www.madurafnl.com

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SHAREHOLDERS’ INFORMATION

SHAREHOLDERS’ INFORMATION

6.

7.

8.

9.

period of 60 days from the date of execution of instrument of transfer.For expeditious transfer of shares in physical form, shareholders should fill in complete and correct particulars in the transfer deed. Wherever applicable, registration number of Power of Attorney should also be quoted in the transfer deed at the appropriate place. Shareholders of the Company who have multiple accounts in identical name(s) or holding more than one Share Certificate in the same name under different Ledger Folio(s) in physical form are requested to apply for consolidation of such Folio(s) and sent the relevant Share Certificates to the Company. Section 72 of the Companies Act, 2013, extends nominate on facility to individuals holding shares in physical form in companies. Shareholders, in particular, those holding shares in single name, may avail the above facility by furnishing the particulars of their nominations in the prescribed Nomination Form, which can be downloaded from the website of the Company or obtained from the Investor Service Centre of the Company by sending written request through any mode including e-mail on [email protected] Shareholders are requested to visit the Company’s website www.adityabirlanuvo.com for • Information on investor services offered by the Company. • Downloading of various forms/formats, viz., Nomination form, ECS Mandate form, Indemnity, Affidavits, etc. • Registering your e-mail ID with the Company to receive Notice of General Meetings, Audited Financial Statement, Directors’ Report, Auditors’ Report, etc., henceforth electronically. NECS Facility: In terms of a notification issued by the Reserve Bank of India, with effect from 1st October, 2009, remittance of Dividend through ECS is replaced by National Electronic Clearing Service (NECS). Banks have been instructed to move to the NECS platform. The advantages of NECS over ECS include faster credit of remittance to

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

the beneficiary’s account, coverage of more bank branches and ease of operations. NECS essentially operates on the new and unique bank account number, allotted by bank post-implementation of Core Banking System of inward instructions and efficiency in handling bulk transactions. To enable remittance of dividend through NECS, Members are requested to provide their new account number allotted to them by their respective banks after implementation of Core Banking Solution. The account number must be provided to the Company in respect of shares held in physical form and to the depository participants in respect of shares held in electronic form. 10. Correspondence with the Company: Shareholders/Beneficial Owners are requested to quote their Folio No./DP and Client ID Nos., as the case may be, in all correspondence with the Company. All correspondence regarding shares of the Company should be addressed to the Investor Service Centre of the Company at its Registered Office at Indian Rayon Compound, Veraval-362 266, Gujarat. The Company has also designated an exclusive e-mail ID [email protected] for effective investor’s services where they can register their complaints/queries to facilitate speedy and prompt redressal. 11. Unclaimed Shares in Physical Form Clause 5A(II) of the Listing Agreement provides the manner of dealing with the shares issued in physical form pursuant to a public issue or any other issue and which remains unclaimed with the Company. In compliance with the provisions of the said Clause, the Company had sent three reminders under Registered Post to the Shareholders whose share certificates were returned undelivered and are lying unclaimed so far. During the year, the Company has transferred the unclaimed shares into one folio in the name of “Aditya Birla Nuvo Limited- Unclaimed Share Suspense Account” and thereafter these shares are subsequently dematerialised on 19th Feb, 2015. Upon transfer and dematerialisation

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As per Clause 5A(II) of the Listing Agreement, a report in respect of the Equity Shares issued in physical form pursuant to a public issue or any other issue and lying in the ABNL- Unclaimed Suspense Account as on 31st March , 2015 is as under:-

Sr. Description No. 1

2

3

4

Number of Shareholders

Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account Number of shareholders who have approached the issuer during FY 15 for transfer of shares from the Unclaimed Suspense Account Number of shareholders to whom shares were transferred in FY 15 from the Unclaimed Suspense Account Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account as on 31st March, 2015

21. Investor Correspondence: Other than Secretarial Matters

On Secretarial and Investor Grievances Matters

Number of Equity Shares

5,849

178,704

9

418

9

418

5,840

178,286

SHAREHOLDERS’ INFORMATION

to the suspense account, the voting rights on such shares shall remain frozen till the rightful owner of such shares claims the shares. In case your shares are lying unclaimed with the Company, you are requested to write to the Company to know the procedure for claiming the same.

SHAREHOLDERS’ INFORMATION

Chief Financial Officer Aditya Birla Nuvo Limited Corporate Finance Division A-4, Aditya Birla Centre, 4th Floor, S.K. Ahire Marg, Worli, Mumbai 400 030 Phone: (022) 6652 5000/2499 5000 Fax: (022) 6652 5821/2499 5821 E-mail: [email protected]; [email protected] Company Secretary Aditya Birla Nuvo Limited Investor Service Centre Indian Rayon Compound Veraval - 362 266, Gujarat, India Phone: (02876)245711/248629/248495 Fax: (02876)243220 E-mail: [email protected] Corporate Office: A-4, Aditya Birla Centre S.K. Ahire Marg, Worli, Mumbai - 400 030 Phone: (022) 6652 5000 Fax: (022) 6652 5821/2499 5821 E-mail: [email protected]

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SOCIAL REPORT – TOWARDS INCLUSIVE GROWTH

SOCIAL REPORT



Aditya Birla Nuvo Limited - Annual Report 2014-2015

Our Vision Towards inclusive growth, we truly practice compassionate capitalism. Service to society is at the very heart, of our value system. We do so with a sense of purpose. This is manifest in the various CSR projects that we run, providing the less fortunate strata of society with education, healthcare, sustainable livelihood and infrastructure support. We at the Aditya Birla Group collectively, work in 5,000 villages, reach out to 7.5 million people and our CSR spends at the Group level exceed the 2% norm

’’

– Mrs. Rajashree Birla, Chairperson Aditya Birla Centre for Community Initiatives and Rural Development

Aditya Birla Nuvo’s community engagement spans 193 villages, inclusive of 14 model villages. Our CSR work is in proximity to our 6 manufacturing units across 4 states of the country. We reach out to a rural population of 6.85 lakhs at Bangalore in Karnataka, Jagdishpur in Uttar Pradesh, Veraval and Halol in Gujarat and Rishra, in West Bengal. Health Care: We organised over 49 medical camps and 23 speciality medical camps in remote villages at Anekal, Ramnagar in Karnataka, Jagdishpur, Rishra, Veraval and Halol. Over 27,550 persons availed of medical check-ups and diagnostic/referral facilities. Those who needed advanced treatment or were afflicted with serious ailments were taken to our hospitals and some of them referred to speciality hospitals. At our 27 eye check-up camps, 5,254 persons were examined for their vision/sight issues. These camps were held at Bangalore, Jagdishpur, Veraval and Rishra. We performed 951 cataract operations in these camps and distributed 1,878 spectacles. Dental and eye camps were organised for school children, at which 2,014 students were checked and wherever necessary were accorded treatment. More than 800 rural women participated in the 10 cancer awareness camps organised at Anekal and Ramnagar. The focus at these camps was on the detection and prevention of cancer.

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At 8 blood donation camps, 368 donors came forward in Bangalore, Rishra and in Mohali. Our Skin Rehabilitation centre at Jagdishpur treated 6,438 villagers. Indo Gulf Jan Sewa Trust identifies and rehabilitates disabled and leprosy cured patients to enter mainstream society. They are given financial assistance, which has aided them in the setting up of small shops at the village level. So far 20 persons have recoursed to funds to start Kirana stores, tailoring shop and handcarts. Our hospitals and medical centres at plant locations in remote areas of the country attended to more than 1,10,060 patients for minor and major ailments. Mother and Child Health Care: In collaboration with the district health department, primary healthcare centres and Rotary International, we administered 6,19,813 polio doses through 1,379 booths across our locations. Over 2,11,374 children were immunised against other ailments, such as diphtheria, whooping cough, tetanus and hepatitis, besides giving BCG, across our units. Safe drinking water and sanitation: This year we installed 2 hand pumps at Veraval and Jagdishpur, repaired 38 hand pumps – to ensure safe drinking water for 8,721 villagers. Under the Nirmal Gram Yojana, we have facilitated the construction of 1,642 individual toilets in villages around

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Education: Rural schools were extensively supported in the campaign for enrolment, and reduction of dropouts at Bangalore Rural and Urban Districts, Jagdishpur, Veraval, Rishra and Halol. We reached out to 119 schools and 20,053 children. Merit scholarships were awarded to more than 661 students at Anekal and Veraval. In the recent past, we initiated special coaching classes and career counselling programmes for students – to begin with at Channapattana (Tamil Nadu). These are of great benefit to the students. 150 girls enrolled. Likewise we began specialised coaching centres for Grade 10th/12th and for CET competitive exams for Engineering /Medical and other professional courses. Simultaneously, we started career counselling programmes at Rishra, Barasat and Channapattana, in collaboration with Galaxy Institute, Rishra and S V Education Trust, Bangalore. We conduct these educative programmes under the Project Gyanarjan umbrella. Up until now 812 students have registered. Uniforms, books, notebooks, writing pads, bags and stationery was distributed to 6,965 children near our plants at Bangalore Rural / Urban District and Veraval. We continue to support Kasturba Gandhi Balika Vidyalaya (KGBV - Government residential schools for girls). We go into the rural interiors, identify the school dropouts, counsel them and eventually they are persuaded to enrol at the KGBVs by identifying girls and counselling them for enrolment. We also provide uniforms and safe drinking water. Currently, we are engaged with 13 KGBVs with a student population of 1,167 girls. These KGBVs are at Channapattana, Krishnagiri, Veraval, Jagdishpur and Halol. Our efforts have led to 142 girls joining the KGBVs and restarting their education. Furthermore, towards their holistic development, we teach them life skills such as first aid training, adolescent health care and enlist them in cultural events. At Veraval and Channapattana 250 girls are given special coaching. At Madura Fashion & Lifestyle, Bangalore and Veraval, Computer coaching classes support 318 students. We have aided 3,090 children with educational materials at Veraval. To help 85 visually impaired children, we shore up the

efforts of two residential schools at Jagdishpur and Bangalore. More than 275 women in the 25-60 age groups actively participated in our functional literacy program conducted in 11 villages at Jagdishpur. Sustainable Livelihood: On the agricultural front, we have helped farmers earn better through farmer training programmes on advance cropping techniques and other processes to improve yield. NABARD has been a very valuable partner to us and has significantly contributed to the setting up of over 100 farmer clubs with bench strength of 1098 farmers. Together, we have been able to augment the income of the farmers. Vocational Training A year ago, we have launched Project Kaushalya – a Skills Training Centre in collaboration with CII. Our intent is to equip the rural youth with requisite skills that are in sync with the needs of industry and also spawn selfemployment opportunities. So far we have trained and certified 1,036 youngsters in trades such as handling and repair of electrical equipment, auto service technicians, retailing, data entry operators, tailoring, and salon care. Towards this, we have set up 4 training centres at Rishra, Barasat, Jagdishpur and Anekal. Our endeavours have enriched the lives of 687 youngsters. Our project on Integrated Livestock Development, run in collaboration with BAIF is running very successfully. We operate in 12 villages of Veraval and up until now BAIF has provided veterinary support, artificial insemination and vaccinated 5,664 cattle. Project ANYA, the Women Economic Empowerment initiative Through our 17 production centres at Jagdishpur, Veraval and Rishra we trained 717 rural women in Apparel and Jute products manufacturing. The Apparel manufacturing unit at Jagdishpur is now self-sustaining centre. It caters to the local community. The jute bag centre at Rishra services our MORE retail stores. Infrastructure Development: We support Infrastructure Development such as the construction and repair of school buildings, road / repairs in remote locations. Our work adds to the comfort to 15,446 people at Jagdishpur.

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SOCIAL REPORT

Marsur (Anekal) Jagdishpur, Veraval, Rishra and Barasat.

SOCIAL REPORT – TOWARDS INCLUSIVE GROWTH

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

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SOCIAL REPORT – TOWARDS INCLUSIVE GROWTH

Espousing Social Causes

G

Gram Panchayats

We try and change mindsets to bring social reform through advocacy against child labour, illiteracy, child marriages, the marginalisation and abuse of the girl child and women among others. For instance –

G

NABARD

G

Indira Gandhi Eye Hospital & Research Centre, Munshiganj, Amethi.

G

Sri Bhagwan Mahaveer Viklang Sahayata Samiti, Malviya Nagar, Jaipur, Rajasthan

G

The Leprosy Mission India

G

WHO

G

CEE – UNDP

G

Narayan Netralaya, Bangalore

G

GOONJ

G

BAIF

G

Aroni Charitable Trust

J & K Flood Relief Operation

G

Dr. M.C. Modi Hospital, Bangalore

Madura Fashion and Lifestyle, Bangalore in collaboration with GOONJ organised a relief camp to help the flood victims of J&K. We reached out to 3,000 families and we gave them 44,060 garments.

G

CII / Labour net

G

G

G

SOCIAL REPORT

Aditya Birla Nuvo Limited - Annual Report 2014-2015

To promote dowry less marriages, our unit at Veraval organised mass marriages for 50 couples from the underprivileged community. We distributed 40,478 garments to underprivileged people at various charitable organisations at Bangalore. Our unit at Veraval supported Prime Minister’s Jan Dhan Yojana and organised a programme for opening of savings accounts for 185 people.

Accolades/Awards In recognition of our work, the Global CSR Excellence Award was bestowed upon Indo Gulf Fertilizers, Jagdishpur. Our Partners/Collaborators include: G

District Rural Development Authorities at various locations

G

District Health departments

G

District Panchayatiraj Institutions

G

District Industries Centre

G

Sarva Siksha Abhiyan

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Our Investments: For the year 2014 - 2015, our CSR spend was Rs.9.61 crore. In addition, we mobilised Rs.41.53 crore through various Government schemes, acting as catalysts for the community. In sum: Our CSR work is aimed at lifting the burden of poverty. To an extent we have helped lower the level of poverty in villages near our plants. We attained this by reaching out to 4,65,448 people through health care interventions, 30,270 people through education, 18,284 people through sustainable livelihood, 15,446 people through rural infrastructure and 31,817 people through social causes. Given the magnitude of the issue, much more needs to be done, avers Mrs Rajashree Birla.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

ENVIRONMENT REPORT – SUSTAINABLE DEVELOPMENT

“The major attributes of our operations at Aditya Birla Nuvo (ABNL) and its ongoing journey of success revolve around people, environment, safety and inclusive growth. Few organizations can boast of the calibre of people as we have at ABNL. Environmental practices far beyond compliance have been an integral part of our philosophy. At ABNL, various sustainability initiatives include energy optimization, water conservation, social forestry, recycling of waste material as well as safety. We have instituted a governance structure to monitor various sustainability aspects of our operations. As a Group, we endeavour to become the leading Indian conglomerate for sustainable business practices across our global operations by 2017, given our synergizing growth with responsibility”. - Kumar Mangalam Birla Chairman, Aditya Birla Group Indo Gulf Fertilizers, Jaya Shree Textiles and Aditya Birla Insulators (ABI) Halol are ISO-14001: 2004 based environment management systems certified. Responsible Stewardship Indian Rayon

Environment Management System Our Environmental Management system is based on the continuous improvement of our environmental practices and systems through process innovation; technological interventions like state-of-art technologies and equipment; introduction of new on-line continuous environment monitoring systems; adoption of best practices, and setting stringent targets on various environmental aspects. We are a signatory to the WASH Pledge of World Business Council of Sustainable Development (WBCSD). It is a testament to our commitment to provide clean safe water, sanitation and workplace for our employees. Indian Rayon is ISO 14001-2004 Integrated Management System of EMS, QMS (ISO 90012008), OHSAS (18001-2007) and SA (8000-2008) certified. We have also adopted the Du-Pont Safety System for embedding the safety culture at all our operations.

At Indian Rayon, we have developed the sustainability framework in accordance with the GRI G4 guidelines, and have fostered the sustainability concept in our work culture. With regard to your plant at Indian Rayon, Veraval, the clearances from the Ministry of Environment, Forests & Climate Change, New Delhi for the operation of Viscose Filament Yarn Production Unit, Power Plant, Caustic Soda Plant and Pipe line Project have been obtained. The Company has also secured Consolidated Consent and Authorization from the Gujarat Pollution Control Board for Plant operation and Sewage Treatment Plant as well as the Biomedical Waste Authorization in line with the requirement of Biomedical Waste Rules. Indian Rayon’s efforts to maximize reuse and recycling energy and water, while maximizing resource efficiency are in continuum. Under our Cleaner Production initiative, wastes such as briquette powder formed by Process Sludge, Cellulose waste and charcoal churry are sent for incineration to our Group Plant Ultratech Cement at Rajula. For the disposal of the remaining wastes in a controlled manner, we recourse to partnerships

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During the year, we honed our processes in the areas of environmental compliance, securing water sources, effluent management, safety performance improvement and waste management.

ENVIRONMENT REPORT

In sync with our Chairman’s vision, by 2017 ABNL endeavours to become a leading company with sustainable business practices across all operations, balancing its economic growth with environmental and societal interests.

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ENVIRONMENT REPORT – SUSTAINABLE DEVELOPMENT

with various Treatment, Storage and Disposal Facilities (TSDF) as mandated by the pollution control board. Our green belt spans 33.5% of the total Plant area.

ENVIRONMENT REPORT

In recognition of its environment conservation initiatives, Indian Rayon was accorded the prestigious Golden Peacock Environment Management Award - 2014 from the Institute of Directors, New Delhi. Professional Environment Auditors like NEERI (National Environmental Engineering Research Institute) - Nagpur, NIO (National Institute of Oceanography) – Mumbai, ATIRA (Ahmedabad Textile Industries Research Associations) – Ahmedabad, conduct in-depth Environment Audits. They monitor our Plant operations and validate our commitment to sustainable development. Indo Gulf Fertilizer At Indo Gulf all requisite systems for effective management of effluent and emissions are in place and are operating efficiently. These include steam stripping systems, deep hydrolyser, activated carbon filters, neutralization, equalization, ionization process for process condensate, natural oxidation based sewage treatment system and gas flaring system among others The Central Pollution Control Board (CPCB) has brought in rules for online monitoring system for treated effluent discharge and for gaseous emissions from various stacks, for real time monitoring by UPPCB. We have already implemented the automated monitoring system. Our plant is connected with the UPPCB server for data transmission in line with the directive issues by CPCB. To conserve natural resources while cutting down the emission of Green House gases, we have commissioned a major energy saving project which has resulted in the reduction of CO2 emission by 30,000 Te CO2, annually. Additionally, we have installed solar heaters in our canteens and guest houses, thus conserving energy.

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Waste water and other effluents generated in the plant are treated in the effluent treatment plants. The treated waste water meets the standards of irrigation water. It is supplied to the irrigation network in and around our factory and township for the green belt. We have developed and commissioned a Recharge Pond as part of Rain water harvesting. This helps store the rain water for recharging the aquifer. Over the years, we have planted more than a lakh of trees in and around the Fertiliser complex besides bushes and shrubs. With a uniquely developed and well managed irrigation network, the mortality rate of these plants is below 2%. This is over and above the statutory requirement of a 33%green belt of the total area. Aditya Birla Insulators, Halol (ABI) ABI Halol is BSI ISO -14001:2004 certified. Our operations factor conservation of the environment. Waste water and other effluents generated in the plant are treated in the effluent treatment plants in line with regulatory conditions. The Environment Monitoring, Ambient Air Monitoring, Stack Monitoring and the waste water parameter are analyzed by Gujarat Pollution Control Board’s (GPCB) approved third Party. The water meter is installed on the Bore well to get the actual data of water consumption and to reduce the wastage of water. Dyke walls are erected to avoid spillage. We are continuously reviewing our waste management practices to identify potential opportunities for reuse and recycle. This year, we have explored the possibility of re-using the ETP Sludge. Samples were analyzed in-house as well as through third party analysis. After a complete analysis, it was found that there is potential for in house use after purification and chemical correction. We are moving in that direction. Your management is committed to synergising growth with responsibility.

FINANCIAL STATEMENTS

STANDALONE FINANCIAL STATEMENTS

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS

To The Members of Aditya Birla Nuvo Limited

Management’s Responsibility for the Financial Statements 2. The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014. This responsibility also includes 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; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility 3. Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Financial Statements are free from material misstatement. 4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Financial Statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s management and Board of Directors, as well as evaluating the overall presentation of the Standalone Financial Statements. 5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.

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Opinion 6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, its Profit and its cash flows for the year ended on that date.

INDEPENDENT AUDITORS’ REPORT

Report on the Standalone Financial Statements 1. We have audited the accompanying Standalone Financial Statements of Aditya Birla Nuvo Limited (‘the Company’), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, in which are incorporated the branch’s financial statements for the year ended on that date audited by the branch auditors of the Company.

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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

INDEPENDENT AUDITORS’ REPORT

Other Matter 7. The accompanying Standalone Financial Statements include total assets of ` 1,716.15 crore as at March 31, 2015, and total revenues of ` 3,547.87 crore for the year ended on that date, in respect of one branch, which has been audited by branch auditors, whose financial statements, other financial information and auditor’s reports have been furnished to us. Our opinion on the Standalone Financial Statements, in so far as it relates to the amounts and disclosures included in respect of this branch, and our report in terms of sub-sections (3) and (11) of section 143 of the Act, in so far as it relates to the aforesaid branch, is based solely on the reports of such other auditors. Our opinion is not modified in respect of this matter. Report on Other Legal and Regulatory Requirements 8. As required by the Companies (Auditor’s Report) Order, 2015 (‘the Order’) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order. 9. As required by section 143(3) of the Act, we further report that: a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; b. In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; c. The reports on the accounts of the branch offices of the Company audited under section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report; d. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the audited financial statements received from the Branch; e. In our opinion, the aforesaid Standalone Financial Statements comply with the applicable Accounting Standards specified under section 133 of the Act, Read with Rule 7 of the Companies (Accounts) Rules 2014; f. On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act; 10. In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014: (i) The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements – Refer Note 45(iv) to the Standalone Financial Statements; (ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 45(iii) to the Standalone Financial Statements; (iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. For and on behalf of KHIMJI KUNVERJI & CO. Chartered Accountants ICAI Firm Registration No. 105146W

For and on behalf of S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E

Per Shivji Vikamsey Partner Membership No. 2242

Per Vijay Maniar Partner Membership No. 36738

Mumbai Date: May 14, 2015

Mumbai Date: May 14, 2015

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS

(i)

(ii)

(iii)

(a)

The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b)

All fixed assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(a)

The management has conducted physical verification of inventory at reasonable intervals during the year other than inventory lying with third parties, where certificates confirming stocks have been received in respect of substantial portion of stock held.

(b)

The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c)

The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of paragraph 3(iii) (a) to (b) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. (v)

The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company, pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section (1) of the section 148 of the Act, in respect of the Company’s products to which the said rules are made applicable, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income-tax, salestax,wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

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(vii) (a)

INDEPENDENT AUDITORS’ REPORT

Annexure referred to in paragraph 8 of Our Independent Auditors’ Report to the members of the Company on the Standalone Financial Statements for the year ended March 31, 2015

CMYK

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess on account of any dispute, are as follows: Name of the Statute

Nature of the dues

Period

Forum where dispute is pending

Income tax Act, 1961

Tax Demand

AY 2006-07

Commissioner (Appeals) High Court

INDEPENDENT AUDITORS’ REPORT

Customs Act, 1962

Central Excise Act, 1944

1975-76, 1976-77, 1986-87 & 2001-02 2003-04, 2004-05, Tax Demand, Interest 2005-06, 2007-08 and Penalty 2009-10, 2013-14 2013-14 1977-78, 1986-87 1985-86, 1991-92, 1995-00, 2001-02, 2002-03, 2008-09 Excise Duty, Interest 1994-95, 1996-97, and Penalty 1997-98,1998-99, 2005-2012 1997-98 to 2000-01 Entry Tax

2013-14 & 2014-15 1999-00, 2002-03, 2004-05 & 2010-11 2002-03, 2004-05, 2007-08, 2008-09 Sales Tax, 1995-96, 1996-97, Value Added Tax, 1997-98, 1999-00, Central Sales Tax, 2001-02, 2002-03 to Sales Tax Act Non-Submission of 2004-05, 2005-06, forms, Purchase Tax, 2006-07, 2007-08, Trade Tax including 2008-09, 2009-10, Interest 2010-11 2002-03, 2003-04, 2006-07, 2007-08, 2009-10, 2010-11, 2011-12 2002-03, 2003-04 Service Tax Finance Act, 1994 including Interest (Service Tax) 2012-13 and Penalty Textile Committee Act Gujarat Green Cess Act, 2011

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1981-82 to 1998-99 Textile Cess 1990-00 to 2004-05 Cess on generation 2011-12 to 2014-15 of electricity through captive power generation plants

Amount (` in Crores)

102.13 0.39

CESTAT

1.30

Commissioner (Appeals) High Court CESTAT

0.64

Commissioner (Appeals)

1.24

Commissioner/ Deputy Commissioner High Court High Court

0.05

Appellate Tribunal

0.06 3.11

11.14 7.69 1.01

Commissioner (Appeals)/Revisional Boards

17.55

Assessing authorities

7.09

CESTAT

0.82

Commissioner (Appeals) Textile Committee Cess Appellate Tribunal Assessing authorities Supreme Court of India

1.31 0.63 0.65 1.72

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

(c)

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS

In our opinion and to the best of our information and according to the explanations given to us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder.

(viii) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year. (ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders. (x)

According to the information and explanations given to us, the Company has given guarantee for loans taken by subsidiaries from banks or financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

For and on behalf of KHIMJI KUNVERJI & CO. Chartered Accountants ICAI Firm Registration No. 105146W

For and on behalf of S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E

Per Shivji Vikamsey Partner Membership No. 2242

Per Vijay Maniar Partner Membership No. 36738

Mumbai Date: May 14, 2015

Mumbai Date: May 14, 2015

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(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Standalone Financial Statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. However, branch auditors have reported that there was a case of employee misappropriation which was not material and was appropriately dealt with by the management.

INDEPENDENT AUDITORS’ REPORT

(xi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained other than temporary deployment pending application.

MK

BALANCE SHEET AS AT 31ST MARCH, 2015

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores Note No.

As at 31st March, 2015

As at 31st March, 2014

2 3

130.14 8,388.85

130.18 7,977.56

Sub-Total - (A)

8,518.99

8,107.74

4A 5 6A 7A

1,480.46 106.38 114.59 6.49

1,392.19 87.89 96.83 5.22

Sub-Total - (B)

1,707.92

1,582.13

4B 8 6B 7B

1,959.37 1,702.85 494.45 266.11

2,134.00 1,505.44 453.27 208.78

EQUITY AND LIABILITIES (A) Shareholders’ Funds Share Capital Reserves and Surplus (B) Non-Current Liabilities Long-term Borrowings Deferred Tax Liabilities (Net) Other Long-term Liabilities Long-term Provisions

STANDALONE FINANCIAL STATEMENTS

(C) Current Liabilities Short-term Borrowings Trade Payables Other Current Liabilities Short-term Provisions

Sub-Total - (C)

4,422.78

4,301.49

TOTAL (A)+(B)+(C)

14,649.69

13,991.36

9A 9B

1,713.63 45.93 108.02

1,493.23 48.45 306.59

10A 11A 12A

1,867.58 8,694.99 196.63 0.74

1,848.27 7,952.34 192.40 0.78

Sub-Total - (D)

10,759.94

9,993.79

10B 13 14 15 11B 12B

30.00 1,247.00 2,251.14 45.05 273.62 42.94

15.65 1,103.72 2,045.70 39.13 720.68 72.69

ASSETS (D) Non-Current Assets Fixed Assets Tangible Assets Intangible Assets Capital Work-in-Progress Non-Current Investments Long-term Loans and Advances Other Non-Current Assets (E) Current Assets Current Investments Inventories Trade Receivables Cash and Bank Balances Short-term Loans and Advances Other Current Assets

Sub-Total - (E)

3,889.75

3,997.57

TOTAL (D)+(E)

14,649.69

13,991.36

Significant Accounting Policies

1

The accompanying Notes are an integral part of the Financial Statements. As per our attached Report of even date

For and on behalf of the Board of Directors

For KHIMJI KUNVERJI & CO. ICAI Firm Registration No. 105146W Chartered Accountants

LALIT NAIK Managing Director

For S R B C & CO LLP ICAI Firm Registration No. 324982E Chartered Accountants

TARJANI VAKIL P. MURARI B. R. GUPTA G. P. GUPTA S. C. BHARGAVA Directors

SUSHIL AGARWAL Whole-time Director & CFO Per SHIVJI VIKAMSEY Partner Membership No. 2242 Mumbai, May 14, 2015

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Per VIJAY MANIAR Partner Membership No. 36738

ASHOK MALU Joint President & Company Secretary Mumbai, May 14, 2015

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2015

Year Ended 31st March, 2014

9,118.34 (180.08)

8,239.12 (218.55)

8,938.26 171.51

8,020.57 371.20

9,109.77

8,391.77

18 19

3,322.49 1,283.31

2,944.12 1,191.38

20 21

(43.44) 741.60 843.01 1,777.21

(204.43) 638.69 955.00 1,621.20

7,924.18

7,145.96

Note No. Revenue from Operations Less: Excise Duty

16

Net Revenue from Operations Other Income

17

Total Revenue Expenses Cost of Materials Consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade Employee Benefits Expenses Power and Fuel Other Expenses

22

Total Expenses Profit Before Depreciation/Amortisation, Interest and Tax (PBDIT) Depreciation and Amortisation Expenses Finance Cost

23 24

1,185.59 189.36 263.30

1,245.81 199.02 266.56

Profit Before Exceptional Item and Tax Exceptional Items

39

732.93 —

780.23 24.06

Profit Before Tax Tax Expenses Current Tax Write Back of Excess Provision for Tax Related to Earlier Years Deferred Tax

732.93

804.29

185.92 (5.61) 24.93

201.60 (3.82) (67.44)

Profit for the Year

527.69

673.95

Profit Before Tax from Continuing Operations Tax Expense of Continuing Operations

732.93 205.24

780.23 171.04

Profit from Continuing Operations (A) Profit Before Tax from Sale of Assets Attributable to Discontinued Operations Tax Expense/(Credit) from Sale of Assets Attributable to Discontinued Operations

527.69 — —

609.19 24.06 (40.70)



64.76

527.69

673.95

40.56 40.49

54.30 53.74

Profit from Discontinued Operations After Tax (B)

39

Profit for the Year (A) + (B) Basic Earnings Per Share (`) Diluted Earnings Per Share (`) (Face Value of ` 10/- each)

}

36

Significant Accounting Policies

1

The accompanying Notes are an integral part of the Financial Statements. As per our attached Report of even date

For and on behalf of the Board of Directors

For KHIMJI KUNVERJI & CO. ICAI Firm Registration No. 105146W Chartered Accountants

LALIT NAIK Managing Director

For S R B C & CO LLP ICAI Firm Registration No. 324982E Chartered Accountants

TARJANI VAKIL P. MURARI B. R. GUPTA G. P. GUPTA S. C. BHARGAVA Directors

SUSHIL AGARWAL Whole-time Director & CFO

Mumbai, May 14, 2015

Per VIJAY MANIAR Partner Membership No. 36738

ASHOK MALU Joint President & Company Secretary Mumbai, May 14, 2015

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Per SHIVJI VIKAMSEY Partner Membership No. 2242

STANDALONE FINANCIAL STATEMENTS

` in Crores Year Ended 31st March, 2015

MK

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores PARTICULARS A

2014-15

2013-14

732.93

804.29

CASH FLOW FROM OPERATING ACTIVITIES Profit Before Tax Adjustments for: Exceptional Item (Refer Note: 39) Depreciation and Amortisation Expenses Provision for Bad and Doubtful Debts & Advances and Bad Debts written off Provision for Diminution in Value of Investment in Subsidiary Diminution/(Reversal of Diminution) in Value of Fertiliser Bonds Employee Stock Options Expenses

STANDALONE FINANCIAL STATEMENTS

Unrealised (Gain)/Loss on Foreign Exchange



(24.06)

189.36

199.02

11.05

3.39

0.43



(1.54)

0.63

3.76

1.49

(9.42)

12.43

Finance Costs

263.30

266.56

Interest Income

(36.06)

(44.14)

(Gain)/Loss on Fixed Assets Sold

(5.61)

0.87

(Gain)/Loss on Sale of Investments

(8.32)

(41.72)

Gain on Redemption of Preference Shares of Subsidiary

(18.75)





(144.29)

(89.67)

(122.41)

Gain on Buy-Back of Investments of Subsidiary Dividend Income

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

298.53

107.77

1,031.46

912.06

Adjustments for: Decrease/(Increase) in Trade Receivables

(212.62)

240.90

(32.98)

(0.70)

29.43

(4.86)

Decrease/(Increase) in Loans and Advances Decrease/(Increase) in Other Assets Decrease/(Increase) in Inventories

(143.28)

(257.20)

Increase/(Decrease) in Trade Payables

202.39

270.58

Increase/(Decrease) in Other Liabilities

47.44

26.65

Increase/(Decrease) in Provisions

20.73

5.78

CASH GENERATED FROM OPERATIONS Income Taxes Refund/(Paid)

(88.89)

281.15

942.57

1,193.21

(154.82)

NET CASH (USED IN)/FROM OPERATING ACTIVITIES B

(205.03) 787.75

988.18

CASH FLOW FROM INVESTING ACTIVITIES Purchase of Tangible Assets

(227.33)

(405.28)

Purchase of Intangible Assets

(6.67)

(5.79)

Sale of Tangible Assets

10.57

10.29

(743.08)

(2,174.24)

33.75



Acquisition of Additional Shares/Investment in Subsidiary Redemption of Preference Shares of Subsidiary Proceeds from Liquidation of Subsidiary

0.84



Sale of Investment of Associate

0.01





207.20

Buy-Back of Investments by Subsidiary

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 ` in Crores 2014-15

Sale of Carbon Black Business (Net of Cash and Cash Equivalents)



314.72

(21.87)

278.00

Purchase of Subsidiary Optionally Fully Convertible Debentures



(338.28)

Redemption of Subsidiary Optionally Fully Convertible Debentures



380.00

(221.23)

(784.41)

691.07

293.31

Sale/(Purchase) of Current Investments (Net)

Inter-Corporate Deposits to Subsidiary – Given Inter-Corporate Deposits to Subsidiary – Received Back Interest Received from Subsidiaries

17.03

7.98

Interest Received – Others

20.92

34.58

Dividend Received from Subsidiaries

51.80

87.45

Dividend Received from Joint Venture

33.50

25.13

Dividend Received on Other Long-term Investment

3.35

4.69

Dividend Received on Current Investments

1.02

5.14

NET CASH (USED IN)/FROM INVESTING ACTIVITIES C

2013-14

(356.32)

(2,059.51)

CASH FLOW FROM FINANCING ACTIVITIES Redemption of Preference Shares

(0.10)



3.59

674.39

(227.88)

(480.89)

Proceeds from Issue of Shares (including Securities Premium) Repayment of Long-term Borrowings Proceeds from Long-term Borrowings Proceeds/(Repayment) from Short-term Borrowings (Net)

337.38

259.00

(177.76)

951.85

(91.08)

(78.16)

(6.68)



(263.25)

(271.27)

Dividends Paid Corporate Dividend Tax Paid Interest Paid NET CASH (USED IN)/FROM FINANCING ACTIVITIES NET INCREASE IN CASH AND CASH EQUIVALENTS

(425.78)

1,054.92

5.65

(16.41)

CASH AND CASH EQUIVALENTS (OPENING BALANCE)

35.86

52.27

CASH AND CASH EQUIVALENTS (CLOSING BALANCE) (Refer Note: 15)

41.51

35.86

Significant Accounting Policies Refer Note: 1 The accompanying Notes are an integral part of the Financial Statements.

As per our attached Report of even date

For and on behalf of the Board of Directors

For KHIMJI KUNVERJI & CO. ICAI Firm Registration No. 105146W Chartered Accountants

LALIT NAIK Managing Director

For S R B C & CO LLP ICAI Firm Registration No. 324982E Chartered Accountants

TARJANI VAKIL P. MURARI B. R. GUPTA G. P. GUPTA S. C. BHARGAVA Directors

SUSHIL AGARWAL Whole-time Director & CFO

Mumbai, May 14, 2015

Per VIJAY MANIAR Partner Membership No. 36738

ASHOK MALU Joint President & Company Secretary Mumbai, May 14, 2015

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Per SHIVJI VIKAMSEY Partner Membership No. 2242

STANDALONE FINANCIAL STATEMENTS

PARTICULARS

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 1 SIGNIFICANT ACCOUNTING POLICIES: I.

BASIS OF PREPARATION The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspect of the Accounting Standard (AS) Notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for the change in accounting policy explained in paragraph II below. All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle, and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as up to twelve months for the purpose of current/non-current classification of assets and liabilities.

II.

CHANGE IN ACCOUNTING POLICY Till the year ended 31 March, 2014, Schedule XIV to the Companies Act, 1956, prescribed requirements concerning depreciation of fixed assets. From the current year, Schedule XIV has been replaced by Schedule II to the Companies Act, 2013. Effective from 1st April, 2014, the Company has provided depreciation on fixed assets based on useful lives as provided in Schedule II to the Companies Act, 2013 or as re-assessed by the Company. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of fixed assets, though these rates in certain cases are different from lives prescribed under Schedule II.

STANDALONE FINANCIAL STATEMENTS

Further, on application of Schedule II to the Companies Act, 2013, the Company has changed the manner of depreciation for its fixed assets. Now, the Company identifies and determines separate useful life for each major component of the fixed asset, if they have useful life that is materially different from that of the remaining asset. Based on transitional provision given in Schedule II to the Companies Act, 2013, the carrying value of assets whose useful lives are already exhausted amounting to ` 12.51 Crore (net of deferred tax ` 6.44 Crore) has been charged to opening balance of retained earnings. Had there been no change in useful lives of fixed assets, the charge to the Statement of Profit and Loss would have been higher by ` 19.03 Crore. III.

USE OF ESTIMATES The preparation of financial statements in conformity with Indian GAAP requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities, at the end of the reporting period. Although, these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

IV.

TANGIBLE FIXED ASSETS AND DEPRECIATION Tangible Fixed Assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Each part of an item of property, plant and equipment with a cost, that is significant in relation to the total cost of the item, is depreciated separately. This applies mainly to components for machinery. When significant parts of fixed assets are required to be replaced at intervals, the Company recognises such parts as individual assets with specific useful lives and depreciates them accordingly. Any trade discounts and rebates are deducted in arriving at the purchase price. Depreciation on Tangible Fixed Assets is provided on Straight Line method using the rates arrived at based on the useful lives as specified in the Schedule II to the Companies Act, 2013 or estimated by the management. The Company has used the following useful life to provide depreciation on its fixed assets. A: Assets where useful life is same as Schedule II Assets

Useful Life as Prescribed by Schedule II to the Companies Act, 2013

Plant & Machinery:- Continuous Process Plant

25 Years

Buildings (other than factory buildings) RCC Frame Structure

60 Years

Factory Buildings

30 Years

Fences, Wells, Tube Wells

5 Years

Borewell (Pipes, Tubes and Other Fittings)

5 Years

Bridges, Culverts, Bunders, etc.

30 Years

Others (including temporary structure, etc.)

3 Years

Carpeted Roads - RCC

10 Years

Carpeted Roads - other than RCC

5 Years

Non-carpeted Roads

3 Years

General Laboratory Equipment

10 Years

Electrical Installations and Equipment (At Factory)

10 Years

Motors, Tractors, Harvesting Combines and Heavy Vehicles

8 Years

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

B: Assets where useful life differ from Schedule II Assets

Useful Life as Prescribed by Estimated Useful Life Schedule II to the Companies Act, 2013

Plant & Machinery: :- Other than Continuous Process Plant (Single Shift)

15 Years

:- Other than Continuous Process Plant (Double Shift)

Additional 50% depreciation over single shift 20 Years

15 Years and 20 Years

:- Other than Continuous Process Plant (Triple Shift)

Additional 100% depreciation over single shift

10 Years and 15 Years

Thermal/Gas/Combined Cycle Power Generation Plant 40 Years

25 Years

Buildings (other than factory buildings) other than RCC Frame Structure

30 Years

60 Years

Office Electronic Equipment

5 Years

4 Years

Office Computers (end-user devices, desktops, laptops)

3 Years

4 Years

Servers

6 Years

4 Years

Vehicles

8-10 Years

4 Years to 5 Years

Electrically Operated Vehicles

8 Years

5 Years

Furniture & Fixtures and Other Office Equipment

10 Years

5 Years to 7 Years

Useful life of assets different from prescribed in Schedule II has been estimated by the management supported by technical assessment. C: Plant and Machinery 2 to 25 Years

D: Assets at Showroom Assets at Showroom

5 Years

E: Leasehold Assets Leasehold Land

Period of Lease

Leasehold Improvements

Period of Lease 5 Years

Fixed Assets, individually costing less than Rupees five thousand, are fully depreciated in the year of purchase. Depreciation on the Fixed Assets added/disposed off/discarded during the year is provided on pro-rata basis with reference to the month of addition/disposal/discarding, and in the case of capitalisation of Greenfield/Brownfield project, depreciation is charged from the date the project is ready to commence commercial production to the Statement of Profit and Loss. V.

INTANGIBLE ASSETS AND AMORTISATION Intangible Assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any. Intangible Assets are amortised on a straight-line basis over their estimated useful lives.

VI.

Assets

Estimated Useful Life

Brands/Trademarks Technical Know-how Computer Software Goodwill

10 Years 7 Years 3 Years Not being amortised (Tested for Impairment)

IMPAIRMENT OF ASSETS The carrying amounts of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in the prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

VII.

BORROWING COSTS Borrowing Costs attributable to acquisition and construction of qualifying assets are capitalised as a part of the cost of such assets up to the date when such assets are ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred. TRANSLATION OF FOREIGN CURRENCY ITEMS Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Foreign currency monetary items are reported using closing rate of exchange at the end of the year. With respect to the exchange difference arising on translation/settlement of long-term foreign currency items from 1st April, 2011, the Company has adopted the following policy:

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VIII.

STANDALONE FINANCIAL STATEMENTS

Separately identified Component of Plant and Machinery

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

(i)

Foreign exchange difference on account of a depreciable asset is adjusted in the cost of the depreciable asset, which would be depreciated over the balance life of the asset.

(ii)

In other cases, the foreign exchange difference is accumulated in a Foreign Currency Monetary Item Translation Difference Account, and amortised over the balance period of such long-term asset/liability.

Exchange difference on restatement of all other monetary items is recognised in the Statement of Profit and Loss. Other nonmonetary items like fixed assets, investments in equity shares are carried in terms of historical cost using the exchange rate at the date of transaction. IX.

DERIVATIVE INSTRUMENTS Premium/Discount, in respect of forward foreign exchange contract to hedge an underlying recorded asset or liability, is recognised over the life of the contracts. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognised in the Statement of Profit and Loss in the year in which the exchange rate changes. Profit/Loss on cancellation/renewal of forward exchange contract is recognised as income/expense for the year. The Company enters into forward contracts to hedge the foreign currency risk of firm commitments and highly probable forecast transactions and designates such forward contracts as cash flow hedge by applying the principles set out in the Accounting Standard-30 - Financial Instruments: Recognition and Measurement. All such forward contracts are used as risk management tools and not for speculative purposes.

STANDALONE FINANCIAL STATEMENTS

For the forward contracts designated as cash flow hedges, the effective portion of the fair value of forward contracts are recognised in Hedging Reserve (net of taxes) under Reserves and Surplus, and reclassified into, i.e., recognised in, the Statement of Profit and Loss in the period or periods during which the underlying hedged item assumed affects profit or loss. The ineffective portion of the change in fair value of such instruments is recognised in the Statement of Profit and Loss in the period in which they arise. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur, the hedge accounting is discontinued and the fair value changes, arising from the forward contracts are recognised in the Statement of Profit and Loss. The Company uses derivative financial instruments such as currency swap, and interest rate swaps to hedge its risks associated with foreign currency fluctuations and interest rate. As per the Institute of Chartered Accountants of India (ICAI) announcement regarding accounting for derivative contracts, other than covered under AS-11 and foreign exchange contracts to hedge highly probable forecast transactions and firm commitments described above, these are mark-to-market on the portfolio basis and net loss after considering the offsetting effect on the underlying hedged item is charged to the income statement. Net gains are ignored. X.

INVESTMENTS Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Investments are recorded at cost on the date of purchase, which include acquisition charges such as brokerage, stamp duty, taxes, etc. Current Investments are stated at lower of cost and net realisable value. Long-term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in the value.

XI.

INVENTORIES Raw materials, components, stores and spares, and packing materials are valued at lower of cost and net realisable value. However, these items are considered to be realisable at cost if the finished products, in which they will be used, are expected to be sold at or above cost. Work-in-progress, finished goods and stock-in-trade are valued at lower of cost and net realisable value. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed on a weighted-average basis. Proceeds in respect of sale of raw materials/stores are credited to the respective heads. Obsolete, defective and unserviceable inventory are duly provided for. Certified Emission Reductions (CERs) are valued at lower of cost and net realisable value. Cost includes consultant’s fee and the cash payment made under the second levy to the concerned authorities for obtaining the credit of CERs.

XII.

GOVERNMENT GRANTS Government Grants are recognised when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Revenue grants are recognised in the Statement of Profit and Loss. Capital grants relating to specific Tangible/Intangible Assets are reduced from the gross value of the respective Tangible/Intangible Assets. Other capital grants in the nature of promoter’s contribution are credited to capital reserve.

XIII.

REVENUE RECOGNITION Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and can be reliably measured. Revenue from sale of products is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sale of goods are recorded net of trade discounts, rebates, Sales Tax, Value Added Tax and gross of Excise Duty. Revenue from services are recognised as they are rendered based on agreements/arrangements with the concerned parties and recognised net of Service Tax.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

Fertiliser price support under Group Concession and other Scheme of Government of India is recognised based on management’s estimate taking into account known policy parameters and input price escalation/de-escalation. Income from Certified Emission Reductions (CERs) is recognised on sale of CERs. Interest Income is recognised on a time proportion basis taking into account the amount outstanding and applicable interest rate. Dividend income on investments is accounted for when the right to receive the payment is established. RETIREMENT AND OTHER EMPLOYEE BENEFITS (a)

Defined Contribution Plan The Company makes defined contribution to Government Employee Provident Fund, Government Employee Pension Fund, Employee Deposit Linked Insurance, ESI and Superannuation Schemes, which are recognised in the Statement of Profit and Loss on accrual basis.

(b)

Defined Benefit Plan The Company’s liabilities under Payment of Gratuity Act, long-term compensated absences and pension are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method except for short-term compensated absences, which are provided for based on estimates. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the terms of the Government bonds are consistent with the estimated terms of the defined benefit obligation. In respect of certain employees, Provident Fund contributions are made to a Trust, administered by the Company. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and shortfall, if any, shall be made good by the Company. The Company’s liability is actuarially determined (using the Projected Unit Credit Method) at the end of the year and any shortfall in the Fund size maintained by the Trust set up by the Company is additionally provided for. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise.

XV.

EMPLOYEE STOCK OPTIONS The stock options and stock appreciation rights (SAR) granted are accounted for as per the accounting treatment prescribed by Securities and Exchange Board of India (Share-Based Employee Benefits) Regulations, 2014, issued by Securities and Exchange Board of India and the Guidance Note on Accounting for Employee Share-based Payments, issued by the ICAI, whereby the intrinsic value of the option is recognised as employee compensation. The employee compensation is charged to the Statement of Profit and Loss on the straight-line basis over the vesting period of the option. In respect of re-pricing of existing stock options, the incremental intrinsic value of the options is accounted as employee cost over the remaining vesting period. In case of forfeiture stock option which is not vested, amortised portion is reversed by credit to employee compensation expense. In a situation where the stock option expires unexercised, the related balance standing to the credit of the employees Stock Options Outstanding Account are transferred to the General Reserve.

XVI. TAXATION Tax expense comprises of current and deferred tax. Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income-tax Act, 1961. Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that these would be realised in future. The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain, that sufficient future taxable income will be available. In case of unabsorbed losses and unabsorbed depreciation, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profit. At each Balance Sheet date the Company reassesses the unrecognised deferred tax assets.

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Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the ICAI, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period.

STANDALONE FINANCIAL STATEMENTS

XIV.

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NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

XVII. RESEARCH AND DEVELOPMENT Revenue expenditure on research is expensed under the respective heads of the account in the period in which it is incurred. Development expenditure is capitalised as an asset if the following conditions can be demonstrated: a) The technical feasibility of completing the asset so that it can be made available for use or sell. b) The Company has intention to complete the asset and use or sell it. c) The Company has the ability to sell the asset. d) The future economic benefits are probable. e) The Company has the ability to measure the expenditure attributable to the asset during its development reliably. Other development costs which do not meet the above criteria are expensed out during the period in which they are incurred. XVIII. FINANCE LEASE As a Lessee: Leases, where substantially all the risks and benefits incidental to ownership of the leased item are transferred to the Lessee, are classified as finance lease. The Company has capitalised the leased item at lower of fair value and present value of the minimum lease payments at the inception of the lease and disclosed as leased assets. Such assets are amortised over the period of lease or estimated life of such asset, whichever is less. Lease payments are apportioned between the finance charges and reduction of the lease liability based on implicit rate of return. Lease management fees, lease charges and other initial direct costs are capitalised. XIX. OPERATING LEASES (a) As a Lessee: Leases, where significant portion of risk and reward of ownership are retained by the Lessor, are classified as Operating Leases and lease rentals thereon are charged to the Statement of Profit and Loss on a straight-line basis over the lease term.

STANDALONE FINANCIAL STATEMENTS

(b)

XX.

As a Lessor: The Company has leased certain tangible assets, and such leases, where the Company has substantially retained all the risks and rewards of ownership, are classified as operating leases. Lease income is recognised in the Statement of Profit and Loss on a straight-line basis over lease term. Initial direct costs are recognised in the Statement of Profit and Loss.

CASH AND CASH EQUIVALENTS Cash and Cash Equivalents for the purpose of Cash Flow Statement comprise cash on hand and cash at bank including fixed deposit with original maturity period of three months or less and short-term highly liquid investments with an original maturity of three months or less.

XXI. CASH FLOW STATEMENT Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. XXII. EARNINGS PER SHARE Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period and for all periods presented is adjusted for events such as bonus issue; bonus element in a rights issue to the existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. XXIII. CONTINGENT LIABILITIES AND PROVISIONS Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, based on the available evidence. Provisions are recognised when there is a present obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date.

L

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NOTE: 2 SHARE CAPITAL Authorised: Equity Shares of ` 10/- each Redeemable Preference Shares of ` 100/- each

Issued: EQUITY SHARE CAPITAL Equity Shares of ` 10/- each

Subscribed and Paid-up: EQUITY SHARE CAPITAL Equity Shares of ` 10/- each, fully paid-up

Issued, Subscribed and Paid-up: PREFERENCE SHARE CAPITAL 6% Redeemable Cumulative Preference Shares of `100/- each, fully paid-up

` in Crores As at 31st March, 2014

175.00

175.00

5.00

5.00

180.00

180.00

130.28

130.13

130.28

130.13

130.14

130.08

130.14

130.08



0.10



0.10

130.14

130.18

175,000,000 (175,000,000) 500,000 (500,000)

130,279,180 (130,126,295)

130,137,193 (130,084,972)

— (10,000)

Reconciliation of the number of shares outstanding at the beginning and at the end of the period Sr. Description No.

1

2)

Numbers

As at 31st March, 2015

No. of Shares Outstanding at the beginning of the period

As at 31st March, 2015

As at 31st March, 2014

Equity Shares

Preference Shares

Equity Shares

Preference Shares

130,084,972

10,000

120,213,187

10,000



19





51,766



2

Allotment of Rights Shares kept in abeyance on various dates

3

Allotment of Shares on exercise of option by employee under ESOS-2006

4

Conversion of Warrants into Equity Shares by the Promoter Group





9,820,000



5

Redemption of Preference Shares



10,000





6

No. of Shares Outstanding at the end of the period

130,137,193



130,084,972

10,000

52,221

Term/Right Attached to Equity Shares The Company has only one class of equity shares having a par value of ` 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution to all preferential holders. The distribution will be in proportion to the number of the equity shares held by the shareholders. The Board of Directors has recommended Equity Dividend of ` 7.00 per share for the year ended 31st March, 2015 (Previous Year: ` 7.00 per share). The total cash outflows on account of the Equity Dividend would be ` 91.10 Crore (Previous Year: ` 91.06 Crore) and Dividend Distribution Tax thereon (Net of Tax Credit on dividend from subsidiary companies) would be ` 18.55 Crore (Previous Year: ` 6.67 Crore).

141

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1)

NOTES FORMING PART OF FINANCIAL STATEMENTS

STANDALONE FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

3)

During the year, 10,000-6% Redeemable Cumulative Preference Shares of ` 100/- each of the Company have been redeemed out of the profits of the Company, on 29th September 2014. These preference shares carry cumulative dividend @6% p.a. An Interim Dividend of ` ß has been declared and paid on these preference shares on pro-rata basis and Dividend Distribution Tax thereon of ` ß has been paid.

4)

The Company does not have any Holding Company.

5)

Shares in the Company held by each shareholder holding more than 5 per cent shares and the number of shares held are as under: i)

Equity Shares

Sr. No.

As at 31st March, 2015

As at 31st March, 2014

No. of Shares Held

% of Total Paid-up Equity Share Capital

No. of Shares Held

% of Total Paid-up Equity Share Capital

IGH Holdings Private Limited

16,352,102

12.57%

16,352,102

12.57%

2

TGS Investment and Trade Private Limited

13,506,736

10.38%

13,506,736

10.38%

3

Umang Commercial Company Limited

12,494,765

9.60%

12,494,765

9.60%

4

Trapti Trading & Investments Private Limited

9,423,935

7.24%

9,423,935

7.24%

5

Hindalco Industries Limited

8,650,412

6.65%

8,650,412

6.65%

6

Life Insurance Corporation of India

7,276,236

5.59%

7,759,191

5.96%

Preference Shares

Sr. No.

6)

Name of Shareholder

1

ii)

STANDALONE FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Name of Shareholder

As at 31st March, 2015 No. of Shares Held

As at 31st March, 2014

% of Total Paid-up Preference Share Capital

No. of Shares Held

% of Total Paid-up Preference Share Capital

1

Naman Finance and Investment Private Limited





5,000

50.00%

2

Infocyber (India) Private Limited





5,000

50.00%

Shares reserved for issue under options and contracts, including the terms and amounts: For details of Shares reserved for issue under the Employee Stock Options Plan (ESOP) of the Company refer Note: 41.

7)

There are no Equity and Preference Shares issued as fully paid-up pursuant to any contract in consideration of other than cash or bought back during the preceding last five years except issue of 10,000-6% Redeemable Cumulative Preference Shares of ` 100/- each pursuant to a Scheme of Composite Arrangement to shareholders of Pantaloons Fashion & Retail Limited.

8)

Pursuant to the provisions of Section 126 of the Companies Act, 2013, the issue of following equity shares is kept in abeyance. Sr. No.

Particulars

1

Rights Issue (1994)

2

Bonus Share on Above

3

Rights Issue (2007)

No. of Shares As at 31st March, 2015

As at 31st March, 2014

12,575

12,575

6,288

6,288

22,460

22,460

9)

During the year, 100,664 ESOP shares have been issued by the Company, which will be allotted upon the exercise of ESOP.

10)

In the year 1997, the Company had forfeited 4,487 shares held by 299 holders on account of non-payment of call money with interest on shares issued against each detachable warrant.

11)

3,168,459 Equity Shares (Previous Year: 3,182,052) are represented by Global Depository Receipts.

12)

During the last five years there were 30 Bonus Shares (Previous Year: 80 Bonus Shares) issued out of shares kept in abeyance.

13)

Figures in brackets represent the corresponding number of shares for Previous Year.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores As at 31st March, 2015

As at 31st March, 2014

266.62

266.62

8.46

8.46

NOTE: 3 RESERVES AND SURPLUS 1)

Capital Reserve

2)

Capital Redemption Reserve Opening Balance as per last audited Financial Statement Addition: Transfer from Surplus in the Statement of Profit and Loss on Redemption of Preference Shares

3)

0.10



8.56

8.46

3,979.14

3,089.75



884.64

Securities Premium Account Opening Balance as per last audited Financial Statement Conversion of Share Warrants ESOP Exercised

3.54

3.50

Transfer from Stock Options Outstanding Account on Exercise of Options

1.21

1.25

Allotment of Rights Issue Shares

4)



ß

3,983.89

3,979.14

22.08

51.10

22.50

20.98

Debenture Redemption Reserve Opening Balance as per last audited Financial Statement Addition: Transfer from Surplus in the Statement of Profit and Loss Deduction: Transfer to General Reserve on Redemption of Debentures

5)



50.00

44.58

22.08

4.09

3.87

3.76

1.49

Share Options Outstanding Account Opening Balance as per last audited Financial Statement Addition: Charge for the Year Deduction: Transfer to Securities Premium Account on Exercise of Options Transfer to General Reserve on Lapse of Options

1.25



0.02

6.64

4.09

3,475.04

2,925.02

Other Reserves i)

General Reserve* Opening Balance as per last audited Financial Statement Addition: Transfer from Surplus in the Statement of Profit and Loss

200.00

500.00

Transfer from Debenture Redemption Reserve on Redemption of Debentures



50.00

Transfer from Share Options Outstanding Account on Lapse of Options



0.02

12.51



3,662.53

3,475.04

Deduction: Transitional Provision of Schedule II Impact (Net of Deferred Tax Amounting of ` 6.44 Crore) [Refer Note: 1(II)]

` in Crores

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6)

1.21

STANDALONE FINANCIAL STATEMENTS

Addition:

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

ii)

Aditya Birla Nuvo Limited - Annual Report 2014-2015

As at 31st March, 2015

As at 31st March, 2014

(0.43)

(2.47)

(2.08)

0.26

(0.56) —

(2.04) 0.26

(1.95)

(0.43)

3,660.58

3,474.61

222.56

167.34

527.69

673.95

22.50 200.00 0.10

20.98 500.00 —

91.10 — 0.02 ß 18.55 ß

91.06 0.01 0.01 — 6.67 —

417.98

222.56

8,388.85

7,977.56

Hedging Reserve** Opening Balance as per last audited Financial Statement Addition: Gain/(Loss) recognised during the year (Net) Deduction: Gain/(Loss) recycled during the year (Net) Transfer on Sale of Carbon Black Business

Total Other Reserves

STANDALONE FINANCIAL STATEMENTS

7)

Surplus/(Deficit) in the Statement of Profit and Loss Opening Balance as per last audited Financial Statement Addition: Profit for the Year Less: Appropriations Transfer to Debenture Redemption Reserve Transfer to General Reserve Transfer to Capital Redemption Reserve on Redemption of Preference Shares Proposed Dividend on: Equity Shares Preference Shares Equity Dividend relating to Previous Period Interim Dividend on Preference Shares Corporate Tax on Proposed Dividend*** Corporate Tax on Interim Dividend

Total Reserves and Surplus *

General Reserve is created by appropriation from profits of the current year and/or undistributed profits of previous years, before declaration of dividend duly complying with any regulations in this regard. The General Reserve is a free reserve and can be utilised in accordance with the provisions of the Companies Act, 2013.

**

For the forward contracts designated as cash flow hedges, the effective portion of the fair value of forward contracts are recognised in Hedging Reserve under Reserves and Surplus.

***

Net of Tax Credit on dividend from subsidiary companies. ` in Crores As at 31st March, 2015

As at 31st March, 2014

142.33

121.39

NOTE: 4A LONG-TERM BORROWINGS SECURED Rupee Term Loans from Banks Financial Institutions Foreign Currency Loans from Banks Finance Lease Liabilities

42.24

86.73

267.05

399.14

0.59



452.21

607.26

800.00

500.00

UNSECURED Debentures Foreign Currency Loans from Banks

L

144

228.25

284.93

1,028.25

784.93

1,480.46

1,392.19

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores As at 31st March, 2015

As at 31st March, 2014

585.54

996.87

585.54

996.87

1,000.93

741.35

372.90

395.78

1,373.83

1,137.13

1,959.37

2,134.00

1,491.22

1,244.14

NOTE: 4B SHORT-TERM BORROWINGS SECURED Loan Repayable on Demand from Banks

UNSECURED Loan Repayable on Demand from Banks Other Loans and Advances Commercial Papers*

* Maximum balance outstanding during the year * Commercial Papers are shown net of unamortised discounting charges. NOTE: 4A and 4B

` in Crores (I)

SECURED LONG-TERM BORROWINGS:

(A)

Rupee Term Loans from Banks

Non-Current

Current

Non-Current

i)

Term loan secured by way of first pari passu charge created by mortgage of the immovable properties of the Company situated at Veraval and Rishra (Textile Divisions), and hypothecation of movables (save and except book debts) situated at these locations, subject to prior charge(s) created on certain assets in favour of a Financial Institution and on Bankers Goods in favour of the Company’s Bankers for working capital borrowings. Repayment Terms: 17 half-yearly instalments from 1st July, 2007. First four instalments of ` 0.25 Crore each, next 4 instalments of ` 0.50 Crore each, next 4 instalments of ` 1.50 Crore each and next 5 instalments of ` 3.20 Crore each.

3.20



6.40

3.20

ii)

Term loan secured by way of first pari passu charge created by mortgage of immovable properties of the Company’s Madura Garment Export Plants at Kasaba Hobli, Karnataka, and hypothecation of movable fixed assets of the Company at these plants. Repayment Terms: 17 half-yearly instalments from 29th December, 2008. First four instalments of ` 0.16 Crore each, next 4 instalments of ` 0.32 Crore each, next 4 instalments of ` 0.96 Crore each and next 5 instalments of ` 2.05 Crore each.

4.10

4.09

3.01

8.19

iii)

Term loan secured by way of first pari passu charge created by hypothecation of movable fixed assets of the Company’s Madura Garment Export Plant at Kasaba Hobli, Karnataka. Repayment Terms: 32 quarterly instalments from 1st January, 2010. First instalment of ` 0.16 Crore, next 4 instalments of ` 0.04 Crore each, next 8 instalments of ` 0.08 Crore each, next 8 instalments of ` 0.24 Crore each, next 8 instalments of ` 0.51 Crore each and next 3 instalments of ` 0.34 Crore each.

1.53

3.07

0.72

5.12

iv)

Term Loan secured by way of first pari passu charge created by hypothecation of movable plant and machinery of the Company’s Madura Clothing Plant at Marasur Village, Karnataka. Repayment Terms: 17 half-yearly instalments from 27th September, 2009. First four instalments of ` 0.04 Crore

1.02

1.54

0.48

2.56

145

L

Current

As at 31st March, 2014

STANDALONE FINANCIAL STATEMENTS

As at 31st March, 2015

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015 Current

Non-Current

As at 31st March, 2014 Current

Non-Current

each, next 4 instalments of ` 0.08 Crore each, next 4 instalments of ` 0.24 Crore each and next 5 instalments of ` 0.51 Crore each. v)

vi)

STANDALONE FINANCIAL STATEMENTS

vii)

viii)

ix)

x)

xi)

Term Loan secured by way of first pari passu charge created by hypothecation of movable plant and machinery of the Company’s Madura Clothing Plant at Marasur Village, Karnataka. Repayment Terms: 17 half-yearly instalments from 4th September, 2010. First four instalments of ` 0.12 Crore each, next 4 instalments of ` 0.24 Crore each, next 4 instalments of ` 0.72 Crore each and next 5 instalments of ` 1.54 Crore each. Term Loan secured by way of first pari passu charge created by hypothecation of movable plant and machinery of the Company’s Madura Clothing Plant at Marasur Village, Karnataka. Repayment Terms: 21 equal quarterly instalments of ` 0.38 Crore each from 4th September, 2009. Term loan secured by way of first pari passu charge created by hypothecation of the entire movable properties (save and except current assets and assets on which an exclusive charge has been created in favour of Exim Bank) of the Companys’ Rayon Divison Plant at Veraval and Textile Division Plant at Rishra. Repayment Terms: 10 half-yearly instalments from 31st May, 2014. First three instalments of ` 0.40 Crore & each, next 3 instalments of ` 0.80 Crore each and next 4 instalments of ` 7.85 Crore each. Term loan secured by way of first pari passu charge created by hypothecation of the entire movable properties (save and except current assets and assets on which an exclusive charge has been created in favour of Exim Bank) of the Companys’ Rayon Divison Plant at Veraval and Textile Division Plant at Rishra. Repayment Terms: 10 half-yearly instalments from 29th July, 2015. First three instalments of ` 0.74 Crore each, next 3 instalments of ` 1.48 Crore each and next 4 instalments of ` 4.83 Crore each. Term loan secured by way of first pari passu charge created by hypothecation of the entire movable properties of the Companys’ Rayon Divison Plant at Veraval and Textile Division Plant at Rishra. Repayment Terms: 10 half-yearly instalments from 30th June, 2015. First four instalments of ` 0.50 Crore each, next 2 instalments of ` 1.00 Crore each, next 2 instalments of ` 9.00 Crore each, next 1 instalment of ` 10.00 Crore and last instalment of ` 1.00 Crore. Term loan secured by way of first pari passu charge created by hypothecation of the entire movable properties of the Companys’ Rayon Divison Plant at Veraval and Textile Division Plant at Rishra. Repayment Terms: 20 quarterly instalments from 3rd September, 2016. First four instalments of ` 0.56 Crore each, next 8 instalments of ` 1.12 Crore each, next 4 instalments of ` 1.35 Crore each, and last 4 instalments of ` 1.46 Crore each. Term loan to be secured by way of first pari passu charge created by hypothecation of the entire movable properties of the Companys’ Rayon Divison Plant at Veraval and Textile Division Plant at Rishra. Repayment Terms: 21 quarterly instalments from 19th December, 2016. First four instalments of ` 0.18 Crore each, next 4 instalments of ` 0.23 Crore each, next 4 instalments of ` 0.27 Crore each, next 4 instalments of ` 0.36 Crore each and last 5 instalments of ` 0.97 Crore each.

L

146

1.44

7.68

1.44

9.12





0.76



1.20

33.00

0.80

34.20

1.49

24.51



26.00

1.00

32.00



33.00



22.44







9.00





MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores As at 31st March, 2015 Current xii)

Term loan to be secured by way of first pari passu charge by way of hypothecation of all movable assets of the Company’s Madura Clothing Plant at Marasur Village, Karnataka. (Crafted Clothing Plant No. 527, Marsur Village, Anekal Taluk, Bangalore – 562106, and Fashion Craft Plant No. 324, Marsur Village, Anekal Taluk, Bangalore – 562106) Repayment Terms: 21 quarterly instalments from 23rd March, 2017. First three instalments of ` 0.10 Crore each, next 4 instalments of ` 0.13 Crore each, next 4 instalments of ` 0.15 Crore each, next 4 instalments of ` 0.20 Crore each and last 5 instalments of ` 0.54 Crore each. Total Rupee Term Loans from Banks (A)

Non-Current

As at 31st March, 2014 Current

Non-Current



5.00





14.98

142.33

13.61

121.39

Term Loans from Financial Institutions

i)

Term loan secured by way of first pari passu charge created by mortgage of the immovable properties of the Company situated at Veraval and Rishra (Textile Divisions) and hypothecation of movables (save and except book debts) situated at these locations, subject to prior charge(s) created on certain assets in favour of a Financial Institution and on Bankers Goods in favour of the Company’s Bankers for working capital borrowings. Repayment Terms: 17 half-yearly instalments from 10th August, 2007. First four instalments of ` 1.00 Crore each, next 4 instalments of ` 2.00 Crore each, next 4 instalments of ` 6.00 Crore each and next 5 instalments of ` 12.80 Crore each.

12.80



25.60

12.80

ii)

Term loan secured by way of first pari passu charge created by mortgage of the immovable properties of the Company situated at Veraval and Rishra (Textile Divisions) and hypothecation of movables (save and except book debts) situated at these locations, subject to prior charge(s) created on certain assets in favour of a Financial Institution and on Bankers Goods in favour of the Company’s Bankers for working capital borrowings. Repayment Terms: 17 half-yearly instalments from 3rd January, 2009. First four instalments of ` 0.95 Crore each, next 4 instalments of ` 1.90 Crore each, next 4 instalments of ` 5.70 Crore each and next 5 instalments of ` 12.16 Crore each.

24.32

24.32

17.86

48.64

iii)

Term loan secured by way of first pari passu charge created by hypothecation of movable fixed assets situated at Veraval and Rishra (Textile Divisions). Repayment Terms: 17 half-yearly instalments from 20th March, 2010. First four instalments of ` 0.35 Crore each, next 4 instalments of ` 0.70 Crore each, next 4 instalments of ` 2.10 Crore each and next 5 instalments of ` 4.48 Crore each.

6.58

17.92

4.20

24.50

iv)

Term loan secured by way of first pari passu charge created by mortgage of immovable properties of the Company’s Madura Garment Export Plants at Parappana Agrahara, Karnataka, and hypothecation of movable fixed assets of the Company at these plants. Repayment Terms: 16 equal half-yearly instalments of ` 0.42 Crore from 20th December, 2006.





0.42



147

L

(B)

STANDALONE FINANCIAL STATEMENTS

- Effective cost for the above loans are in the range of 5.20% to 12.10% per annum. (Previous Year: in the range of 4.71% to 12.10% per annum.)

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015 Current

Non-Current

As at 31st March, 2014 Current

Non-Current

v)

Term loan secured by way of first pari passu charge created by mortgage of immovable properties of the Company’s Madura Garment Export Plants at Parappana Agrahara, Karnataka, and hypothecation of movable fixed assets of the Company at these plants. Repayment Terms: 16 equal half-yearly instalments of ` 0.33 Crore from 20th March, 2008.

0.34



0.66

0.34

vi)

Term Loan secured by way of first pari passu charge created by mortgage of immovable properties of the Company’s Madura Clothing Plant at Marasur Village, Karnataka, and hypothecation of movable fixed assets of the Unit at these plants. Repayment Terms: 16 equal half-yearly instalments of ` 0.23 Crore each from 20th September, 2008.

0.45



0.46

0.45

44.49

42.24

49.20

86.73

Total Rupee Term Loans from Financial Institutions (B)

STANDALONE FINANCIAL STATEMENTS

- Effective cost for the above loans are in the range of 2.49% to 6.75% per annum. (Previous Year: in the range of 2% to 6.75% per annum.) (C)

Foreign Currency Term Loans from Banks

i)

Foreign Currency Loan secured by way of first pari passu charge created by hypothecation of all movable properties (excluding current assets and investments) of the Company’s Garment Division (Madura Garments), including brand rights and goodwill but excluding all movable properties relating to Madura Garments Exports Plants at Kasaba Hobli, Karnataka, Madura Clothing Plant at Marasur Village, Karnataka, and Madura Garments Export Plants at Parappana Agrahar, Karnataka. Repayment Terms: 3 equal instalments of ` 32.76 Crore each on the date falling on 36, 42 and 48 months from 29th September, 2011. (Refinanced on 8th July, 2014)





65.52

32.76

ii)

Foreign Currency Loan secured by way of first pari passu charge created by hypothecation on all movable Fixed Assets of the Company (save and except current assets and investments) situated at Veraval and Rishra (Textile Division).







158.12







161.64

46.62



46.62

46.62

52.71

105.41





Repayment Terms: 3 equal instalments of ` 52.71 Crore each on the date falling on 4th, 5th and 6th year from 11th January, 2012. (Refinanced on 31st July, 2014) iii)

Foreign Currency Loan secured by way of first pari passu charge created by hypothecation on all movable Fixed Assets of the Indo Gulf Fertiliser Division (excluding Argon Gas Plant) situated at Jagdishpur, Uttarpradesh. Repayment Terms: Bullet payment on 16th May, 2017. (Refinanced on 10th November, 2014)

iv)

Foreign Currency Loan secured by way of first pari passu charge by way of hypothecation of entire movable assets (save and except current assets) situated at Veraval, Rishra (Textile Division), Insulator Divisions at Halol and Rishra. Repayment Terms: 2 equal yearly instalments of USD 0.50 Crore each from 11th November, 2014 and 2 equal instalments of USD 0.50 Crore each from 25th February, 2015.

v)

Foreign Currency Loan secured by way of first pari passu charge created by hypothecation on all movable assets of the Company (save and except current assets) situated at Veraval and Rishra (Textile Divisions). Repayment Terms: 3 equal yearly instalments of ` 52.71 Crore each starting from 11th January, 2016.

L

148

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores As at 31st March, 2015 Current vi)

Foreign Currency Loan secured by way of first pari passu charge created by hypothecation on all movable assets of the Indo Gulf Fertiliser Division (save and except current assets) situated at Jagdishpur, Uttarpradesh. Repayment Terms: Bullet payment on 16th May, 2017. Total Foreign Currency Term Loans from Banks (C)

Non-Current

As at 31st March, 2014 Current

Non-Current



161.64





99.33

267.05

112.14

399.14

- Effective cost for the above loans are in the range of 5.95% to 8.17% per annum. (Previous Year: in the range of 6% to 9.10% per annum.) (D)

Finance Lease Liability

i)

Finance Lease Obligation is secured by hypothecation of plant and machinery taken on lease. Repayment Terms : Lease obligation plus interest is payable in 19 quarterly instalments of ` 0.06 Crore each.

0.17

0.59





Total Finance Lease Liability (D)

0.17

0.59





158.97

452.21

174.95

607.26

- Effective cost for the above loan is 9.95% per annum. (Previous Year: Nil) Total Secured Long-term Borrowings

` in Crores Current

Non-Current

As at 31st March, 2014 Current

Non-Current

(II)

UNSECURED LONG-TERM BORROWINGS:

(A)

Debentures

i)

8.99% 29th Series Non-Convertible Debentures. Repayment Terms: Redeemable at par on 29th January, 2018.



300.00



300.00

ii)

9.00% 30th Series Non-Convertible Debentures. Repayment Terms: Redeemable at par on 10th May, 2023.



200.00



200.00

iii)

8.68% 31st Series Non-Convertible Debentures. Repayment Terms: Redeemable at par on 2nd February, 2020.



300.00





Total Debentures



800.00



500.00

Unsecured Long-term Foreign Currency Borrowings:

i)

Foreign Currency Loan from Bank. Repayment Terms: 3 instalments of ` 9.45 Crore, ` 9.45 Crore and ` 28.33 Crore each on the date falling on 3rd, 4th and 5th year from 1st June, 2010, and 3 instalments of ` 9.45 Crore, ` 9.45 Crore and ` 28.34 Crore each on the date falling on 3rd, 4th and 5th year from 26th July, 2010. (Refinanced on 10th November, 2014)





18.90

56.68

ii)

Foreign Currency Loan from Bank. Repayment Terms: Bullet payment on 21st November, 2014.





33.33



iii)

Foreign Currency Loan from Bank. Repayment Terms: Intsalments of ` 28.34 Crore each on 1st June, 2015 and 26th July, 2015.

56.68







iv)

Foreign Currency Loan from Bank. Repayment Terms: 3 equal half-yearly instalments of ` 32.76 Crore each from 29th September, 2014.

32.76







v)

Foreign Currency Loan from Bank. Repayment Terms: Bullet payment on 24th August, 2016. (Refinanced on 10th November, 2014)







228.25

149

L

(B)

STANDALONE FINANCIAL STATEMENTS

As at 31st March, 2015

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015 vi)

Foreign Currency Loan from Bank. Repayment Terms: Bullet payment on 24th August, 2016. Total Unsecured Long-term Foreign Currency Borrowings

Current Non-Current — 228.25 89.44

228.25

As at 31st March, 2014 Current —

Non-Current —

52.23

284.93

- Effective cost for the above loans are in the range of 3.76% to 6.41% per annum. (Previous Year: in the range of 6.45% to 7.75% per annum.) Total Unsecured Long-term Borrowings

89.44

1,028.25

52.23

784.93 ` in Crores As at 31st Mach, 2014

(III)

SECURED SHORT-TERM BORROWINGS:

i)

Working Capital Borrowings are secured by hypothecation of inventories, book debts and other movables, both present and future, held as current assets.

585.54

673.77

ii)

Loan has been availed by the unit under the Special Banking Arrangement (SBA) of Department of Fertilizer, Government of India, and has been secured against subsidy recoverable from Government of India. As per the arrangement, the loan will be repaid directly by Government of India to the Bank and corresponding adjustment will be made in Subsidies recoverable. Interest rate in Previous Year @ 10.40% per annum, out of which interest @ 8% per annum will be borne by Government of India.



323.10

585.54

996.87

Total Secured Short-term Borrowings

STANDALONE FINANCIAL STATEMENTS

As at 31st March, 2015

-

Effective cost for the above loans are in the range of 9.25% to 15.50% per annum. (Previous Year: in the range of 2.40% to 16.50% per annum.)

-

Foreign Currency Loans have been fully hedged for foreign exchange and interest rate fluctuation by way of Currency & Interest Rate swaps, Interest swaps and Long Term Forward Contracts.

-

Effective cost has been calculated with hedged cost in terms of foreign currency loan and net of interest subsidy in case of TUF loans.

L

150

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores As at 31st March, 2015

As at 31st March, 2014

NOTE: 5 DEFERRED TAX LIABILITIES Deferred Tax Liabilities at the year end comprise timing differences on account of: Depreciation

163.46

136.36

163.46

136.36

Expenditure/Provisions allowable on Payment basis

38.81

35.41

Others

18.27

13.06

57.08

48.47

106.38

87.89

Deposits

96.04

73.00

Others

18.55

23.83

114.59

96.83

248.24

227.18

DEFERRED TAX ASSETS Deferred Tax Assets at the year end comprise timing differences on account of:

Net Deferred Tax Liabilities

NOTE: 6B OTHER CURRENT LIABILITIES Current Maturities of Long-term Borrowings (Refer Note: 4A and 4B) Current Maturities of Finance Lease Obligations (Refer Note: 4A and 4B) Interest Accrued but Not Due on Borrowings

0.17



32.07

32.03

Investors’ Education and Protection Fund to be credited (as and when due): Unpaid Dividend Money Due for Refund on Fraction Shares

3.26

2.99

0.28

0.28

Other Payables: Advance from Customers

41.88

34.64

Payables for Capital Expenditure

29.69

37.24

Statutory Dues

62.49

49.49

Deposits

45.72

42.81

Derivative Liability (Net)*

14.36

14.80

Others

16.29

11.81

494.45

453.27

6.49

5.22

6.49

5.22

* This represents Mark-to-Market on Derivative Contracts taken for the purpose of hedging. NOTE: 7A LONG-TERM PROVISIONS Employee Benefits

151

L

Provisions for:

STANDALONE FINANCIAL STATEMENTS

NOTE: 6A OTHER LONG-TERM LIABILITIES

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015

As at 31st March, 2014

89.13

72.45

55.33

29.36

91.10

91.06



0.01

18.55

6.67

NOTE: 7B SHORT-TERM PROVISIONS Provisions for: Employee Benefits Others Taxation (Net of Advance Tax ` 583.23 Crore (Previous Year: ` 536.93 Crore)) Proposed Dividend Equity Preference Provision for Corporate Tax on Dividend# Equity Preference Other Short-term Provisions##





12.00

9.23

266.11

208.78

# Net of Tax Credit on Dividend from subsidiary companies.

STANDALONE FINANCIAL STATEMENTS

## Additional disclosure as per Accounting Standard-29 – “Provisions, Contingent Liabilities and Contingent Assets” A.

Warranty Opening Balance Arising during the year Unused Amounts Reversed Closing Balance

0.50

0.75

0.03



(0.09)

(0.25)

0.44

0.50

Provision is recognised for expected warranty claims on Insulator product sold during the last three years based on the past experience of level of returns and replacements. It is expected that this provision will be utilised within one year. B.

Customer Relationship Management Loyalty Programme Opening Balance Arising during the year Utilised Closing Balance

8.73

5.29

28.58

22.62

(25.75)

(19.18)

11.56

8.73

Customer Relationship Management Loyalty Programmes are the schemes designed with an intention to retain the existing customer and attract new customers by rewarding a customer for his loyalty and patronage. It is expected that this provision will be utilised within one year. NOTE: 8 TRADE PAYABLES Trade Payables

1,702.85

1,505.44

1,702.85

1,505.44

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2015, and no interest payment made during the year to any Micro, Small and Medium Enterprises. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.

L

152

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

NOTE: 9A ` in Crores

TANGIBLE ASSETS Freehold Leasehold Freehold Leasehold Leasehold Land Land Buildings Buildings Improvements

Plant & Furniture Office Vehicles Railway Equipment & Fixtures Equipment Sidings

TOTAL

Gross Block As at 1st April, 2013 Additions Transfer of Carbon Black Business Deletions As at 31st March, 2014

45.35

33.11

389.23

4.84

14.25

3,423.12

253.52

50.16

24.18

5.84

4,243.60

0.40

0.27

40.09

1.16

2.10

221.80

56.31

3.69

3.48



329.30

16.99

7.07

81.16





753.65

7.74

8.62

4.11



879.34



0.72

1.06



1.60

48.65

32.44

2.97

3.83



91.27

28.76

25.59

347.10

6.00

14.75

2,842.62

269.65

42.26

19.72

5.84

3,602.29

Additions





10.61

0.42

3.65

350.06

48.43

6.03

5.29



424.49

Deletions





0.30



0.81

42.35

15.93

4.52

3.17



67.08

28.76

25.59

357.41

6.42

17.59

3,150.33

302.15

43.77

21.84

5.84

3,959.70

As at 1st April, 2013

2.82

103.54

1.80

8.66

1,970.76

187.04

38.54

11.40

5.55

2,330.11

For the Year

0.11

8.90

0.63

2.08

122.90

47.53

3.12

3.03



188.30

Transfer of Carbon Black Business

1.02

15.72





299.90

4.56

6.29

1.75



329.24

Deletions

0.58

0.26



1.60

40.16

32.14

2.83

2.54



80.11

1.33

96.46

2.43

9.14

1,753.60

197.87

32.54

10.14

5.55

2,109.06

0.10

10.12

0.54

2.93

116.70

39.82

5.88

4.08



180.17

Deletions



0.02



0.80

38.72

15.79

4.46

2.32



62.11

Charge to General Reserve on account of Schedule II



6.88





11.74

0.02

0.31





18.95

As at 31st March 2015

1.43

113.44

2.97

11.27

1,843.32

221.92

34.27

11.90

5.55

2,246.07

As at 31st March, 2015

As at 31st March, 2014 For the Year

Net Block as at 31st March, 2014

28.76

24.26

250.64

3.57

5.61

1,089.02

71.78

9.72

9.58

0.29

1,493.23

Net Block as at 31st March, 2015

28.76

24.16

243.97

3.45

6.32

1,307.01

80.23

9.50

9.94

0.29

1,713.63

A. i)

The Company’s share in assets held under co-ownership - Leasehold Land ` 19.80 Crore (Previous Year: ` 19.80 Crore), Buildings ` 23.85 Crore (Previous Year: ` 23.85 Crore), Furniture & Fixtures ` 2.67 Crore (Previous Year: ` 2.65 Crore) and Office Equipment ` 5.75 Crore (Previous Year: ` 5.62 Crore).

ii)

Buildings include ` 8.19 Crore (Previous Year: ` 8.19 Crore) being cost of Debentures and Shares in a company entitling the right of exclusive occupancy and use of certain premises.

Details of Tangible Assets capitalised under Finance Lease: i)

C.

Plant and Equipment include Gross Block ` 0.98 Crore (Previous Year: ` Nil) and Net Block ` 0.78 Crore (Previous Year: ` Nil). Refer Note 38 (iv).

Addition to Plant and Equipment is net of Subsidy ` 0.02 Crore (Previous Year: ` 2.45 Crore).

153

L

B.

Gross Block of Tangible Assets includes:

STANDALONE FINANCIAL STATEMENTS

Accumulated Depreciation

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 9B ` in Crores

INTANGIBLE ASSETS Goodwill

Brands/ Trademarks

Computer Software

Technical Know-how

TOTAL

20.41

187.12

42.10

6.60

256.23

Additions





6.50



6.50

Deletions





0.13



0.13

Transfer of Carbon Black Business





3.24



3.24

Gross Block As at 1st April, 2013

As at 31st March, 2014

20.41

187.12

45.23

6.60

259.36

Additions





6.67



6.67

Deletions





0.04



0.04

20.41

187.12

51.86

6.60

265.99

As at 1st April, 2013



164.46

34.12

4.61

203.19

For the Year



4.24

5.56

0.92

10.72

Deletions





0.13



0.13

Transfer of Carbon Black Business





2.87



2.87

As at 31st March, 2015

STANDALONE FINANCIAL STATEMENTS

Accumulated Amortisation

As at 31st March, 2014



168.70

36.68

5.53

210.91

For the Year



2.14

6.13

0.92

9.19

Deletions





0.04



0.04



170.84

42.77

6.45

220.06

Net Block as at 31st March, 2014

20.41

18.42

8.55

1.07

48.45

Net Block as at 31st March, 2015

20.41

16.28

9.09

0.15

45.93

As at 31st March, 2015

All Intangible Assets are other than internally generated. ` in Crores Year Ended 31st March, 2015

Year Ended 31st March, 2014

Salaries and Wages



1.20

Contribution to Provident and Other Funds



0.10

Staff Welfare Expenses



0.08

Legal and Professional Expenses



5.08

Travelling and Conveyance



0.20

Interest Expenses



3.42

Miscellaneous Expenses



0.20

Total



10.28

NOTE: 9A and 9B During the year, the Company has capitalised the following expenses to cost of Fixed Assets/Capital Work-in-Progress

Add: Brought forward from previous year

6.61

11.93

Less: Capitalised during the year

3.05

15.60

Balance Pending Allocation included in Capital Work-in-Progress

3.56

6.61

L

154

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores

Face Value

As at 31st March, Number 2015

As at 31st March, Number 2014

NOTE: 10A NON-CURRENT INVESTMENTS

10 10 10 10 10 10 10

837,526,221

757,010,000 1,406,893,920 21,000,000 73,143,588 98,838,896 26,027,500 430,000

Less: Provision for Diminution Associate Birla Securities Limited

10



Less: Provision for Diminution Others Aditya Birla Science & Technology Private Limited (formerly Aditya Birla Science & Technology Company Limited) Birla Management Centre Services Limited Aditya Birla Port Limited

2,355.81

837,526,221

2,355.81

2,355.81

2,355.81

1,117.01 717,010,000 1,751.23 1,406,893,920 21.00 21,000,000 1,245.21 69,523,000 362.94 98,838,896 454.69 26,027,500 0.43 9,400

717.01 1,751.23 21.00 1,183.65 362.94 454.69 0.01

(0.43)



4,952.08

4,490.53



495,800

2.53



(2.52)



0.01

10 10

2,400,000 7,000

2.40 0.01

2,400,000 7,000

2.40 0.01

10

100,000

0.10

100,000

0.10

2.51 Preference Shares Unquoted Subsidiaries 8.00% Cumulative and Redeemable Preference Shares of Pantaloons Fashion & Retail Limited 8.00% Cumulative and Redeemable Preference Shares of Madura Garments Lifestyle Retail Company Limited 0.01% Compulsory Convertible Preference Shares of Aditya Birla Financial Services Limited (formerly Aditya Birla Financial Services Private Limited) 6% Non-Convertible Non-Cumulative Redeemable Preference Shares of Aditya Birla Financial Services Limited (formerly Aditya Birla Financial Services Private Limited)

2.51

10

500,000

0.50

500,000

0.50

10

10,000,000

10.00

10,000,000

10.00

10

476,500,000

476.50

876,500,000

876.50

10

681,110,000

681.11





1,168.11 Others 5.25% Cumulative Redeemable Preference Shares of Aditya Birla Health Services Limited# 8% Preference Shares of Birla Management Centre Services Limited

887.00

100

1,500,000

15.00

1,500,000

15.00

10

200

ß

200

ß

15.00

15.00

155

STANDALONE FINANCIAL STATEMENTS

Unquoted Subsidiaries Aditya Birla Financial Services Limited (formerly Aditya Birla Financial Services Private Limited)* Birla Sun Life Insurance Company Limited* ABNL Investment Limited Indigold Trade and Services Limited Madura Garments Lifestyle Retail Company Limited* ABNL IT & ITES Limited Shaktiman Mega Food Park Private Limited

10

L

Trade Investments Valued at Cost, except otherwise stated Investments in Equity Instruments Quoted Joint Venture IDEA Cellular Limited*

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores

Face Value

As at 31st March, Number 2015

As at 31st March, Number 2014

Non-Trade Investments Valued at Cost Quoted Investment in Equity Instruments Hindalco Industries Limited

1

33,506,337

TOTAL NON-CURRENT INVESTMENTS

201.48

33,506,337

201.48

201.48

201.48

8,694.99

7,952.34

* Refer Note: 26(e) # Each Preference Share is optionally convertible in 10 Equity Share of ` 10/- each fully paid-up on the expiry of a period of 15 years from the date of allotment. Notes: 1. All shares are fully paid-up, unless otherwise stated 2. Aggregate Amount of Quoted Investments 3. Market Value of Quoted Investments 4. Aggregate Amount of Unquoted Investments

STANDALONE FINANCIAL STATEMENTS

5. Aggregate Amount of Diminution in Value of Investments

2,557.29

2,557.29

15,842.71

11,986.75

6,137.70

5,395.05

0.43

2.52

NOTE: 10B CURRENT INVESTMENTS (Valued at lower of Cost and Fair Value) Equity Instuments Unquoted Subsidiaries, at Cost Aditya Vikram Global Trading House Limited, Mauritius*

US$ 1





150,000



0.65 0.65

Preference Shares Unquoted Subsidiaries Current Maturity of Long-term Investment, at Cost Preference Shares of Aditya Birla Minacs Worldwide Limited redeemable at premium of 125%

100





1,500,000

15.00



15.00

Units of Mutual Fund Quoted, at Cost Kotak Gilt Investment Regular Plan Direct Growth

10

2,057,258

10.00



SBI Magnam Gilt Long Term Plan-Growth

10

4,910,707

15.00



DSP Black Rock Ultra STP Direct Growth

10

50,000,000

5.00



30.00

15.65



15.65

2. Aggregate Amount of Quoted Investments

30.00



3. Market Value of Quoted Investments

30.01



TOTAL CURRENT INVESTMENTS Notes: 1. Aggregate Amount of Unquoted Investments

*

Aditya Vikram Global Trading House Ltd., Mauritius, wholly owned subsidiary of the Company has been liquidated.

L

156

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores As at 31st March, 2015

As at 31st March, 2014

11.78

17.38

NOTE: 11A LONG-TERM LOANS AND ADVANCES (Unsecured, Considered Good, except otherwise stated) Capital Advance Unsecured, Considered Good Unsecured, Considered Doubtful Less: Provision for Doubtful

0.05

0.05

(0.05)

(0.05)

146.77

126.01

Security Deposits Unsecured, Considered Good Unsecured, Considered Doubtful

3.22

0.62

(3.22)

(0.62)

10.10

18.04

Inter-Corporate Deposits

9.27

11.58

VAT, Other Taxes Recoverable, Statutory Deposits and Dues from Government

0.50

0.49

Prepaid Expenses

9.89

11.48

Advance for Expenses, Materials and Employees

8.32

7.42

196.63

192.40

39.70

59.10

Less: Provision for Doubtful Loans and Advances to Related Parties (Refer Note: 42)

NOTE: 11B SHORT-TERM LOANS AND ADVANCES (Unsecured, Considered Good, except otherwise stated) Security Deposits Unsecured, Considered Good Unsecured, Considered Doubtful Less: Provision for Doubtful Loans and Advances to Related Parties (Refer Note: 42) *

0.46

0.41

(0.46)

(0.41)

73.17

534.88

4.92

2.61

67.60

35.75

0.58

0.58

Other Loans and Advances Inter-Corporate Deposits VAT, Other Taxes Recoverable, Statutory Deposits and Dues from Government Unsecured, Considered Good Unsecured, Considered Doubtful

(0.58)

(0.58)

Advance Tax (Net of Provision ` 131.06 Crore (Previous Year: ` 10.51 Crore))

Less: Provision for Doubtful

27.15

26.67

Prepaid Expenses

19.49

18.08

41.59

43.59

2.61

2.32

Advance for Expenses, Materials and Employees ** Unsecured, Considered Good Unsecured, Considered Doubtful Less: Provision for Doubtful

(2.61)

(2.32)

273.62

720.68

Includes amount due from Directors and Officers

0.19



**

Includes amount due from Subsidiary Company

0.15



157

L

*

STANDALONE FINANCIAL STATEMENTS

Other Loans and Advances

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Disclosure as per Clause 32 of Listing Agreement ` in Crores (i)

Loans and Advances in the nature of Loans given to Subsidiaries

Balance as on 31st March, 2015

Balance as on 31st March, 2014

Maximum Amount Due at any time During the Year Ended 31st March, 2015

Maximum Amount Due at any time During the Year Ended 31st March, 2014

10.10

14.80

43.59

16.00

Aditya Birla Customer Services Ltd. (formerly Aditya Birla Customer Services Private Ltd.) Aditya Birla Finance Ltd.







100.05

42.43

42.43

45.93

42.43

3.24

3.24

3.24

3.24

Aditya Birla Minacs Worldwide Ltd.



479.75

536.90

481.15

ABNL Investment Ltd.



1.00

1.00

2.90

ABNL IT & ITES Ltd.



1.38

2.51

1.52

Indigold Trade and Services Ltd.



0.22

59.21

0.78

27.31

10.10

55.10

11.12







96.37

Balance as on 31st March, 2015

Balance as on 31st March, 2014

Maximum Amount Due at any time During the Year Ended 31st March, 2015

Maximum Amount Due at any time During the Year Ended 31st March, 2014

- no repayment schedule or repayment beyond seven years

0.90

0.86

1.24

1.86

- no interest or at an interest rate below which is specified in Section 186 of the Companies Act, 2013

8.48

8.07

10.56

9.41

Aditya Birla Money Mart Ltd. Aditya Birla Money Insurance Advisory Services Ltd.

Madura Garments Lifestyle Retail Company Ltd. Pantaloons Fashion & Retail Ltd.

STANDALONE FINANCIAL STATEMENTS

(ii) Loans and Advances in the nature of Loans given to Employees

Employee Loan given in the ordinary course of the business and as per the service rules of the Company

Disclosure as per Section 186(4) of the Companies Act, 2013 (a)

Details of Inter-Corporate Deposits granted during the year as below: Name of the Loanee

Granted During the Year

Remarks

Unsecured Aditya Birla Customer Services Ltd. (formerly Aditya Birla Customer Services Pvt. Ltd.) Aditya Birla Money Mart Ltd. Aditya Birla Minacs Worldwide Ltd.

28.79

Terms of deposit - 24 Months, Interest Rate @10.50% to 11.50% P.A. Payable on Call

3.50

Terms of deposit - On Call, Interest Rate @11.50% P.A. Payable on Maturity

77.15

ABNL IT & ITES Ltd.

Terms of deposit - 1 day + Call, Interest Rate @ 11.75% P.A. Payable on Call

2.61

Terms of deposit - 1 day + Call, Interest Rate @ 10.00% to 10.50% P.A. Payable on Call

Indigold Trade and Services Ltd.

59.03

Terms of deposit - 1 day + Call, Interest Rate @ 10.00% to 10.50% P.A. Payable on Call

Madura Garments Lifestyle Retail Company Ltd.

50.16

Terms of deposit - 1 day + Call, Interest Rate @ 10.00% to 10.75% P.A. Payable on Call

Aditya Birla Science & Technology Company Pvt. Ltd.

2.61

-

The loans have been utilised for meeting their business requirements.

(b)

Details of Investment made during the year as below: Name of the Company Aditya Birla Financial Services Limited (formerly Aditya Birla Financial Services Private Limited) Indigold Trade and Services Ltd. Shaktiman Mega Food Park Private Limited Total

L

158

` in Crores Amount 681.11 61.55 0.42 743.08

Terms of deposit - 36 Months, Interest Rate @ 8.50% to 9.00% P.A. Payable on Call

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

As at 31st March, 2015

` in Crores As at 31st March, 2014

0.12

0.11

0.62

0.67

0.74

0.78

0.12

0.11

2.19

9.85

NOTE: 12A OTHER NON-CURRENT ASSETS Other Bank Balances* Bank Deposits with more than twelve months maturity Government Grant Receivable

*Amount held as Margin Money under lien to bank for issuing guarantee

NOTE: 12B Fertiliser Bonds # Government Grant Receivable

20.34

31.76

Export Incentive Receivable

17.90

26.46

Less: Provision for Export Incentive Receivable

(0.06)

(0.06)

2.57

4.68

42.94

72.69

ß

2.34

Others*

*Includes dues from subsidiaries.

# The Company had received Fertilisers Bonds in the earlier years of ` 65.50 Crore from the Ministry of Fertiliser, Government of India, against the outstanding amount of subsidy receivable, out of which bonds amounting to ` 2.38 Crore (Previous Year: ` 11.58 Crore) are outstanding at the year end. The market value of the above bonds are lower than book value, therefore the diminution in the value of above bonds has been accounted.

NOTE: 13 INVENTORIES (Lower of Cost and Net Realisable Value) 323.38

251.91

124.18

117.01

Finished Goods (Includes Goods-in-Transit ` Nil (Previous Year: ` 0.02 Crore)) Stock-in-Trade (Includes Goods-in-Transit ` Nil (Previous Year: ` 4.67 Crore)) Stores and Spares (Includes Goods-in-Transit ` 9.24 Crore (Previous Year: ` 0.55 Crore)) Waste/Scrap Packing Materials

383.85

371.70

306.10

280.60

100.09

73.69

0.63 8.77

0.06 8.66



0.09

1,247.00

1,103.72

Certified Emission Reductions (CERs)

159

L

Raw Materials (Includes Goods-in-Transit ` 21.79 Crore (Previous Year: ` 14.67 Crore)) Work-in-Progress

STANDALONE FINANCIAL STATEMENTS

OTHER CURRENT ASSETS

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

As at 31st March, 2015

` in Crores As at 31st March, 2014

NOTE: 14 TRADE RECEIVABLES Due for period exceeding Six months from the due date of payment Secured, Considered Good Unsecured, Considered Good (Includes subsidy receivables from Government of India ` 12.98 Crore (Previous Year: ` 5.64 Crore)) Unsecured, Considered Doubtful Less: Provision for Doubtful

0.58

1.24

62.86

51.11

22.01

14.77

(22.01)

(14.77)

Others Secured, Considered Good Unsecured, Considered Good (Includes subsidy receivables from Government of India ` 1,180.30 Crore (Previous Year: ` 1,145.56 Crore)) Unsecured, Considered Doubtful

STANDALONE FINANCIAL STATEMENTS

Less: Provision for Doubtful

39.61

24.98

2,148.09

1,968.37

0.14

0.01

(0.14)

(0.01)

2,251.14

2,045.70

37.84

24.85

1.49

1.44

NOTE: 15 CASH AND BANK BALANCES Cash and Cash Equivalents Balances with Banks Current Accounts Cash on Hand Cheques/Drafts on Hand (A)

2.18

9.57

41.51

35.86

0.12

0.11

Other Bank Balances Deposit Accounts (with original maturity period of more than three months) Others Unclaimed Dividend

3.26

2.99

0.28

0.28

(B)

3.66

3.38

(A) + (B)

45.17

39.24

0.12

0.11

45.05

39.13

Money Due for Refund on Fraction Shares

Less: Bank Deposits with more than twelve months maturity (transferred to Other Non-Current Assets) (Refer Note: 12A)

L

160

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

Year Ended 31st March, 2015

` in Crores Year Ended 31st March, 2014

Manufactured

7,068.54

6,325.54

Traded

1,971.96

1,834.77

9,040.50

8,160.31

7.64

8.72

39.71

44.83

Scrap Sales

17.28

19.24

Miscellaneous Other Operating Income

13.21

6.02

NOTE: 16 REVENUE FROM OPERATIONS SALE OF PRODUCTS

B.

SALE OF SERVICES

C.

OTHER OPERATING INCOME Export Incentive

Total A + B + C

70.20

70.09

9,118.34

8,239.12

Ammonia

9.61

36.43

181.61

204.98

Garments

1,898.17

1,618.59

Insulators

587.03

542.00

Linen Fabric

325.83

279.15

28.77

30.65

Caustic Soda

Sulphuric Acid and Allied Chemicals Urea

2,194.53

1,953.79

Viscose Filament Rayon Yarn

695.76

604.66

Wool Top

309.58

349.40

Yarn Linen

453.12

356.42

Yarn Worsted

331.07

305.61

53.46

43.86

7,068.54

6,325.54

130.98

97.36

34.54

92.24

1,629.42

1,449.04

81.07

77.01

Others

Sale Value of Traded Goods under broad heads Agro Chemicals Bulk Fertilisers Garments Seeds Specialty Fertilisers

63.26

50.98

Viscose Filament Rayon Yarn

28.06

62.46

Others

4.63

5.68

1,971.96

1,834.77

161

STANDALONE FINANCIAL STATEMENTS

Details of Sale Value of Goods Manufactured under broad heads

L

A.

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores

STANDALONE FINANCIAL STATEMENTS

NOTE: 17 OTHER INCOME Interest Income from Subsidiaries Others Dividend Income Subsidiary Company Joint Venture Long-term Investments Current Investments Net Gain on Sale of Investments Current Subsidiary Company Others Gain on Redemption of Preference Share of Subsidiary Gain on Buy-Back of Investments of Subsidiary Foreign Exchange Gain (Net) Profit on Sale of Fixed Assets (Net) Other Non-Operating Income

NOTE: 18 COST OF MATERIALS CONSUMED Raw Materials Consumed Packing Materials Consumed

Details of Raw Materials Consumed under broad heads Alumina Clays Cotton Staple and Synthetic Yarn Fabric Flax Fibre Metal Parts Natural Gas Staple and Synthetic Fibre Wood Pulp Wool Fibre Others

NOTE: 19 PURCHASE OF STOCK-IN-TRADE Purchase of Finished Goods

Details of Purchases of Finished Goods under broad heads Agro Chemicals Bulk Fertilisers Garments Seeds Specialty Fertilisers Viscose Filament Rayon Yarn Others

L

162

Year Ended 31st March, 2015

Year Ended 31st March, 2014

15.26 20.80

9.75 34.39

51.80 33.50 3.35 1.02

87.45 25.13 4.69 5.14

0.19 8.13 18.75 — 3.01 5.61 10.09

41.72 — — 144.29 — — 18.64

171.51

371.20

3,192.26 130.23

2,824.70 119.42

3,322.49

2,944.12

22.47 27.83 301.18 382.96 103.91 119.60 1,423.27 16.25 142.99 463.31 188.49

22.27 21.94 272.67 367.45 80.08 120.26 1,120.70 17.10 147.89 498.78 155.56

3,192.26

2,824.70

1,283.31

1,191.38

1,283.31

1,191.38

73.02 30.65 999.58 67.67 96.30 12.62 3.47

81.03 83.74 849.91 62.09 43.07 68.15 3.39

1,283.31

1,191.38

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores Year Ended 31st March, 2014

371.70 280.60 117.01 0.06 0.09

369.79 187.10 76.67 0.15 0.18

769.46

633.89

383.85 306.10 124.18 0.63 —

371.70 280.60 117.01 0.06 0.09

814.76

769.46

1.86 —

0.64 (69.50)

(Increase)/Decrease

(43.44)

(204.43)

Movement of (Increase)/Decrease in Inventories Finished Goods Stock-in-Trade Work-in-Process Waste/Scrap Certified Emission Reductions (CERs)

(12.15) (25.50) (7.17) (0.57) 0.09

(1.91) (93.50) (40.34) 0.09 0.09

Details of Inventories: Manufactured Goods Caustic Soda Garments Insulators Linen Fabric Sulphuric Acid and Allied Chemicals Urea Viscose Filament Rayon Yarn Yarn Linen Yarn Worsted Others

1.97 216.48 30.01 38.84 1.51 13.15 35.92 12.91 28.41 4.65

3.21 175.12 29.78 45.30 0.86 17.98 28.08 23.43 42.87 5.07

383.85

371.70

8.53 — 292.53 2.03 0.03 2.75 0.23

6.24 0.36 254.17 0.94 0.39 18.27 0.23

306.10

280.60

2.44 1.50 19.69 18.82 41.19 13.00 — 9.34 18.20

1.97 2.08 21.32 18.37 34.83 13.74 0.12 6.85 17.73

124.18

117.01

NOTE: 20 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE Opening Stocks Finished Goods Stock-in-Trade Work-in-Process Waste/Scrap Certified Emission Reductions (CERs)

Less: Closing Stocks Finished Goods Stock-in-Trade Work-in-Process Waste/Scrap Certified Emission Reductions (CERs)

Add/(Less): (Increase)/Decrease in Excise Duty on Stocks Stock Transfer on Sale of Carbon Black Business

Traded Goods Agro Chemicals Bulk Fertilisers Garments Seeds Specialty Fertilisers Viscose Filament Rayon Yarn Others

Work-in-Progress Ammonia Customised Fertilisers Garments Insulators Linen Fabric Viscose Filament Rayon Yarn Wool Top Yarn Linen Yarn Worsted

163

L

Year Ended 31st March, 2015

STANDALONE FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores

STANDALONE FINANCIAL STATEMENTS

NOTE: 21 EMPLOYEE BENEFITS EXPENSES Salaries and Wages Contribution to Provident and Other Funds (Refer Note: 40) Expense on Employee Stock Options Scheme (Refer Note : 41) Expense on Stock Appreciation Rights Scheme (Refer Note : 41) Staff Welfare Expenses

Year Ended 31st March, 2015

Year Ended 31st March, 2014

627.45 67.26 3.76 1.50 41.63

544.66 50.43 1.49 ß 42.11

741.60

638.69

NOTE: 22 OTHER EXPENSES Consumption of Stores and Spares Rent Repairs & Maintenance of: Buildings Plant and Machinery Others Insurance Rates and Taxes Processing Charges Commission to Selling Agents Brokerage and Discounts Advertisement and Sales Promotion Transportation and Handling Charges Store Security, Housekeeping and Other Expenses Legal and Professional Expenses (Refer Note: 33, Details of Auditors’ Remuneration) Provision for Bad and Doubtful Debts, Advances and Bad Debts written off Provision for Diminution in Value of Investment in Subsidiary Travelling and Conveyance Loss on Sale/Discard of Fixed Assets (Net) Bank Charges Directors’ Sitting Fees Directors’ Commission Foreign Exchange Loss (Net) Contribution to Research & Development Institution Information Technology Expenses

140.73 317.76

134.19 276.93

11.91 48.18 59.79 12.14 40.33 60.41 231.04 31.79 275.71 78.45 154.41 76.87 11.05 0.43 55.94 — 9.37 0.21 4.50 — 1.41 22.75

11.72 52.20 52.66 11.68 29.83 70.33 213.10 36.48 268.40 70.27 123.56 59.17 3.39 — 55.25 0.87 9.59 0.17 4.50 24.03 2.99 18.48

Miscellaneous [email protected]

132.03

91.41

1,777.21

1,621.20

16.50



180.17 9.19

188.30 10.72

189.36

199.02

249.78 13.52

238.44 28.12

263.30

266.56

9.94 —

13.07 3.42

@ Includes Contribution to General Electoral Trust for political purpose for distribution to political parties/persons NOTE: 23 DEPRECIATION AND AMORTISATION EXPENSES Depreciation of Tangible Assets Amortisation of Intangible Assets

NOTE: 24 FINANCE COST Interest Expenses* Other Borrowing Costs

*Net of Interest Rebate Subsidy from Technology Upgradation Fund *Net of Interest Capitalised

L

164

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

NOTE: 25 CONTINGENT LIABILITIES NOT PROVIDED FOR Brief Description of Contingent Liabilities

Customs Duty, Customs Act, 1942

Excise Duty, Central Excise Act, 1944

Service Tax, Finance Act, 1994

As at 31st March, 2015

As at 31st March, 2014

Departmental appeal against CESTAT order for deleting demand of payment of duty for non fulfilment of provision of EXIM policy related to Advance Licence obtained by Madura Coats Ltd.

2.04

2.04

Demand of Differential Custom Duty on acquisition of ENKA Tech Know-how

1.27

1.27

Various other cases pertaining to demand of counter-vailing duty and additional duties on imports, supplementary Drawback claim, etc.

2.25

1.91

Demand for Non-inclusion of freight charges in transaction value for the purpose of payment of excise duty on sale of chlorine

4.38



Departmental appeal against commissioner order for demand of differential excise duty on processing of yarn Cake in to Cone at STPL Bhestan under Noti. 30/2004-CE

7.72



Show cause-cum-demand notice alleging that mixing of duty paid dyes amounts to manufacture and attracts duty for the period from March 1986 to September 1988.

1.62

1.62

Show cause-cum-demand notice for availment of Cenvat credit on capital goods used exclusively for manufacture of exempted goods for the period from April 2005 to March 2007.

1.01

1.01

Demand for payment of duty for removal of Refinished Imported Garments without paying duty

2.11

2.03

Demand of duty for alleged wrong availment of benefit of exemption under Notification 38/2003-CE in respect of ready-made garments procured from job workers

8.25

8.25

Show cause-cum-demand notice of excise duty on inclusion of Type Test Charges with the value of insulators

1.49

1.43

Various other cases demanding duty on reversal of Cenvat credit on sale of capital goods, reversal of credit on inputs used for manufacturing dutiable and exempted goods, etc.

5.51

5.74

Show cause-cum-demand notices for availment of Cenvat credit of Service Tax paid on commission to overseas agents since services are not falling under input service for the period from April 2005 to March 2010

2.25

2.25

Demand for Cenvat credit of Service Tax taken on Goods Transport Agency service on outward transportation from place of removal till buyer’s place

3.94

3.85



1.05

Demand of Service Tax due to mismatch of Freight Inward declared in ER-4 and ST-3 Returns

1.31

1.23

Various other cases pertaining to disallowance of Cenvat credit of Service Tax on commission paid to overseas agent, in GTA services, service for outward transportation and other services alleging not be classified as input services for availment of Cenvat credit, etc.

1.44

2.53

Show cause-cum-demand notice for reversal of Cenvat credit of Service Tax on Business Auxiliary Services

165

STANDALONE FINANCIAL STATEMENTS

` in Crores

Claims against the Company not acknowledged as debts Nature of Statute

L

(a)

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores Nature of Statute

Brief Description of Contingent Liabilities

Sales tax, Commercial Tax Act

Income-tax Act, 1961

As at 31st March, 2015

As at 31st March, 2014

Non-receipt of C and F forms, disallowance of Input Tax Credit (ITC) on purchases by Power Plant, reversal of ITC, for AY 2006-07 Demand for Short of Form H, I and C, Input Tax Credit Short adjusted on Stores Spares

9.98

9.98

4.03

6.93

Demand for Re-assessment for the year 2011-12 under Karnataka VAT Department

4.36



Demand for UP VAT for AY 2009-10, 2010-11 and 2011-12

5.02



Various other cases in respect of short forms of H, I and C, disallowance of input credit, etc.

2.56

1.75

Various Departmental Appeal in ITAT, High Court on 14A disallowance, disallowance of additional depreciation, disallowance of depreciation on goodwill and various matters

51.23

36.18

Demand for various additions in tax assessment of AY 2009-10 and AY 2010-11

18.82

2.16

102.12



Demand for non-deduction of TDS on purchase of shares of Joint Venture Company u/s 201(1) and 201(1A) Other Statutes

Labour Reinstatement and Workmen Compensation cases

3.85

6.82

80.73

69.72

Claim by various customers (Pedeee Syria, MGVCL)

2.80

6.24

Railways demanded Land Licence Fees, in 2008, for the land used for constructing and connecting siding with Railway at Sindurwa since 1988

6.42

5.12

Demand letter issued by UPSIDC for making payment of maintenance charges on land allotted in 1983

22.84

18.23

Various other cases pertaining to Industrial Disputes, Railways licence fee demand, Textile Cess on ready-made garments, possession of Gaon Sabha land and other Civil cases

25.33

23.34

386.68

222.68

STANDALONE FINANCIAL STATEMENTS

Water drawal charges for the period of Apr-99 to till date

Grand Total (b) Bills Discounted with Banks

51.11

38.17

(c) Corporate Guarantees given to Banks for loans taken by subsidiaries

17.50

705.53



12.10

(d) Corporate Guarantees given in connection with performance obligation of the subsidiaries

(e) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched was required to be supplied in jute bags up to 31st August, 2001. The Company made conscious efforts to use jute packaging material as required under the said Act. However, due to non-availability of material as per the Company’s product specifications as well as due to strong customer resistance to use of jute bags, the specific percentage could not be adhered to. The Company has received a show cause notice, against which a writ petition has been filed with the Hon’ble High Court, which is awaiting for hearing. The Jute Commissioner, Kolkata, had filed transfer petition, various writ petitions has been filed in different High Courts by other aggrieved parties, including the Company, before the Hon’ble Supreme Court of India praying for consolidation of all cases at one Court. The transfer petition is pending before the Hon’ble Supreme Court. The Company has been advised that the said levy is bad in law.

L

166

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores As at 31st March, 2015

As at 31st March, 2014

66.09

85.03

154.26

155.25

NOTE: 26 CAPITAL AND OTHER COMMITMENTS (a) Estimated Amount of Contracts remaining to be executed on Capital Account and not provided for (Net of Advances) (b) Customs Duty on Capital Goods and Raw Materials Imported under Advance Licensing/EPCG Scheme, against which export obligation is to be fulfilled (c) For commitment under lease contract Refer Note: 38. (d) For commitment under derivative contract Refer Note: 44. (e) Transfer of investments in IDEA Cellular Ltd. (IDEA) and Birla Sun Life Insurance Co. Ltd. is restricted by the terms contained in their respective joint venture agreements. Non-disposal undertakings for IDEA, Aditya Birla Finance Limited (subsidiary of Aditya Birla Financial Service Limited (ABFSL)), Pantaloons Fashion & Retail Limited (subsidiary of Indigold Trade and Service Limited) and Madura Garments Lifestyle Retails Company Limited investments have also been provided to certain Banks for respective credit facilities extended by them.

(f)

Aditya Birla Finance Limited (ABFL), a subsidiary of the Company, has issued 10.20% Non-Convertible sub-ordinate Debenture (NCD) aggregating ` 300 Crore. The Company has entered into an option agreement with the holders of such NCD, pursuant to which the holders have put option on the Company, and the Company has call option on the holders on expiry of 36 months from the date of allotment of NCD. Further, on happening of certain events, the put option can also be exercised by the holders on the Company on any other date on happening of such events.

` in Crores Year Ended 31st March, 2015

Year Ended 31st March, 2014

NOTE: 27 VALUE OF IMPORTS CALCULATED ON C.I.F. BASIS Raw Materials

1,147.52

1,137.28

Stores and Spares

14.84

19.51

Capital Goods

70.08

160.64

Purchase of Finished Goods

70.15

114.17

2.95

1.49

Technical Assistance Fees/Royalties

16.04

19.48

Interest and Commitment Charges*

18.87

25.84

3.32

2.86

NOTE: 28 EXPENDITURE IN FOREIGN CURRENCY (on accrual basis) Advertisement

Professional Charges Travelling Commission Others

1.54

1.71

11.95

8.97

5.24

5.96

167

L

*Interest expenditure in Foreign Currency includes interest on External Commercial Borrowing (ECB) which is fully hedged.

STANDALONE FINANCIAL STATEMENTS

Pursuant to the Shareholders’ Agreement entered into with the Joint Venture partner, the Company has, in respect of Birla Sun Life Insurance Company Limited, agreed to infuse its share of capital from time to time to meet the solvency requirement prescribed by the regulatory authority.

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 29 VALUE OF IMPORTED AND INDIGENOUS RAW MATERIALS AND SPARE PARTS CONSUMED AND PERCENTAGE THEREOF TO THE TOTAL CONSUMPTION ` in Crores Percentage Year Ended Percentage Year Ended 31st March, 2015 31st March, 2014 Raw Materials: Imported Indigenous

35.01% 64.99%

1,117.66 2,074.60

39.03% 60.97%

3,192.26 Spare Parts: Imported Indigenous

15.15% 84.85%

7.38 41.33

1,102.37 1,722.33 2,824.70

18.99% 81.01%

48.71

9.51 40.56 50.07

NOTE: 30 AMOUNT REMITTED IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND In respect of Accounting Year

STANDALONE FINANCIAL STATEMENTS

No. of Shareholders No. of Equity Shares Dividend Remitted in Foreign Currency

2013-14

2012-13

438 94,782 0.07

436 113,096 0.07

Year Ended 31st March, 2015

Year Ended 31st March, 2014

728.59 2.14

748.07 3.43

15.91 5.56

12.85 4.53

1.04 0.12

1.04 0.12

0.16 0.08

0.18 0.14

1.40

1.48

0.43 0.03

0.43 0.03

0.02 0.09

0.03 0.09

0.57

0.58

0.05 0.01

0.05 0.01

0.06

0.06

2.03

2.12

NOTE: 31 EARNINGS IN FOREIGN CURRENCY (on accrual basis) ` in Crores

On Export of Manufactured Goods (F.O.B. Basis) On Export of Traded Goods (F.O.B. Basis) NOTE: 32 THE FOLLOWING ARE INCLUDED UNDER OTHER HEADS OF EXPENSES IN THE STATEMENT OF PROFIT AND LOSS Particulars Head under which it is clubbed Consumption of Stores Repairs and Maintenance Insurance Staff Welfare Expenses NOTE: 33 DETAILS OF AUDITORS’ REMUNERATION Payments to Statutory Auditor: As Auditors For Audit Fees (Including Limited Review Fees) For Tax Audit In other capacity For Other Services For Reimbursement of Expenses

Payments to Branch Auditor: As Auditors As Audit Fees (Including Limited Review Fees) As Tax Audit In other capacity For Other Services For Reimbursement of Expenses

Payments to Cost Auditor: For Audit Fees For Reimbursement of Expenses

L

168

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

NOTE: 34 DETAILS OF EXPENDITURE INCURRED IN IN-HOUSE RESEARCH & DEVELOPMENT (R&D) FACILITIES APPROVED BY DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH, MINISTRY OF SCIENCE AND TECHNOLOGY, GOVERNMENT OF INDIA, UNDER SECTION 35 OF INCOME-TAX ACT, 1961 ` in Crores

i)

Year Ended 31st March, 2014

0.01



Capital Expenditure Capital Equipment

ii)

Year Ended 31st March, 2015

Revenue Expenditure Salaries and Wages

0.84

0.88

Material Consumables/Spares

0.01

0.03

Other Expenditure directly related to R&D

0.31

0.48

iii)

Total R&D Expenditure on approved R&D Facilities (Total i) & ii))

1.17

1.39

iv)

Less: Amount Received by R&D Facilities





v)

Net Amount of R&D Expenditure

1.17

1.39

No. of Certified Emission Reductions (CERs) held as inventory (Units)



69,518

No. of Certified Emission Reductions (CERs) under certification (Units)



46,553

NOTE: 35

` in Crores As at 31st March, 2015

As at 31st March, 2014

527.69

673.95

ß

0.01

NOTE: 36 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD-20 – EARNINGS PER SHARE Earnings Per Share (EPS) is calculated as under: Net Profit as per the Statement of Profit and Loss Less: Preference Dividend and Tax thereon Net Profit for EPS

(A)

527.69

673.94

Weighted-average Number of Equity Shares for calculation of Basic EPS

(B)

130,111,149

124,121,740

40.56

54.30

130,111,149

124,121,740

41,323

41,323

(A/B)

Weighted-average Number of Equity Shares Outstanding Add: Shares Held in Abeyance Add: Dilutive impact of Employee Stock Options Add: Potential Equity Shares Due to Share Warrants Weighted-average Number of Equity Shares for calculation of Diluted EPS Diluted EPS (`) Nominal Value of Shares (`)

(C) (A/C)

168,085

80,735



1,174,496

130,320,557

125,418,294

40.49

53.74

10.00

10.00

169

L

Basic EPS (`)

STANDALONE FINANCIAL STATEMENTS

DISCLOSURE IN RESPECT OF SELF-GENERATED CERs

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 37 DISCLOSURE IN RESPECT OF COMPANY’S JOINT VENTURES IN INDIA PURSUANT TO ACCOUNTING STANDARD-27– ‘FINANCIAL REPORTING OF INTEREST IN JOINT VENTURES’ Name of the Venture

Country of Incorporation

IDEA Cellular Limited

India

Proportion of Ownership Interest As at As at 31st March, 2015 31st March, 2014 23.28%

25.23% ` in Crores

The aggregate of Company’s share in the above venture is: Non-Current Assets

10,475.66

11,116.95

Current Assets

3,600.16

629.27

Non-Current Liabilities

4,665.38

5,389.83

Current Liabilities

4,049.56

2,186.71

Total Revenue

7,594.20

6,752.99

Expenses (Including Depreciation and Taxation)

6,838.52

6,256.52

Contingent Liabilities

3,852.44

2,761.88

Capital Commitments

7,636.38

1,430.46

Year Ended 31st March, 2015

Year Ended 31st March, 2014

304.53

267.76

NOTE: 38 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD-19– LEASES IS AS UNDER

STANDALONE FINANCIAL STATEMENTS

` in Crores

Assets Taken on Lease: i)

Operating Lease Payment recognised in the Statement of Profit and Loss Minimum Lease Rent Contingent Lease Rent

ii)

The Company has taken certain Office Premises, Showrooms and Residential Houses on non-cancellable/cancellable operating lease.

iii)

The future minimum rental payable in respect of non-cancellable operating lease are as follows:

13.23

9.17

317.76

276.93

` in Crores

iv)

As at 31st March, 2015

As at 31st March, 2014

Not later than one year

35.90

66.22

Later than one year and not later than five years

35.38

52.84

71.28

119.06

The details of finance lease payments payable and their Present Value as at the Balance Sheet Date: ` in Crores Particulars

Total Lease Charges Payable

Present Value

Interest

Not later than one year

0.25

0.17

0.08

Later than one year and not later than five years

0.70

0.59

0.11

Total

0.95

0.76

0.19

L

170

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

NOTE: 39 DISCONTINUING OPERATIONS The Company, in its Committee of Directors meeting held on 6th April, 2013, had decided to divest the Carbon Black business with effect from 1st April, 2013, on a going concern basis, by way of a slump sale, to SKI Carbon Black (India) Private Limited. In accordance with approval given by the shareholders, the Company had accounted for slump sale of Carbon Black business (identified as reportable segment under AS-17) with effect from 1st April, 2013, on a going concern basis to SKI Carbon Black (India) Private Limited pursuant to Business Transfer Agreement entered into with them and accordingly, in the previous year, a gain of ` 24.06 Crore on the said slump sale had been recognised as an exceptional item and a net tax credit of ` 40.70 Crore (including reversal of deferred tax credit) had been netted off with the tax expense. The following statement shows the revenue and expenses of Carbon Black Business: Year Ended 31st March, 2014

Total Revenue





Total Expenses





Profit Before Depreciation/Amortisation, Interest and Tax (PBDIT)





Depreciation and Amortisation Expenses





Finance Cost





Profit Before Exceptional Item and Tax





Profit on Sale of Assets attributable to the Discontinued Operations



24.06

Profit Before Tax from Discontinued Operations



24.06

Tax Expenses of Discontinued Operations (Net of reversal of Deferred Tax liability on sale of assets attributable to Carbon Black Business ` Nil) (Previous Year: ` 77.58 Crore)



(40.70)

Profit for the Year



64.76

Total Assets





Total Liabilities





Operating Activities





Investing Activities





Financing Activities





Net Cash Inflow/(Outflow)





The carrying amount of the total assets and liabilities transferred are as follows:

The net cash flows attributable to the Carbon Black Business are as follows:

NOTE: 40 RETIREMENT BENEFITS Disclosure in respect of Employee Benefits pursuant to Accounting Standard-15 (Revised) The details of the Company’s Defined Benefit Plans in respect of Gratuity (funded by the Company): General Description of the Plan The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement, whichever is earlier. The benefit vests after five years of continuous service. In case of some employees, the Company’s scheme is more favourable as compared to the obligation under Payment of Gratuity Act, 1972. ` in Crores As at 31st March, 2015

As at 31st March, 2014

Present Value of the funded Defined Benefit Obligations at the end of the year

136.43

110.24

Fair Value of Plan Assets

135.05

110.55

1.38

(0.31)

Amounts recognised in the Balance Sheet in respect of Gratuity

Net (Asset)/Liability

171

L

(a)

STANDALONE FINANCIAL STATEMENTS

` in Crores Year Ended 31st March, 2015

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015

As at 31st March, 2014

Amounts recognised in Employee Benefits Expenses in the Statement of Profit and Loss in respect of Gratuity Current Service Cost Interest on Defined Benefit Obligations Expected Return on Plan Assets Net Actuarial (Gain)/Loss recognised during the year

8.91 9.21 (9.12) 12.30

9.49 8.55 (9.28) 2.79

Net Gratuity Cost

21.30

11.55

9.12 6.82

9.28 (3.79)

15.94

5.49

Change in Present Value of the Obligations: Opening Defined Benefit Obligations Current Service Cost Interest Cost Actuarial (Gain)/Loss Liabilities Settled on Divestment Benefits Paid

110.24 8.91 9.21 19.12 — (11.05)

114.81 9.49 8.55 (1.00) (9.92) (11.69)

Closing Defined Benefit Obligations

136.43

110.24

Change in Fair Value of the Plan Assets: Opening Fair Value of the Plan Assets Expected Return on the Plan Assets Actuarial Gain/(Loss) Contributions by the Employer Assets Distributed on Divestment Benefits Paid

110.55 9.12 6.82 19.61 — (11.05)

112.28 9.28 (3.79) 14.39 (9.92) (11.69)

Closing Fair Value of the Plan Assets

135.05

110.55

Investment Details of the Plan Assets Government of India Securities Corporate Bonds Insurer Managed Fund Special Deposit Scheme Others

27% 1% 51% 2% 19%

21% 1% 58% 3% 17%

100%

100%

Actual Return on Plan Assets: Expected Return on Plan Assets Actuarial Gain/(Loss) on Plan Assets Actual Return on Plan Assets

STANDALONE FINANCIAL STATEMENTS

Reconciliation of Present Value of the Obligation and the Fair Value of the Plan Assets:

Total There are no amount included in the Fair Value of Plan Assets for: i)

Company’s own financial instrument

ii)

Property occupied by or other assets used by the Company ` in Crores

Experience Adjustment

31st March, 2015

31st March, 2014

31st March, 2013

31st March, 2012

31st March, 2011

Defined Benefit Obligation

136.43

110.24

114.81

101.01

92.43

Plan Assets

135.05

110.55

112.28

97.70

86.22

(1.38)

0.31

(2.53)

(3.31)

(6.21)

Surplus/(Deficit) Experience Adjustment on Plan Liabilities

9.53

8.33

3.84

3.01

6.62

Experience Adjustment on Plan Assets

6.82

(3.79)

3.18

(1.52)

(0.08)

Expected rate of return on assets is based on the average Long-term rate of return expected on investments of the funds during the estimated term of the obligations.

L

172

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

As at 31st March, 2015

As at 31st March, 2014

Principal Actuarial Assumptions at the Balance Sheet Date Discount Rate 8.00% 8.90% Estimated Rate of Return on the Plan Assets 8.50% 8.50% The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. Estimated amount of contribution expected to be paid to the fund during the annual period being after the Balance Sheet date is ` 10 Crore (Previous Year: ` 7 Crore). (b)

The details of the Company’s Defined Benefit Plans in respect of the Company owned Provident Fund Trust ` in Crores

Contribution to Company-Owned Employees’ Provident Fund Trust (Excludes amount capitalised ` Nil Crore (Previous Year: ` 0.10 Crore))

Year Ended 31st March, 2015

Year Ended 31st March, 2014

10.93

11.32

The details of the Plan Assets position as under: Plan Assets at Fair Value Liability Recognised in the Balance Sheet Assumption used in determining the present value obligation of interest rate guarantee under the Deterministic Approach Discount Rate for the term of the Obligations Discount Rate for the remaining term of maturity of Investment Portfolio Guaranteed Interest Rate

As at 31st March, 2014

406.50 Nil

361.02 Nil

7.90% 7.87% 8.75%

8.95% 8.88% 8.75%

The details of the Company’s Defined Benefit Plans in respect of Pension for (unfunded by the Company): General Description of the Plan In addition to contribution to the state managed pension plan, the Company provides pension to some employees, which is discretionary in the nature. The quantum of pension depends on the cadre of the employee at the time of retirement.

Amounts recognised in the Balance Sheet in respect of Pension: Present Value of unfunded Defined Benefit Obligations at the end of the Year Fair Value of Plan Assets

As at 31st March, 2015

` in Crores As at 31st March, 2014

6.62 —

6.27 —

Net Liability/(Asset) Amounts recognised in Employee Benefits Expenses in the Statement of Profit and Loss in respect of Pension: Interest on Defined Benefit Obligations Net Actuarial (Gain)/Loss recognised during the Year

6.62

6.27

0.51 1.02

0.46 0.60

Net Pension Cost

1.53

1.06

6.27 0.51 1.02 (1.18)

6.39 0.46 0.60 (1.18)

6.62

6.27

8.00%

8.90%

Reconciliation of Present Value of the Obligations: Opening Defined Benefit Obligations Interest Cost Actuarial (Gain)/Loss Benefits Paid Closing Defined Benefit Obligations Financial Assumptions at the Valuation Date Discount Rate

173

L

(c)

As at 31st March, 2015

STANDALONE FINANCIAL STATEMENTS

The Guidance Note on implementing AS-15, ‘Employee Benefits (Revised 2005)’, issued by the ICAI states that Provident Funds set-up by employers, which requires interest shortfall to be met by the employer, needs to be treated as Defined Benefit Plan. The Company set-up Provident Fund does not have existing deficit of Interest shortfall. The actuary has accordingly provided for a valuation and based on the below provided assumptions there is no shortfall as at 31st March, 2015, and 31st March, 2014. As per the actuarial valuation report, the interest shortfall liability being “Other Long-term Employee Benefits”, detailed disclosures are not required. ` in Crores

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Experience Adjustment

31st March, 2015

Aditya Birla Nuvo Limited - Annual Report 2014-2015

31st March, 2014

31st March, 2013

31st March, 2012

` in Crores 31st March, 2011

Defined Benefit Obligations

6.62

6.27

6.39

6.46

6.93

Experience adjustment on Plan Liabilities

0.75

0.90

0.37

0.13

0.05 ` in Crores

(d)

Year Ended 31st March, 2015

Year Ended 31st March, 2014

35.03

27.56

Defined Contribution Plans – Amount recognised as an expense and included in the Note: 21 as “Contribution to Provident and Other Funds”

NOTE: 41 Disclosure under Employee Stock Options Scheme (I)

Under the Employee Stock Options Scheme-2006 (ESOS-2006), the Company has granted options to the eligible employees of the Company and its Subsidiaries. The details are as under: Employee Stock Options Scheme: Particulars

Tranche - I

STANDALONE FINANCIAL STATEMENTS

No. of Options * Method of Accounting Vesting Plan

Exercise Period

Grant Date Grant/Exercise Price (` Per Share) Repricing of the Option on 20th August, 2010 Market Price on the date of Grant of Option (` Per Share) Market Price on the date of Repricing of Option (` Per Share)

Tranche - II

Tranche - III

Tranche - IV

Tranche - V

163,280 166,093 17,174 11,952 3,370 Intrinsic Value Intrinsic Value Intrinsic Value Intrinsic Value Intrinsic Value Graded Graded Graded Graded Graded Vesting - 25% Vesting - 25% Vesting - 25% Vesting - 25% Vesting - 25% every year every year every year every year every year 5 Years from 5 Years from 5 Years from 5 Years from 5 Years from the date of the date of the date of the date of the date of Vesting Vesting Vesting Vesting Vesting 23.08.2007 25.01.2008 20.08.2010 08.09.2010 07.06.2011 1,180.00 1,802.00 687.00 697.00 748.00 687.00

687.00







1,282.55

1,948.70

816.85

839.80

905.10

816.85

816.85







Details of Activity in the Plan: 2014-15

2013-14

Particulars

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options Outstanding at the beginning of the year Granted during the year Exercised during the year Lapsed during the year

116,235

687.00 to 748.00 — 687.00 to 697.00 697.00

689.80

168,841

688.93

— 687.97

— 51,766

687.00 to 748.00 — 687.00

— 687.00

697.00

840

687.00

687.00

Options Outstanding at the end of the year Options unvested at the end of the year Options exercisable at the end of the year

62,331

687.00 to 748.00 —

691.14

116,235

689.80



7,956

687.00 to 748.00 —

687.00 to 748.00

690.36

108,279

687.00 to 748.00

688.78

— 52,221 1,683

843 61,488

* Includes 3,360 options granted to employees of Subsidiaries.

L

174



MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

The ESOP compensation cost is amortised on a straight-line basis over the total vesting period of the options. Accordingly ` (0.01) Crore {net of recovery of ` Nil from the subsidiaries} (Previous Year: ` 0.04 Crore net of recovery of ` Nil from the subsidiaries) has been charged to the current year Statement of Profit and Loss. For the option exercised during the period, the weighted-average share price at the exercise date was ` 1,494.92 per share (Previous Year: ` 1,102.13). The weighted-average remaining contractual life for the stock options outstanding as at 31st March, 2015, is 1.65 years (Previous Year: 2.06 years). Fair Valuation: The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under:

Risk-Free Interest Rate (%)

On the Date of Grant Tranche - I

Tranche - II

Tranche - III

Tranche - IV

Tranche - V 8.09

7.78

7.78

8.09

8.09

Option Life (Years)

5

5

5

5

5

Expected Volatility

38.00

38.00

54.04

53.88

34.05

Expected Dividend Yield (%)

0.52

0.52

0.86

0.86

0.57

Weighted-average Fair Value per Option (`)

591.53

825.67

471.44

486.82

443.49

Particulars

On the Date of Re-pricing

Risk-Free Interest Rate (%)

Tranche - I

Tranche - II

8.09

8.09

Option Life (Years)

5

5

Expected Volatility*

54.04

54.04

Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

0.36

0.50

355.12

366.54

*Expected volatility of the Company’s stock price is based on NSE price data of last two years. Under the Employee Stock Options Scheme-2013 (ESOS-2013), the Company has granted Options and Restricted Stock Units (RSU’s) to the eligible employees of the Company. The details are as under: (A)

Stock Options: Employees Stock Options Scheme: Particulars No. of Options

Tranche - I

Tranche - II

Tranche - III

104,272

16,239

35,060

Method of Accounting

Intrinsic Value

Intrinsic Value

Intrinsic Value

Vesting Plan

Graded Vesting - 25% every year

Graded Vesting - 25% every year

Graded Vesting - 25% every year

5 Years from the date of Vesting

5 Years from the date of Vesting

5 Years from the date of Vesting

Exercise Period

Grant Date

07.12.2013

29.01.2014

12.11.2014

Grant/Exercise Price (` Per Share)

1,239.80

1,053.85

1,726.95

Market Price on the date of Grant of Option (` Per Share)

1,239.80

1,053.85

1,726.95

175

L

(II)

STANDALONE FINANCIAL STATEMENTS

Particulars

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Details of Activity in the Plan: 2014-15

2013-14

Particulars

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options

Options Outstanding at the beginning of the year

120,511 1,053.85 to 1,239.80

1,214.74







Granted during the year

Range of WeightedExercise average Price (`) Exercise Price (`)

35,060

1,726.95

1,726.95

120,511

1,053.85 to 1,239.80

1,214.74













Lapsed during the year

56,916

1,239.80

1,239.80







Options Outstanding at the end of the year

98,655 1,053.85 to 1,726.95

1,382.32

120,511

1,053.85 to 1,239.80

1,214.74

Options unvested at the end of the year

86,096





120,511





Options exercisable at the end of the year

12,559 1,053.85 to 1,239.80

1,179.67







Exercised during the year

The ESOP compensation cost is amortised on a straight-line basis over the total vesting period of the options. Accordingly ` Nil has been charged to the current year Statement of Profit and Loss (Prevous Year: ` Nil).

STANDALONE FINANCIAL STATEMENTS

The weighted-average remaining contractual life for the stock options outstanding as at 31st March, 2015, is 6.62 years (Previous Year: 7.21 years). Fair Valuation: The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under: Particulars

On the Date of Grant Tranche - I

Tranche - II

Tranche - III

8.88

8.87

7.91

Option Life (Years)

5

5

5

Expected Volatility*

30.02

29.97

30.45

Risk-Free Interest Rate (%)

Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

0.61

0.73

0.42

509.65

428.05

694.22

*Expected volatility of the Company’s stock price is based on NSE price data of last three years. (B)

Restricted Stock Units Employees Stock Options Scheme: Particulars No. of Options Method of Accounting Vesting Plan

Exercise Period Grant Date Grant/Exercise Price (` Per Share) Market Price on the date of Grant of Option (` Per Share)

L

176

Tranche - I

Tranche - II

Tranche - III

101,731

9,567

12,630

Intrinsic Value

Intrinsic Value

Intrinsic Value

Bullet Vesting-end of 3 years from the grant date

Bullet Vesting-end of 3 years from the grant date

Bullet Vesting-end of 3 years from the grant date

5 Years from the date of Vesting

5 Years from the date of Vesting

5 Years from the date of Vesting

07.12.2013

29.01.2014

12.11.2014

10.00

10.00

10.00

1,239.80

1,053.85

1,726.95

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Details of Activity in the Plan: 2014-15 Particulars

Options Range of Exercise Price (`)

Options Outstanding at the beginning of the year

111,298

Granted during the year

Weightedaverage Exercise Price (`)

Options

10.00

10.00







12,630

10.00

10.00

111,298

10.00

10.00













Exercised during the year Lapsed during the year

2013-14 Range of WeightedExercise average Price (`) Exercise Price (`)

18,887

10.00

10.00







Options Outstanding at the end of the year

105,041

10.00

10.00

111,298

10.00

10.00

Options unvested at the end of the year

105,041





111,298

















Options exercisable at the end of the year

The ESOP compensation cost is amortised on a straight-line basis over the total vesting period of the options. Accordingly ` 3.77 Crore has been charged to the current year Statement of Profit and Loss (Previous Year: ` 1.45 Crore).

Fair Valuation: The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under: Particulars

On the Date of Grant Tranche - I

Tranche - II

Risk-Free Interest Rate (%)

8.88

8.87

7.91

Option Life (Years)

5.50

5.50

5.50

Expected Volatility*

30.02

29.97

30.45

0.62

1.23

0.70

1,195.33

1,008.87

1,684.01

Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

Tranche - III

*Expected volatility of the Company’s stock price is based on NSE price data of last three years. (C) Stock Appreciations Rights: Scheme: Particulars

Tranche - I

Tranche - II

91,239

14,199

30,678

Method of Accounting

Intrinsic Value

Intrinsic Value

Intrinsic Value

Vesting Plan

Graded Vesting - 25% every year

Graded Vesting - 25% every year

Graded Vesting - 25% every year

3 Years from the date 3 Years from the date of Vesting or 6 Years of Vesting or 6 Years from the date of grant, from the date of grant, whichever is earlier whichever is earlier

3 Years from the date of Vesting or 6 Years from the date of grant, whichever is earlier

No. of Options

Exercise Period

07.12.2013

29.01.2014

12.11.2014

Grant Price (` Per Share)

1,239.80

1,053.85

1,726.95

Market Price on the date of Grant of Option (` Per Share)

1,239.80

1,053.85

1,726.95

177

L

Grant Date

Tranche - III

STANDALONE FINANCIAL STATEMENTS

The weighted-average remaining contractual life for the stock options outstanding as at 31st March, 2015, is 6.82 years (Previous Year: 7.71 years).

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Details of Activity in the Plan: 2014-15

2013-14

Particulars

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options

Options Outstanding at the beginning of the year

105,438 1,053.85 to 1,239.80

1,214.74



Granted during the year

30,678

Exercised during the year

1,726.95

1,726.95

Range of WeightedExercise average Price (`) Exercise Price (`) —



105,438 1,053.85 to 1,239.80

1,214.74













Lapsed during the year

49,802

1,239.80

1,239.80







Options Outstanding at the end of the year

86,314 1,053.85 to 1,726.95

1,382.35

105,438 1,053.85 to 1,239.80

1,214.74

Options Unvested at the end of the year

75,324





105,438





Options Exercisable at the end of the year

10,990 1,053.85 to 1,239.80

1,179.67







The Stock Appreciation Right’s compensation cost is amortised on a straight-line basis over the total vesting period of the options. Accordingly ` 1.50 Crore (Previous Year: ` ß) has been charged to the current year Statement of Profit and Loss.

STANDALONE FINANCIAL STATEMENTS

The weighted-average remaining contractual life for the Stock Appreciation Right’s outstanding as at 31st March, 2015, is 4.35 years (Previous Year: 4.96 years). Fair Valuation: The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under: Particulars

As at 31.03.2015 Tranche - I

Tranche - II

Risk-Free Interest Rate (%)

7.91

7.91

7.91

Option Life (Years)

2.60

2.73

3.50

Expected Volatility*

29.73

29.73

29.73

0.46

0.46

0.46

676.44

812.61

508.39

Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

Tranche - III

* Expected volatility of the Company’s stock price is based on NSE price data of last three years. The Company is following Intrinsic Value for Employee Stock Options Scheme valuation. Had the compensation cost for the stock options granted under ESOS-2006 and 2013 been recognised based on fair value in accordance with Black-Scholes Merton Formula, the proforma amount of net profit and earnings per share of the Company would have been as under: ` in Crores Particulars Net Profit

2014-15

2013-14

527.69

673.95

Add: Compensation Cost as per Intrinsic Value

5.26

1.49

Less: Compensation Cost as per Fair Value

7.85

3.27

525.10

672.17

Adjusted Net Income Weighted-average Number of Basic Equity Shares Outstanding (In Nos.)

130,111,149

124,121,740

Weighted-average Number of Diluted Equity Shares Outstanding (In Nos.)

130,320,557

125,418,294

10

10

Face Value of the Equity Share (In `) Reported Earnings Per Share (EPS) -

Basic EPS (`)

40.56

54.30

-

Diluted EPS (`)

40.49

53.74

Proforma Earnings Per Share (EPS)

L

178

-

Basic EPS (`)

40.36

54.15

-

Diluted EPS (`)

40.29

53.59

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

179

L

NOTE: 42 LIST OF RELATED PARTIES PARTIES WHERE CONTROL EXIST SUBSIDIARIES Aditya Birla Financial Services Limited (ABFSL) (formerly Aditya Birla Financial Services Private Limited) Aditya Birla Capital Advisors Private Limited (ABCAPL) Aditya Birla Customer Services Limited (ABCSL) (formerly Aditya Birla Customer Services Private Limited) Aditya Birla Trustee Company Private Limited (ABTCPL) Aditya Birla Money Limited (ABML) Aditya Birla Commodities Broking Limited (ABCBL) Aditya Birla Financial Shared Services Limited (ABFSSL) Aditya Birla Finance Limited (ABFL) Aditya Birla Securities Private Limited (ABSPL) (up to 10th September, 2014) Aditya Birla Insurance Brokers Limited (ABIBL) Birla Sun Life Asset Management Company Limited (BSAMC) Birla Sun Life AMC (Mauritius) Ltd. Aditya Birla Sun Life AMC Ltd., Dubai Aditya Birla Sun Life AMC Pte. Ltd., Singapore India Advantage Fund Ltd. (IAFL) International Opportunities Fund SPC (IOF) Birla Sun Life Trustee Company Private Limited (BSTPL) Aditya Birla Housing Finance Ltd. (ABHFL) (formerly LIL Investment Limited) Aditya Birla Money Mart Limited (ABMML) Aditya Birla Money Insurance Advisory Services Limited (ABMIASL) ABNL IT & ITES Limited (IT&ITES) Aditya Birla Minacs BPO Private Limited (ABMBPL) Aditya Birla Minacs Worldwide Limited (ABMWL) (up to 8th May, 2014) Aditya Birla Minacs Philippines Inc. (ABMPI) (up to 8th May, 2014) AV TransWorks Limited. (AVTL) (up to 8th May, 2014) Aditya Birla Minacs Worldwide Inc. (ABMWI) (up to 8th May, 2014) Aditya Birla Minacs BPO Limited (ABMBL) (up to 8th May, 2014) Minacs Worldwide SA de CV (MWSC) (up to 8th May, 2014) The Minacs Group (USA) Inc. (MGI) (up to 8th May, 2014) Bureau of Collection Recovery, LLC (BCR) (up to 8th May, 2014) Bureau of Collections Recovery (BCR) Inc. (up to 8th May, 2014) Minacs Limited (ML) (up to 8th May, 2014) Minacs Worldwide GmbH (MWGH) (up to 8th May, 2014) Minacs Kft. (up to 8th May, 2014) Aditya Vikram Global Trading House Limited (AVGTHL) (up to 29th September, 2014) Birla Sun Life Insurance Company Limited (BSLICL) Birla Sun Life Pension Management Limited (BSLPML) (w.e.f. 19th January, 2015) ABNL Investment Limited (ABNL Inv) Shaktiman Mega Food Park Private Limited (SMFP) Madura Garments Lifestyle Retail Company Limited (MGLRCL) Indigold Trade and Services Limited (ITSL) Pantaloons Fashion & Retail Limited (PFRL) OTHER RELATED PARTIES JOINT VENTURES IDEA Cellular Limited (IDEA) ASSOCIATES Birla Securities Limited (BSL) (up to 14th November, 2014) KEY MANAGEMENT PERSONNEL (KMP) Mr. Lalit Naik - Managing Director (Deputy Managing Director upto 30th June, 2014) Mr. Sushil Agarwal - Whole-time Director Dr. Rakesh Jain - Managing Director (Upto 30th June, 2014) ENTERPRISES HAVING COMMON KEY MANAGEMENT PERSONNEL (KMP) Aditya Birla Science & Technology Company Private Limited (ABSTCPL) (Common KMP Mr. Lalit Naik) (w.e.f. 30th March, 2015)

STANDALONE FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Disclosure in respect of Related Parties pursuant to Accounting Standard-18 During the year, following transactions were carried out with the related parties in the ordinary course of business: ` in Crores Transaction/Nature of Relationship

Subsidiaries

Joint Ventures

Associates

Key Enterprise Management having Personnel common Key Management Personnel

Grand Total

— (0.03) 4.06 — 4.06 (0.03)

— — — — — —

— — — — — —

— — — — — —

— — — — — —

— (0.03) 4.06 — 4.06 (0.03)

0.01 (1.74) 0.01 (1.74)

— — — —

— — — —

— — — —

— — — —

0.01 (1.74) 0.01 (1.74)

1.16 — 1.16 —

— — — —

— — — —

— — — —

— — — —

1.16 — 1.16 —

— (6.32) — (6.32)

— — — —

— — — —

— — — —

— — — —

— (6.32) — (6.32)

0.93 (0.59) — — 0.93 (0.59)

— — 3.01 (3.16) 3.01 (3.16)

— — — — — —

— — — — — —

— — — — — —

0.93 (0.59) 3.01 (3.16) 3.94 (3.75)

130.26 (121.59) 136.52 (123.38) 266.78 (244.97)

— — — — — —

— — — — — —

— — — — — —

— — — — — —

130.26 (121.59) 136.52 (123.38) 266.78 (244.97)

0.02 (0.21) 3.13 (0.34) 5.72 (8.03) — (0.05) 3.65 (0.65) — (0.40) 2.45 (0.01) 0.07 (0.06)

— — — — — — — — — — — — — — — —

— — — — — — — — — — — — — — — —

— — — — — — — — — — — — — — — —

— — — — — — — — — — — — — — — —

0.02 (0.21) 3.13 (0.34) 5.72 (8.03) — (0.05) 3.65 (0.65) — (0.40) 2.45 (0.01) 0.07 (0.06)

Purchase of Goods

MGLRCL PFRL TOTAL Information Technology Cost ABMWL TOTAL Brokerage and Discounts PFRL

STANDALONE FINANCIAL STATEMENTS

TOTAL Advertisement and Sales Promotion Expenses PFRL TOTAL Other Expenses BSLICL IDEA TOTAL Sales of Goods PFRL MGLRCL TOTAL Interest Received ABNL Inv ABCSL ABMWL ABFL MGLRCL PFRL ITSL IT&ITES

L

180

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores Subsidiaries

Joint Ventures

Associates

0.20 — 0.02 — — — 15.26 (9.75)

— — — — — — — —

— — — — — — — —

— — — — — — — —

— — — — 0.01 — 0.01 —

0.02 — 0.01 — 15.27 (9.75)

51.80 (87.45) — — 51.80 (87.45)

— — 33.50 (25.13) 33.50 (25.13)

— — — — — —

— — — — — —

— — — — — —

51.80 (87.45) 33.50 (25.13) 85.30 (112.58)

0.12 — (0.12) — IDEA — — — (ß) TOTAL 0.12 — (0.12) (ß) Receipt against Reimbursement of Revenue/Capital Expenditure PFRL 2.36 — (4.03) — ABMWL — — (0.04) — ABFL 0.06 — (0.04) — MGLRCL 0.12 — (0.12) — ABFSL 0.21 — — — ABNL Inv ß — (0.01) — IT&ITES — — (0.09) — SMFP ß — (ß) — TOTAL 2.75 — (4.33) — Payment for Reimbursement of Expenses PFRL 0.47 — (4.72) — ABFL 0.02 — (0.03) — TOTAL 0.49 — (4.75) — Purchase of Fixed Assets

— — — — — —

— — — — — —

— — — — — —

0.12 (0.12) — (ß) 0.12 (0.12)

— — — — — — — — — — — — — — — — — —

— — — — — — — — — — — — — — — — — —

— — — — — — — — — — — — — — — — — —

2.36 (4.03) — (0.04) 0.06 (0.04) 0.12 (0.12) 0.21 — ß (0.01) — (0.09) ß (ß) 2.75 (4.33)

— — — — — —

— — — — — —

— — — — — —

0.47 (4.72) 0.02 (0.03) 0.49 (4.75)

— — — — — —

— — — — — —

— — — — — —

— (0.04) 0.04 — 0.04 (0.04)

BSLI ABSTCPL TOTAL Dividend Received BSLICL IDEA TOTAL Other Income MGLRCL

MGLRCL ABFL TOTAL

— (0.04) 0.04 — 0.04 (0.04)

— — — — — —

Grand Total

0.20

181

STANDALONE FINANCIAL STATEMENTS

ABMML

Key Enterprise Management having Personnel common Key Management Personnel

L

Transaction/Nature of Relationship

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores Transaction/Nature of Relationship

Sale of Fixed Assets ABFL PFRL TOTAL Interest Expenses BSLICL TOTAL Managerial Remuneration Paid * Mr. Lalit Naik Mr. Sushil Agarwal

STANDALONE FINANCIAL STATEMENTS

Dr. Rakesh Jain TOTAL Fresh Investments Made ITSL ABFSL SMFP IT&ITES TOTAL Sale of Investments BSL TOTAL Winding up of Subsidiary AVGTHL TOTAL Buy-Back of investments BSLI

Subsidiaries

Joint Ventures

Associates

Key Enterprise Management having Personnel common Key Management Personnel

— (0.08) ß (0.38) ß (0.46)

— — — — — —

— — — — — —

— — — — — —

— — — — — —

— (0.08) ß (0.38) ß (0.46)

ß (0.21) ß (0.21)

— — — —

— — — —

— — — —

— — — —

ß (0.21) ß (0.21)

— — — — — — — —

— — — — — — — —

— — — — — — — —

5.49 (3.22) 3.94 (2.27) 6.72 (6.88) 16.15 (12.37)

— — — — — — — —

5.49 (3.22) 3.94 (2.27) 6.72 (6.88) 16.15 (12.37)

61.55 (1,112.58) 681.11 (607.01) 0.42 — — (454.65) 743.08 (2,174.24)

— — — — — — — — — —

— — — — — — — — — —

— — — — — — — — — —

— — — — — — — — — —

61.55 (1,112.58) 681.11 (607.01) 0.42 — — (454.65) 743.08 (2,174.24)

— — — —

— — — —

0.01 — 0.01 —

— — — —

— — — —

0.01 — 0.01 —

0.84 — 0.84 —

— — — —

— — — —

— — — —

— — — —

0.84 — 0.84 —

— — — —

— — — —

— (207.20) — (207.20)

— — — —

— — — —

400.00

— — — (207.20) — — TOTAL — — — (207.20) — — Conversion of 0.01% Compulsory Convertible Preference Shares into Equity Shares ABFSL 400.00 — — — — — TOTAL 400.00 — — — — —

L

182

Grand Total

400.00 —

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

` in Crores Joint Ventures

Associates

Key Enterprise Management having Personnel common Key Management Personnel

Provision for Diminution in Value of Long-term Investments SMFP 0.43 — — — — — — — TOTAL 0.43 — — — — — — — Proceeds from Redemption of Preference Shares ABMWL 33.75 — — — — — — — TOTAL 33.75 — — — — — — — Proceeds from Redemption of Optionally Fully Convertible Debentures Purchased from Outsiders ABMWL — — — — (380.00) — — — TOTAL — — — — (380.00) — — — Redemption of Debentures Held By BSLI — — — — (25.00) — — — TOTAL — — — — (25.00) — — — Loans/Deposits Granted (including Inter-Corporate Deposits) ABNL Inv — — — — (1.87) — — — ABMWL 77.15 — — — (544.75) — — — ABFL — — — — (100.00) — — — PFRL — — — — (89.98) — — — MGLRCL 50.15 — — — (15.35) — — — ITSL 59.03 — — — (2.04) — — — ABCSL 28.79 — — — (25.80) — — — ABMIAS — — — — (3.24) — — — IT&ITES 2.61 — — — (1.38) — — — ABMML 3.50 — — — — — — — TOTAL 221.23 — — — (784.41) — — — Advance Given Mr. Lalit Naik — — — 0.19 — — — — TOTAL — — — 0.19 — — — — Loans Granted Received Back (including Inter-Corporate Deposits) ABNL Inv 1.00 — — — (3.77) — — — ITSL 59.24 — — — (1.82) — — — ABMWL 556.90 — — — (65.00) — — —

Grand Total

— — — —

0.43 — 0.43 —

— — — —

33.75 — 33.75 —

— — — —

— (380.00) — (380.00)

— — — —

— (25.00) — (25.00)

— — — — — — — — — — — — — — — — — — — — — —

— (1.87) 77.15 (544.75) — (100.00) — (89.98) 50.15 (15.35) 59.03 (2.04) 28.79 (25.80) — (3.24) 2.61 (1.38) 3.50 — 221.23 (784.41)

— — — —

0.19 — 0.19 —

— — — — — —

1.00 (3.77) 59.24 (1.82) 556.90 (65.00)

183

STANDALONE FINANCIAL STATEMENTS

Subsidiaries

L

Transaction/Nature of Relationship

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores Transaction/Nature of Relationship

Subsidiaries

Joint Ventures

Associates

— (100.00) — (96.47) 32.95 (5.25) 33.49 (21.00) 3.99 — 3.50 — 691.07 (293.31)

— — — — — — — — — — — — — —

— — — — — — — — — — — — — —

— — — — — — — — — — — — — —

— — — — — — — — — — — — — —

— (100.00) — (96.47) 32.95 (5.25) 33.49 (21.00) 3.99 — 3.50 — 691.07 (293.31)

— (10.27) — (125.00) — (135.27)

— — — — — —

— — — — — —

— — — — — —

— — — — — —

— (10.27) — (125.00) — (135.27)

83.08 (552.92) — (1.77) 113.18 (77.13) 0.04 (0.17) — (12.10) 17.50 (705.53) 6,120.19 (5,393.18)

— — — — — — 0.24 (0.22) — — — — 2,355.81 (2,355.81)

— — — — — — — — — — — — — (0.01)

— — — — 0.19 — — — — — — — — —

14.19 — — — — — — — — — — — 2.40 —

97.27 (552.92) — (1.77) 113.37 (77.13) 0.28 (0.39) — (12.10) 17.50 (705.53) 8,478.40 (7,749.00)

ABFL PFRL MGLRCL ABCSL IT&ITES ABMML TOTAL Guarantees Given During the Year MGI

STANDALONE FINANCIAL STATEMENTS

ITSL TOTAL Outstanding Balances as on 31st March Loans Granted Outstanding Balances Interest Accured on Loans Granted Amounts Receivable Amounts Payable Performance Guarantees Outstanding For Corporate Guarantees Outstanding For Investments Outstanding

Key Enterprise Management having Personnel common Key Management Personnel



Figures in brackets represent corresponding amount of previous year.



No amount in respect of the related parties have been written off/back or provided for during the year.



Related party relationship have been identified by the management and relied upon by the auditors.

Grand Total

` in Crores * Remuneration to Key Managerial Personnel Salary and Perquisites

Current Year

Previous Year

14.63

10.87

ESOP and SAR

0.95

0.40

Contribution to Provident and Other Funds

0.57

1.10

16.15

12.37



Expenses towards gratuity and leave encashment provisions are determined actuarially on an overall Company basis at the end of each year and, accordingly, have not been considered in the above information, except to the extent of amount paid to Dr. Rakesh Jain.

L

184

MK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF FINANCIAL STATEMENTS

NOTE: 43 Disclosure in respect of Corporate Social Responsibility under Section 135 of the Companies Act, 2013, and Rules thereon ` in Crores Nature of Expenses

Amount

Revenue Expenses: Contribution to Trust (Refer Note: 22) (Included in Miscellaneous Expenses)

4.47

Repairs and Maintenance (Refer Note: 22)

0.17

Salaries and Wages (Refer Note: 21)

0.39

Construction of Capital Assets under CSR Projects

4.58

Total

9.61

NOTE: 44 STATEMENT OF DERIVATIVES – OUTSTANDING AT THE BALANCE SHEET DATE Derivatives: Outstanding at the Balance Sheet Date

Currency and Interest Rate Swap

USD

Buy

103,666,667

126,000,000

Hedging of Loan

Currency and Interest Rate Swap

JPY

Buy

2,307,300,000

2,947,300,000

Hedging of Loan

USD

Buy Sell

77,765,659 23,194,250

69,300,213 10,298,931

Hedging Purpose

EUR

Buy Sell

15,427,036 3,524,110

10,318,734 6,453,514

Hedging Purpose

Forward Contracts

GBP

Sell

1,577,166

1,224,394

Hedging Purpose

Forward Contracts

JPY

Sell

111,044,500

45,070,000

Hedging Purpose

Forward Contracts

CNY

Buy

4,063,500



Hedging Purpose

Forward Contracts and Interest Rate Swap

USD

Buy

17,455,869

10,000,000

Hedging of Loan

Forward Contracts

Purpose

Foreign Currency Exposure which are not hedged As at 31st March, 2015 Currency

Foreign Currency

` in Crores

Trade Receivables

USD EUR GBP

2,004,157 323,186 34,272

12.54 2.18 0.32

Loans and Advances

USD EUR JPY

11,545 19,848 1,181,846

0.07 0.13 0.06

Trade Payables

USD AUD EUR GBP

6,750,974 536,314 243,712 3,820

42.25 2.59 1.65 0.04

Other Current Liabilities

USD EUR

401,398 10,986

2.51 0.07

Particulars

As at 31st March, 2014 Currency

Foreign Currency

` in Crores

Trade Receivables

USD EUR GBP

3,796,483 14,452 778,195

22.82 0.12 7.77

Loans and Advances

USD EUR

26,730 199

0.16 ß

Trade Payables

USD EUR GBP JPY

9,300,103 1,607,656 72,068 779,300

55.89 13.28 0.72 0.05

Other Current Liabilities

USD

72,014

0.44

Particulars

185

STANDALONE FINANCIAL STATEMENTS

Foreign Option Currency

Forward Contracts

(b)

Amount in Foreign Currency As at As at 31st March, 2015 31st March, 2014

Nature of Contract

L

(a)

MK

NOTES FORMING PART OF FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 45

STANDALONE FINANCIAL STATEMENTS

OTHER SIGNIFICANT NOTES (i)

The Company has presented segment information in its Consolidated Financial Statements, which are part of the same annual report. Accordingly, in terms of provisions of Accounting Standard on Segment Reporting (AS-17) no disclosure related to the segment are presented in the Standalone Financial Statements.

(ii)

The Company is one of the Promoter members of Aditya Birla Management Corporation Private Limited, a Company limited by guarantee which has been formed to provide a common pool of facilities and resources to its members, with a view to optimise the benefits of specialisation and minimize cost to each member. The Company’s share of expenses under the common pool has been accounted for under the appropriate head.

(iii)

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long-term contracts has been made in the books of account.

(iv)

The Company’s pending litigations comprise of claims by or against the Company primarily by the workers/employees/ customers/suppliers, etc., and proceedings pending with tax and other government authorities. The Company has reviewed its pending litigations and proceedings and has adequately provided for where Provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made adequate provision in the financial statements and appropriate disclosure for contingent liabilities is given in Note 25.

(v)

ABNL IT & ITeS Limited, a wholly owned subsidiary of the Company, at its meeting of the Board of Directors, held on 30th January, 2014, had approved the divestment of shares held by it in its IT-ITeS subsidiary, Aditya Birla Minacs Worldwide Limited, and had executed a Share Purchase Agreement with a group of investors led by Capital Square Partners and CX Partners subject to fulfilment of requisite consents and approvals. All requisite consents and approvals which were part of closing conditions had been completed. With this divestment, Aditya Birla Minacs Worldwide Limited and its eleven subsidiaries ceased to be subsidiaries of Aditye Birla Nuvo Limited, with effect from 9th May, 2014.

(vi)

The Board of Directors of Aditya Birla Nuvo Limited (the Company) at its meeting held on May 03, 2015, have considered and approved a Composite Scheme of Arrangement between the Company, Madura Garments Lifestyle Retail Company Limited (MGLRCL) (100% subsidiary) and Pantaloons Fashion & Retail Limited (PFRL) (72.62% subsidiary) and their respective shareholders and creditors u/s Sections 391 to 394 of the Companies Act, 1956 [“Composite Scheme”]. Pursuant to the said scheme Madura Fashion, a branded apparel retailing division of the Company and Madura Lifestyle, a luxury branded apparel retailing division of MGLRCL will be demerged into PFRL. Shareholders to the Company will get 26 new equity shares of PFRL for every 5 equity shares held in the Company pursuant to demerger of Madura Fashion. Shareholders of MGLRCL will get 7 new equity shares of PFRL for every 500 equity shares held in MGLRCL. Preference shareholders of MGLRCL will get 1 new equity share of PFRL. After the scheme of arrangement new holding of the Company (directly and through other subsidiaries) in PFRL would be 9.06%. The Scheme 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 involved in the Composite Scheme. The appointed date of the Scheme will be 1st April, 2015, and expected to be consummated in next 6 to 9 months.

(vii) Figures of ` 50,000 or less have been denoted by ‘ß’. (viii) Previous Year’s figures have been regrouped/rearranged, wherever necessary. As per our attached Report of even date

For and on behalf of the Board of Directors

For KHIMJI KUNVERJI & CO. ICAI Firm Registration No. 105146W Chartered Accountants

LALIT NAIK Managing Director

For S R B C & CO LLP ICAI Firm Registration No. 324982E Chartered Accountants

TARJANI VAKIL P. MURARI B. R. GUPTA G. P. GUPTA S. C. BHARGAVA Directors

SUSHIL AGARWAL Whole-time Director & CFO Per SHIVJI VIKAMSEY Partner Membership No. 2242 Mumbai, May 14, 2015

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Per VIJAY MANIAR Partner Membership No. 36738

ASHOK MALU Joint President & Company Secretary Mumbai, May 14, 2015

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CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

To the Members of Aditya Birla Nuvo Limited Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Aditya Birla Nuvo Limited (hereinafter referred to as “the Holding Company”), its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), its associate and jointly controlled entity, comprising of the consolidated Balance Sheet as at March 31, 2015, the consolidated Statement of Profit and Loss, and consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as ‘the consolidated financial statements’). Management’s Responsibility for the Consolidated Financial Statements The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms with the requirement of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its associate and jointly controlled entity in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group and of its associate and jointly controlled entity are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the respective entities and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. These respective financial statements have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid. Auditor’s Responsibility

CONSOLIDATED FINANCIAL STATEMENTS

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Holding Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in paragraph (a) of the Other Matters below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the consolidated state of affairs of the Group, its associate and jointly controlled entity as at March 31, 2015, their consolidated profit and their consolidated cash flows for the year ended on that date. Emphasis of Matter The auditors of Idea Cellular Limited (‘Idea’) a jointly controlled entity of the Company, without qualifying their opinion on the consolidated financial statements of Idea have drawn attention to note no. 26(f) to the consolidated

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INDEPENDENT AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

financial statements, that the Department of Telecommunication (‘DoT’) has issued demand notices dated January 8, 2013 towards one time spectrum charges for spectrum held by Idea beyond 6.2 Mhz for the period from July 1, 2008 to December 31, 2012 amounting to the Group’s share of ` 85.93 crore and beyond 4.4 Mhz for the period from January 1, 2013 till the expiry of the license amounting to the Group’s share of ` 406.06 crore in the respective telecom service areas. In the opinion of Idea, inter-alia, the above demand amounts to alteration of financial terms of the licenses issued in the past. Idea therefore, filed a petition before the Hon’ble High Court of Bombay, which directed DoT, not to take any coercive action until the matter is further heard. The financial impact of the above mentioned matter is dependent upon the outcome of the petition filed by Idea in the Hon’ble High Court of Bombay and therefore no effect for the one-time spectrum has been given in these consolidated financial statements. Our opinion is not modified in respect of this matter. Other Matters (a) The accompanying consolidated financial statements include total assets of ` 61,168.36 crore as at March 31, 2015, and total revenues of ` 17,844.63 crore and net cash outflows of ` 376.97 crore for the year ended on that date, in respect of twenty five subsidiaries and one jointly controlled entity, which have been audited either by one of us or by one of us jointly with others or by other auditors, whose financial statements, other financial information and auditor’s reports have been furnished to us by the management. Our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and jointly controlled entity, and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries and a jointly controlled entity, is based solely on the reports of such other auditors. (b) The accompanying consolidated financial statements also include consolidated revenues of ` 282.16 crore and net cash inflows of ` 37.42 crore of subsidiaries disposed-off during the year, which has been reviewed by other auditors, whose reviewed condensed financial statements and other reviewed financial information have been furnished to us. Our opinion on the consolidated financial statements in so far as it relates to the amounts and disclosures included in respect of this subsidiary is based solely on the review reports of such other auditors.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters. Report on Other Legal and Regulatory Requirements 1.

As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, based on the comments in the auditor’s report of the Holding company, its subsidiaries, associate and jointly controlled entity incorporated in India, to whom the Order applies, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2.

As required by section 143 (3) of the Act, we report, to the extent applicable, that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements; (b) In our opinion proper books of account as required by law relating to preparation of the aforesaid consolidation of the financial statements have been kept so far as it appears from our examination of those books and reports of the other auditors; (c) The consolidated Balance Sheet, consolidated Statement of Profit and Loss, and consolidated Cash Flow Statement dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements;

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(d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

CONSOLIDATED FINANCIAL STATEMENTS

(c) The auditors of Birla Sun Life Insurance Company Limited (‘BSLI’), a subsidiary company, have reported that the actuarial valuation of liabilities of BSLI for policies in force is the responsibility of BSLI’s Appointed Actuary (‘the appointed actuary’). The actuarial valuation of liabilities for policies in force has been duly certified by the appointed actuary. The appointed actuary has certified to BSLI that the assumptions for such valuation are in accordance with the guidelines and norms issued by the Insurance Regulatory and Development Authority (‘IRDA’) and the Actuarial Society of India in concurrence with IRDA. BSLI auditors have relied on the appointed actuary’s certificate in this regard for forming their opinion on financial statements of BSLI. Further, BSLI auditors have relied on the certificate from the appointed actuary for current and non-current classification of policy liabilities with respect to reliance on the work done and the report of other auditors.

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INDEPENDENT AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

(e) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2015 taken on record by the Board of Directors of the Holding Company and the reports of the auditors who are appointed under Section 139 of the Act, of its subsidiary companies, associate and jointly controlled entity incorporated in India, none of the directors of the Group’s companies, its associate and jointly controlled company incorporated in India is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164(2) of the Act. (f)

With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us and based on the report of the auditors of its subsidiaries, associate and jointly controlled entity: i.

The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associate and jointly controlled entity – Refer Note 40(ii) to the consolidated financial statements;

ii.

Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 40(i) to the consolidated financial statements;

iii.

There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company, its subsidiaries, associate and jointly controlled entity incorporated in India.

For and on behalf of S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E

Per Shivji Vikamsey Partner Membership Number: 2242 Mumbai Date: May 14, 2015

Per Vijay Maniar Partner Membership Number: 36738 Mumbai Date: May 14, 2015

CONSOLIDATED FINANCIAL STATEMENTS

For and on behalf of Khimji Kunverji & Co. Chartered Accountants ICAI Firm Registration Number: 105146W

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Annexure referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date

(i)

(a)

The Holding Company and the Covered Entities have maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b)

All fixed assets have not been physically verified by the management of the Holding Company and Covered Entities during the year but there is a regular programme of verification which, in our opinion and as reported by the auditors of the Covered Entities, is reasonable having regard to the size of the Holding Company and the Covered Entities and the nature of their assets. No material discrepancies were noticed on such verification.

(a)

The management of the Holding Company and the Covered Entities have conducted physical verification of inventory at reasonable intervals during the year other than inventory lying with third parties, where certificates confirming stocks have been received in respect of substantial portion of stock held.

(b)

The procedures of physical verification of inventory followed by the management of holding company and respective covered entities are reasonable and adequate in relation to the size of the Holding Company and the Covered Entities and the nature of their businesses.

(c)

The Holding Company and the Covered Entities are maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii)

(a)

The Holding Company and the Covered Entities have not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a) and (b) of the Order are not applicable to the Holding Company and the Covered Entities and hence not commented upon.

(iv)

In our opinion and according to the information and explanations given to us and as reported by the auditors of Covered Entities, there are adequate internal control systems commensurate with the size of the Holding Company and the Covered Entities and the nature of their businesses, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit and as reported by the auditors of the Covered Entities, no major weakness or continuing failure to correct any major weakness in the internal control system was observed in respect of these areas.

(ii)

(v)

The Holding Company and the Covered Entities have not accepted any deposits from the public.

(vi)

We and auditors of the Covered Entities have broadly reviewed the books of account maintained by the Holding Company and Covered Entities respectively, to the extent applicable and relevant, pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. The detailed examination of the same has not been made by us or such other auditors. To the best of our knowledge and as explained and as reported by the auditors of certain other Covered Entities, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Companies Act, 2013, for the products/services of these other Covered Entities.

(vii) (a)

The Holding Company and the Covered Entities are generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, cess and other material statutory dues as applicable to the respective Covered Entities. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable for the Holding Company and the Covered Entities.

(b)

According to the records of the Holding Company and as reported by auditors of certain Covered Entities, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess on account of any dispute, are as per annexure A.

(c)

According to the information and explanations given to us and as reported by the auditor of Covered Entities, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder has been transferred to such fund within time to the extent applicable to the Holding Company and Covered Entities.

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(viii) There are no accumulated losses at the end of the financial year and no cash losses in the current and immediately preceding financial year in respect of the Holding Company and certain Covered Entities that

CONSOLIDATED FINANCIAL STATEMENTS

With respect to Aditya Birla Nuvo Limited (‘Holding Company’) and its subsidiaries, joint controlled entity and associate incorporated in India and to whom the provisions of the Order apply (‘Covered Entities’), we report as follows:

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INDEPENDENT AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

have been registered for a period of more than five years. In respect of certain other Covered Entities that have been registered for a period of more than five years, the accumulated losses at the end of the financial year are less than fifty per cent of their net worth and they have not incurred cash losses in the current and immediately preceding financial year. However, based on the reports of the auditors of certain other Covered Entities, the accumulated losses at the end of the financial year are more than fifty per cent of their net worth and/or have incurred cash losses in the current and/or immediately preceding financial year. (ix)

Based on our audit procedures and as per the information and explanations given by the management and as reported by the auditors of Covered Entities, the Holding Company and Covered Entities have not defaulted in their repayment of dues to financial institutions, banks or debenture holders.

(x)

According to the information and explanations given to us and based on the reports of auditors of Covered Entities, the Holding Company and certain Covered Entities have given guarantee for loans taken by others from banks and financial institutions, the terms and conditions whereof are not prima-facie prejudicial to the interest of the Holding Company and such Covered Entities.

(xi)

Based on the information and explanations given by the management and the reports of auditors of Covered Entities, term loans obtained by the Holding Company and certain Covered Entities were applied for the purpose for which loans were obtained, other than temporary deployment pending application.

CONSOLIDATED FINANCIAL STATEMENTS

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the consolidated financial statements and as per the information and explanations given by the management and reports of auditors of Covered Entities, which we have relied upon, we report that no fraud on or by the Holding Company and the Covered Entities has been noticed or reported during the year, except auditors of one of the subsidiaries has reported that, during the year under audit, two borrowers of the subsidiary have defrauded the subsidiary by submitting forged documents at the time of borrowing and consequently such loans amounting to ` 7.95 crore have become doubtful of recovery and the same have been fully provided for by the subsidiary and in case of the Holding Company, there was a case of employee misappropriation which was not material and was appropriately dealt with by the management.

For and on behalf of Khimji Kunverji & Co. Chartered Accountants ICAI Firm Registration Number: 105146W

For and on behalf of S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E

Per Shivji Vikamsey Partner Membership Number: 2242 Mumbai Date: May 14, 2015

Per Vijay Maniar Partner Membership Number: 36738 Mumbai Date: May 14, 2015

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Annexure A: Dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess on account of any dispute

Finance Act, 1994 (Service Tax)

Tax Demands

Service tax including interest and penalty

Employee Provident Funds & Miscellaneous Provident Fund Provident Act, 1952 Karnataka Stamp Stamp Duty Act, 1957

Customs Act, 1962

Custom Duty incl. interest and penalty

Entry Tax

Sales Tax Act

Period

AY 2001-02, 2007-08 to 2009-10 Ay 2000-1 to 2012-13 AY 2001-02, 2008-09 to 2010-11 to 2012-13 AY 2010-11 to 2012-13 Deputy Commissioner (Appeals) 1998-99, 2002-03 to 2009-10, High Court 2011-12 to 2012-13 2002-03 to 2011-12 Appellate Tribunal 2002-03, 2005-07, 2007-08 to Commissioner (Appeals) 2012-13 2004-05 to 2010-11 Commissioner 2009-10 to 2011-12 Regional Provident Fund Commissioner 2003-04 to 2007-08 1975-76 to 1976-77, 1986-87, 2001-02 & 2003-04 2003-04 to 2005-06, 2007-08, 2009-10, 2013-14 2013-14 2008-09 to 2010-11, 2012-13 to 2013-14 1998-99 to 2000-01, 2003-04 to 2011-12, 2013-14 & 2014-15 2002-03 2007-08 to 2008-09, 2012-13

1998-99 to 2000-01, 2010-11 to 2014-15 Sales Tax, Value Added 1999-00, 2002-03, 2004-05, Tax, Central Sales Tax, 2010-11 & 2012-13 to 2014-15 Trade Tax incl. Interest, 1997-98 to 2001-02, 2003-2014 Non-submission of forms 1995-96 to 1997-98, 1999-00, 2001-02, 2002-03 to 2011-12 2005-06 to 2013-14 1998-99, 2002-03, 2003-04, 2005-06, 2006-07, 2008-09 to 2014-15 1977-78, 1986-87

Central Excise Act, 1944

Excise Duty, Interest and Penalty

1985-86, 1991-92, 1995-96 to 1999-00, 2001-02, 2002-03, 2007-08 1994-95, 1996-97, 1997-98, 2005-06 to 2011-12 1997-98 to 2000-01 1981-82 to 1998-99

Textile Committee Act

Gujarat Green Cess Act, 2011

Forum where dispute is pending High Court Income Tax Appellate Tribunal Commissioner (Appeals)

Textile cess 1990-00 to 2004-05 Cess on generation of 2011-12 to 2014-15 electricity through captive power generation plants

Amount (` in Crores) 0.04 732.73 1,341.21 0.24 41.62 17.19 62.37 2.25 1.40

Chief Revenue Controlling Authority, Karnataka High Court

0.39

Appellate Tribunal

1.46

Commissioner (Appeals) Supreme Court

0.64 0.95

High Court State Tax Tribunal Deputy/Joint Commissioner (Appeals) Assessing Officer

0.91

16.69 0.52 0.58 1.55

High Court

29.34

State Tax Tribunal Commissioner of Commercial Taxes (Appeals)/Revisional Board Additional/Joint Commissioner (Appeals) Assessing Officer

2.46 17.57 0.43 14.80

High Court

0.06

Appellate Tribunal

3.11

Commissioner (Appeals)

1.24

Commissioner/Deputy Commissioner Textile Committee Cess Appellate Tribunal Assessing authorities Supreme Cort of India

0.05 0.63 0.65 1.72

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Income Tax Act, 1961

Nature of the dues

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CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2015

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015

As at 31st March, 2014

Sub-Total - (A)

130.14 12,737.86 12,868.00 801.83 13,669.83

130.18 11,058.56 11,188.74 778.12 11,966.86

2B

3.20

0.49

4A 5 6A 7A

15,036.59 549.02 473.47 290.10 27,184.24 524.15 10.42 44,067.99

11,895.61 552.23 562.09 242.69 22,801.68 475.44 18.49 36,548.23

6,420.87 3,079.56 6,872.82 387.54 738.38 373.71 8.06 17,880.94 75,621.96

6,534.25 3,090.98 4,285.88 342.55 206.99 — 54.84 14,515.49 63,031.07

7,125.39 7,388.66 1,313.62 10.23 15,837.90

7,642.57 7,123.55 3,209.42 23.44 17,998.98

5,351.23 550.73 21,529.90 64.15 11,070.73 26.92 54,431.56

3,357.39 478.17 16,999.88 48.02 6,531.92 43.95 45,458.31

332.21 3,607.58 2,934.10 1,742.51 2,496.22 1,128.30 8,429.60 519.88 21,190.40 75,621.96

772.54 663.48 3,634.55 1,542.22 2,642.69 718.62 6,841.29 757.37 17,572.76 63,031.07

Note No. EQUITY AND LIABILITIES (A) Shareholders’ Funds Share Capital Reserves and Surplus Equity Attributable to Owners of the Parent Minority Interest Total Equity (B) Preference Shares issued by Subsidiary and Joint Venture Companies (C) Non-Current Liabilities Long-term Borrowings Deferred Tax Liabilities (Net) Other Long-term Liabilities Long-term Provisions Policyholders’ Fund Fund for Discontinued Policies Fund for Future Appropriations

2A 3

Sub-Total - (C) (D) Current Liabilities Short-term Borrowings Trade Payables Other Current Liabilities Short-term Provisions Policyholders’ Fund Fund for Discontinued Policies Fund for Future Appropriations

4B 6B 7B

Sub-Total - (D) TOTAL (A) + (B) + (C) + (D)

CONSOLIDATED FINANCIAL STATEMENTS

ASSETS (E) Non-Current Assets Fixed Assets Tangible Assets Intangible Assets Capital Work-in-Progress Intangible Assets under Development

8A 8B

Non-Current Investments Investments of Life Insurance Business 9A Other Investments 10A Assets Held to Cover Linked Liabilities of Life Insurance Business 11A Deferred Tax Assets (Net) 5 Long-term Loans and Advances 12A Other Non-Current Assets 13A Sub-Total - (E) (F) Current Assets Current Investments Investments of Life Insurance Business 9B Other Investments 10B Assets Held to Cover Linked Liabilities of Life Insurance Business 11B Inventories 14 Trade Receivables 15 Cash and Bank Balances 16 Short-term Loans and Advances 12B Other Current Assets 13B Sub-Total - (F) TOTAL (E) + (F) Significant Accounting Policies 1 The accompanying Notes are an integral part of the Financial Statements. As per our attached Report of even date

For and on behalf of the Board of Directors

For KHIMJI KUNVERJI & CO. ICAI Firm Registration No. 105146W Chartered Accountants

LALIT NAIK Managing Director

For S R B C & CO LLP ICAI Firm Registration No. 324982E Chartered Accountants

TARJANI VAKIL P. MURARI B. R. GUPTA G. P. GUPTA S. C. BHARGAVA Directors

SUSHIL AGARWAL Whole-time Director & CFO Per SHIVJI VIKAMSEY Partner Membership No. 2242 Mumbai, May 14, 2015

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ASHOK MALU Joint President & Company Secretary Mumbai, May 14, 2015

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CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2015

Year Ended 31st March, 2015

` in Crores Year Ended 31st March, 2014

26,696.09 (180.08) 26,516.01 407.95 26,923.96

26,110.05 (218.55) 25,891.50 340.21 26,231.71

19

3,322.49 2,326.37

2,944.12 2,183.99

20 21

(95.26) 2,420.88 3,771.89

(226.68) 3,895.38 3,665.50

22 23

243.70 9,135.68 21,125.75

(343.08) 9,185.92 21,305.15

5,798.21 1,702.75 1,757.57 2,337.89 (13.33) 2,324.56

4,926.56 1,608.86 1,550.82 1,766.88 5.42 1,772.30

813.74 (0.99) (3.88) 24.61 1,491.08

546.34 (34.76) 1.94 36.98 1,221.80

Profit for the Year Attriburable to Owners of Parent Minority Interest Profit for the Year

1,415.50 75.58 1,491.08

1,142.88 78.92 1,221.80

Profit Before Tax from Continuing Operations Tax Expense of Continuing Operations Profit from Continuing Operations (A)

2,362.77 835.65 1,527.12

1,734.53 586.54 1,147.99

Profit/(Loss) Before Tax from Ordinary Activities of Discontinued Operations Profit/(Loss) Before Tax from Sale of Assets Attributable to Discontinued Operations Tax Expense/(Credit) from Ordinary Activities of Discontinued Operations Tax Expense/(Credit) from Sale of Assets Attributable to Discontinued Operations Profit from Discontinued Operations (B) 32 Profit for the Year (A) + (B)

(24.88) (13.33) (2.17) — (36.04) 1,491.08

13.71 24.06 4.66 (40.70) 73.81 1,221.80

108.79 108.62

92.08 91.12

Note No. Revenue from Operations Less: Excise Duty Net Revenue from Operations Other Income Total Revenue

17

18

Expenses Cost of Materials Consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade Employee Benefits Expenses Benefits Paid (Life Insurance Business) Change in Valuation of Liability in respect of Life Insurance Policies in Force Other Expenses Total Expenses Profit Before Depreciation/Amortisation, Interest and Tax (PBDIT) Depreciation and Amortisation Expenses Finance Cost Profit Before Exceptional Item and Tax Exceptional Items Profit Before Tax Tax Expenses Current Tax MAT Credit Short/(Excess) Provision for Tax of Earlier Years (Net) Deferred Tax Profit for the Year

Basic Earnings Per Share (`) Diluted Earnings per Share (`) (Face Value of ` 10/- each) Significant Accounting Policies The accompanying Notes are an integral part of the Financial Statements.

}

24 25 28

29 1

As per our attached Report of even date

For and on behalf of the Board of Directors

For KHIMJI KUNVERJI & CO. ICAI Firm Registration No. 105146W Chartered Accountants

LALIT NAIK Managing Director

For S R B C & CO LLP ICAI Firm Registration No. 324982E Chartered Accountants

TARJANI VAKIL P. MURARI B. R. GUPTA G. P. GUPTA S. C. BHARGAVA Directors

SUSHIL AGARWAL Whole-time Director & CFO Per VIJAY MANIAR Partner Membership No. 36738

ASHOK MALU Joint President & Company Secretary Mumbai, May 14, 2015

195

L

Per SHIVJI VIKAMSEY Partner Membership No. 2242 Mumbai, May 14, 2015

CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores PARTICULARS A

CASH FLOW FROM OPERATING ACTIVITIES Profit Before Tax Adjustments for: Exceptional Items (Refer Note: 28) Depreciation/Amortisation Change in Valuation of Liabilities in respect of life Policies Provision/(Reversal) of Diminution in Value of Fertiliser Bonds Provision for Bad and Doubtful Debts & Advances and Bad Debts written off Expense on Employee Stock Options Scheme Expense on Employee Stock Appreciation Rights Unrealised (Gain)/Loss on Foreign Exchange Finance Cost Interest Income (Profit)/Loss on Fixed Assets Sold (Profit)/Loss on Sale of Investments Dividend Income

CONSOLIDATED FINANCIAL STATEMENTS

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES Adjustments for: Decrease/(Increase) in Trade Receivables Decrease/(Increase) in Loans and Advances Decrease/(Increase) in Other Assets Decrease/(Increase) in Inventories Decrease/(Increase) in Investment of Life Insurance Policyholders Increase/(Decrease) in Trade Payables Increase/(Decrease) in Other Liabilities Increase/(Decrease) in Provisions

2014-15

2013-14

2,324.56

1,772.30

13.33 1,702.75

(5.42) 1,608.86

243.70

(343.08)

(1.54)

0.63

104.15 11.72 1.12 15.36 652.25 (54.77) (10.67) (146.02) (6.54)

101.07 2.91 0.49 13.34 809.16 (70.29) (2.12) (54.62) (15.76) 2,524.84

2,045.17

4,849.40

3,817.47

(214.63) (5,467.17) (49.02) (201.62)

CASH GENERATED FROM OPERATIONS Income Taxes Refund/(Paid)

167.22 (4,063.01) (115.05) (273.98)

(122.30) 223.43 275.76 91.55 (5,464.00)

447.61 233.36 268.22 83.06 (3,252.57)

(614.60) (654.67)

564.90 (529.37)

NET CASH FROM OPERATING ACTIVITIES B

CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets Sale of Fixed Assets Acquisition of Additional Shares/Investment in Subsidiary (Net of Cash and Cash Equivalents) Sale of Unit/Subsidiaries (Net of Cash and Cash Equivalents) Sale/(Purchase) of Current Investments (Net) Purchase of Long-term Investments Sale of Long-term Investments Inter-Corporate Deposit - Given Inter-Corporate Deposit - Received Back Interest Received (Increase)/Decrease in Other Bank Deposits (Original Maturity more than three months) Dividend Received from Long-term investments Dividend Received from Current Investments NET CASH (USED IN)/FROM INVESTING ACTIVITIES

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(1,269.27)

35.53

(1,900.28) 31.07

(4,427.50) 34.59

(58.74)

(291.41)

347.95 (2,660.53) (422.43) — (36.00) — 31.32

314.72 1,599.76 (105.36) 75.00 — 2.00 73.12

(26.95) 3.14 3.40

84.44 4.76 11.00 (4,688.05)

(2,624.88)

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 ` in Crores

PARTICULARS C

CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Issue of Shares (including Securities Premium) Share of Proceeds from Issue of Shares by JV Share of Proceeds from Issue of Shares by Subsidiary Redemption of Prefernce Shares Repayment of Borrowings Proceeds from Borrowings Buy Back of Shares by Subsidiaries to Minority Shareholders Dividend Paid by the Company Dividend Paid by the Joint Venture Company relating to earlier years Dividend Paid by Subsidiaries to Minority Shareholders Corporate Dividend Tax Paid Interest Paid

2014-15

2013-14

3.59 871.45 35.00 (0.10) (2,221.23) 8,439.70

674.39 7.17 — — (1,343.52) 4,202.59

— (91.08)

(72.80) (78.16)

(2.59)



(23.20) (52.27) (619.37)

(33.00) (28.70) (766.47)

NET CASH (USED IN)/FROM FINANCING ACTIVITIES Foreign Exchange Difference on Translation of Foreign Currency Cash and Cash Equivalents NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS (OPENING BALANCE) CASH AND CASH EQUIVALENTS (CLOSING BALANCE) (Refer Note: 16)

6,339.90

2,561.50

— 382.58 666.54 1,049.12

0.61 (27.24) 693.78 666.54

For Significant Accounting Policies Refer Note: 1 The accompanying Notes are an integral part of the Financial Statements. As per our attached Report of even date

For and on behalf of the Board of Directors

For KHIMJI KUNVERJI & CO. ICAI Firm Registration No. 105146W Chartered Accountants

LALIT NAIK Managing Director

TARJANI VAKIL P. MURARI B. R. GUPTA G. P. GUPTA S. C. BHARGAVA Directors

CONSOLIDATED FINANCIAL STATEMENTS

For S R B C & CO LLP ICAI Firm Registration No. 324982E Chartered Accountants

SUSHIL AGARWAL Whole-time Director & CFO

Mumbai, May 14, 2015

Per VIJAY MANIAR Partner Membership No. 36738

ASHOK MALU Joint President & Company Secretary Mumbai, May 14, 2015

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L

Per SHIVJI VIKAMSEY Partner Membership No. 2242

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NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 1 SIGNIFICANT ACCOUNTING POLICIES: I.

BASIS OF PREPARATION The Consolidated Financial Statements (CFS) comprise the financial statement of Aditya Birla Nuvo Ltd. (“Company”) and its Subsidiaries, Joint Ventures and Associate (hereinafter referred to as “Group Companies” and together as “Group”) (Refer Annexure ‘A’ to Note – 1). The CFS of the Group have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspect of the Accounting Standards (AS) notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014, in case of Life Insurance Company guidelines issued by the Insurance Regulatory and Development Authority (IRDA) and in case of Non-Banking Financial Companies (NBFCs) guidelines issued by the Reserve Bank of India (RBI), as applicable to NBFC. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained in paragraph II below. All assets and liabilities have been classified as current or non-current as per the Group’s normal operating cycle, and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Group has ascertained its operating cycle as upto twelve months for the purpose of current/non-current classification of assets and liabilities.

II.

CHANGE IN ACCOUNTING POLICY Till the year ended 31st March, 2014, Schedule XIV to the Companies Act, 1956, prescribed requirements concerning depreciation of fixed assets. From the current year, Schedule XIV has been replaced by Schedule II to the Companies Act, 2013. Effective from 1st April, 2014, the Company has provided depreciation on fixed assets based on useful lives as provided in Schedule II to the Companies Act, 2013 or as re-assessed by the Company. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of fixed assets, though these rates in certain cases are different from lives prescribed under Schedule II. Further, on application of Schedule II to the Companies Act, 2013, the Company has changed the manner of depreciation for its fixed assets. Now, the Company identifies and determines separate useful life for each major component of the fixed asset, if they have useful life that is materially different from that of the remaining asset. Based on transitional provision given in Schedule II to the Companies Act, 2013, the carrying value of assets whose useful lives are already exhausted amounting to ` 28.40 Crore (net of deferred tax ` 6.44 Crore) has been charged to opening balance of retained earnings. Had there been no change in useful lives of fixed assets, the charge to the Statement of Profit and Loss would have been higher by ` 5.16 Crore.

CONSOLIDATED FINANCIAL STATEMENTS

III.

USE OF ESTIMATES The preparation of Consolidated Financial Statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumption that affect reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities, at the date of the financial statements and the results of operations during the reporting period end. Although, these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these judgments, assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

IV.

PRINCIPLES OF CONSOLIDATION The financial statements are prepared in accordance with the principles and procedures required for the preparation and presentation of Consolidated Financial Statements as laid down under the Accounting Standard (AS)-21, “Consolidated Financial Statements”. The Consolidated Financial Statements are prepared by applying uniform accounting policies in use at the Group. Investments in Associate Companies have been accounted under the equity method as per AS-23 – “Accounting for Investments in Associates in Consolidated Financial Statements”. Interests in Joint Ventures have been accounted by using the proportionate consolidation method as per AS-27 – “Financial Reporting of Interests in Joint Ventures.” The excess/deficit of cost to the Company of its investment over its portion of net worth in the consolidated entities at the respective dates, on which the investment in such entities was made, is recognised in the CFS as Goodwill/Capital reserve. Minority Interest in the net assets of Subsidiaries consists of: i.

The amount of equity attributable to the minorities at the date on which investment in Subsidiary is made.

ii.

The minorities’ share of movements in equity since the date the parent–subsidiary relationship came into existence.

Entities acquired during the year have been consolidated from the respective dates of their acquisition. List of companies included in Consolidation are mentioned in Annexure A.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

TANGIBLE FIXED ASSETS AND DEPRICIATION Tangible Fixed Assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. This applies mainly to components for machinery. When significant parts of fixed assets are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly. Any trade discounts and rebates are deducted in arriving at the purchase price. Depreciation on Tangible Fixed Assets is provided on Straight Line Method using the rates arrived at based on the useful lives as specified in the Schedule II to the Companies Act, 2013 or estimated by the management. The Group has used the following useful life to provide depreciation on its fixed assets. A: Assets where useful life is same as Schedule II Assets

Useful Life as Prescribed by Schedule II of the Companies Act, 2013

Plant & Machinery:- Continuous Process Plant

25 Years

Buildings (other than factory buildings) RCC Frame Structure

60 Years

Factory Buildings

30 Years

Fences, Wells, Tube Wells

5 Years

Borewell (Pipes, Tubes and Other Fittings)

5 Years

Bridges, Culverts, Bunders, etc.

30 Years

Others (including temporary structure, etc.)

3 Years

Carpeted Roads - RCC

10 Years

Carpeted Roads - other than RCC

5 Years

Non-carpeted Roads

3 Years

General Laboratory Equipment

10 Years

Electrical Installations and Equipment (At Factory)

10 Years

Motors, Tractors, Harvesting Combines and Heavy Vehicles

8 Years

B: Assets where useful life differ from Schedule II Assets

Useful Life as Prescribed by Schedule II to the Companies Act, 2013

Estimated Useful Life

:- Other than Continuous Process Plant (Single Shift)

15 Years

15 Years and 20 Years

:- Other than Continuous Process Plant (Double Shift)

Additional 50% depreciation over single shift

20 Years

Additional 100% depreciation over single shift

10 Years and 15 Years

40 Years

25 Years

:- Other than Continuous Process Plant (Triple Shift) Thermal/Gas/Combined Cycle Power Generation Plant Buildings (other than factory buildings) other than RCC Frame Structure

30 Years

60 Years

Office Electronic Equipment

5 Years

4 Years

Office Computers (end-user devices, desktop, laptops)

3 Years

3 to 5 Years

Servers

6 Years

3 to 5 Years

Vehicles

8-10 Years

4 to 5 Years

Electrically Operated Vehicles

8 Years

5 Years

Furniture & Fixtures and Other Office Equipment

10 Years

2 to 10 Years

Network Equipment (Including towers and shelters)

18 Years

7 to 20 Years

Optical Fibre

18 Years

15 Years

Useful life of assets different from prescribed in Schedule II has been estimated by the management supported by technical assessment.

199

CONSOLIDATED FINANCIAL STATEMENTS

Plant & Machinery:

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V.

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

C: Plant and Machinery Separately identified Component of Plant and Machinery

2 to 25 Years

D: Assets at Showroom Assets at showroom (Excluding Assets of Pantaloons format)

5 Years

E: Leasehold Assets Leasehold Land

Period of Lease

Leasehold Improvements

Period of Lease

Fixed Assets, individually costing less than Rupees five thousand, are fully depreciated in the year of purchase. Depreciation on the Fixed Assets added/disposed off/discarded during the year is provided on pro-rata basis with reference to the month of addition/disposal/discarding, and in the case of capitalisation of Greenfield/Brownfield project, depreciation is charged from the date the project is ready to commence commercial production to the Statement of Profit and Loss. Asset Retirement Obligation in Telecom Business are capitalised based on a constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Such costs are depreciated over the remaining useful life of the assets. VI.

INTANGIBLE ASSETS AND AMORTISATION Intangible Assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised on a straight-line basis over their estimated useful lives. Assets

Estimate Useful Life

Brands/Trademarks

5 to10 years

Technical Know-how

7 years

Computer Software

2 to 6 years

Telecom Entry & Licence Fees and Bandwidth

Over period of licence

Client Acquisition Cost

2 to 5 years

Investment Management Rights

Over period of 10 years

Non-Compete Fees

3 years

Goodwill

Not being amortised (Tested for Impairment)*

Goodwill on Consolidation

Not being amortised (Tested for Impairment)

* Amortised by the subsidiaries before its acquisition by the Group.

CONSOLIDATED FINANCIAL STATEMENTS

VII.

PRE-OPERATIVE EXPENDITURE Expenditure during construction period incurred on projects, which are directly attributable to projects under implementation, are treated as Pre-operative expenses, pending allocation to the assets, and are included under “Capital Work-in-Progress”. These expenses are apportioned to fixed assets on commencement of commercial production.

VIII.

IMPAIRMENT OF ASSETS The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in the prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

IX.

BORROWING COSTS Borrowing Costs attributable to acquisition and construction of qualifying assets are capitalised as a part of the cost of such assets up to the date when such assets are ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.

X.

TRANSLATION OF FOREIGN CURRENCY ITEMS Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Foreign currency monetary items are reported using closing rate of exchange at the end of the year. With respect to the exchange difference arising on translation/settlement of long-term foreign currency items from 1st April, 2011, the Group has adopted following policy: (i)

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Foreign exchange difference on account of a depreciable asset is adjusted in the cost of the depreciable asset, which would be depreciated over the balance life of the asset.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

(ii)

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

In other cases, the foreign exchange difference is accumulated in a Foreign Currency Monetary Item Translation Difference Account, and amortised over the balance period of such long-term asset/liability.

Exchange difference on restatement of all other monetary items is recognised in the Statement of Profit and Loss. Other non-monetary items like fixed assets, investments in equity shares are carried in terms of historical cost using the exchange rate at the date of transaction. Translation of foreign subsidiary is done in accordance with AS-11 (Revised) – “The Effects of Changes in Foreign Exchange Rates”. In the case of subsidiaries, the operation of which are considered as integral, the Balance Sheet items have been translated at closing rate except share capital and fixed assets, which have been translated at the transaction date. The income and expenditure items have been translated at the average rate for the year. Exchange Gain/(Loss) is recognised in the Statement of Profit and Loss. In case of subsidiaries, the operation of which are considered as non-integral, all assets and liabilities are converted at the closing rate at the end of the year, and items of income and expenditure have been translated at the weighted-average rates, where such rates approximate the exchange rate at the date of transaction. Exchange gain/(loss) arising on conversion is recognised under Foreign Currency Translation Reserve. XI.

DERIVATIVE INSTRUMENTS Premium/Discount in respect of forward foreign exchange contract to hedge an underlying recorded asset or liability is recognised over the life of the contracts. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognised in the Statement of Profit and Loss in the year in which the exchange rate changes. Profit/Loss on cancellation/renewal of forward exchange contract is recognised as income/expense for the year. The Group enters into forward contracts to hedge the foreign currency risk of firm commitments and highly probable forecast transactions and designates such forward contracts as cash flow hedge by applying the principles set out in the Accounting Standard-30 – Financial Instruments: Recognition and Measurement. All such forward contracts are used as risk management tools and not for speculative purposes. For the forward contracts designated as cash flow hedges, the effective portion of the fair value of forward contracts are recognised in Hedging Reserve (net of taxes) under Reserves and Surplus, and reclassified into, i.e., recognised in, the Statement of Profit and Loss in the period or periods during which the underlying hedged item assumed affects profit or loss. The ineffective portion of the change in fair value of such instruments is recognised in the Statement of Profit and Loss in the period in which they arise. If the hedging relationship ceases to be effective or it becomes probable that the expected transaction will no longer occur the hedge accounting is discontinued, and the fair value changes arising from the forward contracts are recognised in the Statement of Profit and Loss. The Group uses the Derivative financial instruments such as forward contracts, currency swaps and interest rate swaps to hedge risks associated with foreign currency fluctuations and interest rate. As per ICAI announcement regarding accounting for derivative contracts, other than covered under AS-11 and foreign exchange contracts to hedge highly probable forecast transactions and firm commitments described above, these are mark-to-market on the portfolio basis and net loss after considering the offsetting effect on the underlying hedged item is charged to the income statement. Net gains are ignored.

Investments are recorded at cost on the date of purchase, which includes acquisition charges such as brokerage, stamp duty, taxes, etc., but excludes pre-acquisition interest, i.e. (from the previous coupon date to the transaction settlement date), if any, on purchase. If an investment is acquired in exchange of another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident. Current Investments are stated at lower of cost and net realisable value. Long-term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in the value. Investments of Life Insurance Business: Investments are made in accordance with the Insurance Act, 1938, the Insurance Regulatory and Development Authority (Investment) Regulations, 2000, the Insurance Regulatory and Development Authority (Investment) (Amendment) Regulations, 2001, and various other circulars/notifications issued by the IRDA in this context from time to time. i.

Debt Securities a) Investments of Shareholders’ fund and non-linked fund of Policyholders: All debt securities, including government securities, are considered as ‘held to maturity’ and stated at amortised cost. b) Policyholders’ linked funds: All debt securities, including government securities, are valued using CRISIL Bond Valuer/CRISIL Gilt Prices, as applicable.

201

CONSOLIDATED FINANCIAL STATEMENTS

INVESTMENTS Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

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NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

ii.

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Equity Shares Listed equity shares are valued and stated at fair value, using the last quoted closing prices on the National Stock Exchange (NSE), at the Balance Sheet date. If the equity shares are not traded on the NSE, then closing prices of the Bombay Stock Exchange (BSE) is considered. Equity shares acquired through primary markets, and awaiting listing are valued at their issue price. Unlisted equity shares are valued as per the valuation policy duly approved by its Investment Committee.

iii.

Mutual Funds Mutual fund units are valued at previous day’s Net Asset Value.

XIII.

INVENTORIES Raw materials, components, stores and spares, and packing material are valued at lower of cost and net realisable value. However, these items are considered to be realisable at cost if the finished products, in which they will be used, are expected to be sold at or above cost. Work-in-progress, finished goods and stock-in-trade are valued at lower of cost and net realisable value. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed on a weighted-average basis. Proceeds in respect of sale of raw materials/stores are credited to the respective heads. Obsolete, defective and unserviceable inventory is duly provided for. Certified Emission Reductions (CERs) are valued at lower of cost and net realisable value. Cost includes consultant’s fee and the cash payment made under the second levy to the concerned authorities for obtaining the credit of CERs.

XIV.

GOVERNMENT GRANTS Government Grants are recognised when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Revenue grants are recognised in the Statement of Profit and Loss. Capital grants relating to specific Tangible/Intangible Assets are reduced from the gross value of the respective Tangible/Intangible Assets. Other capital grants in the nature of promoter’s contribution are credited to capital reserve.

XV.

REVENUE RECOGNITION Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and can be reliably measured. Revenue from sale of products are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales of goods are recorded net of trade discounts, rebates, Sales Tax, Value Added Tax and gross of Excise Duty. Revenue from services are recognised as they are rendered based on agreements/arrangements with the concerned parties and recognised net of Service Tax. In case of fixed price contracts revenue is recognised on percentage of completion method and revenue from time and materials contract is recognised as the services are provided. Maintenance income is accrued evenly over the period of contract. Unbilled receivables, represent revenues recognised from the bill cycle date to the end of each month. These are billed in subsequent periods as per the agreed terms.

CONSOLIDATED FINANCIAL STATEMENTS

Fertiliser price support under Group Concession and other Scheme of Government of India is recognised based on management’s estimate taking into account known policy parameters and input price escalation/de-escalation. Income from Certified Emission Reductions (CERs) is recognised on sale of CERs. The property in merchandise of third party concession stores located within the main departmental store of the Group passes to the Group once a customer decides to purchase an item from the concession store. The Group in turn sells the item to the customer and is according included under retail sales. Gift voucher sales are recognised when the vouchers are redeemed and goods are sold to the customer. Interest Income is recognised on a time proportion basis taking into account the amount outstanding and applicable interest rate except in case of NBFC business non-performing assets are recognised on receipt basis. Dividend income on investments is accounted for when the right to receive the payment is established. For Life Insurance Business, revenue is recognised as follows: Premium is recognised as income when due from policyholders. For unit-linked businesses, premium income is recognised when the associated units are created. Premium on lapsed policies is recognised as income when such policies are reinstated. Premiums are net of Service Tax on risk premium collected, if any. In case of Linked Business, Top-up premiums paid by policyholders is considered as single premium and are unitised as prescribed by the regulations. This premium is recognised when the associated units are created. Income from linked policies, which include asset management fees, policy administration charges, mortality charges and other charges, if any, are recovered from the linked funds in accordance with the terms and conditions of the policies and recognised when due. Accretion of discount and amortisation of premium relating to debt securities is recognised over the remaining maturity period on a straight-line basis.

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NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

The realised gain/loss on debt securities held for linked business and on sale of equity shares/mutual fund units is the difference between the net sale consideration and weighted-average cost. Reinsurance premium ceded is accounted for at the time of recognition of the premium income in accordance with the terms and conditions of the relevant treaties with the reinsurers. Impact on account of subsequent revisions to or cancellations of premium is recognised in the year in which they occur. In case of Telecom Business, Recharge fees on recharge vouchers is recognised as revenue as and when the recharge voucher is activated by the subscriber. Unbilled receivables, represent revenues recognised from the bill cycle date to the end of each month. These are billed in the subsequent periods as per the terms of the billing plans. Revenue from passive infrastructure is recognised on accrual basis (net of reimbursements) as per the contractual terms on straight-line method over the contract period. Income from Financial Services includes brokerage and fees on mutual fund units, bonds, fixed deposits, IPOs private equity and other alternative products, and services which is recognised when due, on completion of transaction. Management fees are recognised on accrual basis at specific rates, applied on the average daily net assets of each scheme. The fees charged are in accordance with the terms of Scheme Information Documents of respective schemes and are in line with the provisions of SEBI (Mutual Funds) Regulations, 1996, as amended from time to time. Advisory and portfolio management fees are accounted on an accrual basis as per contractual terms with clients. Income on discounted instruments is recognised over the tenure of the instrument on a straight-line basis. Stock and Commodity Brokerage Income is recognised on the trade date of the transaction upon confirmation of the transactions by the exchanges. Trusteeship fee is recognised on an accrual basis, in accordance with the terms of the Trust Deed. XVI.

BENEFITS PAID (INCLUDING CLAIMS) In case of Life Insurance Business deaths and other claims are accounted for, when notified. Survival and maturity benefits are accounted when due. Surrenders/Withdrawals under linked policies are accounted in the respective schemes when the associated units are cancelled. Reinsurance recoverable thereon is accounted for in the same period as the related claim. Repudiated claims disputed before judicial authorities are provided for based on the management prudence considering the facts and evidences available in respect of such claims.

XVII.

LICENCE FEES – REVENUE SHARE (TELECOM BUSINESS) With effect from, 1st August, 1999, the variable Licence fee computed at prescribed rates of revenue share is being charged to the Statement of Profit and Loss in the period in which the related revenue arises. Revenue for this purpose comprises adjusted gross revenue as per the licence agreement of the licence area to which the licence pertains.

XVIII. SCHEME EXPENSES (ASSET MANAGEMENT BUSINESS)

XIX.

DISTRIBUTION COSTS (PRIVATE EQUITY FUND) Distribution costs incurred by the Group in respect of Private Equity - Fund I and the Aditya Birla Private – Sunrise Fund, have been accrued over the Commitment Period and the extended Commitment Period of the Fund I and the Sunrise Fund, respectively, as defined in the Fund’s Private Placement Memorandum.

XX.

FUND FOR FUTURE APPROPRIATION AND FUND FOR DISCONTINUED POLICIES (LIFE INSURANCE BUSINESS) Amounts estimated by the Appointed Actuary as Funds for Future Appropriation in respect of lapsed Unit Linked Policies are set-aside in the Balance Sheet, and are not available for distribution to shareholders until expiry of the revival period. Premium Discontinuance Fund represents the fund value of all policies which are issued and discontinued after July 2010 and are set-aside in the Balance Sheet as per requirement of relevant regulations. RETIREMENT AND OTHER EMPLOYEE BENEFITS a)

Defined Contribution Plan The Group makes defined contribution to Government Employee Provident Fund, Government Employee Pension Fund, Employee Deposit Linked Insurance, ESI and Superannuation Scheme which are recognised in the Statement of Profit and Loss on accrual basis.

b)

Defined Benefit Plan The Group’s liabilities under Payment of Gratuity Act, long-term compensated absences and pension are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method except for short-term compensated absences which are provided for based on estimates. Actuarial gains and losses are

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XXI.

CONSOLIDATED FINANCIAL STATEMENTS

Expenses relating to New Fund Offer are charged to the Statement of Profit and Loss. Expenses of schemes of Birla Sun Life Mutual Fund in excess of the stipulated limits as per SEBI (Mutual Fund) Regulations, 1996, and expenses incurred directly (inclusive of advertisement/brokerage of expenses) on behalf of the schemes of Birla Sun Life Mutual Fund are charged to the Statement of Profit and Loss in the year in which they are incurred. Trail Commission paid for future period for Equity Link Saving Schemes (ELSS), Fixed Tenure Schemes, Close-ended Schemes and Systematic Investment Plans (SIPs) in the different schemes during the year are treated as prepaid expenses, and such brokerage and commission are expensed out over three years in case of ELSS or duration of closed schemes or over the duration of the SIP. Any other brokerage/ commission is expensed in the year in which they are incurred. Brokerage paid in advance in respect of Portfolio Management Business is amortised over the contractual period.

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the terms of the Government bonds are consistent with the estimated terms of the defined benefit obligation. In respect of certain employees, Provident Fund contributions are made to a Trust administered by the Group. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and shortfall, if any, shall be made good by the Group. The Group’s liability is actuarially determined (using the Projected Unit Credit Method) at the end of the year, and any shortfall in the Fund size maintained by the Trust set up by the Group is additionally provided for. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise. c)

Long-term Incentive Plan Provision for long-term incentive plan for different cadre of employees is based on the estimated future liability of long-term plan and same is assessed on yearly basis.

XXII.

EMPLOYEE STOCK OPTIONS The stock options and stock appreciation rights (SAR) granted are accounted for as per the accounting treatment prescribed by Securities and Exchange Board of India (Share-Based Employee Benefits) Regulations, 2014, issued by Securities and Exchange Board of India and the Guidance Note on Accounting for Employee Share-based Payments, issued by the ICAI, whereby the intrinsic value of the option is recognised as employee compensation. The employee compensation is charged to the Statement of Profit and Loss on the straight-line basis over the vesting period of the option. In respect of re-pricing of existing stock options, the incremental intrinsic value of the options is accounted as employee cost over the remaining vesting period. In case of forfeiture stock option which is not vested, amortised portion is reversed by credit to employee compensation expense. In a situation where the stock option expires unexercised, the related balance standing to the credit of the employees Stock Options Outstanding Account are transferred to the General Reserve.

XXIII. TAXATION Tax expense comprises of current and deferred tax. Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income-tax Act, 1961, and tax laws prevailing in the respective tax jurisdictions the Group operates. Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts, and there is an intention to settle the asset and the liability on a net basis. The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that these would be realised in future.

CONSOLIDATED FINANCIAL STATEMENTS

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Group writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain that sufficient future taxable income will be available. In case of unabsorbed losses and unabsorbed depreciation, deferred tax assets thereon are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profit. At each Balance Sheet date the Group reassesses unrecognised deferred tax assets. Minimum Alternatives Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the companies in the Group will pay normal Income Tax during the specified period. In the year, in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The companies in the Group review the same at each Balance Sheet date and write down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Group will pay normal Income Tax during the specified period. XXIV. RESEARCH AND DEVELOPMENT Revenue expenditure on research is expensed under the respective heads of the account in the period in which it is incurred. Development expenditure is capitalised as an asset if the following conditions can be demonstrated: a)

The technical feasibility of completing the asset so that it can be made available for use or sell.

b)

The Group has the intention to complete the asset and use or sell it.

c)

The Group has the ability to sell the asset.

d)

The future economic benefits are probable.

e)

The Group has the ability to measure the expenditure attributable to the asset during its development reliably. Other development costs which do not meet the above criteria are expensed out during the period in which they are incurred.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

XXV.

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

OPERATING LEASES i.

As a Lessee: Leases, where significant portion of risk and reward of ownership are retained by the Lessors, are classified as Operating Leases, and lease rentals thereon are charged to the Statement of Profit and Loss on a straight-line basis over the lease term.

ii.

As a Lessor: The Group has leased certain tangible assets and such leases, where the Group has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income is recognised in the Statement of Profit and Loss on a straight-line basis over lease term. Initial direct costs are recognised in the Statement of Profit and Loss.

XXVI. FINANCE LEASE As a Lessee: Leases, where substantially all the risks and benefits incidental to ownership of the leased item are transferred to the Lessee, are classified as finance lease. The Group has capitalised the leased item at lower of fair value and present value of the minimum lease payments at the inception of the lease and disclosed as leased assets. Such assets are amortised over the period of lease or estimated life of such asset, whichever is less. Lease payments are apportioned between the finance charges and reduction of the lease liability based on implicit rate of return. Finance charges are charged directly against income. Lease management fees, lease charges and other initial direct costs are capitalised. XXVII. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents for the purpose of Cash Flow Statement comprise cash in hand and cash at bank including fixed deposit with original maturity period of three months or less and short-term highly liquid investments with an original maturity of three months or less. XXVIII.SEGMENT REPORTING The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Group. The Group’s operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Group operate. Further, inter-segment revenue have been accounted for based on the transaction price agreed to between segments which is primarily market based. Unallocated items include general corporate income and expense items, which are not allocated to any business segment.

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated. XXX. EARNINGS PER SHARE Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period and for all periods presented is adjusted for events such as bonus issue; bonus element in a rights issue to the existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. XXXI. CONTINGENT LIABILITIES AND PROVISIONS Contingent Liabilities are possible but not probable obligation as on the Balance Sheet date, based on the available evidence. Provisions are recognised when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date.

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In case of NBFC Business, Non-performing loans are written off/provided for, as per management estimates, subject to the minimum provision required as per the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. The General Provision @0.25% on Standard Assets is made as per the RBI Circular issued in January 2011.

CONSOLIDATED FINANCIAL STATEMENTS

XXIX. CASH FLOW STATEMENT

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Annexure ‘A’ to Note – 1 “Significant Accounting Policies” Country of Incorporation

Proportion of Ownership Interest as on 31st March, 2015

Proportion of Ownership Interest as on 31st March, 2014

Aditya Birla Financial Services Limited (Formerly known as Aditya Birla Financial Services Private Limited) (ABFSL)

India

100.00%

100.00%

Aditya Birla Capital Advisors Private Limited (ABCAPL) (Subsidiary of ABFSL)

India

100.00%

100.00%

Aditya Birla Customer Services Limited (ABCSL) (Formerly known as Aditya Birla Customer Services Private Limited) (Subsidiary of ABFSL)

India

100.00%

100.00%

Aditya Birla Trustee Company Private Limited (ABTCPL) (Subsidiary of ABFSL)

India

100.00%

100.00%

Aditya Birla Money Limited (ABML) (Subsidiary of ABFSL)

India

75.00%

75.00%

Aditya Birla Commodities Broking Limited (ABCBL) (100% Subsidiary of ABML)

India

75.00%

75.00%

Aditya Birla Financial Shared Services Limited (ABFSSL) (Subsidiary of ABFSL)

India

100.00%

100.00%

Aditya Birla Finance Limited (ABFL) (Subsidiary of ABFSL)

India

100.00%

100.00%

Aditya Birla Securities Private Limited (ABSPL) (Subsidiary of ABFL) (ceased to be subsidiary w.e.f. 10th September, 2014)

India



100.00%

Aditya Birla Insurance Brokers Limited (ABIBL) (Subsidiary of ABFSL)

India

50.01%

50.01%

Aditya Birla Money Mart Limited (ABMML) (Subsidiary of ABFSL)

India

100.00%

100.00%

Aditya Birla Money Insurance Advisory Services Limited (Subsidiary of ABMML)

India

100.00%

100.00%

Birla Sun Life Asset Management Company Limited (BSAMC) (Subsidiary of ABFSL)

India

51.00%

51.00%

Mauritius

51.00%

51.00%

Dubai

51.00%

51.00%

Aditya Birla Sun Life AMC Pte. Ltd., Singapore (ABSLAMC) (100% Subsidiary of BSAMC)

Singapore

51.00%

51.00%

India Advantage Fund Limited* (Subsidiary of BSAMC)

Mauritius

51.00%

51.00%

Cayman Islands

51.00%

51.00%

Birla Sun Life Trustee Company Private Limited (BSTPL) (Subsidiary of ABFSL)

India

50.85%

50.85%

Aditya Birla Housing Finance Limited (Subsidiary of ABFSL)

India

100.00%

100.00%

ABNL IT & ITES Ltd. (ABNLIT)

India

100.00%

100.00%

Aditya Birla Minacs Worldwide Limited (ABMWL) (Subsidiary of ABNLIT) (ceased to be subsidiary w.e.f. 9th May, 2014)

India



99.85%

Philippines



99.85%

AV TransWorks Limited (AVTL) (100% Subsidiary of ABMWL) (ceased to be subsidiary w.e.f. 9th May, 2014).

Canada



99.85%

Aditya Birla Minacs Worldwide Inc. (ABMWI) (100% Subsidiary of AVTL) (ceased to be subsidiary w.e.f. 9th May, 2014)

Canada



99.85%

UK



99.85%

India

100%

100%

Mexico



99.85%

SUBSIDIARIES

Birla Sun Life AMC (Mauritius) Ltd. (100% Subsidiary of BSAMC) Aditya Birla Sun Life AMC Ltd., Dubai (100% Subsidiary of BSAMC)

CONSOLIDATED FINANCIAL STATEMENTS

International Opportunities Fund SPC(IOF)** (Subsidiary of ABSLAMC)

Aditya Birla Minacs Philippines Inc. (ABMPI) (100% Subsidiary of ABMWL) (ceased to be subsidiary w.e.f. 9th May, 2014)

Aditya Birla Minacs BPO Ltd. (ABMBL) (100% Subsidiary of ABMWI) (ceased to be subsidiary w.e.f. 9th May, 2014) Aditya Birla Minacs BPO Private Limited (ABMBPL) (Subsidiary of ABNLIT w.e.f. 24th January, 2014, earlier subsidiary of ABMWL) Minacs Worldwide SA de CV (MWSC) (100% Subsidiary of ABMWI) (ceased to be subsidiary w.e.f. 9th May, 2014)

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Country of Incorporation

Proportion of Ownership Interest as on 31st March, 2015

Proportion of Ownership Interest as on 31st March, 2014

The Minacs Group (USA) Inc. (MGI) (100% Subsidiary of ABMWI) (ceased to be subsidiary w.e.f. 9th May, 2014)

USA



99.85%

Bureau of Collection Recovery, LLC (BCR) (100% Subsidiary of MGI) (ceased to be subsidiary w.e.f. 9th May, 2014)

USA



99.85%

Bureau of Collections Recovery (BCR) Inc. (Subsidiary of ABMWI upto 20th February, 2014)

Canada





Minacs Limited (ML) (100% Subsidiary of ABMWI) (ceased to be subsidiary w.e.f. 9th May, 2014)

UK



99.85%

Minacs Worldwide GmbH (MWGH) (100% Subsidiary of ML) (ceased to be subsidiary w.e.f. 9th May, 2014)

Germany



99.85%

Minacs Kft. (100% Subsidiary of MWGH) (ceased to be subsidiary w.e.f. 9th May, 2014)

Hungary



99.85%

Aditya Vikram Global Trading House Limited (AVGTHL) (ceased to be subsidiary w.e.f. 29th September, 2014)

Mauritius



100.00%

Birla Sun Life Insurance Company Limited (BSLICL)

India

74.00%

74.00%

Birla Sun Life Pension Management Limited (Subsidiary of BSLICL) (BSLPML)

India

74.00%



ABNL Investment Limited (ABNL Inv)

India

100.00%

100.00%

Shaktiman Mega Food Park Private Limited (SMFP) (Ownership interest upto 15th January, 2015, 94.00%)

India

100.00%

94.00%

Madura Garments Lifestyle Retail Company Limited (MGLRCL)

India

100.00%

100.00%

Indigold Trade and Services Limited (ITSL)

India

100.00%

100.00%

Pantaloons Fashions & Retail Limited (PFRL) (Subsidiary of ITSL) (Ownership interest upto 29th September, 2014, 67.95%)

India

72.62%

67.95%

India

23.28%

25.23%

India



50.00%

IDEA Cellular Limited (IDEA) ASSOCIATES Birla Securities Limited (BSL) (ceased to be an associate w.e.f. 15th November, 2014)

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* India Advantage Fund Limited (IAFL), wholly owned Subsidiary of Birla Sun Life Asset Management Company Limited, is a collective investment scheme set-up as a fund in Mauritius with the status of a limited company under the Mauritius Companies Act. In terms of constitution and private placement memorandum, IAFL has classes of redeemable participating shares. Each class of participating shares has its own Balance Sheet and Statement of Profit and Loss. The Profit/Loss of each such class belongs to the participating shareholders of that class. Birla Sun Life Asset Management Company Limited (BSAMC) owns 100% of the management share, and management shareholder is not entitled to any beneficial interest in the profit/loss of various classes nor is required to make good any shortfall. In substance, there are no direct or indirect economic benefits received by the management shareholders. The substance over form must prevail. Accordingly, the Group has not consolidated IAFL in the Consolidated Financial Statements. ** Aditya Birla Sun Life AMC Pte Limited, Singapore, has made investment in International Opportunities Fund. International Opportunities Fund SPC(IOF) is segregated portfolio company set up as a fund in Cayman Islands under the Cayman Islands Monetary Act. In terms of constitution and private placement memorandum, IOF has various segregated portfolio which issues redeemable participating shares. Each Segregated Portfolio of participating shares has its own Balance Sheet and Profit and Loss Account. The Profit/Loss of each such Portfolio belongs to the participating shareholders of that segregated portfolio. Aditya Birla Sun Life Asset Management Pte. Limited (ABSLAMC) owns 100% of the management share, and management shareholder is not entitled to any beneficial interest in the profit/loss of various segregated portfolios nor is required to make good any shortfall. In substance there are no direct or indirect economic benefits received by the management shareholders. The substance over form must prevail. Accordingly, the Group has not consolidated IOF in the Consolidated Financial Statement.

CONSOLIDATED FINANCIAL STATEMENTS

JOINT VENTURES

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores NOTE: 2A SHARE CAPITAL Authorised: Equity Shares of ` 10/- each Redeemable Preference Shares of ` 100/- each

Issued: EQUITY SHARE CAPITAL Equity Shares of ` 10/- each

Subscribed and Paid-up: EQUITY SHARE CAPITAL Equity Shares of ` 10/- each, fully paid-up

Issued, Subscribed and Paid-up: PREFERENCE SHARE CAPITAL 6% Redeemable Cumulative Preference Shares of ` 100/- each, fully paid-up

1)

CONSOLIDATED FINANCIAL STATEMENTS

As at 31st March, 2014

175.00

175.00

5.00

5.00

180.00

180.00

130.28

130.13

130.28

130.13

130.14

130.08

130.14

130.08



0.10



0.10

130.14

130.18

175,000,000 (175,000,000) 500,000 (500,000)

130,279,180 (130,126,295)

130,137,193 (130,084,972)

— (10,000)

Reconciliation of the number of shares outstanding at the beginning and at the end of the period Sr. Description No.

2)

Numbers

As at 31st March, 2015

As at 31st March, 2015

As at 31st March, 2014

Equity Shares

Preference Shares

Equity Shares

Preference Shares

1.

No. of Shares Outstanding at the beginning of the period

130,084,972

10,000

120,213,187

10,000

2.

Allotment of Rights Shares kept in abeyance on various dates





19



3.

Allotment of Shares on exercise of option by employee under ESOS-2006

52,221



51,766



4.

Conversion of Warrants into Equity Shares by the Promoter Group





9,820,000



5.

Redemption of Preference Shares



10,000





6.

No. of Shares Outstanding at the end of the period

130,137,193



130,084,972

10,000

Term/Right Attached to Equity Shares The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution to all preferential holders. The distribution will be in proportion to the number of the equity shares held by the shareholders. The Board of Directors has recommended Equity Dividend of ` 7.00 per share for the year ended 31st March, 2015 (Previous Year: ` 7.00 per share). The total amount of dividend proposed to be distributed to Equity Shareholders would be ` 91.10 Crore (Previous Years: ` 91.06 Crore).

3)

During the year, 10,000- 6% Redeemable Cumulative Preference Shares of ` 100/- each of the Company have been redeemed out of the profits of the Company, on 29th September, 2014. These Preference Shares carry cumulative dividend @6% p.a. An Interim dividend of ` ß has been declared and paid on these preference shares on pro-rata basis.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

4)

The Company does not have any holding company.

5)

Shares in the Company held by each shareholder holding more than 5 per cent shares and the number of shares held are as under: i)

Equity Shares

Sr.

Name of Shareholder

No.

As at 31st March, 2014

No. of Shares Held

% of Total Paid-up Equity Share Capital

No. of Shares Held

% of Total Paid-up Equity Share Capital

1.

IGH Holdings Private Limited

16,352,102

12.57%

16,352,102

12.57%

2.

TGS Investment and Trade Private Limited

13,506,736

10.38%

13,506,736

10.38%

3.

Umang Commercial Company Limited

12,494,765

9.60%

12,494,765

9.60%

4.

Trapti Trading & Investments Private Limited

9,423,935

7.24%

9,423,935

7.24%

5.

Hindalco Industries Limited

8,650,412

6.65%

8,650,412

6.65%

6.

Life Insurance Corporation of India

7,276,236

5.59%

7,759,191

5.96%

ii) Sr.

Preference Shares Name of Shareholder

No.

6)

As at 31st March, 2015

As at 31st March, 2015

As at 31st March, 2014

No. of Shares Held

% of Total Paid-up Preference Share Capital

No. of Shares Held

% of Total Paid-up Preference Share Capital

1.

Naman Finance and Investment Private Limited





5,000

50.00%

2.

Infocyber (India) Private Limited





5,000

50.00%

Share reserved for issue under options and contracts, including the terms and amounts:

7)

There are no Equity and Preference Shares issued as fully paid-up pursuant to any contract in consideration of other than cash or bought back during the preceding last five years except issue of 10,000 6% Redeemable Cumulative Preference Shares of ` 100 each pursuant to a Scheme of Composite Arrangement to shareholders of Pantaloons Fashion & Retail Limited.

8)

Pursuant to the provisions of Section 126 of Companies Act, 2013, the issue of following equity shares are kept in abeyance. Sr.

Particulars

No.

9)

1.

Rights Issue (1994)

2.

Bonus Share on Above

3.

Rights Issue (2007)

No. of Shares As at 31st March, 2015

As at 31st March, 2014

12,575

12,575

6,288

6,288

22,460

22,460

During the year 100,664 ESOP shares have been issued by the Company, which will be allotted upon exercise of ESOP. In the year 1997, the Company had forfeited 4,487 shares held by 299 holders on account of non-payment of call money with interest on shares issued against each detachable warrant.

11)

3,168,459 equity shares (Previous Year: 3,182,052) are represented by Global Depository Receipts.

12)

During the last five years, there were 30 Bonus Shares (Previous Year: 80 Bonus Shares) issued out of shares kept in abeyance.

13)

Figures in brackets represent the corresponding number of shares for Previous Year.

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10)

CONSOLIDATED FINANCIAL STATEMENTS

For details of Shares reserved for issue under the Employee Stock Option Plan ( ESOP) of the Group refer Note: 34.

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015

As at 31st March, 2014

0.01

0.01

2.74



0.45

0.48

3.20

0.49

269.97

269.97

9.61

9.61

0.10



9.71

9.61

6,092.02

5,198.60

— 5.91 2.27

884.64 8.79 3.61

802.88



32.26 —

— ß

175.41

3.62

6,759.93

6,092.02

41.54

66.91

24.91

24.63

13.45 0.46

50.00 —

52.54

41.54

8.55

12.92

11.72

2.91

2.27

3.61

NOTE: 2B PREFERENCE SHARE ISSUED BY SUBSIDIARY AND JOINT VENTURE COMPANIES 6% Redeemable Cumulative Preference Shares of ` 100/- each, fully paid-up of the Subsidiary Company 0.001% Compulsorily Convertible Preference Shares of ` 10/- each, fully paid-up of the Subsidiary Company Compulsory Convertible Preference Shares of ` 10/- each, fully paid-up of the Subsidiary Company of Joint Venture Company

NOTE: 3 RESERVES AND SURPLUS 1) Capital Reserves 2) Capital Redemption Reserve Opening Balance as per last audited Financial Statement Addition: Transfer from Surplus/(Deficit) in the Statement of Profit and Loss on Redemption of Preference Shares

CONSOLIDATED FINANCIAL STATEMENTS

3)

4)

5)

Securities Premium Account Opening Balance as per last audited Financial Statement Addition: Conversion of Share Warrants ESOP Exercised Transfer from Stock Options Outstanding Account on Exercise of Options Premium on issue of shares via QIP and Preferential Allotment (Net of Share issue expenses of ` 5.88 Crore) Premium on issue of Compulsorily Convertible Preference Shares of the Subsidiary Company Allotment of Rights Issue Shares Deduction: Stake Change in Joint Venture

Debenture Redemption Reserve Opening Balance as per last audited Financial Statement Addition: Transfer from Surplus in the Statement of Profit and Loss Deduction: Transferred to General Reserve on Redemption of Debentures Stake Change in Joint Venture Share Options Outstanding Account Opening Balance as per last audited Financial Statement Addition: Charge for the year Deduction: Transfer to Securities Premium Account on Exercise of Options Transfer to General Reserve on Lapse of Options Stake Change in Joint Venture

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3.66

0.32

0.01

17.68

8.55

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores

Other Reserves i) General Reserve Opening Balance as per last audited Financial Statement Addition: Transfer from Surplus in the Statement of Profit and Loss Transfer from Debenture Redemption Reserve on Redemption of Debentures Transfer from Share Options Outstanding Account on Lapse of Options Reserve created on merger of certain companies with JV of Idea Deduction: Transitional Provision of Schedule II Impact (Net of Deferred Tax Amounting of ` 6.44 Crore) [Refer Note: 1(II)] Depreciation Charge on Fair Value Portion of Fixed Assets by JV of Idea Group’s Share of Idea JV discrepancy in physical verification of Fixed Assets as per scheme Amount Transferred to Surplus in Profit and Loss Amount Transferred on Stake Change of Joint Venture/Divestment of Subsidiaries ii)

Special Reserve(a) Opening Balance as per last audited Financial Statement Addition: Transfer from Surplus in the Statement of Profit and Loss

iii)

Capital Fund(b)

iv)

Credit/(Debit) Fair Value Change Account(c) Opening Balance as per last audited Financial Statement Addition/(Deduction) during the year

v)

vi)

Foreign Currency Translation Reserve Opening Balance as per last audited Financial Statement Addition: During the Year Deduction: Amount Transferred on Divestment of Subsidiaries and Businesses Hedging Reserve(d) Opening Balance as per last audited Financial Statement Addition: Gain/(Loss) recognised during the year (Net) Deduction: Gain/(Loss) recycled during the year (Net) Amount Transferred on Divestment of Subsidiaries and Busnesses

Total Other Reserves

3,640.62

2,986.44

201.76 13.45 — —

501.40 50.00 3.66 132.69

13.21 17.73

— 30.66

0.20 13.45

2.89 —

11.95

0.02

3,799.29

3,640.62

92.29

58.76

54.69

33.53

146.98

92.29

0.02

0.02

0.10 (0.10)

ß 0.10



0.10

156.38

130.78

9.97

25.60

164.68



1.67

156.38

(31.13)

(6.93)

2.86

(49.81)

(2.50) (23.55)

(25.87) 0.26

(2.22)

(31.13)

3,945.74

3,858.28

211

L

6)

As at 31st March, 2014

CONSOLIDATED FINANCIAL STATEMENTS

As at 31st March, 2015

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores

7)

(a)

Surplus/(Deficit) in the Statement of Profit and Loss Opening Balance as per last audited Financial Statement Addition/(Deduction): Profit of the Year Amount Transferred on Stake Change of Joint Venture/ Divestment of Subsidiaries Transfer from General Reserve Transitional Provision of Schedule II Impact (Net of Deferred Tax Amounting of ` Nil Crore) [Refer Note: 1(II)] Share of Minority Interest on Transitional provision of Schedule II Impact Less: Appropriations Transfer to Debenture Redemption Reserve Transfer to General Reserve Transfer to Capital Redemption Reserve Transfer to Special Reserve Proposed Dividend on: Equity Preference Equity Dividend relating to Previous Period Interim Dividend on Preference Shares Corporate Tax on Proposed Dividend Corporate Tax on Interim Dividend of Joint Venture Company by its Joint venture Corporate Tax on Dividend relating to earlier years of Joint Venture Company Corporate Tax on Interim Dividend on Preference Shares

As at 31st March, 2015

As at 31st March, 2014

778.59

312.79

1,415.50

1,142.88

(81.57) 13.45

(0.76) —

(15.19) 3.09

— —

24.91 201.76 0.10 54.69

24.63 501.40 — 33.53

91.10 — 2.60 β 30.13

91.06 0.01 0.07 — 22.03

25.85

3.59

0.44 β

β —

1,682.29

778.59

12,737.86

11,058.56

Special Reserve

CONSOLIDATED FINANCIAL STATEMENTS

Special Reserve represents the reserve created pursuant to the Reserve Bank of India Act, 1934 (the “RBI Act”). In terms of Section 45-IC of the RBI Act, a Non-Banking Finance Company is required to transfer an amount not less than 20 per cent of its net profit to a Reserve Fund before declaring any dividend. Appropriation from this Reserve Fund is permitted only for the purposes specified by RBI. (b) Capital Fund Capital fund comprises an amount received, on a non-repatriable basis from the Sponsor, as a contribution to the Birla Sun Life Mutual Fund (‘the Fund’) in accordance with the terms of the Trust Deed, together with accretion thereon. The amount is held by the Company in its fiduciary capacity as the trustee to the Fund and is intended to be utilised only for the purposes of settlement of claims, if any, from the unit holders of the mutual fund schemes launched by the Fund. (c)

Credit/(Debit) Fair Value Change Account Unrealised gain/loss due to changes in fair value of listed equity shares and mutual funds are taken to the Fair Value Change Account for Shareholders’ Investments of Life Insurance Business.

(d) Hedging Reserve For the forward contracts designated as cash flow hedges, the effective portion of the fair value of forward contracts are recognised in Hedging Reserve.

L

212

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

NOTE: 4A LONG-TERM BORROWINGS SECURED Debentures Rupee Term Loans from Banks Others Foreign Currency Loans from Banks Others Finance Lease Liabilities

UNSECURED Debentures Rupee Term Loans from Others Foreign Currency Loans from Banks Deferred Payment Liability towards Spectrum

NOTE: 4B SHORT-TERM BORROWINGS SECURED Loan Repayable on Demand from Banks

UNSECURED Loan Repayable on Demand from Banks Others Other Loans and Advances Commercial Papers*

As at 31st March, 2015

` in Crores As at 31st March, 2014

3,360.38

1,220.33

6,317.81 188.86

4,802.76 266.97

267.05 1,027.59 8.17

399.14 1,288.68 8.05

11,169.86

7,985.93

1,350.00 6.05 333.16 2,177.52

955.00 2.86 746.30 2,205.52

3,866.73

3,909.68

15,036.59

11,895.61

1,911.17

2,465.15

1,911.17

2,465.15

1,348.01 100.00

844.16 9.54

3,061.69

3,215.40

4,509.70

4,069.10

6,420.87

6,534.25

812.30 32.87

789.28 33.31

NOTE: 5 DEFERRED TAX LIABILITIES Deferred Tax Liabilities at the year end comprise timing differences on account of: Depreciation Expenditure/Provisions allowed on Payment Basis

845.17

822.59

DEFERRED TAX ASSETS Deferred Tax Assets at the year end comprise timing differences on account of: Depreciation Expenditure/Provisions Allowable on Payment Basis Provision for Doubtful Debt and Advances Unabsorbed Depreciation and Carry Forward Losses Others

4.78 89.67 87.37 152.08 26.40

3.09 71.79 74.80 146.70 22.00

Net Deferred Tax Liabilities/(Assets)

360.30 484.87

318.38 504.21

Deferred Tax presented in Balance Sheet Deferred Tax Liabilities (Net) Deferred Tax Assets (Net)

549.02 64.15

552.23 48.02

Net Deferred Tax Liabilities/(Assets)

484.87

504.21

213

L

Deferred Tax Assets in certain subsidiaries are recognised on losses and unabsorbed depreciation only to the extent of Deferred Tax Liabilities in those subsidiaries.

CONSOLIDATED FINANCIAL STATEMENTS

*Commercial Papers are shown net of unamortised discounting charges.

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015

As at 31st March, 2014

89.01 44.73

73.15 109.12

149.97 32.61 73.37 1.32 82.46

128.57 74.55 75.36 2.81 98.53

473.47

562.09

4,526.36

2,109.53

0.75

0.81

366.80

204.50

4.50

15.15

NOTE: 6A OTHER LONG-TERM LIABILITIES Trade Payables Interest Accrued but Not Due on Borrowings Other Payables Deposits Advance from Customers Income Received in Advance Payables for Capital Expenditure Others

NOTE: 6B OTHER CURRENT LIABILITIES Current Maturities of Long-term Borrowings Current Maturities of Finance Lease Obligations Interest Accrued but Not Due on Borrowings Income Received in Advance Investors’ Education and Protection Fund to be credited as and when due Unpaid Dividend

3.27

3.07



0.02

0.28

0.28

Advance from Customers

522.11

549.47

Book Overdraft

233.60

87.02

Payables for Capital Expenditure

405.59

394.18

Statutory Dues

312.48

372.26

71.50

79.99

Unpaid Matured Deposits and Interest Accrued thereon Money Due for Refund on Fraction Shares Other Payables

Deposits Dividend Payable by Joint Venture Due to Life Insurance Policyholders

CONSOLIDATED FINANCIAL STATEMENTS

Provisions for Premium on Redemption of Debentures

0.03



311.86

307.62



47.09

Derivative Liability (Net)*

14.66

24.40

Others

99.03

90.49

6,872.82

4,285.88

100.45

76.39

Contingent Provision on Standard Asset of Financing Activities

23.92

12.95

Provision for Doubtful Loans and Advances of Financing Activities

89.70

73.02

Other Long-term Provisions#

76.03

80.33

290.10

242.69

*This represents Mark-to-Market on Derivative Contracts taken for the purpose of hedging. NOTE: 7A LONG-TERM PROVISIONS Provisions for: Employee Benefits Others

L

214

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores

NOTE: 7B SHORT-TERM PROVISIONS Provisions for: Employee Benefits Others Taxation (Net of Advance Tax) Proposed Dividend Equity Preference Provision for Corporate Tax on Dividend Equity Preference Contingent Provision on Standard Asset of Financing Activities Other Short-term Provisions #

As at 31st March, 2015

As at 31st March, 2014

153.95

138.52

69.51

56.05

91.10 —

91.06 0.01

30.13 — 30.07 12.78

22.02 0.01 25.41 9.47

387.54

342.55

# Additional disclosure as per Accounting Standard-29 – “Provisions, Contingent Liabilities and Contingent Assets” A. Warranty Opening Balance 0.53 0.75 Arising during the year 0.13 0.04 Utilised (0.02) — Unused Amounts Reversed (0.09) (0.25) 0.55

0.54

Long-term Short-term

0.11 0.44

— 0.54

0.55

0.54

Provision is recognised for expected warranty claims on products sold during the last two to three years based on the past experience of level of returns and replacements. Customer Relationship Management Loyalty Programme Opening Balance 8.93 5.29 Arising during the year 30.76 23.26 Utilised (26.09) (19.62) Unused Amounts Reversed (1.26) — Closing Balance

12.34

8.93

Short-term

12.34

8.93

12.34

8.93

Customer Relationship Management Loyalty Programme are the schemes designed with an intention to retain the existing customer and attract new customers by rewarding a customer for his loyalty and patronage. It is expected that this provision will be utilised within one year. Asset Retirement Obligation Opening Balance Arising during the year Change in Liability on Stake Change of Joint Venture Addition pursuant to merger of subsidiary and certiain companies in JV of IDEA Utilised

80.33 2.59 (6.21) — (0.79)

37.79 1.92 (0.06) 41.20 (0.52)

Closing Balance

75.92

80.33

Long-term

75.92

80.33

75.92

80.33

Asset Retirement Obligation provision is recognised for the costs to be incurred for the restoration of premises taken on lease to install equipment, at the end of the lease period. It is expected that this provision will be utilised at the end of the lease period of the respective sites as per the respective lease agreements.

215

L

C.

CONSOLIDATED FINANCIAL STATEMENTS

B.

Closing Balance

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 8A ` in Crores

TANGIBLE ASSETS Freehold Land Gross Block As at 1st April, 2013 47.93 Additions 1.02 Deletions — Foreign Exchange Translation Difference — Addition/(Deletion) on Stake Change/Divestment/ Amalgamations (16.99)

Freehold Buildings

Leasehold Buildings

Leasehold Improvements

Plant & Equipment

Furniture & Fixtures

Office Vehicles Equipment

33.39 0.27 0.72

446.83 41.13 1.27

4.84 1.16 —

321.21 37.64 32.34

12,400.61 1,331.06 237.07

746.33 102.19 45.40

564.54 48.83 13.83

68.75 14.81 15.29







3.88

8.21

2.10

0.44



Railway Sidings

TOTAL

5.84 14,640.27 — 1,578.11 — 345.92 —

14.63



(738.17)

(7.07)

(81.24)





(612.14)

(7.80)

(8.75)

(4.18)

31.96 0.02 0.04

25.87 17.89 —

405.45 12.96 0.41

6.00 0.42 —

330.39 28.44 10.30

12,890.67 1,288.74 210.94

797.42 110.24 31.89

591.23 74.91 25.43

64.09 17.35 11.00









0.22

1.19

0.59

0.09



(0.23)

(0.02)

(3.44)



(107.08)

(1,026.73)

(66.56)

(23.88)

(2.99)

— (1,230.93)

As at 31st March, 2015 31.71 Accumulated Depreciation As at 1st April, 2013 For the Year Deletions Foreign Exchange Translation Difference Addition/(Deletion) on Stake Change/Divestment/ Amalgamations

43.74

414.56

6.42

241.67

12,942.93

809.80

616.92

67.45

5.84 15,181.04

2.89 0.12 0.58

123.62 12.22 0.33

1.80 0.63 —

190.06 40.02 27.89

5,644.69 1,166.54 217.63

404.98 99.97 41.77

329.10 77.65 12.22

40.41 11.19 13.02

5.55 — —

6,743.10 1,408.34 313.44







1.83

6.70

0.92

0.18





9.63

(1.01)

(15.75)





(311.66)

(4.62)

(6.44)

(1.80)



(341.28)

1.42 0.29 —

119.76 12.69 0.10

2.43 0.54 —

204.02 38.48 9.11

6,288.64 1,211.87 196.33

459.48 139.56 31.19

388.27 90.03 24.66

36.78 12.79 8.22

5.55 — —

7,506.35 1,506.25 269.61







0.11

0.90

0.42

0.06





1.49



6.88





15.74

5.05

7.17





34.84

As at 31st March, 2014 Additions Deletions Foreign Exchange Translation Difference Addition/(Deletion) on Stake Change/Divestment/ Amalgamations

CONSOLIDATED FINANCIAL STATEMENTS

Leasehold Land

As at 31st March, 2014 For the Year Deletions Foreign Exchange Translation Difference Charge to Retained earnings on account of Schedule II Addition/(Deletion) on Stake Change/Divestment/ Amalgamations As at 31st March, 2015

5.84 15,148.92 — 1,550.97 — 290.01 —

2.09

(0.01)

(1.55)



(77.70)

(580.67)

(46.11)

(15.78)

(1.85)



(723.67)

1.70

137.68

2.97

155.80

6,740.15

527.21

445.09

39.50

5.55

8,055.65

Net Block as at 31st March, 2014

31.96

24.45

285.69

3.57

126.37

6,602.03

337.94

202.96

27.31

0.29

7,642.57

Net Block as at 31st March, 2015

31.71

42.04

276.88

3.45

85.87

6,202.78

282.59

171.83

27.95

0.29

7,125.39

A.

B.

C.

D. E. F. G.

Gross Block of Tangible Assets includes: (i) The Group’s share in assets held under co-ownership - Leasehold Land ` 19.80 Crore (Previous Year: ` 19.80 Crore), Buildings ` 23.85 Crore (Previous Year: ` 23.85 Crore), Furniture & Fixtures ` 2.67 Crore (Previous Year: ` 2.65 Crore) and Office Equipment ` 5.75 Crore (Previous Year: ` 5.68 Crore). (ii) Buildings include ` 21.68 Crore (Previous Year: ` 21.68 Crore) being cost of Debentures and Shares in a Company entitling the right of exclusive occupancy and use of certain premises. (iii) Registration of Freehold Land of ` 0.15 Crore (Previous Year: ` 0.15 Crore) in favour of the Group is subject to resolution of disputes. Details of Tangible Assets capitalised under Finance Lease: (i) Plant and Equipment include Gross Block of ` 323.98 Crore (Previous Year: ` 315.88 Crore) and Net Block ` 103.41 Crore (Previous Year: ` 92.68 Crore). (ii) Office Equipment includes Gross Block of ` 0.74 Crore (Previous Year: ` 0.17 Crore) and Net Block of ` 0.66 Crore (Previous Year: ` 0.15 Crore). Depreciation Charge for the year includes: (i) Accelerated Depreciation of ` 219.53 Crore (Previous Year: ` 157.84 Crore) on account of refurbishment, store closure and due to the change in estimate useful life of certain tangible assets. (ii) Prior Period Depreciation of ` Nil Crore (Previous Year: ` 13.02). Group’s Share in Exchange loss of ` 27.51 Crore (Previous Year: ` 188.60 Crore) has been capitalised as per Para 46A of AS-11 by Joint Venture. Capital Work-in-Progress is net of Impairment provision amounting to Group’s share of ` 112.77 Crore (Previous Year: ` 122.23 Crore) in Joint Venture. Addition to Plant and Equipment is net of Subsidy ` 0.02 Crore (Previous Year: ` 2.45 Crore). For Assets given on Operating Lease — Refer Note: 31.

L

216

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 8B ` in Crores

INTANGIBLE ASSETS Goodwill

Goodwill on Consolidation

Brands/ Computer Trade- Software marks

Technical Investment Know-how Management Rights

Client Acquisition Cost

Telecom NonEntry/ Compete Licence Fees Fees*

TOTAL

Gross Block As at 1st April, 2013

0.33 8,275.20

1,226.30

3,604.67

193.17

378.34

6.60

53.84

16.28

2,795.67

Additions





21.60

109.13







17.79



Deletions







0.13











0.13

0.69

13.69



10.13





0.27





24.78



153.02

Foreign Exchange Translation Difference Addition/(Deletion) on Stake Change/Divestment/ Amalgamations

148.52



160.94



(3.44)







(4.48)

1,226.99

3,779.30

214.77

494.03

6.60

53.84

16.55

2,808.98

Additions



37.69



70.58



3.79



1,668.51

Deletions







1.71











1.71

0.58

11.49



0.16





0.22





12.45

As at 31st March, 2014

Foreign Exchange Translation Difference Addition/(Deletion) on Stake Change/Divestment/ Amalgamations As at 31st March, 2015

0.33 8,601.39 — 1,780.57

(39.59)

(1,025.21)



(158.89)





(16.77)

(217.21)

— (1,457.67)

1,187.98

2,803.27

214.77

404.17

6.60

57.63



4,260.28

0.33 8,935.03

Accumulated Amortisation/Impairment 5.74



169.77

267.63

4.61

40.39

13.00

729.77

0.22 1,231.13

Amortisation for the Year





4.61

70.90

0.92

5.38

1.74

147.52

0.11

231.18

Impairment Loss During the Year



18.65















18.65

Deletions







0.13











0.13

0.09





1.02





0.07





1.18



(4.17)

Foreign Exchange Translation Difference Addition/(Deletion) on Stake Change/ Divestment/Amalgamations







(3.01)







(1.16)

5.83

18.65

174.38

336.41

5.53

45.77

14.81

876.13

Amortisation for the Year





4.49

44.25

0.92

5.56

0.18

158.83



Impairment Loss During the Year



















Deletions







1.71











1.71

0.08





0.09





0.15





0.32

As at 31st March, 2014

Foreign Exchange Translation Difference Addition/(Deletion) on Stake Change/ Divestment/Amalgamations

0.33 1,477.84 214.23

(5.91)





(52.96)





(15.14)

(70.30)

— (144.31)



18.65

178.87

326.08

6.45

51.33



964.66

0.33 1,546.37

Net Block as at 31st March, 2014

1,221.16

3,760.65

40.39

157.62

1.07

8.07

1.74

1,932.85

— 7,123.55

Net Block as at 31st March, 2015

1,187.98

2,784.62

35.90

78.09

0.15

6.30



3,295.62

— 7,388.66

As at 31st March, 2015

A.

All Intangible Assets are other than internally generated.

B.

Details of Intangible Assets capitalised under Finance Lease: Software includes Gross Block of ` 58.94 Crore (Previous Year: ` 60.80 Crore) and Net Block of ` 8.31 Crore (Previous Year: ` 9.51 Crore).

* Based on Written-down Value, the balance amortisation period of material Intangible Assets: As at 31st March, 2015

As at 31st March, 2014

Telecom Entry/Licence Fees

Ranges between 12 and 240 months based on Ranges between 24 and 228 months based on the respective Telecom Service Licence period. the respective Telecom Service Licence period.

217

L

Intangible Assets

CONSOLIDATED FINANCIAL STATEMENTS

As at 1st April, 2013

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores Year Ended 31st March, 2015

Year Ended 31st March, 2014

NOTE: 8A and 8B During the year, the Group has capitalised the following expenses to cost of Fixed Assets/Capital Work-in-Progress Salaries and Wages Contribution to Provident and Other Funds Staff Welfare Expenses Power and Fuel Rent Legal and Professional Expenses Travelling and Conveyance Interest Expenses Miscellaneous Expenses

2.94 — — 0.20 — — 0.11 121.81 0.08

1.20 0.10 0.08 — 0.48 5.08 0.20 13.60 0.49

Add: Brought forward from previous year Less: Capitalised during the year Less: Impact on Stake Change

125.14 16.80 74.91 0.79

21.23 13.07 17.50 —

66.24

16.80 ` in Crores

NOTE: 9A INVESTMENTS OF LIFE INSURANCE BUSINESS: NON-CURRENT (i) Shareholders’ Investments Quoted Investments in Government or Trust Securities Debentures/Bonds

CONSOLIDATED FINANCIAL STATEMENTS

Unquoted Investments in Equity Instruments Others (Fixed Deposits)

Sub-Total - (i) (ii)

Policyholders’ Investments Quoted Investments in Equity Instruments Preference Shares Government or Trust Securities Debentures/Bonds Unquoted Investments in Equity Instruments Others (Fixed Deposits)

As at 31st March, 2014

676.91 746.46

580.88 528.60

1,423.37

1,109.48

1.25 45.85

1.25 9.90

47.10

11.15

1,470.47

1,120.63

288.15 0.22 2,140.15 1,371.76

30.40 0.19 1,305.54 882.11

3,800.28

2,218.24

6.96 73.52

— 18.52

80.48

18.52

Sub-Total - (ii)

3,880.76

2,236.76

Total - (i) + (ii)

5,351.23

3,357.39

5,448.88 5,223.65 127.58

3,224.26 3,327.72 29.67

Aggregate Market Value of Quoted Investments Aggregate Book Value of Quoted Investments Aggregate Book Value of Unquoted Investments

L

218

As at 31st March, 2015

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

NOTE: 9B INVESTMENTS OF LIFE INSURANCE BUSINESS: CURRENT (i) Shareholders’ Investments Quoted Investments in Government or Trust Securities Debentures/Bonds Mutual Funds

Unquoted Investments in Others Fixed Deposits Collateralised Borrowing and Lending Obligation

0.37 0.75 50.69

— 5.00 170.01

51.81

175.01

30.00 —

30.00 3.57 33.57

81.81

208.58

69.97 19.84 120.88

179.15 13.00 111.17

210.69

303.32

10.00 6.60 23.11

95.00 92.76 72.88

39.71

260.64

Sub-Total - (ii)

250.40

563.96

Total - (i) + (ii)

332.21

772.54

262.55 262.50 69.71

478.33 478.33 294.21

Policyholders’ Investments Quoted Investments in Government or Trust Securities Debentures/Bonds Mutual Funds

Unquoted Investments in Others Fixed Deposits Collateralised Borrowing and Lending Obligation Certificate of Deposits

Aggregate Market Value of Quoted Investments Aggregate Book Value of Quoted Investments Aggregate Book Value of Unquoted Investments

219

L

30.00 Sub-Total - (i) (ii)

As at 31st March, 2014

CONSOLIDATED FINANCIAL STATEMENTS

` in Crores As at 31st March, 2015

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015

As at 31st March, 2014

201.72

201.72

NOTE: 10A OTHER INVESTMENTS: NON-CURRENT Quoted Investments in Equity Instruments Debentures or Bonds Mutual Funds

1.11

1.11

102.31

50.00

305.14

252.83

Unquoted Investments in Equity Instruments

2.58

2.74

Preference Shares

26.68

27.49



0.07

Debentures or Bonds Mutual Funds* Others (Private Equity Fund, PMS and Real Estate Fund)

25.65

0.04

190.68

195.00

245.59

225.34

550.73

478.17

Aggregate Market Value of Quoted Investments

546.56

527.76

Aggregate Book Value of Quoted Investments

305.14

252.83

Aggregate Book Value of Unquoted Investments

245.59

225.34

0.04

0.04

* Includes Earmarked towards Capital Fund NOTE: 10B OTHER INVESTMENTS: CURRENT Quoted Investments in Equity Instruments

CONSOLIDATED FINANCIAL STATEMENTS

Mutual Funds



0.15

3.78

134.00

3.78

134.15

Unquoted Investments in Debentures or Bonds

467.57

116.73

3,111.92

226.54

24.31

186.06

3,603.80

529.33

3,607.58

663.48

Aggregate Market Value of Quoted Investments

3.79

141.10

Aggregate Book Value of Quoted Investments

3.78

134.15

3,603.80

529.33

Mutual Funds Others (Commercial Papers)

Aggregate Book Value of Unquoted Investments

L

220

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores As at 31st March, 2015

As at 31st March, 2014

NOTE: 11A ASSET HELD TO COVER LINKED LIABILITIES OF LIFE INSURANCE BUSINESS: NON-CURRENT Quoted Investments in Equity Instruments

11,251.04

Preference Shares Government or Trust Securities Debentures or Bonds

10,256.04

8.74

7.65

4,701.36

2,901.32

5,270.65

3,666.18

21,231.79

16,831.19



29.72

270.50

115.10

27.61

23.87

Unquoted Investments in Debentures or Bonds Others Fixed Deposits Other Current Assets Interest Accrued on Investments

298.11

168.69

21,529.90

16,999.88

Aggregate Market Value of Quoted Investments

21,231.79

16,831.19

Aggregate Book Value of Quoted Investments

21,231.79

16,831.19

270.50

144.82

Total

Aggregate Book Value of Unquoted Investments NOTE: 11B ASSET HELD TO COVER LINKED LIABILITIES OF LIFE INSURANCE BUSINESS: CURRENT Quoted Equity Instruments

88.86



Government or Trust Securities

51.48

108.82

Debentures or Bonds

336.96

640.80

Mutual Funds

701.54

863.56

1,178.84

1,613.18

326.98 102.66 568.84 126.45

716.31 132.69 497.71 128.89

1.14 342.20 0.91 286.08

164.52 291.20 7.20 82.85

1,755.26

2,021.37

2,934.10

3,634.55

Unquoted Investments in Others Fixed Deposits Collateralised Borrowing and Lending Obligation Certificate of Deposits Commercial Papers Other Current Assets Bank Balances Interest Accrued on Investments Dividend Receivables Outstanding Contracts Total

1,178.84

1,613.18

Aggregate Book Value of Quoted Investments

1,178.84

1,613.18

Aggregate Book Value of Unquoted Investments

1,124.93

1,475.60

221

L

Aggregate Market Value of Quoted Investments

CONSOLIDATED FINANCIAL STATEMENTS

Investments in

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores

CONSOLIDATED FINANCIAL STATEMENTS

NOTE: 12A LONG-TERM LOANS AND ADVANCES (Unsecured, Considered Good, except otherwise stated) Capital Advance (Refer Note: 40 (iv)(A)) Unsecured, Considered Good Unsecured, Considered Doubtful Less: Provision for Doubtful Security Deposits Unsecured, Considered Good Unsecured, Considered Doubtful Less: Provision for Doubtful Other Loans and Advances Loans and Advances of Financing Activities Secured, Considered Good Unsecured, Considered Good Unsecured, Considered Doubtful Inter-Corporate Deposits Unsecured, Considered Good Loans against Insurance Policy (Secured, Considered Good) VAT, Other Taxes Recoverable, Statutory Deposits and Dues from Government Unsecured, Considered Good Unsecured, Considered Doubtful Less: Provision for Doubtful Advance Tax (Net of Provision) MAT Credit Entitlement Prepaid Expenses Advance for Expenses, Materials, Employees and Others

NOTE: 12B SHORT-TERM LOANS AND ADVANCES (Unsecured, Considered Good, except otherwise stated) Security Deposits Unsecured, Considered Good Unsecured, Considered Doubtful Less: Provision for Doubtful Other Loans and Advances Loans and Advances of Financing Activities Secured, Considered Good Unsecured, Considered Good Inter-Corporate Deposits Unsecured, Considered Good Loans against Insurance Policy (Secured, Considered Good) VAT, Other Taxes Recoverable, Statutory Deposits and Dues from Government Unsecured, Considered Good Unsecured, Considered Doubtful Less: Provision for Doubtful Advance Tax (Net of Provision) MAT Credit Entitlement Prepaid Expenses Advance for Expenses, Material, Employees and Others* Unsecured, Considered Good Unsecured, Considered Doubtful Less: Provision for Doubtful

*Refer Note: 40(vi)

L

222

As at 31st March, 2015

As at 31st March, 2014

476.90 0.10 (0.10)

27.49 0.36 (0.36)

459.22 3.44 (3.44)

481.32 0.77 (0.77)

8,853.52 569.56 153.00

4,982.80 213.93 147.11

9.27 37.86

11.58 28.24

18.79 0.15 (0.15) 91.40 135.98 103.70 161.53

17.10 — — 113.12 285.06 51.95 172.22

11,070.73

6,531.92

76.06 0.51 (0.51)

92.40 0.42 (0.42)

5,401.11 2,260.00

4,071.09 2,018.55

40.92 0.01

9.61 0.22

188.34 0.58 (0.58) 130.60 0.16 117.00

171.28 0.58 (0.58) 137.36 14.06 93.67

215.40 22.51 (22.51)

233.05 22.26 (22.26)

8,429.60

6,841.29

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores As at 31st March, 2015

As at 31st March, 2014

Bank Deposits with more than twelve months maturity

1.42

1.39

Interest Accrued on Loans and Advances and Investments

14.22

5.35

NOTE: 13A OTHER NON-CURRENT ASSETS Other Bank Balances*

Government Grant Receivable

0.62

0.67

Revenue Equalisation Reserve

10.66

36.54

26.92

43.95

*Amount Held as Margin Money under lien to bank for issuing guarantee

0.54

0.51

*Lien Marked in favour of IRDA

0.88

0.88

NOTE: 13B OTHER CURRENT ASSETS Fertiliser Bonds #

2.19

9.85

Unbilled Revenue

103.44

390.05

Interest Accrued on Loans and Advances, Investments and Fixed Deposits

301.10

209.86

Government Grant Receivable

20.34

87.78

Export Incentive Receivable

17.90

26.46

Less: Provision for Export Incentive Receivable

(0.06)

(0.06)

Others

74.97

33.43

519.88

757.37

# The Company had received Fertilisers Bonds of ` 65.50 Crore received from the Ministry of Fertiliser, Government of India, against the outstanding amount of subsidy receivable, out of which bonds amounting to ` 2.38 (Previous Year: ` 11.58) are outstanding at the year end. The market value of the above bonds are lower than book value, therefore the diminution in the value of above bonds has been accounted. NOTE: 14 Raw Materials (Includes Goods-in-Transit ` 21.79 Crore (Previous Year: ` 14.67 Crore))

323.38

251.91

Work-in-Progress

124.18

117.01

Finished Goods (Includes Goods-in-Transit ` Nil (Previous Year: ` 0.02 Crore))

383.85

371.70

Stock-in-Trade (Includes Goods-in-Transit ` 9.19 Crore (Previous Year: ` 15.57 Crore))

782.09

705.45

Stores and Spares (Includes Goods-in-Transit ` 9.24 Crore (Previous Year: ` 0.55 Crore))

113.66

85.98

Packing Materials Certified Emission Reductions

0.63

0.06

14.72

10.02



0.09

1,742.51

1,542.22

223

L

Waste/Scrap

CONSOLIDATED FINANCIAL STATEMENTS

INVENTORIES (Lower of Cost and Net Realisable Value)

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015

As at 31st March, 2014

6.95

6.62

NOTE: 15 TRADE RECEIVABLES Due for period exceeding Six months from the Due date of payment Secured, Considered Good Unsecured, Considered Good (Includes subsidy receivables from Government of India ` 12.98 Crore (Previous Year: ` 5.64 Crore)) Unsecured, Considered Doubtful Less: Provision for Doubtful

72.25

63.61

101.67

102.86

(101.67)

(102.86)

118.32

102.19

2,298.70

2,470.27

Others Secured, Considered Good Unsecured, Considered Good (Includes subsidy receivables from Government of India ` 1,180.30 Crore (Previous Year: ` 1,145.56 Crore)) Unsecured, Considered Doubtful Less: Provision for Doubtful

11.32

10.35

(11.32)

(10.35)

2,496.22

2,642.69

NOTE: 16 CASH AND BANK BALANCES Cash and Cash Equivalents Balances with Banks Current Accounts

256.17

105.50

Deposit Accounts (with original maturity period of three months or less)

670.68

428.70

Cash on Hand

26.64

25.16

Cheques/Drafts on Hand

95.63

107.18

1,049.12

666.54

77.02

50.10

0.03



(A) Other Bank Balances Deposit Accounts (with original maturity period of more than three months)# Earmarked Balances towards Dividend Others

CONSOLIDATED FINANCIAL STATEMENTS

Unclaimed Dividend Unclaimed Matured Deposits Money Due for Refund on Fraction Shares (B) (A) + (B) Less: Bank Deposits with more than twelve months maturity (transferred to Other Non-Current Assets) (Refer Note: 13A)

# Includes deposits placed under lien towards bank guarantees for margins with exchange/banks.

L

224

3.27

3.07



0.02

0.28

0.28

80.60

53.47

1,129.72

720.01

1.42

1.39

1,128.30

718.62

75.59

47.89

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores Year Ended 31st March, 2015

Year Ended 31st March, 2014

Manufactured

6,932.02

6,325.55

Traded

4,018.61

3,571.44

10,950.63

9,896.99

NOTE: 17 REVENUE FROM OPERATIONS A.

B.

SALE OF PRODUCTS

SALE OF SERVICES Telecom Services

7,426.71

6,611.93

Life Insurance Premium

4,966.38

4,525.81

Other Financial Services

2,661.52

1,935.85

282.16

2,858.61

IT-ITES Services (Refer Note: 32) Other Services

C.

7.64

8.72

15,344.41

15,940.92

Export Incentive

39.71

44.83

Scrap Sales

19.09

20.17

Discount Income

14.88

6.39

297.95

175.55

29.42

25.20

OTHER OPERATING INCOME

Investment Income on Life Insurance Policyholders’ Fund Miscellaneous Other Operating Income

Total A + B + C

401.05

272.14

26,696.09

26,110.05

NOTE: 18 OTHER INCOME Interest Income on Investments Current Long-term Interest Income - Others

0.50

1.88

145.51

141.21

57.57

68.83

3.14

11.00

Current Long-term Net Gain on Sale of Current Investments

3.40

4.76

146.02

54.62

Other Non-Operating Income Profit on Sale of Fixed Assets (Net)

10.67

2.12

Others

41.14

55.79

407.95

340.21

3,192.26

2,824.70

NOTE: 19 COST OF MATERIALS CONSUMED Packing Materials Consumed

130.23

119.42

3,322.49

2,944.12

225

L

Raw Materials Consumed

CONSOLIDATED FINANCIAL STATEMENTS

Dividends Income on Investments

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores Year Ended 31st March, 2015

Year Ended 31st March, 2014

Finished Goods

371.70

369.79

Stock-in-Trade

705.45

589.70

Work-in-Process

117.01

76.67

NOTE: 20 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE Opening Stocks

Waste/Scrap

0.06

0.15

Certified Emission Reductions

0.09

0.18

1,194.31

1,036.49

Finished Goods

383.85

371.70

Stock-in-Trade

782.09

705.45

Work-in-Process

124.18

117.01

Less: Closing Stocks

Waste/Scrap Certified Emission Reductions

0.63

0.06



0.09

1,290.75

1,194.31

1.86

0.64

Add/(Less): Increase/(Decrease) in Excise Duty on Stocks Impact on Stake Change Stock Transfer on Sale of Carbon Black Business

(0.68)





(69.50)

(95.26)

(226.68)

Movement of (Increase)/Decrease in Inventories Finished Goods

(12.15)

(1.91)

Stock-in-Trade

(76.64)

(115.75)

Work-in-Process

(7.17)

(40.34)

Waste/Scrap

(0.57)

0.09

0.09

0.09

2,153.57

3,498.83

141.96

164.06

11.72

2.91

CONSOLIDATED FINANCIAL STATEMENTS

Certified Emission Reductions NOTE: 21 EMPLOYEE BENEFITS EXPENSES Salaries and Wages Contribution to Provident and Other Funds (Refer Note: 33) Expense on Employee Stock Options Scheme (Refer Note: 34) Expense on Employee Stock Appreciation Rights (Refer Note: 34)

1.12

0.49

112.51

229.09

2,420.88

3,895.38

(Released from)/Transfer to Fund for Future Appropriation

(54.86)

(136.20)

Change in Premium Discontinuance Fund

422.42

270.40

4,884.44

1,842.53

(5,008.30)

(2,319.81)

243.70

(343.08)

Staff Welfare Expenses

NOTE: 22 CHANGE IN VALUATION OF LIABILITY IN RESPECT OF LIFE INSURANCE POLICIES IN FORCE

Change in Valuation of Liability in respect of Life Insurance Policies Investment (Income)/Loss on the Life Insurance Policyholders’ Fund related to Linked Business

L

226

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores Year Ended 31st March, 2015

NOTE: 23 OTHER EXPENSES Consumption of Stores and Spares Power and Fuel Rent

Year Ended 31st March, 2014

176.00

171.45

1,413.21

1,527.06

842.40

866.35

Buildings

16.54

16.43

Plant and Machinery

305.30

313.85

Others

119.89

121.00

Insurance

24.24

24.73

Rates and Taxes

74.42

127.34

Processing Charges Passive Infrastructure Charges Licence and WPC Charges Roaming and Access Charges

60.41

70.33

533.23

452.01

837.15

737.66

1,120.84

1,049.94

Connectivity Charges

124.76

151.54

Subscriber Acquisition and Servicing Expenses

196.83

198.47

Commission to Selling Agents

826.40

734.42

Brokerage and Discounts

267.58

222.24

Advertisement and Sales Promotion Expenses

619.04

594.18

Transportation and Handling Charges

122.86

115.44

Store Security, Housekeeping and Other Expenses

166.32

135.14

Distribution Expenses

59.70

63.46

Bad Debts and Provision for Bad and Doubtful Debts and Advances including Contingency Provision for Standard Assets of NBFC

104.15

101.07

Travelling and Conveyance

149.40

171.02

Bank Charges

40.13

36.86

Foreign Exchange Loss (Net)

14.04

35.46

Information Technology Expenses

192.54

206.25

Miscellaneous Expenses

728.30

942.22

9,135.68

9,185.92

1,506.25

1,408.34

214.23

231.18

NOTE: 24 DEPRECIATION AND AMORTISATION EXPENSES Depreciation of Tangible Assets Amortisation of Intangible Assets Less: Depreciation Charged to General Reserve pursuant to merger scheme by Joint Venture

(17.73)

(30.66)

1,702.75

1,608.86

1,728.15

1,498.98

29.42

51.84

1,757.57

1,550.82

9.94

13.07

121.81

13.60

NOTE: 25 Interest Expenses* Other Borrowing Costs

*Net of Interest Rebate Subsidy from Technology Upgradation Fund *Net of Interest Capitalised

227

L

FINANCE COST

CONSOLIDATED FINANCIAL STATEMENTS

Repairs and Maintenance of:

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 26 CONTINGENT LIABILITIES NOT PROVIDED FOR (a)

` in Crores

Claims against the Group not acknowledged as Debts Nature of Statute

Brief Description of Contingent Liabilities

Excise Duty, Central Excise Act, 1944

Various other cases demanding duty for alleged wrong availment of benefit of exemption under Notification 38/2003-CE in respect of readymade garments, demand of differential excise duty on processing of yarn Cake in to Cone, demand of non-inclusion of Type Test Charges with the value of insulators, demand on reversal of Cenvat Credit on sale of capital goods, reversal of credit on inputs used for manufacturing dutiable and exempted goods, etc.

Customs Duty, Customs Act, 1942

Various other cases pertaining to demand of non-fulfilment of EXIM policy, differential duty on ENKA Tech Know-how, counter-vailing duty and additional duties on imports, supplementary Drawback claim, etc.

Sales Tax

Service Tax, Finance Act, 1994

CONSOLIDATED FINANCIAL STATEMENTS

Income-tax Act, 1961

As at 31st March, 2015

As at 31st March, 2014

32.08

20.08

5.72

5.22

Demands raised by the VAT/Sales Tax Authorities of few states on Broadband Connectivity, SIM cards, etc., on which the Company has already paid Service Tax.

37.87

25.32

Entry tax demand in certain states on receipt of material from outside the state.



8.70

Various other cases in respect of short forms of H, I and C, disallowance of input credit, tax demand on freight charges and on export to Nepal.

26.06

18.66

Show Cause-cum-Demand Notice from Service Tax Authorities issued for the AY 2007-08 to AY 2012-13 disputing Cenvat Credit eligibility on input services.

113.34

113.30

Demand mainly on account of interpretation of Rule 6(3), denial of Cenvat related to towers, shelters and OFC ducts, disallowance of Cenvat allegedly not related to output service.

93.88

53.58

Disallowance of Cenvat Credit on input services and service tax paid under reverse charge mechanism, rebate claim rejected.

26.61

20.92

Service Tax demands related to excess utilization of Cenvat against liability on risk premium and payment of reimbursements to agents.

39.82

39.82

Various other cases pertaining to disallowance of Cenvat Credit of Service Tax on commission paid to overseas agent, in GTA services, service for outward transportation and other services alleging not be classified as input services for availment of Cenvat Credit, etc.

10.86

11.96

Various Dept. Appeal in ITAT, High Court on 14A disallowance, disallowance of additional depreciation, disallowance of depreciation on goodwill and various matters.

70.05

36.18

102.12



2,329.30

1,572.82

37.62

26.96

Demand for non-deduction of TDS on purchase of shares of Idea u/s 201(1) and 201(1A). The appeals which are pending before various Appellate Authorities mainly on account of: 1. Disallowance of revenue share licensee, non applicability of TDS on pre-paid margin, interest on interest free advances to wholly owned subsidiaries. 2. Treating proceeds of CCPS as cash Credit. 3. Capital Gain on demerger of a telecom undrtaking. 4. Short-term capital gain on the fair valuation of investment in JV done as per High Court approved scheme. 5. Demand on difference between revalued figure of Investment in Indus held through a wholly owned subsidiary and book value of PI assets transferred to step down subsidiary through High Court approved scheme. Various cases pertaining to demand in tax assessment for various years.

L

228

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

` in Crores Nature of Statute

Brief Description of Contingent Liabilities

As at 31st March, 2015

As at 31st March, 2014

Others Statutes

Demand letter issued by UPSIDC for making payment of maintenance charges on land allotted in 1983. The matter is currently pending before the High Court, Lucknow.

22.84

18.23

Demand of water drawal charges by irrigation department. Matter pending before the High Court, Gujarat.

80.73

69.72

826.88

503.18

61.99

65.05

Licensing Disputes. Disputed matters with local Municipal Corporations, Electricity Boards, etc. Letter of Comfort given to bank for third parties. Repudiation of death claims and customer complaints. Bank Guarantee given by ABNL IT & ITES for ABMWL. Various Other cases pertaining to Industrial Disputes, Railways licence fee demand, Textile Cess on ready-made garments, claims made by clients on sale of securities and other Civil cases. Grand Total (b) Bills Discounted with Banks. (c)

214.94



26.32

9.11



10.20

92.70

67.26

4,251.73

2,696.27

51.11

38.17

Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched was required to be supplied in jute bags up to 31st August, 2001. The Company made conscious efforts to use jute packaging material as required under the said Act. However, due to non-availability of material as per the Company’s product specifications as well as due to strong customer resistance to use of jute bags, the specific percentage could not be adhered to. The Company has received a show cause notice, against which a writ petition has been filed with the Hon’ble High Court, which is awaiting for hearing. The Jute Commissioner, Kolkata, had filed transfer petition, various writ petitions have been filed in different High Courts by other aggrieved parties, including the Company, before the Hon’ble Supreme Court of India praying for consolidation of all cases at one Court. The transfer petition is pending before the Hon’ble Supreme Court. The Company has been advised that the said levy is bad in law.

(e)

The Group’s share in certain disputed tax demand notices and show cause notices relating to Direct and Indirect Tax matters of Joint Venture of IDEA (IDEA’s JV) amounting to ` 55.91 Crore (Previous Year: ` 148.65 Crore) have neither been acknowledged as claims nor considered as contingent liabilities by the IDEA’s JV. Based on internal assessment and independent advice taken from tax experts by the IDEA’s JV, it is of the view that the possibility of any of these tax demands materialising is remote.

(f)

DoT has issued demand notices towards one-time spectrum charges –

for spectrum beyond 6.2 Mhz in respective service areas for retrospective period from 1st July, 2008 to 31st December, 2012, Group’s share amounting to ` 85.93 Crore, and



for spectrum beyond 4.4 Mhz in respective service areas effective 1st January, 2013, till expiry of the period as per respective licences Group’s share amounting to ` 406.06 Crore.

In the opinion of IDEA, inter-alia, the above demands amount to alteration of financial terms of the licences issued in the past. IDEA, therefore, petitioned the Hon’ble High Court of Bombay, where the matter was admitted and is currently sub-judice. The Hon’ble High Court of Bombay has directed the DoT, not to take any coercive action until the matter is further heard. As per the terms of the Stock Purchase Agreement (SPA) executed between ABNL IT&ITES with group of investors led by Capital Square Partners and CX Partners, dated January 30, 2014, Amendment Agreement dated April 30, 2014 and Amended and Restated Amendment Agreement dated May 8, 2014, the Company has indemnified the Purchaser in respect of litigation and other matters pertaining to the period prior to closing, including the cost incurred towards settlement/defence for these litigation matters. As per the terms of the SPA, there is a limit on the indemnity amount and the indemnity period, i.e., USD 6 million and 3 years from the date of closing, respectively. This limit, however, does not include (i) ownership of shares and assets (ii) tax matters and (iii) Three specific litigation matters. During the year, litigation claim and related expenses aggregating USD 0.59 Million raised against the Company which have been fully provided. The Company does not expect any claim in respect of other matters. The detais of Contingent Liability in respect of tax matters are given below: Income Tax matters: ` 21.20 Crore. Service Tax matters: ` 26.61 Crore.

229

L

(g)

CONSOLIDATED FINANCIAL STATEMENTS

(d) The Birla Sun Life Mutual Fund has invested in the “Pass Through Certificates” (PTC) issued by various Securitisation Trusts. The Income Tax Department treated the interest Income from the PTC as taxable in the hands of such securitisation Trusts. The Department has also issued the demand notices to various Mutual Funds, who are the beneficiaries in such trusts. The Birla Sun Life Mutual Fund has also received the demand notice for AY 2009-10, and at present the case is being heard at ITAT. Based on expert’s advice, the management does not expect the liability to crystalise, hence no provision is made in the books of account.

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015

As at 31st March, 2014

NOTE: 27 CAPITAL AND OTHER COMMITMENTS (a)

Spectrum won in Auctions (Refer Note: 40 (iv)(A))

6,565.15



(b)

Estimated Amount of Contracts remaining to be executed on Capital Account and not provided for (Net of Advances)

1,159.47

1,005.68



7.47

154.26

165.21

(c) (d)

(e)

Uncalled commitments in respect of Investments in the Units of Aditya Birla Private Equity Fund I and Aditya Birla Private Equity Sunrise Fund Custom Duty on Capital Goods and Raw Materials Imported under Advance Licensing/EPCG Scheme, against which export obligation is to be fulfilled For commitment under lease contract Refer Note: 31.

(f)

For commitment under derivative contract Refer Note: 37.

(g)

Transfer of investments in IDEA Cellular Ltd. (IDEA) and Birla Sun Life Insurance Co. Ltd. is restricted by the terms contained in their respective joint venture agreements. Non-disposal undertakings for IDEA, Aditya Birla Finance Limited (subsidiary of Aditya Birla Financial Service Limited (ABFSL)), Pantaloons Fashion & Retail Limited (subsidiary of Indigold Trade and Service Limited) and Madura Garments Lifestyle Retails Company Limited investments have also been provided to certain Banks for respective credit facilities extended by them. Pursuant to the Shareholders’ Agreement entered into with the Joint Venture partner, the Company has, in respect of Birla Sun Life Insurance Company Limited, agreed to infuse its share of capital from time to time to meet the solvency requirement prescribed by the regulatory authority.

(h)

Aditya Birla Finance Limited (ABFL), a subsidiary of the Company, has issued 10.20% Non-Convertible sub-ordinate Debenture (NCD) aggregating ` 300 Crore. The Company has entered into an option agreement with the holders of such NCD pursuant to which the holders have put option on the Company and the Company has call option on the holders on expiry of 36 months from the date of allotment of NCD. Further, on happening of certain events, the put option can also be exercised by the holders on the Company on any other date on happening of such events.

(i)

Idea Cellular Limited (IDEA), a Joint Venture Company, to buy compulsorily convertible preference shares issued by Aditya Birla Telecom Limited (ABTL), a subsidiary of the Company, from the holder at a mutually agreed consideration based on the fair value, in the event the holder exercises exit rights. In case, the holder of CCPS exercises the right of conversion, ABTL will issue equity shares equivalent to 30.3125% of its total Equity Share Capital.

CONSOLIDATED FINANCIAL STATEMENTS

NOTE: 28 EXCEPTIONAL ITEMS (a)

In the current year, Loss on Sale of IT & ITES subsidiary, Aditya Birla Minacs Worldwide Limited of ` 13.33 Crore. (Refer Note: 32 for Disclosure as per Discontinuing operations)

(b)

In the previous year, Gain on Sale of Carbon Black Business of ` 24.06 Crore. (Refer Note: 32 for Disclosure as per Discontinuing Operation)

(c)

In the previous year, Aditya Birla Financial Services Private Limited, a wholly owned subsidiary of the Company, provided for diminution in value of its Long-term Investment in two subsidiaries, namely, Aditya Birla Money Limited and Aditya Birla Money Mart Limited. The impact of diminution in Consolidated Financial Statement amounting to ` 18.64 Crore has been recognised as an exceptional items as an impairment of Goodwill created on acquisition of these subsidiaries. Above impairment is pertains to 'Other Financial Services’ Segment.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores As at 31st March, 2015

As at 31st March, 2014

1,415.50

1,142.88

ß

0.01

NOTE: 29 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD-20 – EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS Earnings Per Share (EPS) is calculated as under: Net Profit as per the Statement of Profit and Loss attributable to Owners Less: Preference Dividend and Tax thereon Net Profit for EPS

(A)

1,415.50

1,142.87

Weighted-Average Number of Equity Shares for calculation of Basic EPS

(B)

130,111,149

124,121,740

Basic EPS (`)

(A/B)

108.79

92.08

130,111,149

124,121,740

41,323

41,323

168,085

80,735

Weighted-Average Number of Equity Shares Outstanding Add: Shares Held in Abeyance Add: Dilutive Impact of Employee Stock Options Add: Potential Equity Shares Due to Share Warrants Weighted-Average Number of Equity Shares for calculation of Diluted EPS

(C)

Diluted EPS (`)

(A/C)

Nominal Value of Shares (`)



1,174,496

130,320,557

125,418,294

108.62

91.12

10.00

10.00

NOTE: 30 DETAILS OF PROPORTIONATE SHARE OF JOINT VENTURE COMPANIES The Group’s proportionate share in the Assets, Liabilities, Income and Expenses of its Joint Venture companies included in these Consolidated Financial Statements are given below: ` in Crores As at 31st March, 2015

As at 31st March, 2014

0.45

0.48

4,927.72

3,736.47

4,928.17

3,736.95

3,864.99

4,573.71

Deferred Tax Liabilities (Net)

442.65

457.48

Other Long-term Liabilities

224.24

232.85

Long-term Provisions

133.50

125.79

4,665.38

5,389.83

48.26

163.28

EQUITY AND LIABILITIES

Share Capital - Preference Reserves and Surplus

(B) Non-Current Liabilities Long-term Borrowings

(C) Current Liabilities

Trade Payables Other Current Liabilities Short-term Provisions

721.03

703.40

3,209.94

1,272.68

70.33

47.35

4,049.56

2,186.71

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Short-term Borrowings

CONSOLIDATED FINANCIAL STATEMENTS

(A) Shareholders’ Funds

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores As at 31st March, 2015

As at 31st March, 2014

ASSETS (D) Non-Current Assets Fixed Assets Tangible Assets

4,961.52

5,515.99

Intangible Assets

3,311.64

1,952.44

Capital Work-in-Progress

1,196.64

2,881.06

9,469.80

10,349.49

995.20

730.92

10.66

36.54

10,475.66

11,116.95

2,683.26

54.38

Long-term Loans and Advances Other Non-Current Assets (E) Current Assets Current Investments Inventories

16.54

17.23

Trade Receivables

125.01

115.35

Cash and Bank Balances

361.69

47.46

Short-term Loans and Advances

286.09

307.33

Other Current Assets

127.57

87.52

3,600.16

629.27

Contingent Liabilities

3,852.44

2,761.88

Capital Commitments

7,636.38

1,430.46

Year Ended 31st March, 2015

Year Ended 31st March, 2014

7,467.49

6,668.65

126.71

84.34

7,594.20

6,752.99

` in Crores STATEMENT OF PROFIT AND LOSS Revenue from Operations Other Income Total Revenue

CONSOLIDATED FINANCIAL STATEMENTS

Expenses Purchase of Stock-in-Trade

33.12

48.98

1.33

(0.36)

362.25

331.04

Other Expenses

4,528.13

4,224.06

Total Expenses

4,924.83

4,603.72

Profit Before Depreciation/Amortisation, Interest and Tax (PBDIT)

2,669.37

2,149.27

Depreciation and Amortisation Expenses

1,254.27

1,140.22

Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade Employee Benefits Expenses

Finance Cost Profit Before Exceptional Item and Tax

247.75

241.00

1,167.35

768.05

Exceptional Items





Profit Before Tax

1,167.35

768.05

Tax Expenses —

Current Tax

393.02

168.73



MAT Credit

(0.99)

(34.76)



Deferred Tax

19.64

137.61

755.68

496.47

Profit for the Year

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

NOTE: 31 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD-19 – LEASES IS AS UNDER: ` in Crores Year Ended 31st March, 2014

1,230.99

1,201.33

Assets Taken on Lease: i)

Operating Lease Payment recognised in the Statement of Profit and Loss Minimum Lease Rent Contingent Lease Rent

120.41

99.48

1,351.40

1,300.81

ii)

The Group has taken certain Office Premises, Main switching centre locations, Leasehold Improvements, Furniture and Fixtures, Information Technology and Office Equipment, BPO centres, Showrooms and Residential Houses on non-cancellable/cancellable operating lease.

iii)

The future minimum rental payable in respect of non-cancellable operating lease are as follows: As at 31st March, 2015

As at 31st March, 2014

751.21

812.85

Later than one year and not later than five years

2,147.02

2,398.62

Later than five years

1,372.92

1,188.55

4,271.15

4,400.02

Not later than one year

iv)

The details of finance lease payments payable and their Present Value of the Group as at the Balance Sheet Date: Particulars

Total Lease Charges Payable

Present Value

Interest

a) Not later than one year

2.63 (3.64)

2.10 (2.92)

0.53 (0.72)

b) Later than one year and not later than five years

3.39 (4.16)

2.94 (3.62)

0.45 (0.54)

6.02 (7.80)

5.04 (6.54)

0.98 (1.26)

Total

Figures in brackets represent corresponding amount of Previous Year. Assets Given on Lease: The Group has leased under operating lease arrangements certain Optical Fibre Cables on Indefeasible Rights of Use (IRU) basis, the gross block, accumulated depreciation and depreciation expense of the assets given on IRU basis is not separately identifiable and, hence, not disclosed. ` in Crores As at As at 31st March, 2015 31st March, 2014 The future minimum lease rental in respect of the above Optical Fibre Cables lease is as follows: Not later than one year Later than one year and not later than five years Later than five years

29.48

4.66

99.53

0.32

109.20



233

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B.

CONSOLIDATED FINANCIAL STATEMENTS

A.

Year Ended 31st March, 2015

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 32 DISCONTINUING OPERATIONS Carbon Black Business The Company, in its Committee of Directors meeting held on 6th April, 2013, had decided to divest the Carbon Black business with effect from 1st April, 2013, on a going-concern basis, by way of a slump sale, to SKI Carbon Black (India) Private Limited. In accordance with approval given by the shareholders, the Company had accounted for slump sale of Carbon Black business (identified as reportable segment under AS-17) with effect from 1st April, 2013, on a going-concern basis to SKI Carbon Black (India) Private Limited pursuant to Business Transfer Agreement entered into with them and accordingly, in the previous year, a gain of ` 24.06 Crore on the said slump sale had been recognised as an exceptional item and a net tax credit of ` 40.70 Crore (including reversal of deferred tax credit) had been netted off with the tax expense. The following statement shows the revenue and expenses of Carbon Black Business: ` in Crores Year Ended 31st March, 2015

Year Ended 31st March, 2014

Total Revenue





Total Expenses





Profit Before Depreciation/Amortisation, Interest and Tax (PBDIT)





Depreciation and Amortisation Expenses





Finance Cost





Profit Before Exceptional Item and Tax





Profit on Sale of Asset Attributable to Discontinued Operation



24.06

Profit Before Tax from Discontinued Operation



24.06

Tax Expenses of Discontinued Operations (Net of reversal of Deferred Tax liability on sale of assets attributable to Carbon Black Business ` Nil (Previous Year: ` 77.58 Crore)



(40.70)

Profit for the Year



64.76

The carrying amount of the total assets and liabilities transferred are as follows:

CONSOLIDATED FINANCIAL STATEMENTS

` in Crores As at 31st March, 2015

As at 31st March, 2014

Total Assets





Total Liabilities





Year Ended 31st March, 2015

Year Ended 31st March, 2014

Operating Activities





Investing Activities





Financing Activities





Net Cash Inflow/(Outflow)





The net cash flows attributable to the Carbon Black Business are as follows: ` in Crores

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

IT & ITeS Business ABNL IT & ITES Limited, a wholly owned subsidiary of the Company, at its meeting of the Board of Directors held on 30th January, 2014, had approved the divestment of shares held by it in its IT-ITeS subsidiary, Aditya Birla Minacs Worldwide Limited (identified as reportable segment under AS-17), and had executed a Share Purchase Agreement with a group of investors led by Capital Square Partners and CX Partners at an Enterprise Value of USD 260 Million (including deferred grant) subject to working capital adjustment and fulfilment of requisite consents and approvals. All requisite consents and approvals which were part of closing conditions have been completed. With this divestment, Aditya Birla Minacs Worldwide Limited and its subsidiaries ceased to be subsidiaries of the Company, with effect from 9th May, 2014, and a loss of ` 13.33 Crore (Net off one-time fees) has been recognised as an exceptional item. The following statement shows the revenue and expenses of IT & ITeS Business: ` in Crores

Revenue from Operations Other Income Total Revenue

Year Ended 31st March, 2015

Year Ended 31st March, 2014

283.16

2,897.73

0.04

7.08

283.20

2,904.81

205.36

1,934.76

Employee Benefits Expenses Other Expenses

83.51

686.52

Total Expenses

288.87

2,621.28

Profit/(Loss) Before Depreciation/Amortisation, Interest and Tax (PBDIT)

(5.67)

283.53

Depreciation and Amortisation Expenses

10.78

101.80

8.43

168.02

Profit/(Loss) Before Exceptional Item and Tax

(24.88)

13.71

Exceptional Items

(13.33)



Profit/(Loss) Before Tax from Discontinued Operations

(38.21)

13.71

(2.17)

4.66

Profit/(Loss) for the Year

(36.04)

9.05

Profit/(Loss) Before Tax from Ordianry Activities of Discontinued Operation Profit/(Loss) Before Tax from Sale of Assets Attributable to Discontinued Operations

(24.88) (13.33)

13.71 —

(2.17)

4.66

(36.04)

9.05

As at 8th May, 2014

` in Crores As at 31st March, 2014

Total Assets

1,696.20

1,846.99

Total Liabilities

1,458.91

1,415.86

Year Ended 31st March, 2015

` in Crores Year Ended 31st March, 2014

Finance Cost

Tax Expenses/(Credit) of Discontinued Operations

Tax Expense/(Credit) from Ordinary Activities of Discontinued Operations Profit/(Loss) for the Year The carrying amount of the total assets and liabilities transferred are as follows:

The net cash flows attributable to the IT & ITeS Business are as follows:

Investing Activities Financing Activities Foreign Exchange difference on translation of foreign currency cash and cash equivalents Net Cash Inflow/(Outflow)

18.28

152.09

(34.10)

(73.92)

52.91

(98.71)

0.33

0.61

37.42

(19.93)

235

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Operating Activities

CONSOLIDATED FINANCIAL STATEMENTS

Expenses

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 33 RETIREMENT BENEFITS Disclosure in respect of Employee Benefits pursuant to Accounting Standard-15 (Revised) (a)

The details of the Group’s Defined Benefit Plans in respect of Gratuity (funded by the Group): General Description of the Plan The Group operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement, whichever is earlier. The benefit vests after five years of continuous service. In case of some employees, the Group’s scheme is more favourable as compared to the obligation under Payment of Gratuity Act, 1972. A small part of the gratuity plan, which is not material, is unfunded and managed within the Group. ` in Crores As at 31st March, 2015

As at 31st March, 2014

218.13 189.58

184.07 164.63

28.55

19.44

21.26 15.41 (13.14) 14.91

22.18 14.50 (13.03) (4.49)

Net Gratuity Cost

38.44

19.16

Actual Return on Plan Assets: Expected Return on Plan Assets Actuarial Gain/(Loss) on Plan Assets

13.14 10.03

13.03 (3.93)

Actual Return on Plan Assets

23.17

9.10

Reconciliation of Present Value of the Obligations and the Fair Value of the Plan Assets: Change in Present Value of the Obligations: Opening Defined Benefit Obligations 184.07 Current Service Cost 21.26 Interest Cost 15.41 Actuarial (Gain)/Loss 24.94 Liability on Stake Change/Divestment/Amalgamation of Subsidiaries/Joint Ventures (10.57) Benefits Paid (16.98)

183.51 22.18 14.50 (8.42) (9.96) (17.74)

Closing Defined Benefit Obligations

218.13

184.07

Change in Fair Value of the Plan Assets: Opening Fair Value of the Plan Assets Expected Return on the Plan Assets Actuarial Gain/(Loss) Asset on Stake Change/Divestment/Amalgamation of Subsidiaries/Joint Ventures Contributions by the Employer Benefits Paid

164.63 13.14 10.03 (7.79) 26.55 (16.98)

159.61 13.03 (3.93) (9.84) 23.50 (17.74)

Closing Fair Value of the Plan Assets

189.58

164.63

Investment Details of the Plan Assets Government of India Securities Corporate Bonds Special Deposit Scheme Insurer Managed Fund* Others

20% 1% 2% 63% 14%

15% 1% 2% 70% 12%

Total

100%

100%

*included in the Fair Value of the Plan Assets, investment in Group’s own financial instruments (funds of Birla Sun Life Insurance Company Limited)

96.65

97.94

Amounts recognised in the Balance Sheet in respect of Gratuity Present Value of the funded Defined Benefit Obligations at the end of the year Fair Value of Plan Assets Net Liability/(Asset)

CONSOLIDATED FINANCIAL STATEMENTS

Amounts recognised in Employee Benefits Expenses in the Statement of Profit and Loss in respect of Gratuity Current Service Cost Interest on Defined Benefit Obligations Expected Return on Plan Assets Net Actuarial (Gain)/Loss recognised during the year

There are no amount included in the Fair Value of the Plan Assets for Property occupied by or other assets used by the Group.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores

Experience Adjustment

31st March, 2015

31st March, 2014

31st March, 2013

31st March, 2012

31st March, 2011

Defined Benefit Obligations

218.13

184.07

183.51

143.87

126.73

Plan Assets

189.58

164.63

159.61

133.25

113.98

Surplus/(Deficit)

(28.55)

(19.44)

(23.90)

(10.62)

(12.75)

Experience Adjustment on Plan Liabilities

10.55

11.13

8.25

3.86

7.09

Experience Adjustment on Plan Assets

10.03

(3.93)

4.33

(1.79)

0.36

Expected rate of return on assets is based on the average long-term rate of return expected on investments of the fund during the estimated term of the obligations. As at As at 31st March, 2015 31st March, 2014 Principal Actuarial Assumptions at the Balance Sheet Date Discount Rate

7.80% - 8.00%

8.00% - 9.00%

Estimated Rate of Return on the Plan Assets

8.00% - 9.00%

7.50% - 9.00%

The Estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The details of the Group’s Defined Benefit Plans in respect of Gratuity (unfunded by the Group): As at 31st March, 2015

` in Crores As at 31st March, 2014

8.56

5.87

1.35

0.99

Amounts recognised in the Balance Sheet in respect of Gratuity Present Value of the unfunded Defined Benefit Obligations at the end of the year Amounts recognised in Employee Benefits Expenses in the Statement of Profit and Loss in respect of Gratuity Current Service Cost Interest on Defined Benefit Obligations

0.59

0.29

Net Actuarial (Gain)/Loss recognised during the year

1.54

0.98

Net Gratuity Cost

3.48

2.26

Opening Defined Benefit Obligations

5.87

2.95

Current Service Cost

1.35

0.99

Interest Cost

0.59

0.29

Actuarial (Gain)/Loss

1.54

0.98

Liability on Stake Change/Divestment/Amalgamation of Subsidiaries/Joint Ventures

(0.08)

1.07

Benefits Paid

(0.71)

(0.41)

8.56

5.87

Closing Defined Benefit Obligations

Experience Adjustment

31st March, 2015

31st March, 2014

31st March, 2013

31st March, 2012

31st March, 2011

Defined Benefit Obligations

8.56

5.87

2.95

0.83

0.39

Experience Adjustment on Plan Liabilities

0.40

0.05

0.08

ß

ß

As at 31st March, 2015

As at 31st March, 2014

7.75% - 8.00%

8.25% - 9.10%

Principal Actuarial Assumptions at the Balance Sheet Date Discount Rate

237

CONSOLIDATED FINANCIAL STATEMENTS

Reconciliation of Present Value of the Obligation:

L

(b)

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

(c)

Aditya Birla Nuvo Limited - Annual Report 2014-2015

The details of the Group’s Defined Benefit Plans in respect of Group owned Provident Fund Trust Year Ended 31st March, 2015

` in Crores Year Ended 31st March, 2014

12.45

12.82

Contribution to the Group-Owned Employees’ Provident Fund Trust (Excluding amount capitalised ` Nil (Previous Year: ` 0.10 Crore))

The Guidance Note on implementing AS-15 – 'Employee Benefits (Revised 2005)’, issued by the ICAI states that the Provident Funds set-up by employers, which require interest shortfall to be met by the employer, needs to be treated as Defined Benefit Plan. The Group set-up Provident Fund does not have existing deficit of Interest shortfall. The actuary has provided the valuation and based on the below provided assumptions there is no shortfall as at 31st March, 2015, and 31st March, 2014. As per the actuarial valuation report, the interest shortfall liability being “Other Longterm Employee Benefits”, detailed disclosures are not required.

The details of the Plan Assets position as under: Plan Assets at Fair Value Liability Recognised in the Balance Sheet Assumption used in determining the present value of obligation of interest rate guarantee under the Deterministic Approach Discount Rate for the term of the Obligations Discount Rate for the remaining term of maturity of Investment Portfolio Guaranteed Interest Rate (d)

As at 31st March, 2015

` in Crores As at 31st March, 2014

579.84 Nil

510.05 Nil

7.82% - 7.90% 7.87% 8.75%

8.95% - 9.00% 8.88% 8.75%

The details of the Group’s Defined Benefit Plans in respect of Pension (unfunded by the Group): General Description of the Plan In addition to the contribution to the state managed pension plan, the Group provides pension to some employees, which is discretionary in the nature. The quantum of pension depends on the cadre of the employee at the time of retirement. As at 31st March, 2015

` in Crores As at 31st March, 2014

6.62

6.27

0.51 1.02

0.46 0.60

1.53

1.06

6.27 0.51 1.02 (1.18)

6.39 0.46 0.60 (1.18)

6.62

6.27

Amounts recognised in the Balance Sheet in respect of Pension: Present Value of unfunded Defined Benefit Obligations at the end of the year Amounts recognised in Employee Benefits Expenses in the Statement of Profit and Loss in respect of Pension: Interest on Defined Benefit Obligations Net Actuarial (Gain)/Loss recognised during the year

CONSOLIDATED FINANCIAL STATEMENTS

Net Pension Cost Reconciliation of Present Value of the Obligations: Opening Defined Benefit Obligations Interest Cost Actuarial (Gain)/Loss Benefits Paid Closing Defined Benefit Obligations Financial Assumptions at the Valuation Date Discount Rate Experience Adjustment Defined Benefit Obligations Experience Adjustment on Plan Liabilities

(e)

8.00%

31st March, 2015

31st March, 2014

31st March, 2013

31st March, 2012

6.62 0.75

6.27 0.90

6.39 0.37

6.46 0.13

Defined Contribution Plans – Amount recognised as an expense and included in the Note: 21 as “Contribution to Provident and Other Funds”

L

238

8.90% ` in Crores 31st March, 2011 6.93 0.05

Year Ended 31st March, 2015

` in Crores Year Ended 31st March, 2014

91.07

132.08

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 34 DISCLOSURE UNDER EMPLOYEE STOCK OPTIONS SCHEME EMPLOYEE STOCK OPTIONS PLAN OF THE COMPANY Under the Employee Stock Options Scheme-2006 (ESOS-2006), the Company has granted Options to the eligible employees of the Company and its Subsidiaries. The details are as under: (i)

Employee Stock Options Scheme:

Particulars

Tranche - I

Tranche - II

Tranche - III

Tranche - IV

Tranche - V

163,280

166,093

17,174

11,952

3,370

Method of Accounting

Intrinsic Value

Intrinsic Value

Intrinsic Value

Intrinsic Value

Intrinsic Value

Vesting Plan

Graded Vesting - 25% every year

Graded Vesting - 25% every year

Graded Vesting - 25% every year

Graded Vesting - 25% every year

Graded Vesting - 25% every year

5 Years from the Date of Vesting

5 Years from the Date of Vesting

5 Years from the Date of Vesting

5 Years from the Date of Vesting

5 Years from the Date of Vesting

23.08.2007

25.01.2008

20.08.2010

08.09.2010

07.06.2011

1,180.00

1,802.00

687.00

697.00

748.00

687.00

687.00







1,282.55

1,948.70

816.85

839.80

905.10

816.85

816.85







No. of Options

Exercise Period

Grant Date Grant/Exercise Price (` Per Share) Re-pricing of the Option on 20th August, 2010 (` Per Share) Market Price on the date of Grant of Option (` Per Share) Market Price on the date of Re-pricing of Option (` Per Share) (ii) Details of Activity in the Plan

2014-15

2013-14

Particulars

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options Outstanding at the beginning of the year

116,235

687.00 to 748.00

689.80

168,841

687.00 to 748.00

688.93

Granted during the year Exercised during the year Lapsed during the year Options Outstanding at the end of the year Options Unvested at the end of the year Options Exercisable at the end of the year











52,221

687.00

687.97

51,766

687.00

687.00

1,683

697.00

697.00

840

687.00

687.00

62,331

687.00 to 748.00

691.14

116,235

687.00 to 748.00

689.80

843





7,956





61,488

687.00 to 748.00

690.36

108,279

687.00 to 748.00

688.78

For the option exercised during the period, the weighted-average share price at the exercise date was ` 1494.92 per share (Previous Year: ` 1,102.13 per share). The weighted-average remaining contractual life for the stock options outstanding as at 31st March, 2015, is 1.65 years (Previous Year: 2.06 years). (iii) Fair Valuation: The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under: Particulars

Risk-Free Interest Rate (%) Option Life (Years) Expected Volatility* Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

On the Date of Grant Tranche - I

Tranche - II

Tranche - III

Tranche - IV

Tranche - V

7.78 5 38 0.52 591.53

7.78 5 38 0.52 825.67

8.09 5 54.04 0.86 471.44

8.09 5 53.88 0.86 486.82

8.09 5 34.05 0.57 443.49

239

CONSOLIDATED FINANCIAL STATEMENTS

(A)

L

1)

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Particulars

On the Date of Repricing Tranche - I

Tranche - II

8.09

8.09

Risk-Free Interest Rate (%) Option Life (Years)

5

5

54.04

54.04

0.36

0.5

355.12

366.54

Expected Volatility * Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

* Expected volatility of the Company’s stock price is based on NSE price data of last two years. (B)

Under the Employee Stock Options Scheme-2013 (ESOS-2013), the Company has granted options and Restricted Stock Units (RSUs) to the eligible employees of the Company. The details are as under: (a)

Stock Options:

(i)

Employee Stock Options Scheme:

Particulars

Tranche - I

Tranche - II

104,272

16,239

35,060

Intrinsic Value

Intrinsic Value

Intrinsic Value

Vesting Plan

Graded Vesting - 25% every year

Graded Vesting - 25% every year

Graded Vesting - 25% every year

Exercise Period

5 Years from the Date of Vesting

5 Years from the Date of Vesting

5 Years from the Date of Vesting

No. of Options Method of Accounting

Grant Date

07.12.2013

29.01.2014

12.11.2014

Grant/Exercise Price (` Per Share)

1,239.80

1,053.85

1,726.95

Market Price on the date of Grant of Option (` Per Share)

1,239.80

1,053.85

1,726.95

(ii)

Details of Activity in the Plan 2014-15

CONSOLIDATED FINANCIAL STATEMENTS

Tranche - III

2013-14

Particulars

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options Outstanding at the beginning of the year Granted during the year

120,511

1,053.85 to 1,239.80 1,726.95

1,214.74







1,726.95

120,511

1,214.74

Exercised during the year Lapsed during the year Options Outstanding at the end of the year Options Unvested at the end of the year Options Exercisable at the end of the year

— 56,916 98,655

— 1,239.80 1,053.85 to 1,726.95 —

— 1,239.8 1,382.32

— — 120,511



120,511

1,053.85 to 1,239.80 — — 1,053.85 to 1,239.80 —

1,053.85 to 1,239.80

1,179.67







35,060

86,096 12,559

— — 1,214.74 —

The weighted-average remaining contractual life for the stock options outstanding as at 31st March, 2015, is 6.62 years (Previous Year: 7.21 years). (iii) Fair Valuation: The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under: Particulars On the Date of Grant Tranche - I Tranche - II Tranche - III Risk-Free Interest Rate (%) 8.88 8.87 7.91 Option Life (Years) 5 5 5 Expected Volatility * 30.02 29.97 30.45 Expected Dividend Yield (%) 0.61 0.73 0.42 Weighted-average Fair Value per Option (`) 509.65 428.05 694.22 * Expected volatility of the Company’s stock price is based on NSE price data of last three years.

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NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

(b)

Restricted Stock Units: (i)

Employee Stock Options Scheme:

Particulars

Tranche - I

No. of Options

Exercise Period

101,731

9,567

12,630

Intrinsic Value

Intrinsic Value

Bullet Vesting-end of 3 years from the grant date

Bullet Vesting-end of 3 years from the grant date

Bullet Vesting-end of 3 years from the grant date

5 Years from the Date of Vesting

5 Years from the Date of Vesting

5 Years from the Date of Vesting

07.12.2013

29.01.2014

12.11.2014

10.00

10.00

10.00

1,239.80

1,053.85

1,726.95

Grant Date Grant/Exercise Price (` Per Share) Market Price on the date of Grant of Option (` Per Share) (ii)

Tranche - III

Intrinsic Value

Method of Accounting Vesting Plan

Tranche - II

Details of Activity in the Plan 2014-15

2013-14

Particulars

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options Outstanding at the beginning of the year Granted during the year Exercised during the year Lapsed during the year Options Outstanding at the end of the year Options unvested at the end of the year Options exercisable at the end of the year

111,298

10.00

10.00







12,630 — 18,887 105,041

10.00 — 10.00 10.00

10.00 — 10.00 10.00

111,298 —

10.00 —

10.00 —

111,298

10.00

10.00

105,041





111,298

















The weighted-average remaining contractual life for the stock options outstanding as at 31st March, 2015, is 6.82 years (Previous Year: 7.71 years). (iii) Fair Valuation:

Particulars Risk-Free Interest Rate (%) Option Life (Years) Expected Volatility * Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

On the Date of Grant Tranche - I

Tranche - II

Tranche - III

8.88 5.5 30.02 0.62 1,195.33

8.87 5.5 29.97 1.23 1,008.87

7.91 5.5 30.45 0.70 1,684.01

* Expected volatility of the Company’s stock price is based on NSE price data of last three years. OF SUBSIDIARY COMPANY (A)

Pantaloons Fashion & Retail Limited (PFRL) The Company provides Share-based Payment schemes to its employees. During the year ended 31 March, 2014, an employee stock option plan (ESOP) was introduced. The relevant details of the scheme and the grant are as below: On 22nd July, 2013, the ESOP Compensation Committee (“Committee”) and the Board of Directors (“Board”) approved the introduction of an ESOP Scheme, viz., Pantaloons Employee Stock Option Scheme-2013 (“Scheme”) for issue of Stock options (“Options”) and Restricted Stock Units (“RSUs”) to the key employees and directors of the Company, subject to the approval of the Shareholders of the Company. Shareholders of the Company, vide a resolution passed at the Sixth Annual General Meeting of the Company, held on 23rd August, 2013, approved the introduction of the Scheme and authorised the Board/Committee to finalise and implement the scheme. Accordingly, pursuant to the resolution passed by the Committee on 25th October, 2013, the Committee finalised the scheme and granted Options and RSUs to the Eligible Employees. The details of the Scheme, are as below:

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CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under:

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

(i)

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Employee Stock Options Scheme:

Particulars

Stock Options Tranche - I

No. of Options

Exercise Period

Tranche - I

Tranche - II

830,382

11,686

259,849

5,000

Intrinsic Value

Intrinsic Value

Intrinsic Value

Intrinsic Value

Graded Vesting 25% every year

Graded Vesting 25% every year

Graded Vesting 25% every year

Graded Vesting 25% every year

5 Years from the Date of Vesting

5 Years from the Date of Vesting

5 Years from the Date of Vesting

5 Years from the Date of Vesting

Method of Accounting Vesting Plan

RSUs

Tranche - II

Grant Date

25.10.2013

10.06.2014

25.10.2013

10.06.2014

Grant/Exercise Price (` Per Share)

102.10

118.20

10.00

10.00

Market Price on the date of Grant of Option (` Per Share)

102.10

118.20

102.10

118.20

(ii)

Details of Activity in the Plan

Particulars

Year Ended 31st March, 2015

Weightedaverage Exercise Price (`)

Year Ended 31st March, 2014

Weightedaverage Exercise Price (`)

830,382

102.10





11,686

118.20

830,382

102.10









Lapsed during the year

264,956

102.10





Options Outstanding at the end of the year

577,112

102.32

830,382

102.10

Options Unvested at the end of the year

577,112



830,382









Options Granted under ESOS-2013 Options Outstanding at the beginning of the year Granted during the year Exercised during the year

Options Exercisable at the end of the year Remaining Contractual Life of Outstanding Options (Years)

5

6

RSUs Granted under ESOS-2013 Options Outstanding at the beginning of the year Granted during the year

259,849

10.00





5,000

10.00

259,849

10.00









Exercised during the year

CONSOLIDATED FINANCIAL STATEMENTS

Lapsed during the year

32,728







Options Outstanding at the end of the year

232,121

10.00

259,849

10.00

Options Unvested at the end of the year

232,121



259,849



— 7



— 8



Options Exercisable at the end of the year Remaining Contractual Life of Outstanding Options (Years) (iii) Fair Valuation:

The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under: Particulars

On the Date of Grant Stock Options

Risk-Free Interest Rate (%) Expected Volatility * Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

RSUs

Tranche - I

Tranche - II

Tranche - I

8.58

7.91

8.58

Tranche - II 7.91

45.93

44.77

45.93

44.77

NIL

NIL

NIL

NIL

52.96

59.32

95.9

111.75

* Expected volatility of the Company’s stock price is based on the Company’s comparable peer group’s stock price on NSE based on the price data of the last three years upto the date of grant as the Company has been listed only for a few months prior to the date of grant.

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Aditya Birla Nuvo Limited - Annual Report 2014-2015

(B)

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Money Limited (ABML) During the year, the Company had formulated the ABML Employee Stock Option Scheme-2014 (ABML ESOP Scheme2014) with the approval of the shareholders at the Annual General Meeting dated 9th September, 2014. The Scheme provides that the total number of options granted thereunder will be 2,770,000 and to follow the Market Value Method (Intrinsic Value) for valuation of the Options. Each option, on exercise, is convertible into one equity share of the Company having face value of ` 1 each. Subsequently, the Nomination and Remuneration Committee of the Board of Directors on 2nd December, 2014 has granted 2,509,341 stock options to its eligible employees under the ABML ESOP Scheme-2014 at an exercise price of ` 34.25/-. The Exercise Price was based on the latest available closing price, prior to the 2nd December, 2014 (the date of grant by the Nomination & Remuneration Committee) on the recognised stock exchanges on which the shares of the Company are listed with the highest trading volume. (i)

Employee Stock Options Scheme:

Particulars

Stock Options

No. of Options

2,509,341

Method of Accounting

Intrinsic Value

Vesting Plan Exercise Period

25% every year Within 5 years from the date of vesting of respective options

Grant Date

02.12.2014

Grant/Exercise Price (` Per Share)

34.25

Market Price on the date of Grant of Option (` Per Share)

34.25

(ii)

Details of Activity in the Plan

Particulars

Year Ended 31st March, 2015

Weighted-average Exercise Price (`)





2,509,341

34.25





Options Granted under ESOS-2014 Options Outstanding at the beginning of the year Granted during the year Exercised during the year Lapsed during the year

60,440

34.25

Options Outstanding at the end of the year

2,448,901

34.25

Options Unvested at the end of the year

2,448,901







Options Exercisable at the end of the year

The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under: Particulars

On the Date of Grant Stock Options Tranche - II

Risk-Free Interest Rate (%) Expected Volatility Expected Dividend Yield (%) Expected Life

NIL 5 Years

OF JOINT VENTURE OF THE COMPANY IDEA Cellular Limited (IDEA), the Joint Venture of the Company, had granted options under the Employee Stock Options Scheme-2006 (“ESOS-2006”) and stock options as well as Restricted Stock Units (RSUs) under ESOS 2013 to its eligiblee employees from time to time. These Options would vest in 4 equal annual instalments after one year of the grant, and the RSUs will vest after 3 years from the date of grant. The maximum period for exercise of Options and RSUs is 5 years from the date of vesting. Each Option and RSU, when exercised, would be converted into one fully paid-up equity share of ` 10/of IDEA. The Options and RSUs granted under the ESOS-2013 and Options granted under ESOS-2006 carry no rights to dividends and no voting rights till the date of exercise. As at the end of the financial year, details of outstanding options are as follows:

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3)

8.13 54.26

CONSOLIDATED FINANCIAL STATEMENTS

(iii) Fair Valuation:

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

(A)

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Details of Activity in the Plan Particulars

i)

Year Ended 31st March, 2015

Weightedaverage Exercise Price (`)

Options Granted under ESOS-2006 Options Outstanding at the beginning of the year Options Granted during the year Options Forfeited/Lapsed during the year Options Exercised during the year Options Expired during the year Options Outstanding at the end of the year Options Unvested at the end of the year Options Exercisable at the end of the year Range of Exercise Price of Outstanding Options (`) Remaining Contractual Life of Outstanding Options (Years)

ii)

Weighted- Year Ended average 31st March, Exercise 2014 Price (`)

7,344,086 — 29,250 2,453,513 9,750 4,851,573 — 4,851,573 39.30 - 68.86

51.06 — 68.86 49.53 45.55 51.74 — 51.75

0.31 - 4.82

12,757,580 — 75,749 5,309,995 27,750 7,344,086 564,566 6,779,520 39.30 - 68.86

50.44 — 61.49 49.48 39.3 51.06 — 49.58

0.31 - 5.82

Options Granted under ESOS-2013 Options Outstanding at the beginning of the year Options Granted during the year Options Forfeited/Lapsed during the year Options Exercised during the year Options Expired during the year Options Outstanding at the end of the year Options Unvested at the end of the year Options Exercisable at the end of the year Range of Exercise Price of Outstanding Options (`) Remaining Contractual Life of Outstanding Options (Years)

18,565,428 559,677 427,809 40,016 — 18,657,280 14,162,887 4,494,393 126.45 - 150.10

126.45 150.10 126.45 126.45 — 127.16 — 126.45

4.87 - 8.75

— 18,565,428 — — — 18,565,428 18,565,428 — 126.45

— 126.45 — — — 126.45 — —

5.87 - 8.87

iii) RSUs Granted under ESOS-2013

CONSOLIDATED FINANCIAL STATEMENTS

Options Outstanding at the beginning of the year Options Granted during the year Options Forfeited/Lapsed during the year Options Exercised during the year Options Expired during the year Options Outstanding at the end of the year Options Unvested at the end of year Options Exercisable at the end of the year Range of Exercise Price of Outstanding Options (`) Remaining Contractual Life of Outstanding Options (Years) (B)

8,105,587 254,499 199,978 — — 8,160,108 8,160,108 — 10.00

10.00 10.00 10.00 — — 10.00 — —

6.87 - 7.75

— 8,105,587 — — — 8,105,587 8,105,587 — 10.00

— 10.00 — — — 10.00 — —

7.87

Fair Valuation: The fair value of each option is estimated using Black and Scholes Option Pricing Model on date of grant/repricing based on the following: ESOS-2006 On the Date of Grant

Particulars Expected Dividend Yield (%) Option Life Risk-Free Interest Rate (%) Expected Volatility (%)

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244

Tranche - I

Tranche - II

Nil

Nil

Nil

6 years and 6 months

6 years and 6 months

6 years and 6 months

On the Date of Re-pricing

Tranche - III Tranche - IV Nil

Tranche - I

Tranche - II

Nil

Nil

6 years and 4 years and 6 months 6 months

5 years and 9 months

7.78

7.5

7.36

8.04 - 8.14

7.36

7.36

40

45.8

54.54

50.45

54.54

54.54

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Particulars

ESOS-2013 Tranche - I Stock Options

Excepted Dividend Yield (%) Option Life

0.24 6 years and 6 months 8.81 - 8.95 34.13 - 44.81

Risk-Free Interest Rate (%) Expected Volatility (%)

Tranche - II RSUs Stock Options

Nil 6 years and 6 months 8.91 43.95

RSUs

0.40 6 years and 6 months 8.04 - 8.06 34.28 - 42.65

0.40 5 years and 6 months 8.05 35.66

STOCK APPRECIATION RIGHTS (SARs) OF THE COMPANY Stock Appreciation Rights Scheme: Particulars Nos. of Options Method of Accounting Vesting Plan Exercise Period

Grant Date Grant Price (` Per Share) Market Price on the Date of Grant of Option (` Per Share) (B)

Tranche - I

Tranche - II

Tranche - III

91,239 Intrinsic Value Graded Vesting 25% every year 3 Years from the date of Vesting or 6 years from the date of grant, whichever is earlier 07.12.2013 1,239.80

14,199 Intrinsic Value Graded Vesting 25% every year 3 Years from the date of Vesting or 6 years from the date of grant, whichever is earlier 29.01.2014 1,053.85

30,678 Intrinsic Value Graded Vesting 25% every year 3 Years from the date of Vesting or 6 years from the date of grant, whichever is earlier 12.11.2014 1,726.95

1,239.80

1,053.85

1,726.95

Details of Activity in the Plan: 2014-15

2013-14

Particulars

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options

Range of Exercise Price (`)

Weightedaverage Exercise Price (`)

Options Outstanding at the beginning of the year Granted during the year Exercised during the year Lapsed during the year Options Outstanding at the end of the year Options Unvested at the end of the year Options Exercisable at the end of the year

105,438

1,053.85 to 1,239.80 1,726.95 — 1,239.80 1,053.85 to 1,726.95 —

1,214.74







1,726.95 — 1,239.80 1,382.35

105,438 — — 105,438

1,214.74 — — 1,214.74



105,438

1,053.85 to 1,239.80 — 1,053.85 to 1,239.80 —

1,179.67







30,678 — 49,802 86,314 75,324 10,990

1,053.85 to 1,239.80



The weighted-average remaining contractual life for the Stock Appreciation Right’s outstanding as at 31st March, 2015, is 4.35 years (Prevoius Year: 4.96 years). (C)

Fair Valuation: The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under: Particulars

Tranche - I

Tranche - II

Tranche - III

Risk-Free Interest Rate (%)

7.91

7.91

7.91

Option Life (Years)

2.60

2.73

3.50

Expected Volatility *

29.73

29.73

29.73

0.46

0.46

0.46

676.44

812.61

508.39

Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

* Expected volatility of the Company’s stock price is based on NSE price data of last three years.

245

CONSOLIDATED FINANCIAL STATEMENTS

(A)

L

1)

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

2)

Aditya Birla Nuvo Limited - Annual Report 2014-2015

OF SUBSIDIARY COMPANY Pantaloons Fashion & Retail Limited (PFRL) On 22nd July, 2013, the ESOP Compensation Committee (“Committee”) and the Board of Directors (“Board”) of PFRL approved the introduction of an ESOP Scheme, viz., Pantaloons Employee Stock Options Scheme-2013 (“Scheme”) for Stock Appreciation Rights (“SARs”) to the key employees and directors of PFRL, subject to the approval of the Shareholders of PFRL. Shareholders of PFRL, vide a resolution passed at the Sixth Annual General Meeting of PFRL, held on 23rd August, 2013, approved the introduction of the Scheme and authorised the Board/Committee of PFRL to finalise and implement the Scheme. Accordingly, pursuant to the resolution passed by the Committee of PFRL on 25th October, 2013, finalised the SARs to the eligible employees. The details of the Scheme, are as below: (A)

Stock Appreciation Rights Scheme: Particulars No. of Options Method of Accounting

Tranche - II

308,295

10,225

Intrinsic Value

Intrinsic Value

Graded Vesting - 25% every year

Graded Vesting - 25% every year

5 Years from the Date of Vesting

5 Years from the Date of Vesting

25.10.2013

10.06.2014

Grant Price (` Per Share)

102.10

118.20

Market Price on the date of Grant of Option (` Per Share)

102.10

118.20

Vesting Plan Exercise Period Grant Date

(B)

Tranche - I

Details of Activity in the Plan: Particulars

Options Outstanding at the beginning of the year Granted during the year Exercised during the year

Year Ended 31st March, 2015

Weighted- Year Ended average 31st March, Exercise 2014 Price (`)

Weightedaverage Exercise Price (`)

308,295

102.10





10,225

118.20

308,295

102.10









Lapsed during the year

127,263

102.10





Options Outstanding at the end of the year

191,257

102.96

308,295

102.10

Options Unvested at the end of the year

191,257



308,295











Options Exercisable at the end of the year

CONSOLIDATED FINANCIAL STATEMENTS

The weighted-average remaining contractual life for the stock options outstanding as at 31st March, 2015, is 5 years (Previous Year: 6 years). (C)

Fair Valuation: The fair value of the options used to compute proforma net profit and earnings per share have been done by an independent valuer using Black-Scholes Merton Formula. The key assumptions and the Fair Value are as under: Particulars Risk-Free Interest Rate (%) Option Life (Years) Expected Volatility * Expected Dividend Yield (%) Weighted-average Fair Value per Option (`)

Tranche - I

Tranche - II

8.58

7.91

5

5

45.93

44.77

Nil

Nil

52.96

59.32

* Expected volatility of the Company’s stock price is based on the Company’s comparable peer group’s stock price on NSE based on the price data of the last three years upto the date of grant as the Company has been listed only for a few months prior to the date of grant. The Group is following the intrinsic value for valuation.

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NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

Had the compensation cost for the stock options granted been recognised based on the fair value in accordance with the Fair Value approach (calculated using valuation methods as mentioned above), the proforma amount of profit for the year and earnings per share of the Group would have been as under: ` in Crores Particulars

Year Ended 31st March, 2015

Year Ended 31st March, 2014

Net Profit attributable to owners

1,415.50

1,142.88

Add: Compensation Cost as per Intrinsic Value

12.84

3.40

Less: Compensation Cost as per Fair Value

31.25

8.37

1,397.09

1,137.91

Adjusted Net Income Weighted-average Number of Basic Equity Shares Outstanding (In Nos.)

130,111,149

124,121,740

Weighted-average Number of Diluted Equity Shares Outstanding (In Nos.)

130,320,557

125,418,294

10.00

10.00

— Basic EPS (`)

108.79

92.08

— Diluted EPS (`)

108.62

91.12

— Basic EPS (`)

107.38

91.68

— Diluted EPS (`)

107.20

90.73

Face Value of the Equity Share (In `) Reported Earnings Per Share (EPS)

Proforma Earnings Per Share (EPS)

NOTE: 35 DISCLOSURE IN RESPECT OF RELATED PARTIES PURSUANT TO ACCOUNTING STANDARD-18 1.

List of Related Parties Joint Ventures IDEA Cellular Limited (IDEA) Associates Birla Securities Limited (BSL) (Upto 13th November, 2014) Key Management Personnel Mr. Lalit Naik – Managing Director (Deputy Managing Director upto 30th June, 2014) Dr. Rakesh Jain – Managing Director (Upto 30th June, 2014) Mr. Sushil Agarwal – Whole-time Director Enterprises having Common Key Management Personnel (KMP) Aditya Birla Science & Technology Company Private Limited (ABSTCPL) - Common KMP Mr. Lalit Naik (w.e.f. 30th March, 2015) During the year, following transactions were carried out with the related parties: ` in Crores

Transaction/Nature of Relationship

Joint Ventures

Associates

Key Enterprises Management having Personnel Common Key Management Personnel (KMP)

Grand Total

ABSTCPL

— —

— —

— —

0.01 —

0.01 —

TOTAL

— —

— —

— —

0.01 —

0.01 —

IDEA

5.92 (5.65)

— —

— —

— —

5.92 (5.65)

TOTAL

5.92 (5.65)

— —

— —

— —

5.92 (5.65)

Interest Received

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Other Expenses

CONSOLIDATED FINANCIAL STATEMENTS

2.

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores Transaction/Nature of Relationship

Joint Ventures

Associates

Key Enterprises Management having Personnel Common Key Management Personnel (KMP)

Grand Total

Mr. Lalit Naik

— —

— —

5.49 (3.22)

— —

5.49 (3.22)

Dr. Rakesh Jain

— —

— —

6.72 (6.88)

— —

6.72 (6.88)

Mr. Sushil Agarwal

— —

— —

3.94 (2.27)

— —

3.94 (2.27)

TOTAL

— —

— —

16.15 (12.37)

— —

16.15 (12.37)

BSL

— —

0.01 —

— —

— —

0.01 —

TOTAL

— —

0.01 —

— —

— —

0.01 —

Mr. Lalit Naik

— —

— —

0.19 —

— —

0.19 —

TOTAL

— —

— —

0.19 —

— —

0.19 —

— —

— —

0.19 —

14.19 —

14.38 —

0.67 (0.25)

— —

— —

— —

0.67 (0.25)

— —

— —

— —

2.40 —

2.40 —

Managerial Remuneration Paid*

Sale of Investments

Advance Given

Outstanding Balances as on 31st March Amounts Receivable Amounts Payable

CONSOLIDATED FINANCIAL STATEMENTS

Investment Outstandings —

Figures in brackets represent corresponding amount of Previous Year.



No amount, in respect of the related parties have been written off/back, is provided for during the year.



Related parties relationships have been identified by the management and relied upon by the auditors.

*

Expenses towards gratuity and leave encashment provisions are determined actuarially on an overall Company basis at the end of each year, and accordingly have not been considered in the above information, except to the extent of amount paid to Dr. Rakesh Jain.

NOTE: 36 DISCLOSURE IN RESPECT OF CORPORATE SOCIAL RESPONSIBILITY UNDER SECTION 135 OF THE COMPANIES ACT, 2013 AND RULES THEREON ` in Crores Nature of Expenses

Year Ended 31st March, 2015

Revenue Expenditure

6.21

Construction of Capital Assets under CSR Projects

4.58

Total

10.79

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248

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

NOTE: 37 STATEMENT OF DERIVATIVES AND UNHEDGED FOREIGN CURRENCY EXPOSURE Derivatives: Outstanding at the Balance Sheet Date Amount in Foreign Currency As at As at 31st March, 2015 31st March, 2014

Nature of Contract

Foreign Option Currency

Currency and Interest Rate Swap

USD

Buy

103,666,667

157,818,000

Hedging of Loan

Currency and Interest Rate Swap

JPY

Buy

2,307,300,000

2,947,300,000

Hedging of Loan

Forward Contracts

USD

Buy Sell

208,694,753 23,194,250

252,963,056 111,978,931

Hedging Purpose

Forward Contracts

EUR

Buy Sell

15,724,398 3,524,110

10,503,831 6,803,514

Hedging Purpose

Forward Contracts

GBP

Buy Sell

172,947 1,577,166

449,976 1,224,394

Hedging Purpose

Forward Contracts

JPY

Buy Sell

— 111,044,500

1,342,567,659 45,070,000

Hedging Purpose

Forward Contracts

CNY

Buy

4,063,500



Hedging Purpose

Forward Contracts and Interest Rate Swap

USD

Buy

17,455,869

10,000,000

Hedging of Loan

Foreign Currency Exposure which are not hedged

Particulars As at 31st March, 2015 Trade Receivables

Loans and Advances

Other Current Liabilities Borrowings Trade Payables

As at 31st March, 2014 Particulars Trade Receivables

Loans and Advances Other Current Liabilities Borrowings Trade Payables

Other Current Assets

Currency

Foreign Currency

` in Crores

USD EUR GBP USD EUR JPY USD EUR USD USD EUR GBP AUD AED CAD HKD KRW MNT SAR SGD THB

5,582,078 341,809 34,272 11,545 19,848 1,181,846 401,398 10,986 110,282,368 16,395,348 565,692 220,204 536,314 10,000 1,000 4,000 140,000 175,000 1,000 3,000 10,000

34.94 2.31 0.32 0.07 0.13 0.06 2.51 0.07 690.27 102.62 3.82 2.04 2.60 0.02 ß ß ß ß ß 0.01 ß

Currency

Foreign Currency

` in Crores

USD EUR GBP JPY CAD MYR USD EUR USD USD USD EUR GBP JPY USD GBP CAD CHF

10,366,015 42,204 883,195 5,664,000 141,000 150,000 26,730 199 72,014 119,524,756 21,309,003 1,766,761 498,888 779,300 1,303,000 90,000 10,000 4,000

62.30 0.35 8.82 0.33 0.77 0.28 0.16 ß 0.44 718.34 128.07 14.59 4.98 0.05 7.83 0.90 0.05 0.03

249

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b)

Purpose

CONSOLIDATED FINANCIAL STATEMENTS

a)

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 38 SEGMENT DISCLOSURES Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organisational structure as well as differential risk and returns of these segments. The Group has considered business segment as the primary segment for disclosure. The products and services included in each of the reported business segments are as follows: SEGMENT

ACTIVITIES

Life Insurance

Life Insurance Services

Other Financial Services

Asset Management, Non-Bank Financial Services, Private Equity, Equity and Commodity Broking, Wealth Management and General Insurance Advisory

Telecom

Telecommunication Services

Branded Apparels and Accessories

Branded Apparels and Accessories

Textiles

Linen Yarn and Fabric, Worsted Yarn and Wool Tops

Agri-Business

Fertilisers, Agro-Chemicals and Seeds

Rayon Yarn

Viscose Filament Yarn, Caustic Soda and Allied Chemicals

Insulators

Insulators

IT-ITeS (Refer Note: 32)

Business Process Outsourcing Services and Software Services

The Group considers secondary segment based on revenues within India as Domestic Revenues and outside India as Export Revenues. Assets are segregated based on their geographical location. ` in Crores

Information about Primary Business Segments Segment Revenue

For the Year Ended 31st March, 2015 External

Total

For the Year Ended 31st March, 2014 External

InterSegment

Total

Life Insurance

5,264.34



5,264.34

4,701.36



4,701.36

Other Financial Services

2,661.52

4.11

2,665.63

1,935.88

10.32

1,946.20

Telecom

7,467.49



7,467.49

6,668.65



6,668.65 4,759.19

Branded Apparels and Accessories

5,450.10



5,450.10

4,759.19



Textiles

1,420.44

15.03

1,435.47

1,289.10

10.95

1,300.05

Agri-Business

2,557.60



2,557.60

2,312.96



2,312.96

Rayon

864.58



864.58

860.29



860.29

Insulators

547.78



547.78

505.46



505.46

IT-ITeS (Refer Note: 32)

282.16

1.00

283.16

2,858.61

39.12

2,897.73

26,516.01

20.14

26,536.15

25,891.50

60.39

25,951.89

Total Segment

CONSOLIDATED FINANCIAL STATEMENTS

InterSegment

Eliminations Total Revenue

L

250

20.14

60.39

26,516.01

25,891.50

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores

Segment Result (PBIT)

For the Year Ended 31st March, 2015

For the Year Ended 31st March, 2014

Life Insurance

285.03

370.75

Other Financial Services

528.51

354.14

1,305.10

951.81

Branded Apparels and Accessories

260.71

199.14

Textiles

146.30

141.37

Agri-Business

115.89

55.87

Rayon

155.69

171.97

Telecom

Insulators

76.49

60.88

(16.45)

181.15

2,857.27

2,487.08

652.25

809.16

Add: Interest Income

54.77

70.29

Add: Unallocable Income (Net of Unallocable Expenses)

78.10

18.67

2,337.89

1,766.88

IT-ITeS (Refer Note: 32) Total Segment Less: Finance Cost

Profit Before Exceptional Items and Tax Exceptional Items (Refer Note: 28) Profit Before Tax Tax Expenses Profit Before Minority Interest Minority Interest Profit for the Year

(13.33)

5.42

2,324.56

1,772.30

833.48

550.50

1,491.08

1,221.80

75.58

78.92

1,415.50

1,142.88

* Finance Cost excludes Finance Cost of ` 1,105.32 Crore (Previous Year: ` 741.66 Crore) and Interest Income excludes interest income of ` 148.81 Crore (Previous Year: ` 141.63 Crore) on Financial Services Business, since it is considered as an expense and income, respectively, for deriving Segment Result. Other Information

Carrying Amount of Segment Assets (including Goodwill) as on

Carrying Amount of Segment Liabilities as on

31st March, 2015

31st March, 2014

31st March, 2015

31st March, 2014

Life Insurance

31,095.09

25,710.06

29,548.62

24,366.30

Other Financial Services

19,081.16

12,767.90

15,802.12

10,426.57

Telecom

13,041.73

13,182.02

1,908.70

1,819.68

4,402.99

4,157.47

1,592.21

1,543.04

Branded Apparels and Accessories

804.21

747.44

567.68

430.30

1,782.78

1,757.38

142.20

141.60

Rayon

859.42

871.47

102.17

112.87

Insulators

551.95

509.67

96.77

79.88

Agri-Business

IT-ITeS (Refer Note: 32) Total Segment Inter-Segment Eliminations Unallocated Corporate Assets/Liabilities Total Assets/Liabilities



2,006.03



303.58

71,619.33

61,709.44

49,760.47

39,223.82

(6.04)

(7.15)

(6.04)

(7.15)

4,008.67

1,328.78

12,194.50

11,847.05

75,621.96

63,031.07

61,948.93

51,063.72

251

L

Textiles

CONSOLIDATED FINANCIAL STATEMENTS

` in Crores

Information about Primary Business Segments

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

` in Crores Other Information

Cost incurred to Acquire Segment Fixed Assets (including CWIP and Capital Advance) for the Year Ended 31st March, 2015

Depreciation/Amortisation for the Year Ended

31st March, 2014

31st March, 2015

31st March, 2014

Life Insurance

30.02

23.71

19.02

16.40

Other Financial Services

36.35

18.76

37.70

34.26

1,638.06

3,791.40

1,254.27

1,140.22

211.57

211.63

263.63

194.64

Telecom Branded Apparels and Accessories Textiles

40.47

77.13

28.03

29.33

Agri-Business

41.68

177.30

30.55

20.46

Rayon

43.27

62.66

38.50

48.16

Insulators

12.23

9.82

17.71

21.44

IT-ITeS (Refer Note: 32)

12.89

71.91

10.78

101.80

2,066.54

4,444.32

1,700.19

1,606.71

0.45

0.95

2.56

2.15

2,066.99

4,445.27

1,702.75

1,608.86

Total Segment Unallocated Total

` in Crores

Information about Secondary Business Segments

CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 31st March, 2015

31st March, 2014

Revenue by Geographical Market In India Outside India

25,483.30 1,032.71

22,429.91 3,461.59

Total

26,516.01

25,891.50

Carrying Amount of Segment Assets In India Outside India

75,483.99 137.97

61,888.35 1,142.72

Total

75,621.96

63,031.07

Cost Incurred to acquire Segment Fixed Assets In India Outside India

2,053.65 13.34

4,385.31 59.96

Total

2,066.99

4,445.27

NOTE: 39 ADDITIONAL INFORMATION PERSUANT TO SCHEDULE III TO THE COMPANIES ACT, 2013, FOR CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 ` in Crores Name of the Entity

HOLDING COMPANY Aditya Birla Nuvo Ltd SUBSIDIARY COMPANIES Aditya Birla Financial Services Ltd Aditya Birla Capital Advisors Pvt Ltd Aditya Birla Customer Services Ltd Aditya Birla Trustee Co. Pvt Ltd Aditya Birla Money Ltd Aditya Birla Commodities Broking Ltd Aditya Birla Financial Shared Services Ltd Aditya Birla Finance Ltd Aditya Birla Securities Pvt Ltd

L

252

Net Assets* % of Consolidated Amount Net Assets

Share in Profit or Loss % of Consolidated Amount Profit and Loss

66.20%

8,518.99

37.28%

527.69

16.79% 0.21% 0.02% 0.00% 0.28% 0.01% 0.00% 20.09% 0.00%

2,160.20 26.44 2.67 0.23 35.97 0.88 0.20 2,584.83 —

-3.43% 0.31% -4.33% 0.00% 0.50% -0.08% 0.01% 19.12% 0.00%

(48.56) 4.44 (61.35) 0.04 7.08 (1.18) 0.07 270.68 (0.00)

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS ` in Crores

Net Assets* % of Consolidated Amount Net Assets Aditya Birla Insurance Brokers Ltd 0.25% 32.27 Aditya Birla Money Mart Ltd -0.09% (11.46) Aditya Birla Money Insurance Advisory Services Ltd -0.19% (24.01) Aditya Birla Housing Finance Limited 0.36% 45.78 Birla Sun Life Asset Management Co. Ltd 4.82% 620.67 Birla Sun Life Trustee Company Pvt. Ltd 0.00% 0.46 ABNL Investment Ltd 0.31% 40.30 Shaktiman Mega Food Park Pvt Ltd 0.00% 0.00 Birla Sun Life Insurance Company Ltd 11.98% 1,541.88 Birla Sun Life Pension Management Limited 0.00% (0.32) Indogld Trade and Services Ltd 8.94% 1,150.68 ABNL IT & ITES Limited 3.23% 415.38 Madura Garments Lifestyle Retail Company Limited 0.61% 77.94 Pantaloons Fashions & Retail Limited 2.69% 345.57 Aditya Birla Minacs Worldwide Ltd 0.00% — Aditya Birla Minacs BPO Private Limited 0.00% 0.56 FOREIGN SUBSIDIARY COMPANIES Aditya Birla Sun Life AMC Pte. Ltd., Singapore 0.02% 3.07 Aditya Birla Sun Life AMC Ltd., Dubai 0.05% 5.85 Birla Sun Life AMC (Mauritius) Ltd 0.03% 4.14 Aditya Vikram Global Trading House Ltd — — Aditya Birla Minacs Philippines Inc. — — A V Transworks Limited, Canada — — Aditya Birla Minacs Worldwide Inc., Canada — — Minacs Worldwide S.A. de C.V., Mexico — — The Minacs Group (USA) Inc. — — Bureau Collections Recovery, LLC (USA) — — Minacs Limited, UK — — Minacs Worldwide GmbH, Germany — — Minacs Kft., Hungary — — Aditya Birla Minacs BPO Limited, UK — — Minority Interest -6.23% (801.83) JOINT VENTURE IDEA Cellular Limited 41.66% 5,360.88 ASSOCIATES Birla Securities Limited — — Consolidation Eliminations and Adjustments (9,270.22) TOTAL ATTRIBUTABLE TO OWNERS

12,868.00

Share in Profit or Loss % of Consolidated Amount Profit and Loss 1.24% 17.59 0.76% 10.76 -0.42% (5.98) -0.36% (5.13) 8.93% 126.34 0.01% 0.08 0.17% 2.47 -0.02% (0.35) 20.16% 285.40 -0.03% (0.37) -0.18% (2.56) -2.09% (29.65) -1.84% (25.98) -16.12% (228.14) -0.32% (4.50) -0.02% (0.25) -0.39% -0.03% 0.35% 0.00% -0.01% 0.00% -0.67% 0.00% -0.52% -0.02% 0.01% 0.01% 0.00% 0.00% -5.34%

(5.46) (0.36) 5.00 0.02 (0.19) 0.03 (9.43) 0.01 (7.34) (0.32) 0.11 0.19 0.03 (0.06) (75.58)

53.39%

755.67



— (85.46) 1,415.50

253

L

Notes: * Net Assets = Total Assets - Total Liabilities. 1. India Advantage Fund Limited (IAFL), wholly owned Subsidiary of Birla Sun Life Asset Management Company Limited, is a collective investment scheme set-up as a fund in Mauritius with the status of a limited company under the Mauritius Companies Act. In terms of constitution and private placement memorandum, IAFL has classes of redeemable participating shares. Each class of participating shares has its own Balance Sheet and Statement of Profit and Loss. The Profit/Loss of each such class belongs to the participating shareholders of that class. Birla Sun Life Asset Management Company Limited (BSAMC) owns 100% of the management share, and management shareholder is not entitled to any beneficial interest in the profit/loss of various classes nor is required to make good any shortfall. In substance, there are no direct or indirect economic benefits received by the management shareholders. The substance over form must prevail. Accordingly, the Group has not consolidated IAFL in the Consolidated Financial Statements. 2. Aditya Birla Sun Life AMC Pte. Limted, Singapore, has made investment in international Opportunities Fund. International Opportunities Fund SPC(IOF) is segregated portfolio company set-up as a fund in Cayman islands under the Cayman Islands Monetary Act. In terms of constitution and private placement memorandum, IOF has various segregated portfolio which issue redeemable participating shares. Each Segregated Portfolio of participating shares has its own Balance Sheet and Profit and Loss Account. The Profit/Loss of each such Portfolio belongs to the participating shareholders of that segregated portfolio. Aditya Birla Sun Life Asset Management Pte. Limited (ABSLAMC) owns 100% of the management share and management shareholder is not entitled to any beneficial interest in the profit/loss of various segregated portfolios nor is required to make good any shortfall. In substance there are no direct or indirect economic benefits received by the management shareholders. The substance over form must prevail. Accordingly, the Group has not consolidated IOF in the Consolidated Financial Statement.

CONSOLIDATED FINANCIAL STATEMENTS

Name of the Entity

CMYK

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Aditya Birla Nuvo Limited - Annual Report 2014-2015

NOTE: 40 OTHER SIGNIFICANT NOTES (i)

(ii)

(iii)

CONSOLIDATED FINANCIAL STATEMENTS

(iv)

(v)

The Group has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long-term contracts has been made in the books of account. The Group’s pending litigations comprise of claims by or against the Company primarily by the workers/employees/ customers/suppliers, etc., and proceedings pending with tax and other government authorities. The Group has reviewed its pending litigations and proceedings and has adequately provided for where Provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Group does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. In respect of litigations, where the management assessment of a financial outflow is probable, the Group has made adequate provision in the financial statements and appropriate disclosure for contingent liabilities is given in Note 26. The Board of Directors of Aditya Birla Nuvo Limited (the Company) at its meeting held on 3rd May, 2015, have considered and approved a Composite Scheme of Arrangement between the Company, Madura Garments Lifestyle Retail Company Limited (MGLRCL) (100% subsidiary) and Pantaloons Fashion & Retail Limited (PFRL) (72.62% subsidiary) and their respective shareholders and creditors u/s Sections 391 to 394 of the Companies Act, 1956 [“Composite Scheme”]. Pursuant to the said scheme, Madura Fashion, a branded apparel retailing division of the Company and Madura Lifestyle, a luxury branded apparel retailing division of MGLRCL, will be demerged into PFRL. Shareholders to the Company will get 26 new equity shares of PFRL for every 5 equity shares held in the Company pursuant to demerger of Madura Fashion. Shareholders of MGLRCL will get 7 new equity shares of PFRL for every 500 equity shares held in MGLRCL. Preference shareholder of MGLRCL will get 1 new equity share of PFRL. After the scheme of arrangement new holding of the Company (directly and through other subsidiaries) in PFRL would be 9.06%. The Scheme 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 involved in the Composite Scheme. The appointed date of the Scheme will be 1st April, 2015, and expected to be consummated in next 6 to 9 months. In respect of a Jointly Controlled Entity of the Company, viz., Idea Cellular Limited (IDEA) A) The Department of Telecommunications (DoT) conducted auctions for frequency blocks in the 800, 900, 1800 and 2100 Mhz spectrum bands in March 2015. The frequency blocks that were put to auction in the 900 and 1800 Mhz band in 17 service areas included the blocks that are currently held by existing licencees whose licences for the respective service areas are due to expire during the financial years (FY) 2015-16 and 2016-17. IDEA successfully bid for its requirements in the nine service areas of Maharashtra, Madhya Pradesh, Kerala, Gujarat, Andhra Pradesh, Haryana, Punjab, Karnataka and Uttar Pradesh (West) where its licences are due to expire during FY 2015-16/201617 and also additional spectrum at Group share of total cost of ` 7,015.59 Crore as under: • 54 Mhz of 900 Mhz spectrum in the 9 service areas of Maharashtra, Madhya Pradesh, Kerala, Gujarat, Andhra Pradesh, Haryana, Punjab, Karnataka and Uttar Pradesh (West). • 20.4 Mhz of 1800 Mhz spectrum in the 6 service areas of Karnataka, Uttar Pradesh (West), Orissa, Tamilnadu, Himachal Pradesh and North East. • 5 Mhz of 2100 Mhz spectrum in Kolkata service area. The validity of the above spectrum will be for a fresh 20-year period starting from the effective date as mentioned in the Letter of Intent (LOI) when issued, which, in case of spectrum blocks currently held by the existing licencees, should be the date of expiry of existing licences. As per the payment options available, the Company has chosen the deferred payment option. Group share of the upfront payment amount under the deferred payment option due on or before 9th April, 2015, was ` 1,800.41 Crore. of which Group share of ` 450.44 Crore was paid on 31st March, 2015, and the Group share in balance amount of ` 1,349.97 Crore was paid on 9th April, 2015. Pending completion of subsequent formalities as per the Notice Inviting Applications (NIA) for the auction and any orders that may be passed by the Hon’ble Supreme Court in related and connected matters currently before it, the amount paid as on 31st March, 2015, has been disclosed as Capital Advances and the Group share in balance amount of ` 6,565.15 Crore has been disclosed under capital commitments. B) During the year, 223,880,597 equity shares of face value of ` 10 each has been issued and allotted to eligible Qualified Institutional Buyers at a price of ` 134 per share, including a premium of ` 124 per Equity Share, aggregating to group’s share of ` 698.35 Crore. Also during the year, 51,838,540 Equity Shares of face value ` 10 each to Axiata Investment 2 (India) Limited on preferential basis at a price of ` 144.68 per Equity Share, including a premium of ` 134.68 equity shares, aggregating to group’s share of ` 174.59 Crore. Consequently, the stake of the Company in IDEA decreased from 25.2295% in the previous year to 23.2786% in the current year. A) The CFS of Aditya Birla Minacs Worldwide Inc. and the Financial Statements of Aditya Birla Minacs Philippines Inc. have been prepared based on Management accounts till 8th May, 2014. These have ceased to be subsidaries of the Company with effect from 9th May, 2014. The accounts of Aditya Birla Securities Private Limited and Aditya Vikram Global Trading House Limited have been consolidated based on management accounts received from respective subsidiaries till 10th September, 2014, and 29th September, 2014, respectively. These have ceased to be subsidiaries. B)

L

254

For the purpose of consolidation, Aditya Vikram Global Trading House Limited is considered as integral operations. The Company has been liquidated on 29th September, 2014. AV TransWorks Limited, Aditya Birla Minacs Worldwide Inc. (CFS), Aditya Birla Minacs Philippines Inc., Birla Sun Life AMC (Mauritius) Ltd., Aditya Birla Sun Life AMC Ltd., Dubai, and Aditya Birla Sun Life AMC Pte. Ltd., Singapore, are considered as non-integral operations. AV TransWorks Limited, Aditya Birla Minacs Worldwide Inc. (CFS), Aditya Birla Minacs Philippines Inc., have ceased to be subsidiaries of the Company with effect from 9th May, 2014.

CMYK

Aditya Birla Nuvo Limited - Annual Report 2014-2015

(vi)

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to a Share Purchase Agreement (‘SPA’) between the Company and Mr. Prataph C. Reddy and others, Erstwhile Promoters, Aditya Birla Money Limited (ABML), a subsidiary of the Company, dated August 28, 2008, the Company had agreed to acquire 31 million equity shares in ABML. The transaction was completed on March 6, 2009. As per the SPA, the Erstwhile Promoters had agreed to indemnify and hold harmless the Company to the extent of any Losses, resulting from or consequent upon or relating to such breach of representations or warranties, covenants or agreement including but not limited to the recoveries of receivables and other assets in the books of ABML, contingencies on tax and related matters, etc. Subsequent to the completion of the above transaction, the Company noted several breaches of representations and warranties including but not limited to non-recovery of debtors, irrecoverable advances, missing fixed assets, etc. Accordingly, the Company based on its internal assessment of the recoverability of receivables, fixed assets, other assets and matters relating to tax and other contingencies arrived at an amount of ` 16.66 Crore as losses incurred on account of breach of representation warranties in the SPA. Further, the Company, vide its letter dated March 5, 2011, made a separate claim of ` 0.52 Crore for amounts becoming due and payable on accounts of various cases initiated by the customers of the ABML. The Company invoked the arbitration mechanism and filed their Statement of Claim on February 26, 2011, with the Arbitration Tribunal. Pending the final outcome of the arbitration proceedings, ABML has identified all such receivables, assets, etc., which have not been recovered and other items, which are the subject matter of the claim to the extent they are in the books of account of the ABML as at March 31, 2014, aggregating ` 14.90 Crore (Previous Year: ` 14.90 Crore) and disclosed the same in Short-term Loans and Advances in Note 12B of the Balance Sheet, as these amounts would be paid directly to the ABML by the Erstwhile Promoters at the direction of the Company as and when the settlement happens. Both parties completed filing of documents. On July 04, 2012, a hearing was held and M/s. Delloitte Haskins & Sells were asked to act as auditors by the Arbitrators with a mandate to submit a report on whether from an accounting perspective, including the accounting treatment that has been given to the items set out in the Statement of Claim, the amounts as claimed are correct as per accounting practice. The arbitral tribunal then directed the Claimants and Respondents to file their objections, if any, to the audit report submitted by M/s. Deloitte Haskins & Sells and had also directed the Respondents to file their list of witnesses (if any) by the end of April 2013. The Respondents filed their objections to the audit report and the Company had also filed its reply to the said objections. Arguments in rebuttal by the Claimant was completed on October 25, 2013, and written submissions were filed by October 29, 2013. The tribunal has reserved the award. During the current year, Arbitral Tribunal has passed an award, allowing claim of ` 10.24 Crore, which excluded premature claims pertaining to income tax, service tax, etc. Further, such award directed the Erstwhile Promoters to pay a sum of ` 5.73 Crore (being 56% of ` 10.23 Crore, as the Company has purchased only 56% of shares), along with interest @ 14% from the date of award. This award was received by the Company on 27th May, 2014. Subsequently, during the year both parties have filed petitions under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside the award and the same are admitted and pending on the file of the High Court of Madras. In respect of such receivables, which excludes premature claims pertaining to income tax, service tax, etc., the Company has created adequate provision, which also includes claims not awarded by the Arbitral Tribunal to the extent of 44%. In respect of tax claims, the Company has obtained favourable order for certain assessment years and is confident of recovering such amount in due course. Such amounts are fully recoverable from the Income Tax Department.

(vii)

The Actuarial liabilities of Life Insurance Business are calculated in accordance with the accepted actuarial practice, requirements of the Insurance Act, 1938, Regulations notified by the IRDA and Practice Standard prescribed by the Institute of Actuaries of India.

(viii)

Figures of ` 50,000 or less have been denoted by ‘ß’.

(ix)

Previous Year’s figures have been regrouped/rearranged, wherever necessary.

As per our attached Report of even date

For and on behalf of the Board of Directors

For KHIMJI KUNVERJI & CO. ICAI Firm Registration No. 105146W Chartered Accountants

LALIT NAIK Managing Director

For S R B C & CO LLP ICAI Firm Registration No. 324982E Chartered Accountants

TARJANI VAKIL P. MURARI B. R. GUPTA G. P. GUPTA S. C. BHARGAVA Directors

SUSHIL AGARWAL Whole-time Director & CFO Per VIJAY MANIAR Partner Membership No. 36738

ASHOK MALU Joint President & Company Secretary Mumbai, May 14, 2015

255

L

Per SHIVJI VIKAMSEY Partner Membership No. 2242 Mumbai, May 14, 2015

CONSOLIDATED FINANCIAL STATEMENTS

Based on legal opinion received and internal assessment, the Company is confident of recovering the allowed claim through the legal process.

CMYK

NUVO ADITYA BIRLA NUVO LIMITED & ITS SUBSIDIARIES / JOINT VENTURES* ADITYA BIRLA NUVO LIMITED

I)

:

Fashion & Lifestyle, Manufacturing (Agri, Caustic Soda and Allied Chemicals, Insulators, Viscose Filament Yarn) Textile.

:

Life Insurance

:

Management of Pension Fund under NPS Scheme

FINANCIAL SERVICES Subsidiaries I

Birla Sun Life Insurance Company Limited [JV with Sun Life Financial Inc of Canada] G

I

Birla Sun Life Pension Management Limited

Aditya Birla Financial Services Limited (“ABFSL”) (formerly Aditya Birla Financial Services Private Limited)

:

Core Investment Company

G

Aditya Birla Capital Advisors Private Limited

:

Private Equity Investment, Advisory & Management Services

G

Aditya Birla Customer Services Limited (formerly Aditya Birla Customer Services Private Limited)

:

Financial & IT enabled services

G

Aditya Birla Finance Limited

:

NBFC/ Fund Based Lending

G

Aditya Birla Financial Shared Services Limited

:

Financial & IT enabled services

G

Aditya Birla Housing Finance Limited

:

Housing Finance

G

Aditya Birla Insurance Brokers Limited

:

Composite Non-life Insurance Advisory & Broking

G

Aditya Birla Money Limited

:

Equity Broking



Aditya Birla Commodities Broking Limited

:

Commodities Broking

G

Aditya Birla Trustee Company Private Limited

:

Trustee of Private Equity Fund

G

Aditya Birla Money Mart Limited

:

Wealth Management & Distribution



:

Life Insurance Advisory- Corporate Agent

G

Aditya Birla Money Insurance Advisory Services Limited

Birla Sun Life Asset Management Company Limited [JV with Sun Life Financial Inc of Canada] 

Birla Sun Life AMC (Mauritius) Limited



Aditya Birla Sun Life AMC Limited, Dubai



Aditya Birla Sun Life AMC Pte. Limited, Singapore

:

!



:

}

Birla Sun Life Trustee Company Private Limited [JV with Sun Life Financial Inc of Canada]

:

Trustee of Birla Sun Life Mutual Fund

Aditya Birla Health Insurance Limited (Proposed JV with MMI Holdings Limited, South Africa)

:

Health Insurance (Proposed)

:

Branded Apparel and Accessories

:

Telecommunication Services

G

I

International Opportunities Fund - SPC (formerly known as Aditya Birla Sun Life - SPC India Advantage Fund Limited

Asset Management

II) GARMENTS & OTHERS SUBSIDIARIES I I

Madura Garments Lifestyle Retail Company Limited Indigold Trade & Services Limited G

I I

Shaktiman Mega Food Park Pvt. Limited ABNL IT & ITES Limited G

I

Pantaloons Fashion and Retail Limited

Aditya Birla Minacs BPO Private Limited

ABNL Investment Limited

IV) TELECOM (JOINT VENTURE) I

Idea Cellular Ltd. th

* As on 14 May, 2015

CMYK

CMYK

A D I T YA B I R L A N U V O L I M I T E D ANNUAL REPORT 2014 -2015

NUVO Aditya Birla Nuvo Limited Corporate Finance Division A-4, Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai 400 030. Fax +91 22 66525821, 24995821 Telephone +91 22 66525000, 24995000 E-mail : [email protected], [email protected] Indian Rayon Compound, Veraval – 362 266, Gujarat Fax +91 2876 243220 Telephone +91 2876 245711, 248629/248495 E-mail : [email protected] Website : www.adityabirlanuvo.com, www.adityabirla.com

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